<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
__________________________________________
FORM 8-KA
Current Report
Pursuant to
Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (date of Earliest Event Reported): September 18, 1996
__________________________________________
SIGHT RESOURCE CORPORATION
(Exact name of Registrant as specified in charter)
DELAWARE 1-11196 ###-##-####
- -------- ------- -----------
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification No.)
of Incorporation)
__________________________________________
67 South Bedford Street, Burlington, MA 01803
- --------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(617) 229-1100
--------------
Registrant's Telephone number including area code
-------------------------------------------------
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------
(a) On September 18, 1996, pursuant to the Asset Transfer and Merger Agreement
(the "Agreement") by and among Sight Resource Corporation (the
"Registrant"), E.B. Acquisition Corp., a wholly owned subsidiary of the
Registrant ("Acquisition"), The E.B. Brown Optical Company ("Optical"),
Brown Optical Laboratories, Inc. ("Laboratories"), E.B. Brown Opticians,
Inc. ("Opticians"), Gordon Safran and Evelyn Safran (Optical, Laboratories
and Opticians are referred to collectively as "Sellers"), which agreement
is effective as of July 1, 1996, Acquisition acquired certain assets
subject to certain liabilities of Laboratories and Optical and merged with
Opticians (the "Transactions"). The Transactions will be accounted for as
a purchase. Sellers are engaged in the business of distributing and
selling eyeglasses, contact lenses, industrial eyewear and hearing aids and
providing related optical, optometric and audiology goods and services to
persons with vision and hearing disorders through a chain of eye care
centers in Ohio and Pennsylvania. The following is a description of the
Transactions:
[ ] Acquisition and Opticians entered into a merger pursuant to which
Acquisition was the surviving Company. In connection with the merger,
all Opticians shares outstanding immediately prior to the merger were
converted into and became the right to receive 521,997 shares (the
"Shares") of common stock of the Registrant. If, during a twenty day
consecutive trading period, prior to the registration of the Shares,
the average closing price of the common stock of the Registrant is less
than $2.75 per share, then the holder of the Shares will be eligible to
receive an additional number of shares of the Registrant equal to
twenty percent of such merger consideration. The amount and nature of
the purchase price was determined by arms length negotiations among the
parties.
[ ] Acquisition acquired certain assets subject to certain liabilities of
Optical and Laboratories. The assets acquired consist primarily of
accounts receivable, inventory, property and equipment. The purchase
price consisted of $4,000,000 in cash and $1,400,000 in notes payable
to shareholders and certain employees of Optical and Laboratories due
in two installments over an eighteen month period. The amount and
nature of the purchase price were determined by arms length
negotiations among the parties.
[ ] In connection with the Agreement, the Registrant has agreed to issue
71,181 shares of common stock of the Registrant on or prior to
September 18, 1998 to two employees of Opticians as an employee benefit
plan.
(b) Following the acquisitions and merger, Acquisition intends on continuing
the use of assets acquired and continue to provide the services described
in 2(a).
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS
-----------------------------------------------------------------
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Exhibit 7.1 includes the audited
combined balance sheet of the Sellers as of December 31, 1995 and the
related combined statements of income, stockholders' equity and cash flows
the year then ended, along with the audit opinion of KPMG Peat Marwick
LLP.
(b) PRO FORMA FINANCIAL INFORMATION. Exhibit 7.2 includes the unaudited
proforma consolidated balance sheets as of December 31, 1995 and June 30,
1996 and the unaudited proforma consolidated statements of operations for
the year ended December 31, 1995 and for the six months ended June 30,
1996, as if the Company had acquired the Sellers as of January 1, 1995 and
1996, respectively.
<PAGE>
(C) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NUMBER TITLE
- -------------- -----
<S> <C>
2.1 Asset Transfer and Merger Agreement dated as of July 1,
1996 by and among Sight Resource Corporation, E.B.
