SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
Date of Report
(Date of earliest
event reported): May 31, 1996
LaCrosse Footwear, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 0-238001 39-1446816
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1319 St. Andrew Street, LaCrosse, Wisconsin 54603
(Address of principal executive offices, including zip code)
(608) 782-3020
(Registrant's telephone number)
<PAGE>
The undersigned registrant hereby amends Item 7 of its Current
Report on Form 8-K dated June 14, 1996 to provide in its entirety as
follows:
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Independent Auditor's Report
Financial Statements
Balance Sheet
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Summary of Significant Accounting Policies
Notes to Financial Statements
<PAGE>
Board of Directors
Rainfair, Inc.
Racine, Wisconsin
Independent Auditor's Report
We have audited the accompanying balance sheet of Rainfair, Inc. as of
April 30, 1996, and the related statements of operations, stockholders'
equity and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our 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 financial statements referred to above present fairly,
in all material respects, the financial position of Rainfair, Inc. as of
April 30, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.
As discussed in Note 11, the Company changed its method of accounting for
post-retirement health care benefits.
As discussed in Note 12 to the financial statements, subsequent to April
30, 1996, the Company has announced its intentions to sell all operating
assets and liabilities of Rainfair, Inc. to a joint venture owned by its
current owner and LaCrosse Footwear, Inc. This subsequent event is not
reflected in the accompanying financial statements.
/s/ CLIFTON, GUNDERSON & CO.
Racine, Wisconsin
May 24, 1996
<PAGE>
RAINFAIR, INC.
BALANCE SHEET
April 30, 1996
ASSETS
CURRENT ASSETS
Cash $ 2,382
Accounts receivable, less allowance for doubtful
accounts of $100,000 2,837,641
Inventories 5,994,010
Prepaid expenses 93,898
Current portion of deferred income taxes 82,000
---------
Total current assets 9,009,931
---------
PROPERTY AND EQUIPMENT
Buildings and improvements 659,564
Machinery and equipment 727,457
Furniture and fixtures 492,519
-------
Total, at cost 1,879,540
Less accumulated depreciation 1,220,888
---------
Total property and equipment 658,652
---------
OTHER ASSETS
Unamortized pension cost 78,517
Deferred income taxes, less current portion above 161,000
---------
Total other assets 239,517
---------
TOTAL ASSETS $ 9,908,100
=========
<PAGE>
STATEMENT 1
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable to bank $6,445,677
Note payable to stockholder 275,000
Current maturities of long-term debt 92,707
Accounts payable 983,470
Accrued liabilities
Payroll and related taxes 145,271
Other 173,261
Income taxes 76,241
Deferred compensation 10,855
---------
Total current liabilities 8,202,482
---------
LONG-TERM LIABILITIES
Long-term debt, less current maturities above 817,851
Unfunded pension liability 435,043
Other unfunded post-retirement benefits 19,982
Deferred compensation 41,166
---------
Total long-term liabilities 1,314,042
---------
Total liabilities 9,516,524
---------
STOCKHOLDERS' EQUITY
Common stock, no par value; 2,800 shares
authorized, 2,000 shares issued and
outstanding 2,000
Retained earnings 572,778
---------
574,778
Treasury stock, 1,256 shares at cost (160,000)
Excess of additional pension liability
over unrecognized prior service cost (23,202)
---------
Total stockholders' equity 391,576
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,908,100
==========
These financial statements should be read only in connection with the
accompanying summary of significant accounting policies and notes to
financial statements.
<PAGE>
STATEMENT 2
RAINFAIR, INC.
STATEMENT OF OPERATIONS
Year Ended April 30, 1996
NET SALES $17,366,159
COST OF SALES 14,009,289
----------
Gross profit 3,356,870
OPERATING EXPENSES
Selling 1,039,278
General and administrative 1,377,950
---------
Total operating expenses 2,417,228
---------
Income from operations 939,642
OTHER INCOME (EXPENSE)
Interest expense (780,918)
Gain on disposal of assets 4,444
Miscellaneous 4,503
---------
Income before income taxes 167,671
PROVISION FOR INCOME TAXES 38,000
---------
NET INCOME $ 129,671
=========
These financial statements should be read only in connection with the
accompanying summary of significant accounting policies and notes to
financial statements.
