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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
FIRST AMENDMENT TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: October 14, 1994
Date of earliest
event reported: October 3, 1994
STANHOME INC.
_________________________________________________________________________
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-1349 04-1864170
_________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
333 WESTERN AVENUE, WESTFIELD, MASSACHUSETTS 01085
_________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (413) 562-3631
Total Number of Pages Contained Herein: 42
Index to Financial Statements and Pro Forma
Financial Information to this Form 8-K/A is on Page: 3
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on
Form 8-K dated October 14, 1994 as set forth in the pages attached hereto:
Item 7. Financial Statements and Exhibits.
The financial statements of businesses acquired and pro forma
financial information attached hereto and described on the following INDEX
TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION are hereby
filed as a part of the Current Report on Form 8-K dated October 14, 1994.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report amendment to be signed on its
behalf by the undersigned hereunto duly authorized.
STANHOME INC.____________________
(Registrant)
Date: December 14, 1994 By/s/G. William Seawright________
G. William Seawright, President
and Chief Executive Officer
<PAGE>
Item 7 Form 8-K/A Page No.
- ------ -------------------
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
Financial statements of businesses acquired
Lilliput Group plc consolidated 4
Group Profit and Loss Account and
Statement of Total Recognised
Gains and Losses for the year ended
December 31, 1993, December 31, 1993
Balance Sheet and Cash Flows for the
year ended December 31, 1993
Report of Independent Auditors 26
Consent of Independent Auditors 27
Lilliput Group plc condensed consolidated 28
Group Profit and Loss Account and
Total Recognised Gains and Losses
for the nine months ended September 30, 1994,
September 30, 1994 Balance Sheet and Cash Flows
for the nine months ended September 30, 1994
Pro forma financial information
Stanhome Inc. and Lilliput Group plc 35
September 30, 1994 Pro Forma Condensed
Consolidated Balance Sheet
Stanhome Inc. and Lilliput Group plc 38
for the year ended December 31, 1993
Pro Forma Condensed Consolidated
Statement of Income
Stanhome Inc. and Lilliput Group plc 40
for the nine months ended September 30,
1994 Pro Forma Condensed Consolidated
Statement of Income
Notes To Pro Forma Financial Information 42
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP PROFIT AND LOSS ACCOUNT FOR THE
YEAR ENDED 31 DECEMBER 1993
(1992 Unaudited)
<CAPTION>
Notes 1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C> <C>
Turnover 2 16,506 13,581
Cost of sales (8,117) (6,960)
------ ------
Gross profit 8,389 6,621
Distribution costs (2,940) (2,576)
Administrative expenses (2,398) (1,916)
------ ------
(5,338) (4,492)
------ ------
Operating Profit 3 3,051 2,129
------ ------
Interest receivable 95 24
Interest payable 6 (71) (145)
------ ------
24 (121)
------ ------
Profit on ordinary activities
before taxation 3,075 2,008
Tax on profit on ordinary activities 7 (1,094) (630)
------ ------
Profit on ordinary activities
after taxation 8 1,981 1,378
Preference dividends 9 (156) (115)
------ ------
Profit attributable to equity
shareholders 1,825 1,263
Ordinary dividends 9 (413) (203)
------ ------
Retained profit for the year 22 1,412 1,060
====== ======
Earnings per ordinary share 10 9.5p 6.7p
</TABLE>
-28-
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES FOR THE YEAR ENDED
31 DECEMBER 1993
(1992 Unaudited)
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
Profit on ordinary activities after taxation 1,981 1,378
Exchange difference on retranslation of net
assets of subsidiary undertaking 13 94
------ ------
Total recognised gains and losses relating to the year 1,994 1,472
====== ======
RECONCILIATION OF SHAREHOLDERS' FUNDS
1993 1992
(pound) (pound)
(000) (000)
Total recognised gains and losses 1,994 1,472
Dividends (569) (318)
Other movements
New shares issued 3,082 -
Share issue costs (603) -
Shares redeemed (1,519) -
------ ------
2,385 1,154
Shareholders' funds at 4 January 2,339 1,185
------ ------
Shareholders' funds at 31 December 4,724 2,339
====== ======
</TABLE>
-29-
<PAGE>
<TABLE>
LILLIPUT GROUP plc
BALANCE SHEET
AT 31 DECEMBER 1993
(1992 and Company Unaudited)
<CAPTION>
Group Company
Notes 1993 1992 1993 1992
(pound) (pound) (pound) (pound)
(000) (000) (000) (000)