Acquisition Corp., The E.B. Brown Optical Company, Brown
Optical Laboratories, Inc., E.B. Brown Opticians, Inc.,
Gordon Safran and Evelyn Safran. (Incorporated herein by
reference to Exhibit 2.1 of the Company's Form 8-K filed
with the Securities and Exchange Commission on October 3,
1996.)
7.1 Audited combined balance sheet of Sellers as of December
31, 1995 and the related combined statement of income,
stockholder's equity and cash flows for the year then
ended, along with the audit opinion of KPMG Peat
Marwick LLP.
7.2 Unaudited proforma consolidated balance sheets as of
December 31, 1995 and June 30, 1996 and the unaudited
proforma consolidated statement of operations for the
year ended December 31, 1995 and the six months ended
June 30, 1996, as if the Company had acquired the net
assets of Sellers as of January 1, 1995 and 1996,
respectively.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SIGHT RESOURCE CORPORATION
Date: December 2, 1996 /s/ ALAN MACDONALD
---------------- -------------------------
Alan MacDonald
Vice President of Finance & Administration
(principal financial and chief accounting officer)
<PAGE>
Exhibit 7.1
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Stockholders
E. B. Brown Optical Company:
We have audited the accompanying combined balance sheet of E. B. Brown Optical
Company and affiliates as of December 31, 1995, and the related combined
statements of income, stockholders equity, and cash flows for the year then
ended. These combined financial statements are the responsibility of E. B.
Brown Optical Company management. Our responsibility is to express an opinion
on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of E. B. Brown Optical
Company and affiliates as of December 31, 1995, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.
/S/ KPMG Peat Marwick LLP
November 25, 1996
Boston, Massachusetts
<PAGE>
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Combined Balance Sheet
December 31, 1995
<TABLE>
<CAPTION>
Assets
----------
<S> <C>
Current assets
Cash and cash equivalents $ 915,068
Trade accounts receivable, less allowance for doubtful
accounts of $40,000 323,758
Inventories 1,109,651
Deferred tax asset (note 4) 294,000
Other current assets 63,004
----------
Total current assets 2,705,481
----------
Investment securities (note 2) 192,312
Property, plant and equipment
Land 30,000
Buildings 56,664
Equipment 2,473,116
Leasehold improvements 1,932,541
Furniture and fixtures 721,802
----------
5,214,123
Less accumulated depreciation and amortization 3,368,698
----------
Net property, plant and equipment 1,845,425
Other assets 233,221
----------
$4,976,439
==========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>
Exhibit 7.1
<TABLE>
<CAPTION>
Liabilities and Stockholders' Equity
------------------------------------
<S> <C>
Current liabilities
Trade accounts payable $ 357,419
Customer deposits 125,538
Income taxes payable (note 4) 42,000
Accrued wages, benefits, and related taxes (note 7) 1,500,268
Accrued expenses 262,632
Reserve for self-insured medical benefits 100,000
----------
Total current liabilities 2,387,857
----------
Stockholders' equity (note 1[c])
Common stock
E. B. Brown Optical Company, no par value; 750 shares
authorized; 75 shares issued and outstanding 2,960
E. B. Brown Optical Laboratories, Inc., no par value; 750 shares
authorized; 100 shares issued and outstanding 10,000
E. B. Brown Opticians, Inc., no par value; 750 shares
authorized; 150 shares issued, no shares outstanding -
----------
12,960
Additional paid-in capital 371,338
Retained earnings 2,185,463
Unrealized holding gains on investment securities 18,821
----------
Total stockholders' equity 2,588,582
----------
Commitments and contingencies (note 3) $4,976,439
==========
</TABLE>
<PAGE>
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Combined Statement of Income
Year ended December 31, 1995
<TABLE>
<S> <C>
Net sales $14,576,819
Cost of goods sold 4,168,986
-----------
Gross profit 10,407,833
Selling, general, and administrative expenses 9,978,992
-----------
Other income 428,841
Interest income 71,283
Other, net 1,397
-----------
Income before income taxes 501,521
Income taxes (note 4) 85,819
-----------
Net income $ 415,702
===========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Combined Statement of Stockholders' Equity
Year ended December 31, 1995
<TABLE>
<CAPTION>
Unrealized
Holding
Gains
(Losses) on Total
Common Additional Retained Investment Stockholders'