<PAGE>
STATEMENT 3
<TABLE>
RAINFAIR, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Year Ended April 30, 1996
<CAPTION>
Unrealized
Common Retained Treasury Pension
Stock Earnings Stock Loss Total
<S> <C> <C> <C> <C> <C>
BALANCE, BEGINNING OF YEAR 2,000 $443,107 $(160,000) $(65,018) $220,089
Change in excess of additional
pension liability over
unrecognized prior service
cost, net of tax - - - 41,816 41,816
Net income 129,671 - - 129,671
----- -------- ------- ------- -------
BALANCE, END OF YEAR 2,000 $572,778 $(160,000) $(23,202) $391,576
===== ======== ======== ======= =======
</TABLE>
These financial statements should be read only in connection with the
accompanying summary of significant accounting policies and notes to
financial statements.
<PAGE>
STATEMENT 4
RAINFAIR, INC.
STATEMENT OF CASH FLOWS
Year Ended April 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 129,671
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 72,365
Deferred income taxes (28,000)
Allowance for doubtful accounts 70,000
Unfunded pension liability 6,101
Other unfunded post-retirement benefits 19,982
Gain on disposal of assets (4,444)
Changes in operating assets and liabilities:
Increase in accounts receivable (641,808)
Increase in inventories (782,032)
Increase in prepaid expenses (11,805)
Increase in accounts payable 155,966
Increase in accrued liabilities 24,392
Decrease in deferred compensation (8,630)
--------
Net cash used in operating activities (998,242)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment 11,429
Purchase of equipment (74,344)
-------
Net cash used in investing activities (62,915)
-------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 18,426,557
Principal payments on borrowings (17,208,265)
Decrease in cash management draw (154,753)
----------
Net cash provided by financing
activities 1,063,539
---------
NET INCREASE IN CASH 2,382
CASH, BEGINNING OF YEAR -
--------
CASH, END OF YEAR
$ 2,382
========
These financial statements should be read only in connection with the
accompanying summary of significant accounting policies and notes to
financial statements.
<PAGE>
RAINFAIR, INC.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
April 30, 1996
Rainfair, Inc. was incorporated on March 27, 1984 in the State of
Wisconsin. The Company manufactures protective clothing and imports boots
and clothing for the industrial and consumer markets and grants credit to
its customers, substantially all of whom are in the United States. The
Company's fiscal year end is April 30. The significant accounting
policies followed by the Company are presented below:
USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
INVENTORIES
Inventories are stated at the lower of cost or market, with cost
determined on a last-in, first-out (LIFO) basis.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Maintenance and repairs,
including the replacement of minor items, are expensed as incurred, and
major additions to property and equipment are capitalized.
Depreciation is provided by the Company on both the straight-line and
accelerated methods over the estimated useful lives of the related assets
after allowing for estimated salvage value on selected assets.
INCOME TAXES
Current tax liabilities or assets are recognized for the estimated taxes
payable or refundable on tax returns for the current year. Deferred
income taxes are provided on temporary differences between financial
statement and income tax reporting. Temporary differences are differences
between the amounts of assets and liabilities reported for financial
statement purposes and their tax bases. Deferred tax liabilities are
recognized for temporary differences that will be taxable in future years'
tax returns. Deferred tax assets are recognized for temporary differences
that will be deductible in future years' tax returns and for operating
loss and tax credit carryforwards. Deferred tax assets are reduced by a
valuation allowance if it is deemed more likely than not that some or all
of the deferred tax assets will not be realized.
PENSION EXPENSE
The Company's funded pension plan expense includes the normal cost plus
amortization of prior service costs over a 30-year period.
The Company annually provides for its unfunded pension plan expense by
calculating an estimated amount utilizing certain actuarial assumptions.
This information is an integral part of
the accompanying financial statements.