<S> <C> <C> <C> <C> <C>
Fixed assets
Tangible assets 11 1,801 1,862 - -
Investments 12 - - 1,425 1,843
------ ------ ------ ------
1,801 1,862 1,425 1,843
------ ------ ------ ------
Current assets
Stocks 13 858 416 - -
Debtors 14 2,145 2,020 52 237
Cash at bank and in hand 15 4,021 1,244 3,058 -
------ ------ ------ ------
7,024 3,680 3,110 237
Creditors: amounts falling
due within one year 16 3,439 2,531 1,038 203
------ ------ ------ ------
Net current assets 3,585 1,149 2,072 34
------ ------ ------ ------
Total assets less current
liabilities 5,386 3,011 3,497 1,877
Creditors: amounts falling due
after more than one year 17 (641) (664) - -
Provision for liabilities
and charges 20 (21) (8) (4) -
------ ------ ------ ------
4,724 2,339 3,493 1,877
====== ====== ====== ======
Capital and reserves
Called up share capital 21 1,163 1,700 1,163 1,700
Share premium account 22 2,286 140 2,286 140
Profit and loss account 22 1,275 499 44 37
------ ------ ------ ------
4,724 2,339 3,493 1,877
====== ====== ====== ======
</TABLE>
-30-
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 1993
(1992 Unaudited)
<CAPTION>
Notes 1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C> <C>
Net cash inflow from operating
activities 3(b) 3,383 2,577
Returns on investment and servicing
of finance
Interest received 95 24
Interest paid (71) (145)
Dividends paid (631) (188)
------ ------
Net cash outflow from returns on
investments and servicing of finance (607) (309)
------ ------
Taxation
Corporation tax paid (612) (358)
Investing activities
Payments to acquire tangible
fixed assets (319) (274)
Receipts from sales of tangible
fixed assets 23 43
------ ------
Net cash outflow from investing
activities (296) (231)
------ ------
Net cash inflow before financing 1,868 1,679
====== ======
Financing
Issue of ordinary share capital 23 (3,082) -
Redemption of share capital 23 1,519 -
Share issue costs 23 603 -
Repayment of long term loans 18 1 953
Repayments of capital element of
finance lease rentals 19 51 168
------ ------
Net cash (inflow)/outflow
from financing (908) 1,121
Increase in cash and cash
equivalents 15 2,776 558
------ ------
1,868 1,679
====== ======
</TABLE>
-31-
<PAGE>
LILLIPUT GROUP plc
NOTES TO THE ACCOUNTS
AT 31 DECEMBER 1993
(1992 AND COMPANY INFORMATION UNAUDITED)
--------------------------------------
1. ACCOUNTING POLICIES
a) Basis of preparation
The accounts are prepared under the historical cost convention and in
accordance with applicable accounting standards.
b) Basis of consolidation
The group accounts consolidate the accounts of Lilliput Group plc and all
its subsidiary undertakings drawn up to 31 December each year. The 1992
accounts were drawn up to 3 January 1993.
c) Research and development
Research and development expenditure is written off as it is incurred.
d) Depreciation
Depreciation is provided on all tangible fixed assets, other than freehold
land, at rates calculated to write off the cost or valuation, less residual
value, of each asset on a straight line basis over its expected useful
life. The expected useful lives are:
Freehold buildings 50 years
Leasehold land and buildings the term of the lease in equal annual
instalments
Plant, machinery and equipment 4 to 5 years
Motor vehicles 4 years
e) Leased assets
Assets held under hire purchase contracts and finance leases, which are
those where substantially all the risks and rewards of ownership of the
asset have passed to the group, are capitalised in the balance sheet and
are depreciated over their useful lives.
The interest element of the rental obligations is charged to the
profit and loss account over the period of the contract or lease and
represents a constant proportion of the balance of capital repayments
outstanding.
Rentals paid under operating leases are charged to income on a
straight line basis over the term of the lease.
f) Stocks
Stocks are stated at the lower of cost and net realisable value. Cost
comprises amounts incurred in bringing each product to its present location
and condition as follows:
Raw materials - purchase cost on a first-in, first
out basis
Work in progress and finished goods - cost of direct materials and
labour plus attributable overheads
based on the normal level of
activity.
Net realisable value is based on estimated selling price less further costs
expected to be incurred to completion and disposal.
g) Deferred taxation
Deferred taxation is provided using the liability method on all timing
differences to the extent that they are expected to reverse in the future
without being replaced, calculated at the rate at which it is anticipated
the timing differences will reverse.
