<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 7, 1997
Cable Design Technologies Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-22724 36-3601505
-------- (Commission (IRS Employer
(State or other jurisdiction File Number) Identification No.)
of incorporation)
- --------------------------------------------------------------------------------
Foster Plaza 7
661 Andersen Drive
Pittsburgh, PA 15220
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 937-2300
--------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
The undersigned Registrant hereby amends Item 7 of its current report on Form 8-
K which was filed with the Securities and Exchange Commission on April 22, 1997,
as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of business acquired.
The following consolidated financial statements of Dearborn Wire and
Cable L.P. and Subsidiaries ("Dearborn") are filed herewith as Item
7(a):
i) See attached Report of Independent Public Accountants.
ii) See attached Consolidated Balance Sheets of Dearborn as of
December 31, 1996 and 1995.
iii) See attached Consolidated Statements of Income of Dearborn for
the years ended December 31, 1996 and 1995.
iv) See attached Consolidated Statements of Cash Flows of Dearborn
for the years ended December 31, 1996 and 1995.
v) See attached notes to Dearborn Consolidated Financial Statements.
(b) Pro forma financial information.
i) Pro forma Condensed Consolidated Statement of Income of the
Registrant for the six months ended January 31, 1997, giving
effect on a pro forma basis to the acquisition of Dearborn.
ii) Pro forma Condensed Consolidated Statement of Income of the
Registrant for the year ended July 31, 1996, giving effect on a
pro forma basis to the acquisition of Dearborn.
iii) Pro forma Condensed Consolidated Balance Sheet of the Registrant
as of January 31, 1997, giving effect on a pro forma basis to the
acquisition of Dearborn.
(c) Exhibits.
*10.1 Asset Purchase Agreement, dated March 31, 1997, between Cable
Design Technologies Inc., Dearborn/CDT, Inc., Dearborn West/CDT,
Inc. and Thermax/CDT, Inc. and Dearborn Wire and Cable L.P.,
Dearborn West L.P. and Thermax Wire, L.P.
______________________________
*Previously filed.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Cable Design Technologies Corporation
By: /s/ Kenneth O. Hale
-----------------------------------------
Name: Kenneth O. Hale
Title: Vice President, Chief Financial Officer
and Secretary
Dated: June 10, 1997
<PAGE>
DEARBORN WIRE AND CABLE L.P.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Dearborn Wire and Cable L.P.:
We have audited the accompanying consolidated balance sheets of DEARBORN WIRE
AND CABLE L.P. AND SUBSIDIARIES as of December 31, 1996 and 1995, and the
related consolidated statements of income and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dearborn Wire and Cable L.P.
and Subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 15, 1997
<PAGE>
DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
- ------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,301,290 $ 3,100,871
Receivables, less allowance for doubtful accounts of $294,000 and 11,168,533 10,105,284
$251,000 for 1996 and 1995, respectively
Inventories (Note 1) 17,310,066 17,823,258
Prepaid expenses 481,327 297,846
------------- -----------
Total current assets 34,261,216 31,327,259
------------- -----------
PROPERTY, PLANT AND EQUIPMENT:
Land 475,891 475,891
Buildings 2,735,970 2,735,970
Leasehold improvements 2,948,602 294,659
Machinery and equipment 8,335,014 7,606,089
Office furniture and equipment 1,927,583 1,510,718
Vehicles 98,528 84,326
Construction in progress 97,077 1,162,099
------------ ----------
16,618,665 13,869,752
Less - Accumulated depreciation 8,630,643 7,570,733
------------- -----------
Property, plant and equipment, net 7,988,022 6,299,019
------------- -----------
OTHER ASSETS:
------------- -----------
Intangible 2,793,207 2,793,207
Other 65,085 85,536
------------- -----------
Total other assets 2,858,292 2,878,743
------------- -----------
$45,107,530 $40,505,021
============= ===========