Stock Capital Earnings Securities Equity (note 1[c])
--------- ---------- ---------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $12,960 371,338 2,534,761 (3,920) 2,915,139
Net income - - 415,702 - 415,702
Dividends - - (765,000) - (765,000)
Unrealized holding gains on
investment securities - - - 22,741 22,741
------- ------- --------- ------ ---------
Balance at December 31, 1995 $12,960 371,338 2,185,463 18,821 2,588,582
======= ======= ========= ====== =========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Combined Statement of Cash Flows
Year ended December 31, 1995
<TABLE>
<S> <C>
Net income $ 415,702
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization of property, plant and equipment 575,371
Allowance for doubtful accounts 5,000
Gain on sale of investment securities (3,094)
Loss on sale of equipment 5,972
Changes in operating assets and liabilities:
Trade accounts receivable 351,617
Inventories (151,803)
Deferred tax asset (8,000)
Other current assets (50,482)
Trade accounts payable (34,993)
Customer deposits (19,649)
Income taxes payable 2,289
Accrued wages, benefits, and related taxes (230,593)
Accrued expenses (48,133)
Reserve for self-insured medical benefits 25,000
----------
Net cash provided by operating activities 834,204
----------
Cash flows from investing activities
Proceeds from sale of investment securities 32,668
Purchases of investment securities available for sale (31,114)
Capital expenditures (589,967)
Proceeds from sale of equipment 3,500
Other assets (9,240)
----------
Net cash used in investing activities (594,153)
----------
Cash flows from financing activities
Dividends paid (765,000)
----------
Net cash used in financing activities (765,000)
----------
Net (decrease) in cash and cash equivalents (524,949)
Cash and cash equivalents at beginning of year 1,440,017
----------
Cash and cash equivalents at end of year $ 915,068
==========
Supplemental disclosure of cash flow information
Taxes paid $ 83,530
==========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Notes to Combined Financial Statements
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Nature of Business
------------------
The business of E. B. Brown Optical Company and affiliates is to
participate in the delivery of eye wear, hearing aids, and service
through the operation of 42 retail stores in Ohio and Western
Pennsylvania, a manufacturing lab, and an industrial eye wear
division.
(b) Acquisition
-----------
Effective July 1, 1996, certain assets were acquired and certain
liabilities were assumed by Sight Resource Corporation, a Delaware
corporation. Sight Resource participates in the delivery of a
complete range of eye care products and services through its
networks of opticians, optometrists, and opthamologists.
(c) Principles of Combination
-------------------------
The combined financial statements include the financial statements
of the E. B. Brown Optical Company, Brown Optical Laboratories,
Inc., and E. B. Brown Opticians, Inc. (Company) which all operate
under common ownership and management. All significant intercompany
balances and transactions have been eliminated in combination.
(d) Cash Equivalents
----------------
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments with original maturities of three
months or less to be cash equivalents.
(e) Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined using the specific identification method.
(f) Investment Securities
---------------------
Investment securities consist of corporate debt and equity
securities. The fair value of debt securities and equity
investments are based on quoted market prices at DecemberE31, 1995.
The Company classifies its debt and equity securities as available-
for-sale.
Unrealized holding gains and losses on available-for-sale securities
are excluded from earnings and are reported as a separate component
of stockholdersO equity until realized. Realized gains and losses
from the sale of available-for-sale securities are determined on a
specific identification basis.
(Continued)
<PAGE>
2
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Notes to Combined Financial Statements
A decline in the market value of any available-for-sale security
below cost that is deemed other than temporary results in a
reduction in carrying amount to fair value. The impairment is
charged to earnings and a new cost basis for the security is
established. There were no impairments in 1995. Dividend and
interest income are recognized when earned.