-32-
<PAGE>
h) Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction or at the contracted rate if the transaction is
covered by a forward exchange contract. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange
ruling at the balance sheet date or, if appropriate, at the forward
contract rate. Investments in overseas subsidiary undertakings are
translated at the rate of exchange ruling at the date of the investment.
All differences are taken to the profit and loss account.
On consolidation, the accounts of overseas subsidiary undertakings
are translated at the rate of exchange ruling at the balance sheet date.
The exchange difference arising on the retranslation of opening net assets
is taken directly to reserves. All other translation differences are taken
to the profit and loss account.
i) Pensions
The group operates a defined contribution pension scheme. Contributions are
charged to the profit and loss account as they become payable in accordance
with the rules of the scheme.
2. TURNOVER AND SEGMENTAL ANALYSIS
Turnover represents the amounts derived from the provision of goods and
services which fall within the group's ordinary activities, stated net of
value added tax.
All of the turnover, operating profit and net operating assets (i.e.,
excluding those assets and liabilities on which interest is earned or paid
respectively) relate to the manufacture and sale of miniature cottages as
collectables and giftware, and are analysed as follows:
<TABLE>
<CAPTION>
a) Turnover by geographical location
<S> <C> <C>
1993 1992
(pound) (pound)
(000) (000)
United Kingdom 12,074 9,538
United States of America 4,432 4,043
------ ------
16,506 13,581
====== ======
b) Turnover by destination
United Kingdom 10,131 8,132
United States of America 4,432 4,043
Continental Europe 1,313 906
Rest of World 630 500
------ ------
16,506 13,581
====== ======
c) Profit
United Kingdom 2,854 1,923
United States of America 197 206
------ ------
Operating profit 3,051 2,129
Net interest 24 (121)
------ ------
Profit on ordinary activities before taxation 3,075 2,008
====== ======
</TABLE>
-33-
<PAGE>
<TABLE>
<CAPTION>
d) Operating assets
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
United Kingdom 2,061 2,109
United States of America 511 438
------ ------
2,572 2,547
Unallocated net assets/(liabilities) 2,152 (208)
------ ------
Total net assets 4,724 2,339
====== ======
Unallocated net assets/(liabilities) comprise:-
Cash at bank and in hand 4,021 1,244
Loans (672) (673)
Corporation tax liabilities (1,036) (568)
Proposed dividend (140) (203)
Provision for deferred tax (21) (8)
------ ------
2,152 (208)
====== ======
3. OPERATING PROFIT
1993 1992
(pound) (pound)
(000) (000)
a) This is stated after charging/(crediting):
Auditors' remuneration - audit services 36 25
- non-audit services 12 7
Depreciation of tangible fixed assets - owned 303 193
- leased 65 42
Operating lease rentals - plant and machinery 12 8
- land and buildings 172 169
- other 119 132
Profit on disposal of tangible fixed assets (11) (9)
====== ======
b) Reconciliation of operating profit to net
cash inflow from operating activities
Operating profit 3,051 2,129
Depreciation charges 368 235
Profit on sale of tangible fixed assets (11) (9)
------ ------
3,408 2,355
(Increase)/decrease in stocks (441) 375
Increase in debtors (108) (177)
Increase in creditors 524 24
------ ------
Net cash inflow from operating activities 3,383 2,577
====== ======
</TABLE>
-34-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4. DIRECTORS' REMUNERATION
1993 1992
(pound) (pound)
(000) (000)
Fees 6 -
Other emoluments (including pension contributions)
Basic salaries 365 289
Benefits 52 21
Performance related bonuses 6 121
Pension contributions 40 36
------ ------
469 467
====== ======
</TABLE>
Benefits in kind comprise fully expensed cars which are stated at the
Inland Revenue scale charge and medical cover stated at cost.
For the year ended 31 December 1992, performance related bonuses were
payable to executive directors based on the achievement of targets set for
return on operating assets. Five of the UK based directors waived their
entitlement to performance related bonuses for the year ended 31 December
1993. Had they not done so, they would have received bonuses totalling
(pounds)50,000. The bonus payable for that year relates to the achievement
of targets set for profit before taxation at the company's US subsidiary
undertaking.
On 26 August 1993, J A Russell, A R Dunning, R E Freestone, D J Tate
and P G Thomas were each granted options over 10,000 "B" ordinary shares at
an exercise price of 50p per share. These options were exercised on 11
November 1993.