LIABILITIES AND PARTNERSHIP EQUITY
- ------------------------------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 275,000 $ 255,000
Accounts payable and accrued expenses 10,149,245 9,864,855
------------ ----------
Total current liabilities 10,424,245 10,119,855
------------- -----------
LONG-TERM DEBT, less current portion shown above 620,000 895,000
------------- -----------
DEFERRED COMPENSATION 168,038 151,873
------------- -----------
EXCESS OF ACQUIRED NET ASSETS OVER COST, net of
accumulated amortization of $289,256 and $204,596 at December 31,
1996 and 1995, respectively 134,073 218,733
------------- -----------
MINORITY INTEREST IN SUBSIDIARIES 732,203 561,386
------------- -----------
PARTNERSHIP EQUITY 33,028,971 28,558,174
------------- -----------
$45,107,530 $40,505,021
============= ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE>
DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------- -----------
<S> <C> <C>
NET SALES $87,910,760 $83,718,078
------------- ----------
OPERATING EXPENSES:
Cost of materials 46,625,453 43,977,254
Warehouse and manufacturing 16,705,103 15,335,239
Selling 5,465,456 5,027,163
General and administrative 7,375,819 6,854,058
------------- ----------
Total operating expenses 76,171,831 71,193,714
------------- ----------
Operating income 11,738,929 12,524,364
------------- ----------
OTHER INCOME (EXPENSE):
Interest income 167,392 168,778
Interest expense (68,186) (139,002)
Minority interest in income of subsidiaries (314,825) (200,622)
Professional fees relating to nonoperating activity (485,152) (496,096)
Miscellaneous 104,615 (34,975)
------------- ----------
Other expense, net (596,156) (701,917)
------------- ----------
NET INCOME BEFORE TAXES 11,142,773 11,822,447
PROVISION FOR STATE INCOME TAXES 216,921 94,809
------------- ----------
NET INCOME FOR THE YEAR 10,925,852 11,727,638
PARTNERSHIP EQUITY, beginning of year 28,558,174 22,069,153
DISTRIBUTIONS (Note 9) (6,455,055) (5,238,617)
------------- -----------
PARTNERSHIP EQUITY, end of year $33,028,971 $28,558,174
============= ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year $10,925,852 $11,727,638
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 1,027,426 685,058
Minority interest in income of subsidiaries 314,825 200,622
Change in operating assets and liabilities:
Increase in receivables (1,063,246) (879,946)
Decrease (increase) in inventories 513,193 (2,724,391)
Increase in prepaid expenses (183,481) (48,035)
Increase in accounts payable and accrued expenses 284,390 1,525,773
Increase in deferred compensation 16,165 20,235
------------- ----------
Net cash provided by operating activities 11,835,124 10,506,954
------------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,780,642) (2,919,091)
Investment in joint venture - (51,725)
------------- ----------
Net cash used in investing activities (2,780,642) (2,970,816)
------------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable - (2,000,000)
Payments on long-term debt (255,000) (235,000)
Distributions to partners (6,455,055) (5,238,617)
Distributions to minority interest in subsidiaries (144,008) (106,342)
------------- ----------
Net cash used in financing activities (6,854,063) (7,579,959)
------------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,200,419 (43,821)
CASH AND CASH EQUIVALENTS, beginning of year 3,100,871 3,144,692
------------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 5,301,290 $ 3,100,871
============= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ 69,491 $ 140,196
Cash paid during the year for state income taxes 171,740 130,520
============= ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Dearborn Wire and Cable L.P. and Subsidiaries (the Partnership) consists of four
divisions which are operated in the Chicago, Illinois, area as separate trades
within the Partnership as follows:
Dearborn Wire and Cable (DWC) is primarily engaged in the manufacture of wire
and cable extrusions and the distribution of wire.
American Electronic Wire is a distributor of primarily surplus wire and cable.