<PAGE>
RAINFAIR, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
NOTE 1 - INVENTORIES
Raw materials $ 830,111
Work in process 130,151
Finished goods 7,233,415
---------
8,193,677
Less adjustment to LIFO basis 2,199,667
---------
Total $5,994,010
=========
NOTE 2 - DEBT
Note payable to bank
At April 30, 1996, the Company had a line-of-credit agreement with a bank
which provides a commitment to borrow amounts based on inventory and
accounts receivable percentages. $6,445,677 was outstanding at April 30,
1996. In addition, $288,606 in letters-of-credit were outstanding at
April 30, 1996. Interest is computed daily at the bank's reference rate
plus one and one-quarter percent on the commercial loan (9.5% at April 30,
1996) and is payable monthly. In addition, interest is computed daily on
the balance of outstanding letters of credit at a fixed 3% annual rate.
The outstanding borrowings are collateralized by accounts receivable,
inventories and life insurance policies. This agreement is renewable on
an annual basis.
Note payable to stockholder
The note payable to stockholder, due January, 1997, secured by assets of
the Company, bears interest at 1% over prime (9.25% at April 30, 1996,
with interest payable monthly.
Long-term debt
Promissory note due in semi-annual payments through
January, 1999, with interest at 8%. Secured by
inventories, accounts receivable, and life
insurance policies. $ 38,572
Promissory note with interest payable annually at 4%.
Principal payments which began December, 1995, with final
payment due December, 2009, secured by a second
mortgage on real estate and building. 840,000
Promissory note, unsecured, due in monthly
installments through October, 1997, with interest
at 8.7% 31,986
-------
Total 910,558
Less current portion 92,707
-------
Long-term portion $817,851
=======
Future maturities of long-term debt are as follows:
Fiscal Year Ending Amount
1997 $ 92,707
1998 83,973
1999 73,878
2000 60,000
2001 60,000
Thereafter 540,000
-------
Total $ 910,558
=======
NOTE 3 - PENSION, PROFIT SHARING AND 401(k) SAVINGS PLANS
The Company has a non-contributory defined benefit pension plan covering
all eligible hourly employees. The Company's policy is to fund pension
cost within the allowable range that is deductible for Federal income tax
purposes.
The plan's funded status projected to the latest actuarial valuation date
is as follows:
March 31,
1996
Vested benefit obligation $ 1,408,370
Nonvested benefit obligation 1,357
---------
Accumulated benefit obligation 1,409,727
Excess of projected benefit obligations over
accumulated benefit obligation -
---------
Projected benefit obligations 1,409,727
Plan assets at fair value 999,684
---------
Projected benefit obligations in excess
of plan assets 410,043
Unrecognized net loss 38,202
Unrecognized net transition asset 78,517
Additional liability (116,719)
--------
Unfunded accrued pension cost $410,043
========
Net pension cost for the years ended April 30 included the following
components:
Service cost $ 9,154
Interest cost 108,637
Actual return on plan assets (152,680)
Net amortization and deferral 94,965
-------
Periodic pension expense $60,076
=======
The expected long-term rate of return on assets was 8% and weighted-
average discount rate was 7.56% for 1996.
The Company also has a non-qualified and unfunded pension plan covering
some retired salaried employees. The estimated present value of
accumulated plan benefits was $25,000 as of April 30, 1996.
Pension expense under both pension plans was $66,256 in 1996.
Employees of the Company covered by a collective bargaining agreement may
participate in a 401(k) savings plan, whereby the employees may elect to
make contributions pursuant to a salary reduction agreement. The Company
makes a matching contribution of $.40 for each dollar of electing
employees' deferrals up to a maximum of 5%.
Employees of the Company that are not covered by collective bargaining
agreements may participate in a 401(k) savings plan, whereby the employees
may elect to make contributions pursuant to a salary reduction agreement.
The Company makes a matching contribution of $.50 for each dollar of
electing employees' deferrals up to a maximum of 5%.
The Company may also make discretionary contributions to the savings and
retirement plans. Matching contributions were $27,000 in 1996.
NOTE 4 - DEFERRED COMPENSATION PLAN
The Company had an unfunded deferred compensation plan covering certain
specified corporate staff and officers. Participant accounts are
maintained and credited with accrued interest at the prime rate.