The emoluments of the chairman, who is also the highest paid UK director,
are as follows:-
<TABLE>
<CAPTION>
<S> <C> <C>
Salary 83 58
Benefits 13 5
------ ------
96 63
Performance related bonus - 29
------ ------
96 92
Pension contributions 15 15
------ ------
111 107
====== ======
</TABLE>
The emoluments (excluding pension contributions) of the directors, fell
within the following ranges:
<TABLE>
<CAPTION>
<S> <C> <C>
No No
Nil - (pounds)5,000 2 1
(pounds)20,001 - (pounds)25,000 1 -
(pounds)45,001 - (pounds)50,000 3 -
(pounds)55,001 - (pounds)60,000 - 3
(pounds)60,001 - (pounds)65,000 1 -
(pounds)70,001 - (pounds)75,000 - 1
(pounds)90,001 - (pounds)95,000 - 1
(pounds)95,001 - (pounds)100,000 2 -
(pounds)100,001 - (pounds)105,000 - 1
</TABLE>
-35-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
5. EMPLOYEE INFORMATION
1993 1992
(pound) (pound)
(000) (000)
Wages and salaries 5,571 4,880
Social security costs 436 402
Other pension costs 112 90
------ ------
6,119 5,372
====== ======
</TABLE>
The average weekly number of employees during the year was made up as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
No No
Manufacturing 491 434
Office and management 74 61
------ ------
565 495
====== ======
</TABLE>
6. INTEREST PAYABLE
<TABLE>
<CAPTION>
<S> <C> <C>
1993 1992
(pound) (pound)
(000) (000)
Bank loans, overdrafts and other loans wholly
repayable within five years 6 36
Bank loans not wholly repayable within five years 60 87
Finance charges payable under finance leases
and hire purchase contracts 5 22
------ ------
71 145
====== ======
</TABLE>
7. TAX ON PROFIT ON ORDINARY ACTIVITIES
<TABLE>
<CAPTION>
<S> <C> <C>
1993 1992
(pound) (pound)
(000) (000)
Based on the profit for the year:
Corporation tax at 33% 1,041 545
Overseas taxation 62 94
Deferred taxation (7) 10
------ ------
1,096 649
Adjustments in respect of previous years (2) (19)
------ ------
1,094 630
====== ======
</TABLE>
8. PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY
The profit dealt with in the accounts of the parent company was
(pounds)1,224,000 (1992: (pounds)354,000).
-36-
<PAGE>
9. DIVIDENDS
<TABLE>
<CAPTION>
<S> <C> <C>
1993 1992
(pound) (pound)
(000) (000)
Preference - paid 156 115
====== ======
Preferred ordinary - paid 273 -
- proposed - 203
Ordinary - final proposed 0.6p 140 -
------ ------
413 203
====== ======
</TABLE>
10. EARNINGS PER ORDINARY SHARE
Earnings per ordinary share are based on the profit for the year after
deducting preference dividends and on 19,286,503 (1992: 18,867,970)
ordinary shares, being the weighted average number of ordinary shares in
issue, as adjusted, during the year.
11. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Plant,
Land and buildings machinery
Short and Motor
Freehold leasehold equipment vehicles Total
(pound) (pound) (pound) (pound) (pound)
(000) (000) (000) (000) (000)
<S> <C> <C> <C> <C> <C>
Cost:
At 4 January 1993 1,133 103 1,501 154 2,891
Exchange adjustment - - 4 - 4
Additions 1 29 148 141 319
Disposals - - (15) (37) (52)
----- ----- ----- ----- -----
At 31 December 1993 1,134 132 1,638 258 3,162
----- ----- ----- ----- -----
Depreciation:
At 4 January 1993 88 30 814 97 1,029
Exchange adjustment - - 4 - 4
Provided during the year 23 15 292 38 368
Disposals - - (10) (30) (40)
----- ----- ----- ----- -----
At 31 December 1993 111 45 1,100 105 1,361
----- ----- ----- ----- -----
Net book value:
At 31 December 1993 1,023 87 538 153 1,801
===== ===== ===== ===== =====
At 4 January 1993 1,045 73 687 57 1,862
===== ===== ===== ===== =====
</TABLE>
Included in fixed assets above are the following amounts relating to assets
acquired under finance leases and hire purchase contracts:-
<TABLE>
<CAPTION>
<S> <C>
(pound)
(000)
Net book value:
At 31 December 1993 14
====
At 4 January 1993 96
====
</TABLE>
-37-
<PAGE>
12. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
1993 1992
(pound) (pound)
(000) (000)
At 4 January 1,843 1,914
Amount received from subsidiary undertakings (418) (71)
----- -----
At 31 December 1,425 1,843
===== =====
Details of the investments in which the company holds more than 10% of the
nominal value of any class of share capital are as follows:
Country of
registration Proportion
(or of voting
Subsidiary incorporation) rights and Nature of
undertaking and operation Holding shares held business
Lilliput Lane England and Ordinary 100% Manufacture
Ltd Wales shares of miniature
cottages for
sale as
collectables
and giftware
Lilliput Inc USA Common 100% Distribution of
stock Lilliput Lane
and other
collectable/
giftware
products
Lilliput England and Ordinary 100% Dormant
Creations Ltd Wales shares
13. STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
1993 1992
(pound) (pound)
(000) (000)
Raw materials and consumables 101 114
Work in progress 79 73
Finished goods 678 229
------ ------
858 416
====== ======
The difference between purchase price or production cost of stocks and
their replacement cost is not material.