Kerrigan Lewis Electronics is engaged in the manufacture of customer-specified
assemblies used primarily in the electronics industry.
Kerrigan Lewis Wire Products is engaged in the manufacture of litz wire and
cable.
Dearborn West L.P. (West) is a 81.5%-owned subsidiary of the Partnership. West
is located in California and is engaged in the distribution of wire.
Thermax Wire L.P. (Thermax) is a 99%-owned subsidiary of the Partnership.
Thermax has three locations - Whitestone, New York; Northridge, California; and
Nogales, Mexico; and is engaged in the manufacture and distribution of high
temperature electronic specialty wire.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Partnership
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated in the consolidation.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand and funds held in short-term investments with a maturity of three months or
less.
<PAGE>
INVENTORIES
The DWC division, West and Thermax determine inventory costs utilizing the last-
in, first-out ("LIFO") method of accounting for inventories. All other
divisions determine inventory costs utilizing the first-in, first-out ("FIFO")
method of accounting for inventories.
The components of inventories as of December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Inventories valued using FIFO $ 3,909,458 $ 5,378,406
----------- -----------
Inventories valued using LIFO:
At FIFO cost 14,304,574 14,278,965
Less-Reduction to LIFO cost (903,966) (1,834,113)
----------- -----------
LIFO inventories 13,400,608 12,444,852
----------- -----------
Total inventories $17,310,066 $17,823,258
=========== ===========
Inventory composition:
Raw materials $ 5,118,695 $ 5,277,418
Work in process 1,672,585 1,890,651
Finished goods 10,518,786 10,655,189
----------- -----------
$17,310,066 $17,823,258
=========== ===========
</TABLE>
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is provided over
the estimated useful lives of the respective assets using a combination of
accelerated and straight-line methods. The estimated useful lives are as
follows:
<TABLE>
<CAPTION>
ASSET DESCRIPTION ASSET LIFE
----------------- ----------
<S> <C>
Buildings 10 to 35 years
Leasehold improvements 5 to 31.5 years
Machinery and equipment 5 to 8 years
Office furniture and equipment 3 to 8 years
Vehicles 3 to 5 years
</TABLE>
Depreciation expense included in the consolidated statements of income was
approximately $1,092,000 and $749,000 for the years ended December 31, 1996 and
1995, respectively.
<PAGE>
INTANGIBLE
The intangible asset represents the excess of cost over the fair value of net
assets of one of the divisions at the date that division was acquired (which was
prior to November 1, 1970). the excess is not being amortized against
operations. In management's opinion, this intangible asset is considered to
have continuing value over an indefinite period of time.
EXCESS OF ACQUIRED NET ASSETS OVER COST
In 1993, the Partnership acquired assets and assumed liabilities related to
Thermax. The excess of the fair market value of net assets purchased over
acquisition cost of approximately $423,000 is being amortized as a credit to
income on a straight-line basis over five years from the date of acquisition.
LONG-LIVED ASSETS
The Company continually evaluates whether circumstances have occurred that
indicate the remaining useful life of its long-lived assets may warrant revision
or that the remaining balance of such assets may not be recoverable. When
factors indicate that such assets should be evaluated for possible impairment,
the Company uses an estimate of the related business segment's undiscounted cash
flows over the remaining life of the asset in measuring whether the asset is
recoverable.
MANAGEMENT'S USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expense during the reporting period. Actual
results could differ from those estimates.
2. RELATED-PARTY TRANSACTIONS
AFFILIATED COMPANIES
During 1996 and 1995, the Partnership transacted business with Cable Technology,
Inc. (Cable Technology). Certain partners of the Partnership are among the
owners of Cable Technology. Purchases from this related party were
approximately $874,000 and $955,000 for the years ended December 31, 1996 and
1995, respectively.
The Partnership was the guarantor of two obligations incurred by affiliated
companies totaling approximately $2,107,000 and $2,223,000 at December 31, 1996
and 1995, respectively.