(g) Property, Plant and Equipment
-----------------------------
Property, plant and equipment are stated at cost. Depreciation on
plant and equipment is calculated on the straight-line method over
the estimated useful lives of the assets. Leasehold improvements
are amortized straight line over the shorter of the lease term or
estimated useful life of the asset.
(h) Income Taxes
------------
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(i) Use of Estimates
----------------
Management of the Company has made estimates and assumptions
relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(j) Advertising Costs
-----------------
The Company expenses advertising costs as incurred. The Company
incurred $577,896 of advertising expense in 1995.
(k) Revenue Recognition
-------------------
Revenue and the related costs from the sale of Company products is
recognized at the time of delivery.
(Continued)
<PAGE>
3
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Notes to Combined Financial Statements
(2) Investment Securities
---------------------
The amortized cost, gross unrealized holding gains, gross unrealized
holding losses, and fair value for available-for-sale securities by
major security type and class of security at December 31, 1995, were
as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Gains (Losses)
-------------------------- ---------------------
Amortized Holding Holding Fair
Cost Gains Losses Value
------------ ---------- ---------- ---------
<S> <C> <C> <C> <C>
Available-for-sale
Debt securities $ 37,243 3,757 - 41,000
Equity securities 136,248 18,564 3,500 151,312
-------- ------ ------- -------
$173,491 22,321 3,500 192,312
======== ====== ======= =======
</TABLE>
Maturities of debt securities classified as available-for-sale
were as follows at December 31, 1995:
Amortized Fair
Cost Value
---------- ----------
Due after ten years $ 37,243 41,000
========== ==========
Proceeds from the sale of investment securities available for sale
were $32,668 in 1995 and gross realized gains included in income were
$3,094 in 1995.
(3) Leases
------
The Company has noncancelable store operating leases that expire over
the next seven years. These leases generally contain renewal options
and require the Company to pay all executory costs such as
maintenance and insurance. Rental payments include minimum rentals
plus additional rentals based on store sales exceeding specified
amounts. Rental expense for operating leases consisted of the
following:
Minimum rentals $851,958
Contingent rentals 123,458
--------
Rental expense $975,416
========
(Continued)
<PAGE>
4
Exhibit 7.1
E.B. BROWN OPTICAL COMPANY AND AFFILIATES
Notes to Combined Financial Statements
Future minimum lease payments under noncancelable operating leases (with
remaining lease terms in excess of one year) as of December 31, 1995 are:
<TABLE>
<CAPTION>
Operating
Year ending December 31, Leases
------------------------ ----------
<S> <C>
1996 $ 846,324
1997 758,396
1998 588,974
1999 423,631
2000 228,138
Thereafter 158,881
---------- ----------
Total minimum lease payments $3,004,344
==========
</TABLE>
As a convenience for its customers, the Company enters sublease
arrangements with independent opticians at various retail stores. The
sublease arrangements require the opticians to pay the Company $10 per
month for the sublease rental space.
(4) Income Taxes
------------
The Company has two affiliates which have elected to be treated as a S
Corporation for income tax purposes. As such, all income, expenses, and
tax credits are passed through to the individual shareholders.