14. DEBTORS
</TABLE>
<TABLE>
<CAPTION>
Group Company
<S> <C> <C> <C> <C>
1993 1992 1993 1992
(pound) (pound) (pound) (pound)
(000) (000) (000) (000)
Trade debtors 1,868 1,789 - -
Other debtors 76 97 52 34
Prepayments and accrued income 201 134 - -
Amount owed by subsidiary
undertaking - - - 203
------ ------ ------ ------
2,145 2,020 52 237
====== ====== ====== ======
</TABLE>
-38-
<PAGE>
15. CASH AND CASH EQUIVALENTS
Analysis of balances as shown in the group balance sheet and changes during
the current and previous year:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Change
1993 1992 in year
(pound) (pound) (pound)
(000) (000) (000)
Cash at bank and in hand 4,021 1,244 2,777
===== ===== =====
Change
1992 1991 in year
(pound) (pound) (pound)
(000) (000) (000)
Cash at bank and in hand 1,244 803 441
Bank overdraft - (68) 68
----- ----- -----
1,244 735 509
===== ===== =====
1993 1992
(pound) (pound)
(000) (000)
Balance at 4 January 1,244 735
Net cash inflow before adjustments for
the effect of foreign exchange rates 2,776 558
Effect of foreign exchange rate changes 1 (49)
----- -----
4,021 1,244
===== =====
</TABLE>
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
Group Company
<S> <C> <C> <C> <C> <C>
Notes 1993 1992 1993 1992
(pound) (pound) (pound) (pound)
(000) (000) (000) (000)
Current instalments due
on loans 18 33 42 - -
Obligations under finance
leases and hire
purchase contracts 19 31 51 - -
Trade creditors 414 445 - -
Amount owed to subsidiary
undertaking - - 898 -
Corporation tax 1,036 568 - -
Other taxes and social
security 598 489 - -
Accruals 825 602 - -
Deferred income 362 131 - -
Dividends 140 203 140 203
------ ------ ------ ------
3,439 2,531 1,038 203
====== ====== ====== ======
</TABLE>
Included within accruals is (pounds)19,000 (1992: (pounds)12,000) relating
to outstanding contributions payable to the pension scheme.
-39-
<PAGE>
17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Notes 1993 1992
(pound) (pound)
(000) (000)
Bank loans 18 639 631
Obligations under finance leases
and hire purchase contracts 19 2 33
------ ------
641 664
====== ======
</TABLE>
18. BANK LOANS
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C> <C>
Not wholly repayable within five years 672 673
Amounts due within one year (33) (42)
------ ------
639 631
====== ======
Instalments not due within five years 502 449
====== ======
</TABLE>
Details of loans not wholly repayable within 5 years are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Bank loan repayable over 15 years from 30 September
1990 in monthly instalments of (pounds)2,730 at an
interest rate of 2% above base rate 256 263
Bank loan repayable over 20 years from 30 September
1990 in monthly instalments of (pounds)3,852 at an
interest rate of 7.81% 416 410
------ ------
672 673
====== ======
</TABLE>
Amounts due at 31 December 1993 are repayable as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
After five years 502 449
Between two and five years 107 140
Between one and two years 30 42
------ ------
639 631
Within one year 33 42
------ ------
672 673
====== ======
</TABLE>
The bank loans are secured by a fixed charge over freehold properties and
book debts and a floating charge over all other assets.