Participants may elect to receive payments over no more than ten years.
The plan has been discontinued and there will be no additional
participants.
Deferred compensation expense amounted to $4,913 in 1996.
NOTE 5 - CASH FLOW DISCLOSURES
Cash paid for interest and income taxes was as follows:
Interest $ 767,520
Income taxes 59,909
NOTE 6 - ADVERTISING
Advertising costs are expensed as incurred. Advertising expense totaled
$49,947 in 1996.
NOTE 7 - OPERATING LEASE
The Company leases its corporate headquarters and principal manufacturing
facility from the Company's sole shareholder. The lease term is from
April 1, 1989 to November 30, 2004, with an annual rental of approximately
$300,000, which will be adjusted at the beginning of the eleventh year to
current appraisal value. Rent expense paid under all operating leases
totaled $316,405, which includes $300,000 building rent.
Based on an independent appraisal it received, the Company believes that
the annual rent under this lease is no more or less than if it had been
with a third party.
The minimum future lease payments are as follows:
Fiscal Year Ending Amount
1997 $300,000
1998 300,000
1999 300,000
2000 300,000
2001 300,000
Thereafter 1,075,000
---------
Total $2,575,000
=========
NOTE 8 - PROVISION FOR INCOME TAXES
The sources of deferred tax assets and liabilities and the tax effects of
each are as follows:
Deferred tax assets:
Allowance for doubtful accounts $ 40,000
Deferred compensation 20,000
Accrued pension costs 126,000
Other accrued post-retirement benefits 8,000
Unrealized pension loss 15,000
Accrued vacation pay 2,000
Capitalized inventory costs 34,000
Manufacturers' sales tax credit carryforwards 7,000
-------
Total deferred tax assets 252,000
Deferred tax liability:
Tax over financial statement depreciation 9,000
-------
Net deferred tax asset $243,000
=======
The net deferred tax asset is presented in the accompanying balance sheet
as follows:
Current deferred tax asset $ 82,000
Long-term deferred tax asset 161,000
-------
$243,000
=======
The provision for income taxes consists of the following components:
Current $ 66,000
Deferred (28,000)
-------
Total provision for income taxes $ 38,000
=======
The Company has Wisconsin manufacturers' sales tax credits available for
carrying forward to offset future income tax of approximately $7,000,
expiring in varying amounts through April 30, 2011.
The Company's provision for income taxes differed from the tax that would
result from applying statutory Federal tax rates to income before income
taxes, primarily because of State income taxes, State tax credits utilized
and nondeductible expenses.
NOTE 9 - SIGNIFICANT CONCENTRATIONS
Generally accepted accounting principles require disclosure of information
about certain significant estimates and current vulnerabilities due to
certain concentrations. These matters include the following:
Collective Bargaining Arrangements
Substantially all of the Company's production employees are covered by a
collective bargaining agreement which is scheduled to expire July, 1997.
Major Customers
The Company derived approximately 21% of net sales in 1996 from one major
customer. As of April 30, 1996, the balance due from this customer was
approximately 17% of the company's accounts receivable.
NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist principally of cash and cash
equivalents, trade receivables and payables and notes payable. There are
no significant differences between the carrying value and fair value of
any of these financial instruments except for the note which bears
interest at 4%. The book value of this note is $840,000 and the fair
value is estimated at $616,706 at April 30, 1996, based on an interest
rate of 9.5%.
NOTE 11 - POSTRETIREMENT HEALTH BENEFITS
The Company provides health insurance benefits to certain retirees under
an agreement with those individuals when they retired. The Company has
recorded the cost of such benefits on a "pay-as-you-go" (cash) basis.
Financial Accounting Standard No. 106, Employees' Accounting for
Postretirement Benefits Other Than Pension, became effective for the
Company for the year ended April 30, 1996. This standard requires
accrual, during the years that the employee renders the necessary service,
of the expected cost of providing those benefits.
The Company's unfunded liability for future health benefits as of April 1,
1995 was $265,243. As permitted under the standard, the Company has
elected a delayed recognition of the unfunded obligation, whereby the
transition obligation is amortized on a straight-line basis over the
average life expectancy period of the plan participants.