The following information relates to the Company's third affiliate, which
has elected to be treated as a C Corporation. As such, the OexpectedO
combined effective tax rate of 40 percent is reduced to a combined
effective rate of 17 percent by the effects of income from continuing
operations of the S Corporations, which is not subject to federal, state,
or local income taxes. Total income taxes for the year ended December 31,
1995 were allocated as follows:
Income tax expense (benefit) attributable to income from continuing
operations consists of:
<TABLE>
<CAPTION>
Current Deferred Total
------- -------- -----
<S> <C> <C> <C>
Year ended December 31, 1995
U.S. federal $74,819 (6,800) 68,019
State and local 19,000 (1,200) 17,800
------- ------ ------
$93,819 (8,000) 85,819
======= ====== ======
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax asset at December 31, 1995 are presented
below:
Deferred tax assets
Vacation accrual $ 15,000
Accrued wages 246,250
Reserve for self-insured medical benefits 22,300
Other 10,450
--------
Net deferred tax assets $294,000
========
(Continued)
<PAGE>
5
Exhibit 7.1
E. B. BROWN OPTICAL COMPANY AND AFFILIATES
Notes to Combined Financial Statements
(5) Defined Contribution and Profit Sharing Plans
---------------------------------------------
The Company maintains a defined contribution employee benefit plan
(401[k]) for all eligible employees. The Company matches employee
contributions at a rate equal to 30 percent of salary deferrals up
to 5 percent of the employeesO compensation. The Company
contributed $37,068 to the 401(k) plan in 1995. The Company made
no contributions to the profit sharing plan in 1995.
(6) Business and Credit Concentrations
----------------------------------
Most of the Company's customers are located in Ohio and Western
Pennsylvania. No single customer accounted for more than 5
percent of the Company's sales in 1995, and no account receivable
from any customer exceeded $11,000. The Company estimates an
allowance for doubtful accounts based on the credit worthiness of
its customers as well as general economic conditions.
Consequently, an adverse change in those factors could effect the
CompanyOs estimate of its bad debts.
(7) Related Party
-------------
Accrued wages, benefits, and related taxes include $1,050,349 owed
to the Company's majority stockholder and president. The amounts
represent unpaid wages from prior periods in satisfaction of the
majority stockholder's duties as president.
<PAGE>
Exhibit 7.2
SIGHT RESOURCE CORPORATION
INTRODUCTION
The accompanying unaudited proforma consolidated balance sheets as of December
31, 1995 and June 30, 1996 gives effect to the acquisition of Sellers as if the
transaction occurred at December 31, 1995 and June 30, 1996, respectively. The
unaudited pro forma consolidated statement of operations for the year ended
December 31, 1995 and the six months ended June 30, 1996, gives effect to the
acquisition as if the occurred as of January 1, 1995 and January 1, 1996,
respectively.
The proforma combined financial statements do not purport to represent what the
Company's financial position or results of operations would have actually been
if such transaction had in fact occurred on those dates or to project the
Company's financial position or results of operations for any future period.
<PAGE>
Exhibit 7.2 (continued)
SIGHT RESOURCE CORPORATION
Unaudited Proforma Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Sight Resource E.B. Brown Pro-forma at
Corporation Opticians Adjustments December 31,
Inc.(1) 1995
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,035 $ 915 $(4,000) (2) $ 4,950
Accounts receivable, net 662 324 - 986
Inventories 1,865 1,110 - 2,975
Prepaid expenses and other current
assets 171 357 (2) (3) 526
------- ------- ------- ------
Total current assets 10,733 2,706 (4,002) 9,437
------- ------- ------- ------
Investment securities - 192 - 192
Property and equipment 8,258 5,214 - 13,472
Less accumulated depreciation (2,480) (3,369) - (5,849)
------- ------- ------- ------