<PAGE>
In June of 1992, the Partnership entered into a lease agreement with an
affiliated company that expires on May 31, 1997. Rent payments to the
affiliated company for the years ended December 31, 1996 and 1995, were
approximately $243,000 per year.
3. DEBT
Long-term debt consists of a note payable to the Village of Wheeling, Illinois,
under an industrial revenue bond arrangement and bears interest at approximately
5.94% at December 31, 1996 and 1995. The note was paid in full on April 7,
1997, the date of acquisition (see Note 13).
A guaranty agreement relating to these notes contains restrictive covenants
regarding minimum Partnership equity and working capital requirements and
limitations on payments of distributions to partners, among other things. At
December 31, 1996, the Partnership was in compliance with or had received
waivers for all covenants.
4. INCOME TAXES
The income of the Partnership will be included with that of each partner for
income tax purposes. The Partnership is responsible only for certain state
income taxes.
5. 401(K) PLAN
The Partnership sponsors a 401(k) defined contribution plan covering
substantially all employees. A portion of compensation deferred by nonunion
employees is matched by the Partnership, subject to certain vesting provisions.
Partnership contributions to the plan totaled approximately $166,000 and
$167,000 for the years ended December 31, 1996, and 1995, respectively.
6. EMPLOYMENT AGREEMENTS
Under agreements dated June 1, 1992, between the Partnership and two of its
partners, the Partnership agreed to compensate these partners, who are active
participants in the operation of the business, at a fixed annual salary plus a
bonus equal to a percentage of the Partnership's net income as defined in the
agreements. This compensation is included in general and administrative expenses
in the determination of net income.
The Partnership also has deferred compensation arrangements with certain
employees. Amounts earned each year vest ratably over periods ranging from three
to five years. Such amounts are paid out over periods ranging from three to six
years. Amounts are fully expensed in the year earned. Included in accounts
payable and accrued expenses is the portion of deferred compensation to be paid
in the next year.
<PAGE>
7. MINORITY INTEREST IN SUBSIDIARY
As of December 31, 1996 and 1995, the minority interest in subsidiary is offset
by a long-term note receivable of approximately $128,500 due from one of the
West limited partners and demand notes of approximately $23,500 due from the
West general partners.
8. SIGNIFICANT CUSTOMER
The Partnership had one nonaffiliated customer who provided approximately 13%
and 16% of net sales for the year ended December 31, 1996 and 1995,
respectively.
9. PARTNERSHIP DISTRIBUTIONS
Partnership distributions include preferential payments to a partner which are
not guaranteed by the Partnership, as defined in the Partnership agreement.
Preferential distributions paid for the years ended December 31, 1996 and 1995,
were $200,000 and $150,000, respectively. Subsequent to year-end, preferential
payments of $100,000 were made to the above partner and additional payments of
approximately $3,532,000 were distributed to all partners.
10. LEASE COMMITMENTS
The Partnership leases certain property and equipment from unaffiliated
companies under various operating leases. The leases expire at various dates
through September 1999. Rent expense charged to operations relating to all
unaffiliated operating leases for the year ended December 31, 1996, was
approximately $675,000.
The future minimum lease payments are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $290,070
1998 220,869
1999 65,652
2000 9,972
2001 5,140
--------
$591,703
========
</TABLE>
11. RECLASSIFICATION
Certain 1995 balances have been reclassed to conform with 1996 presentation.
<PAGE>
12. CONTINGENCIES
From time to time, the Company is subject to litigation proceedings resulting
from the conduct of its business. In the opinion of management, the ultimate
disposition of such matters discussed above will not have a materially adverse
effect on the financial position of the Company.