Disclosures required under FAS No. 106 as of March 31, 1996 are as
follows:
Delayed
Recognition
Discount rate 8%
Health Care Cost trend rates 10%, 9.5% 6%
10%, 9.5%...6%
Accumulated postretirement benefit obligation
as of March 31, 1996 $(258,701)
Fair value of plan assets -
--------
Funded status (258,701)
Unrecognized obligation at transition 238,719
Unrecognized prior service cost -
Unrealized gains and losses -
Accrued postretirement benefit cost 19,982
Net Periodic Postretirement Benefit Cost for 1996
Service cost -
Interest cost 20,152
Amortization of unrecognized obligation
at transition 26,524
-------
Net Periodic Postretirement Benefit Cost $ 46,676
=======
NOTE 12 - SUBSEQUENT EVENT
Subsequent to year-end, the Company reached an agreement to sell the
operating assets of Rainfair, Inc., subject to its operating liabilities,
to a joint venture owned by the Company's majority stockholder and
LaCrosse Footwear, Inc. The sales price exceeds the book value of the
Company's net assets. The joint venture will continue the business
operations of Rainfair, Inc. The sale is expected to be completed May 31,
1996.
This information is an integral part of
the accompanying financial statements.
<PAGE>
(b) Pro Forma Financial Information.
LACROSSE FOOTWEAR, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma financial information relates
to the May 31, 1996 acquisition by a 50% owned subsidiary (the "Subsidiary")
of LaCrosse Footwear, Inc. ("LaCrosse") of substantially all of the assets
of Rainfair, Inc. ("Rainfair") and the assumption of certain specified
liabilities (the "Acquisition"). The Acquisition was accounted for as a
purchase. The pro forma amounts have been prepared based on certain
purchase accounting and other pro forma adjustments (as described in the
accompanying notes) to the December 31, 1995 and March 30, 1996 historical
financial statements of both companies. In June, 1996, Rainfair's name
was changed and the Subsidiary's name was subsequently changed to Rainfair,
Inc.
The unaudited pro forma condensed consolidated statements of
income for the year ended December 31, 1995 and the quarter ended March 30,
1996 reflect the historical results of operations of both companies for the
year ended December 31, 1995 and quarter ended March 30, 1996 with pro
forma acquisition adjustments as if the Acquisition had occurred at the
beginning of the period presented. The unaudited pro forma condensed
consolidated balance sheet at March 30, 1996 reflects the historical
financial position of both companies at March 30, 1996, with pro forma
acquisition adjustments as if the Acquisition had occurred on March 30,
1996. The pro forma adjustments are described in the accompanying notes
and give effect to events that are (a) directly attributable to the
Acquisition, (b) factually supportable, and (c) in the case of certain
income statement adjustments, expected to have a continuing impact.
The unaudited pro forma condensed consolidated financial
statements should be read in connection with LaCrosse's Annual Report on
Form 10-K for the year ended December 31, 1995, along with the April 30,
1996 financial statements of Rainfair and related notes appearing elsewhere
in this Current Report on Form 8-K.
The unaudited pro forma financial information presented is for
information purposes only and does not purport to represent what LaCrosse's
and Rainfair's financial position or results of operations as of the dates
presented would have been had the Acquisition in fact occurred on such
dates or at the beginning of the periods indicated or to project
LaCrosse's consolidated financial position or results of operations for
any future date or period.