Net property and equipment 5,778 1,845 - 7,623
------- ------- ------- ------
Other assets:
Intangible assets 6,908 - 5,380 (4) 12,288
Other assets 135 233 (225) (3) 143
------- ------- ------- -------
Total other assets 7,043 233 5,155 12,431
------- ------- ------- -------
$23,554 $ 4,976 $ 1,153 $29,683
======= ======= ======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Revolving note payable $ 475 $ - $ - $ 475
Current portion of long term debt 400 - 400 (2) 800
Accounts payable 1,727 357 - 2,084
Accrued expenses 2,804 2,031 (11) (3) 4,824
------- ------- ------- ------
Total current liabilities 5,406 2,388 389 8,183
------- ------- ------- ------
Non-current liabilities:
Long term debt, less current
maturities 1,000 - 1,000 (2) 2,000
Other liabilities 703 - - 703
------- ------- ------- ------
Non-current liabilities 1,703 - 1,000 2,703
------- ------- ------- ------
Stockholders' equity:
Common stock 63 13 (8) (5) 68
Additional paid-in capital 25,794 371 1,525 (5) 27,690
Shares issuable - - 432 (6) 432
Accumulated deficit (9,412) 2,185 (2,185) (5) (9,412)
Unrealized holding gains on
investment securities - 19 - 19
------- ------ ------- ------
Total stockholders' equity 16,445 2,588 (236) 18,797
------- ------ ------- -------
$23,554 $ 4,976 $ 1,153 $29,683
======= ======= ======= =======
</TABLE>
<PAGE>
Exhibit 7.2 (continued)
SIGHT RESOURCE CORPORATION
Unaudited Proforma Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Sight Resource E.B. Brown Pro-forma at
Corporation Opticians, Inc. (1) Adjustments June 30, 1996
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 15,662 $ 929 $(4,000) (2) $ 12,591
Accounts receivable, net 955 327 - 1,282
Inventories 1,891 1,224 - 3,115
Prepaid expenses and other current
assets 432 362 (2) (3) 792
--------- ------- ------- --------
Total current assets 18,940 2,842 (4,002) 17,780
--------- ------- ------- --------
Investment securities - 214 - 214
Property and equipment 8,090 5,376 - 13,466
Less accumulated depreciation (2,893) (3,623) - (6,516)
--------- ------- ------- --------
Net property and equipment 5,197 1,753 - 6,950
--------- ------- ------- --------
Other assets:
Intangible assets 6,724 - 5,379 (4) 12,103
Other assets 141 254 (245) (3) 150
--------- ------- ------- --------
Total other assets 6,865 254 5,134 12,253
--------- ------- ------- --------
$ 31,002 $ 5,063 $ 1,132 $ 37,197
========= ======= ======= ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Revolving note payable $ 475 $ - $ - 475
Current portion of long term debt 400 - 400 (2) 800
Accounts payable 1,393 409 - 1,802
Accrued expenses 2,521 1,959 97 (3) 4,577
--------- ------- ------- --------
Total current liabilities 4,789 2,368 497 7,654
--------- ------- ------- --------
Non-current liabilities:
Long term debt, less current
maturities 800 - 1,000 (2) 1,800
Other liabilities 713 - - 713
--------- ------- ------- --------
Non-current liabilities 1,513 - 1,000 2,513
--------- ------- ------- --------
Commitments and contingencies -
Stockholders' equity:
Common stock 80 13 (8) (5) 85
Additional paid-in capital 35,377 371 1,525 (5) 37,273
Shares issuable - - 432 (6) 432
Accumulated deficit (10,757) 2,314 (2,314) (5) (10,757)
Unrealized holding loss on
investment securities - (3) - (3)
--------- ------- ------- --------
Total stockholders' equity 24,700 2,695 (365) 27,033
--------- ------- ------- --------
$ 31,002 $ 5,063 $ 1,132 $ 37,200
========= ======= ======= ========
</TABLE>
<PAGE>
Exhibit 7.2 (continued)
Sight Resource Corporation
Unaudited Proforma Consolidated Statement of Operations
Year ended December 31, 1995
(In thousands, except for per share amounts)
<TABLE>
<CAPTION>
Sight Resource E.B. Brown Pro-forma at
Corporation Opticians, Adjustments December 31,
(A.) 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue $18,240 $14,577 $ - $32,817
Cost of revenue 8,147 4,169 - 12,316
------- ----- ----- -------
Gross profit 10,093 10,408 - 20,501
Selling, general and administrative
expenses 15,265 9,979 128 (B.),(C.) 25,372
------- ----- ----- -------
Income (loss) from operations (5,172) 429 (128) (4,871)