13. SUBSEQUENT EVENT
Effective at the opening of business on April 7, 1997, Cable Design
Technologies, Inc. (CDT) acquired substantially all of the net assets of
Dearborn Wire and Cable L.P.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following Pro Forma Condensed Consolidated Financial Statements are based on
the historical financial statements of Cable Design Technologies Corporation
(the "Company") and of Dearborn Wire and Cable L.P. and Subsidiaries
("Dearborn"), adjusted to give effect to the acquisition of Dearborn by the
Company.
The unaudited pro forma condensed consolidated statements of income for the year
ended July 31, 1996, and the six months ended January 31, 1997, assume that such
event had occurred on August 1, 1995. The unaudited pro forma condensed balance
sheet gives effect to the acquisition of Dearborn by the Company as if the event
had occurred on January 31, 1997.
The pro forma financial information reflects the purchase method of accounting
for the acquisition of Dearborn and, accordingly, is based on estimated purchase
accounting adjustments that are subject to further revision upon completion of
any appraisals or other studies of the fair value of Dearborn's assets and
liabilities. Final purchase accounting adjustments will differ from the pro
forma adjustments presented herein and described in the accompanying notes due
to the results of operation of Dearborn from December 31, 1996, to the date of
the closing, April 7, 1997.
The pro forma financial information does not purport to present what the
Company's results of operations would actually have been if the acquisition of
Dearborn had occurred on the assumed dates, as specified above, or to project
the Company's financial condition or results of operations for any future
period.
The Pro Forma Condensed Consolidated Financial Statements should be read in
conjunction with the audited consolidated financial statements of the Company
and the related notes thereto which are included in the Company's Annual Report
on Form 10-K for its fiscal year ended July 31, 1996, the Company's Current
Report on Form 8-K dated April 22, 1997, (each as filed with the Securities and
Exchange Commission) and the audited financial statements of Dearborn that are
filed herewith as item 7(a).
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JANUARY 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ACQUISITION PRO FORMA
HISTORICAL HISTORICAL PRO FORMA RESULTS
CDT DEARBORN ADJUSTMENTS CONSOLIDATED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(a) (b)
<S> <C> <C> <C> <C> <C>
Net Sales $ 229,928 $43,600 $ 273,528
Cost of Sales 159,961 31,414 (291)(c) 191,649
465 (d)
100 (e)
----------------- -------------- ----------- -----------
Gross Profit 69,967 12,186 (274) 81,879
Selling, general and administrative
expenses 42,181 6,769 (122)(f) 49,633
805 (g)
----------------- -------------- ----------- -----------
Income from operations 27,786 5,417 (957) 32,246
Interest (income) expense, net 2,143 (66) 2,473 (h) 4,550
Minority interest 145 (145)(i) ---
Other (income) expense, net 140 (3) 137
----------------- -------------- ----------- -----------
Income before income taxes 25,503 5,341 (3,285) 27,559
Income tax provision 9,425 104 760 (j) 10,289
----------------- -------------- ----------- -----------
Net income $ 16,078 $ 5,237 $(4,045) $ 17,270
================= ============== =========== ===========
Net income per share of common stock $0.78 $0.84
================= ============== =========== ===========
Weighted average number of common
shares and equivalents 20,533,427 50,218 (k) 20,583,645
================= ============== =========== ===========
</TABLE>
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JANUARY 31, 1997
(a) The historical financial results of CDT represent the six month period
ending January 31, 1997.
(b) The financial results of Dearborn represent the six month period ending
December 31, 1996.
(c) This pro forma adjustment represents a reduction to annual depreciation
expense based on the estimated fair values and remaining lives of the fixed
assets.
(d) This pro forma adjustment represents the increase to cost of sales for the
period assuming the FIFO valuation of inventory methodology was adopted
upon the assumed effective date of the transaction. The Company intends to
adopt the Fifo method of inventory valuation as of the acquisition date.
(e) This pro forma adjustment represents the estimated cost of maintaining
quality assurance under ISO 9002 programs.
(f) This pro forma adjustment represents reversal of non-recurring legal
expenses.