<PAGE>
PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
March 30, 1996
LaCrosse Pro Forma Pro
ASSETS Footwear Rainfair Adjustments Forma
Current assets: (Note 1)
Cash and cash
equivalents $223 $0 $0 $223
Accounts receivable 14,080 2,675 (57) 16,698
Inventories 28,044 6,592 1,858 36,494
Prepaid expenses 1,860 38 0 1,898
Deferred tax assets 1,719 0 0 1,719
------ ----- ----- ------
Total current
assets 45,926 9,305 1,801 57,032
Net Property and
equipment 11,878 665 0 12,543
Intangibles 13,636 0 518 14,154
Other assets 1,277 200 49 1,428
------ ------ ----- ------
Total assets $72,717 $10,170 $2,270 $85,157
====== ====== ===== ======
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of
long-term obligations $1,760 $277 $(277) $1,760
Borrowings under
credit agreement 0 6,939 2,835 9,774
Accounts payable 3,983 951 (325) 4,609
Accrued expenses 5,505 371 (11) 5,865
Dividends payable 29 0 0 29
Income taxes payable 162 35 (35) 162
------ ------ ------ ------
Total current
liabilities 11,439 8,573 2,187 22,199
Accrued postretirement
benefit cost 1,359 0 0 1,359
Accrued pension 0 312 118 430
Long-term obligations 4,892 911 (911) 4,892
Deferred compensation 1,481 53 (53) 1,481
------ ------ ------ ------
Total liabilities 19,171 9,849 1,341 30,361
====== ====== ====== ======
Minority interest 0 0 1,250 1,250
Redeemable preferred
stock 1,957 0 1,957
Total shareholders'
equity 51,589 321 (321) 51,589
------ ------ ------- -------
Total liabilities
and shareholders'
equity $72,717 $10,170 $2,270 $85,157
======= ======= ====== =======
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
<PAGE>
PRO FORMA CONDENSED
STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
Year Ended December 31, 1995
LaCrosse Pro Forma Pro
Footwear Rainfair Adjustments Forma
(Note 2)
Net sales $98,571 $16,846 $(470) $114,947
Cost of goods sold 72,011 13,459 (1,197) 84,273
------ ------ ------ -------
Gross profit 26,560 3,387 727 30,674
Selling and
administrative expenses 19,898 2,282 1,058 23,238
------ ------ ------ ------
Operating Income 6,662 1,105 (331) 7,436
Interest expense (1,457) (716) 175 (1,998)
Miscellaneous income
(expense) 266 (78) 5 193
------ ----- ------- -------
Income before income
taxes 5,471 311 (151) 5,631
Provision for income
taxes 2,143 99 (37) 2,205
------ ------- ------- ------
Net income before
minority interest 3,328 212 (114) 3,426
Minority interest in net
income of subsidiary 0 0 29 29
------ ------ ------ -------
Net income $3,328 $212 ($143 $3,397
====== ====== ====== =======
Net income available to
common shareholders $3,211 $3,280
====== ======
Earnings per common and
common equivalent share $0.48 $0.49
===== =====
Weighted average common
and common equivalent
shares outstanding 6,680 6,680
===== =====
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
<PAGE>
PRO FORMA CONDENSED
STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter ended March 30, 1996
LaCrosse Pro Forma Pro
Footwear Rainfair Adjustments Forma
(Note 2)
Net sales $22,131 $4,648 $(206) $26,573
Cost of goods sold 16,324 3,849 (467) 19,706
------ ----- ------ ------
Gross profit 5,807 799 261 6,867
Selling and administrative
expenses 5,253 600 278 6,131
----- ----- ------ ------
Operating income 554 199 (17) 736
Interest expense (180) (191) 44 (327)
Miscellaneous income 113 1 1 115
----- ------ ------ ------
Income before income taxes 487 9 28 524
Provision for income taxes 190 1 13 204
----- ------ ------ -------
Net income before minority
interest 297 8 15 320
Minority interest in net
income of subsidiary 0 0 7 7
Net income $297 $8 $8 $313
===== ===== ===== ======
Net income available
to common shareholders $268 $284
===== ======
Earnings per common and
common equivalent share $0.04 $0.04
===== =====
Weighted average common
and common equivalent
shares outstanding 6,677 6,677
===== =====
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share data)
NOTE 1
The pro forma condensed consolidated balance sheet has been prepared to
reflect the purchase by a 50% owned subsidiary of LaCrosse of
substantially all of the assets and the assumption of certain specified
liabilities of Rainfair, Inc. (the "Acquisition"). The assets have been
adjusted to their estimated fair value at March 30, 1996. The pro
forma adjustments as of March 30, 1996 reflect the following:
a) The allocation of excess of cost over the fair value of net assets
acquired to goodwill.
b) The restatement of the value of certain assets and liabilities to
their estimated fair market value.
c) The elimination of assets not acquired and liabilities not assumed
as part of the acquisition and the elimination of the LIFO reserve.
d) The financing for the acquisition.