------- ------ ----- -------
Other income (expense)
Interest income 387 71 - 458
Interest expense (253) - (98) (D.) (351)
Other 150 1 - 151
------- ------ ----- -------
Total other income (expense) 284 72 (98) 258
------- ------ ----- -------
Income (loss) before income tax (4,888) 501 (226) (4,613)
Income taxes - 86 (86) (E.) -
------- ----- ----- -------
Net income (loss) $(4,888) $ 415 $(140) $(4,613)
======= ======= ===== =======
Net loss per share $(0.89) - - $(0.77)
======= ======= ===== =======
Weighted average number of
common shares outstanding 5,488 - 522 (F.) 6,010
======= ======= ===== =======
</TABLE>
<PAGE>
Exhibit 7.2 (continued)
Sight Resource Corporation
Unaudited Proforma Consolidated Statement of Operations
Six Month Period Ended June 30, 1996
(In thousands)
<TABLE>
<CAPTION>
Pro-forma
Sight Resource E.B. Brown at
Corporation Options, Inc. Adjustments June 30,
(A.) 1996
-------------- ---------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue $11,569 $7,847 $ - $19,416
Cost of revenue 4,549 2,867 - 7,416
------- ------ ----- -------
Gross profit 7,020 4,980 - 12,000
Selling, general and administrative
expenses 8,541 4,460 203 (B.), (C.) 13,204
------- ------ ----- -------
Income (loss) from operations (1,521) 520 (203) (1,204)
------- ------ ----- -------
Other income (expense)
Interest income, net 179 16 (49) (D.) 146
Other - 5 - 5
------- ------ ----- -------
Total other income (expense) 179 21 (49) 151
------- ------ ----- -------
Income (loss) before income tax (1,342) 541 (252) (1,053)
------- ------ ----- -------
Income taxes - 93 (93) (E.) -
------- ------ ----- -------
Net income (loss) $(1,342) $ 448 $(159) $(1,053)
======= ====== ===== =======
Net loss per share $(0.21) - - $(0.15)
======= ====== ===== =======
Weighted average number of
common shares outstanding 6,402 - 522 (F.) 6,924
======= ====== ===== =======
</TABLE>
<PAGE>
Exhibit 7.2 (continued)
SIGHT RESOURCE CORPORATION
NOTES TO UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 1995 AND
- --------------------------------------------------------------------------------
JUNE 30, 1996
- -------------
1) To include the accounts of Sellers as if the acquisition occurred at
December 31, 1995 and June 30, 1996
2) To adjust for cash payment made and notes payable entered into in
connection with the acquisition of Seller.
3) To adjust for certain assets and certain liabilities not purchased in
the acquisition.
4) To record the excess of the purchase price over the book value of net assets
acquired in connection with the acquisition. An independent appraiser is
currently assessing the fair value of the assets acquired.
5) To eliminate stockholders' equity of Sellers and adjust common stock and
additional paid in capital for 521,997 shares issued in connection with the
acquisition.
6) To record shares issuable to two employees of Opticians as per the Agreement
NOTES TO UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR
- ------------------------------------------------------------------------------
ENDED DECEMBER 31, 1995 AND THE SIX MONTHS ENDED JUNE 30, 1996
- ---------------------------------------------------------------
A) To include the results of Sellers for the year ended December 31, 1995 and
the six months ended June 30, 1996, as if the acquisition occurred at the
beginning of 1995 and 1996, respectively.
B) To adjust the President of Sellers salary in line with the Consulting
Agreement dated September 18, 1996.
C) To adjust for the amortization of goodwill and other intangibles with
amortization periods ranging from 10-25 years.
D) To adjust interest expense related to the indebtedness associated with
acquiring Sellers. Balance outstanding of $1,400,000 at an annual interest
rate of 7% for the year ended December 31, 1995 and the six months ended June
30, 1996.
E) To adjust Federal tax expense based upon consolidated net loss.
F) To adjust the weighted average number of common shares outstanding to reflect
the acquisition as if it occurred at the beginning of 1996 and 1995.