(g) This pro forma adjustment represents the net adjustment to amortization
expense based on the estimated value of goodwill and other intangibles,
amortized over a period of 35 years and 7 years, respectively.
(h) This pro forma adjustment represents additional interest related to
acquisition debt.
(i) This pro forma adjustment represents the reversal of minority interest in
the income of subsidiaries.
(j) This pro forma adjustment represents tax on historical Dearborn results and
the net impact on tax expense as a result of the above pro forma
adjustments.
(k) This pro forma adjustment represents CDT shares purchased by certain of
the selling parties under the provisions of the asset purchase agreement.
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED JULY 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ACQUISITION PRO FORMA
HISTORICAL HISTORICAL PRO FORMA RESULTS
CDT DEARBORN ADJUSTMENTS CONSOLIDATED
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(a) (a) (k)
<S> <C> <C> <C> <C>
Net Sales $ 357,352 $87,417 $ 444,769
Cost of Sales 245,533 62,564 (373)(b) 308,411
487 (c)
200 (d)
-------------- ------------ ------------- -----------
Gross Profit 111,819 24,853 (314) 136,358
Selling, general and
administrative expenses 63,562 13,144 (733)(e) 77,583
1,610 (f)
Non-recurring charges 16,730 16,730
-------------- ------------ ------------- -----------
Income from operations 31,527 11,709 (1,191) 42,045
Interest (income) expense, net 5,362 (76) 5,379 (g) 10,665
Minority interest 248 (248)(h) ---
Other expense, net 271 108 379
-------------- ------------ ------------- -----------
Income before income taxes
and extraordinary items 25,894 11,429 (6,322) 31,001
Income tax provision 10,013 158 1,987 (i) 12,158
-------------- ------------ ------------- -----------
Income before extraordinary
items 15,881 11,271 (8,309) 18,843
Extraordinary loss on
early extinguishment of
debt 596 596
-------------- ------------ ------------- -----------
Net income $ 15,285 $11,271 $(8,309) $ 18,247
============== ============ ============= ===========
Income per share of common
stock:
Income before
extraordinary items $0.85 $1.01
Extraordinary loss (0.03) (0.03)
-------------- ------------ ------------ ----------
Net income $0.82 $0.98
============== ============ ============ ==========
Weighted average number of
common shares and
equivalents 18,626,792 50,218 (j) 18,677,010
============== ============ ============= ==========
</TABLE>
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED JULY 31, 1996
(a) The historical financial results represent the twelve month periods ending
July 31, 1996, for CDT and ending June 30, 1996, for Dearborn.
(b) This pro forma adjustment represents a reduction to annual depreciation
expense based on the estimated fair values and remaining estimated lives of
the fixed assets.
(c) This pro forma adjustment represents the increase to cost of sales for the
period assuming the FIFO valuation of inventory methodology was adopted
upon the assumed effective date of the transaction. The Company intends to
adopt the Fifo method of inventory valuation as of the acquisition date.
(d) This pro forma adjustment represents the estimated cost of maintaining
quality assurance under ISO 9002 programs.
(e) This pro forma adjustment represents the reversal of non-recurring legal
expenses.
(f) This pro forma adjustment represents the net adjustment to amortization
expense based on the estimated value of goodwill and other intangibles,
amortized over a period of 35 years and 7 years, respectively.
(g) This pro forma adjustment represents additional interest related to
acquisition debt.
(h) This pro forma adjustment represents the reversal of minority interest in
the income of subsidiaries.
(i) This pro forma adjustment represents tax on historical Dearborn results and
the net impact on tax expense as a result of the above pro forma
adjustments.
(j) This pro forma adjustment represents CDT shares purchased by certain of the
selling parties under the provisions of the asset purchase agreement.