NOTE 2
The pro forma condensed consolidated statements of operations for the year
ended December 31, 1995 and the three months ended March 30, 1996 are
based on the financial statements of LaCrosse and Rainfair for the twelve
months ended December 31, 1995 and the three months ended March 30, 1996,
respectively, after giving effect to the following pro forma adjustments:
a) Reduction of net sales and cost of sales resulting from the
elimination of sales from LaCrosse to Rainfair.
b) Reclassification of Rainfair's costs to conform with
classifications used by LaCrosse Footwear.
c) Change in operating expenses reflecting reduced depreciation
expense, amortization of goodwill based on a useful life of 15
years and increased facility costs reflecting the terms of a new
lease agreement for the Subsidiary's facility in Racine, Wisconsin.
d) Reduced interest expense, primarily due to lower borrowing costs
for LaCrosse and the improved capital structure of the Subsidiary.
e) Provision for income taxes resulting from incremental income using
LaCrosse's effective tax rate.
NOTE 3
The financial information of the Subsidiary utilized in the pro forma
condensed consolidated financial statements has been extracted from the
full financial statements of Rainfair. Certain expenses, such as deferred
compensation, were not acquired by the Subsidiary and therefore have not
been allocated to the Acquisition. Certain expenses, such as interest,
have been estimated. Income tax expense has been calculated using
LaCrosse's effective tax rate. Similarly, certain assets of Rainfair,
such as cash and deferred taxes, and certain liabilities, such as loans,
were not acquired by the Subsidiary and are therefore eliminated in the
pro forma adjustments.
NOTE 4
The purchase price for Rainfair has been allocated to the underlying
acquired assets and liabilities based on estimated fair values at the date
of the Acquisition. Such estimates may be revised at a later date. A
summary of the purchase price allocation is as follows.
Allocated to: (In Thousands)
Working capital other than cash $ 9,670
Property and equipment 659
Cost in excess of net assets of business acquired 518
-------
Purchase price $10,847
(c) Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed as
part of this Current Report on Form 8-K.
<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 thereunto duly authorized.
LACROSSE FOOTWEAR, INC.
Date: August 5, 1996 By: /s/ Robert J. Sullivan
Robert J. Sullivan
Vice President - Finance and
Administration
<PAGE>
LACROSSE FOOTWEAR, INC.
EXHIBIT INDEX TO FORM 8-K/A REPORT
Dated June 14, 1996
Exhibit
(2.1) Asset Purchase Agreement dated May 16, 1996, by
and among Rainco, Inc., LaCrosse Footwear, Inc.,
Rainfair, Inc. and Craig L. Leipold* [Previously
filed with this Current Report on Form 8-K]
(2.2) Shareholders' Agreement dated as of May 31, 1996
by and between Craig L. Leipold, LaCrosse
Footwear, Inc. and Rainco, Inc. [Previously filed
with this Current Report on Form 8-K]
(23) Consent of Clifton Gunderson L.L.C.
_____________
* The schedules and exhibits to this document are not being filed
herewith. The registrant agrees to furnish supplementally a copy of any
such schedule or exhibit to the Securities and Exchange Commission upon
request.
Exhibit (23)
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-77516, 33-77518 and 333-2702) pertaining
to the LaCrosse Footwear, Inc. Employees' Retirement Savings Plan, the
LaCrosse Footwear, Inc. Union Employees' Retirement Savings Plan and the
LaCrosse Footwear, Inc. 1993 Employee Stock Incentive Plan of our report
dated May 24, 1996 and the related financial statements of Rainfair, Inc.
for the year ended April 30, 1996 included in this Current Report on Form
8-K of LaCrosse Footwear, Inc.
CLIFTON, GUNDERSON L.L.C.
Racine, Wisconsin
August 2, 1996