(k) Pro forma results consolidated presented below represent the effect of
certain transactions that occurred during Fiscal 1996: the Offering and the
acquisitions of NORDX/CDT and Raydex/CDT, excluding the effect of
nonrecurring and extraordinary charges, as previously described and
disclosed in the Company's July 31, 1996 Annual Report and Form 10-K. These
adjustments are being made to reflect these transactions as if they had
occurred as of August 1, 1995 to include the effect of such transactions
on a full twelve month's basis.
(Pro forma unaudited)
Year ended
July 31, 1996
----------------------
(Dollars in thousands)
Net Sales $550,332
Income before extraordinary items 32,173
Net income 32,173
Net income per common share $ 1.58
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JANUARY 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACQUISITION PRO FORMA
HISTORICAL HISTORICAL PRO FORMA RESULTS
CDT DEARBORN ADJUSTMENTS CONSOLIDATED
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(a) (b)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 14,268 $ 5,301 $ (8,000)(c) $ 11,569
Accounts receivable, net of allowance 92,611 11,169 103,780
Inventories 104,334 17,310 904 (d) 122,548
Other current assets 7,333 481 7,814
------------- ---------- ------------ --------
Total current assets 218,546 34,261 (7,096) 245,711
Property, plant and equipment, net 94,357 7,988 1,942 (e) 104,287
Intangible assets 4,274 3,000 (f) 7,274
Goodwill, net of amortization 16,126 2,793 (2,793)(g) 51,591
35,465 (f)
Other assets 1,211 65 1,276
------------- ---------- ------------ --------
Total assets $334,514 $45,107 $ 30,518 $410,139
LIABILITIES
Current maturities of long-term debt $ 8,403 $ 275 $ (275)(h) $ 8,403
Accounts payable 34,000 6,251 40,251
Other accrued liabilities 22,758 3,898 (1,350)(h) 25,869
563 (i)
------------- ---------- ------------ --------
Total current liabilities 65,161 10,424 (1,062) 74,523
Long-term debt 75,405 620 (620)(h) 75,405
66,095 (c) 66,095
Other 5,653 302 (134)(j) 5,821
Deferred income taxes 5,643 5,643
------------- ----------- ------------ --------
Total liabilities 151,862 11,346 64,279 227,487
MINORITY INTEREST IN SUBSIDIARIES 732 (732)(h) ---
STOCKHOLDERS' EQUITY
Preferred stock --- ---
Common stock 184 184
Paid in capital 154,683 154,683
Deferred compensation (174) (174)
Retained earnings 28,262 28,262
Partnership equity 33,029 (33,029)(k) ---
Currency translation adjustment (303) (303)
-------------- ---------- ------------ --------
Total stockholders' equity 182,652 33,029 (33,029) 182,652
Total liabilities and stockholders' equity $334,514 $45,107 $ 30,518 $410,139
============== ========== ============ ========
</TABLE>
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JANUARY 31, 1997
(a) The historical balance sheet of CDT is as of January 31, 1997.
(b) The historical balance sheet of Dearborn is as of December 31, 1996
(c) This pro forma adjustment records the cash payment and acquisition debt to
finance the purchase of Dearborn.
(d) This pro forma adjustment reflects a change in accounting principle from
the LIFO to the FIFO method of inventory valuation, which the Company
intends to adopt as of the acquisition date.
(e) This pro forma adjustment represents the adjustment of property, plant and
equipment to their estimated fair values.
(f) This pro forma adjustment represents the recording of estimated goodwill
and intangibles based on the net assets acquired and the consideration
paid.
(g) This pro forma adjustment represents the elimination of historical Dearborn
goodwill.
(h) This pro forma adjustment reflects the elimination of Dearborn liabilities
not assumed in the transaction; in accordance with the purchase agreement.
(i) This pro forma adjustment reflects the estimated acquisition costs incurred
to consummate the transaction.
(j) This pro forma adjustment represents the elimination of historical Dearborn
negative goodwill.
(k) This pro forma adjustment reflects the elimination of the acquired net
equity of Dearborn.