Analysis of changes in group loan financing during the year:
<TABLE>
<CAPTION>
<S> <C> <C>
At 4 January 673 1,626
Net cash outflow from financing (1) (953)
------ ------
At 31 December 672 673
====== ======
</TABLE>
-40-
<PAGE>
19. OBLIGATIONS UNDER LEASES AND HIRE PURCHASE CONTRACTS
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
Amounts payable: (000) (000)
Within one year 31 58
Between one and two years 3 31
Between two and five years - 4
------ ------
34 93
Less: finance charges allocated to future periods (1) (9)
------ ------
33 84
====== ======
</TABLE>
Finance leases and hire purchase contracts are analysed as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Current obligations 31 51
Non-current obligations 2 33
------ ------
33 84
====== ======
</TABLE>
Analysis of changes in finance leasing during the year:
<TABLE>
<CAPTION>
<S> <C> >C>
At 4 January 84 248
Capital element of finance lease rental payments (51) (168)
Effect of foreign exchange rate changes - 4
------ ------
At 31 December 33 84
====== ======
</TABLE>
Annual commitments of the group under non-cancellable operating leases are
as follows:
<TABLE>
<CAPTION>
Land and Buildings Other
1993 1992 1993 1992
(pound) (pound) (pound) (pound)
(000) (000) (000) (000)
<S> <C> <C> <C> <C>
Operating leases which expire:
Within one year - - 18 37
Between two and five years 112 85 78 92
Over five years 74 82 - -
----- ----- ----- -----
186 167 96 129
===== ===== ===== =====
</TABLE>
The company had no commitments under operating leases at 31 December 1993
(1992: nil).
-41-
<PAGE>
20. PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation provided in the accounts and the amounts not provided are
as follows:-
<TABLE>
<CAPTION>
Provided Not provided
1993 1992 1993 1992
(pound) (pound) (pound) (pound)
(000) (000) (000) (000)
<S> <C> <C> <C> <C>
Group
Capital allowances in
advance of depreciation 25 42 241 241
Short term timing differences (4) (34) - -
----- ----- ----- -----
21 8 241 241
===== ===== ===== =====
</TABLE>
Company
Short term timing differences 4 - - -
===== ===== ===== =====
21. SHARE CAPITAL
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
Authorised
Ordinary shares of 5p each 3,000 -
'A' ordinary shares of 5p each - 209
'B' ordinary shares of 5p each - 77
Deferred shares of 5p each - 319
Preferred ordinary shares of 0.05p each - 2
Redeemable preference shares of (pound)1 each - 1,150
----- -----
3,000 1,757
===== =====
</TABLE>
Allotted, called up and fully paid
<TABLE>
<CAPTION>
1993 1992 1993 1992
No No (pound) (pound)
(000) (000) (000) (000)
<S> <C> <C> <C> <C>
Ordinary shares of 5p each 23,269 - 1,163 -
'A' ordinary shares of 5p each - 4,104 - 205
'B' ordinary shares of 5p each - 476 - 24
Deferred shares of 5p each - 6,375 - 319
Preferred ordinary shares
of 0.05p each - 4,854 - 2
Redeemable preference shares
of (pound)1 each - 1,150 - 1,150
------ ------ ----- -----
23,269 16,959 1,163 1,700
====== ====== ===== =====
</TABLE>
-42-
<PAGE>
On 8 April 1993, the company purchased 100,000 of the 'A' ordinary shares
in issue at a price of 50p per share.
On 26 August 1993 the authorised share capital was increased from
(pounds)1,757,245 to (pounds)1,759,745 by the creation of 50,000 new 'B'
ordinary shares.
On 11 November 1993:
- - 1,057,000 'B' ordinary shares were issued at par;
- - 50,000 'B' ordinary shares were issued at 50p per share;
- - 82,618 'A' ordinary shares were issued at par;
- - the authorised share capital of the company was increased from
(pounds)1,759,745 to (pounds)2,030,762 by the creation of 542,033,625
new preferred ordinary shares;
- - (pounds)240,267 of the amount standing to the credit of the share premium
account and reserves was capitalised by the issue of 480,533,625
preferred ordinary shares credited as fully paid at par, on the basis of
99 new preferred ordinary shares for every one such share held;
- - every 100 preferred ordinary shares were consolidated into one preferred
ordinary share of 5p;
- - all of the preferred ordinary shares, 'A' ordinary shares and 'B'
ordinary shares were converted into and redesignated as ordinary shares;
- - the authorised share capital of the company was increased from
(pounds)2,030,762 to (pounds)4,468,767 by the creation of 48,760,109 new
ordinary shares; and
- - 2,222,214 ordinary shares were issued at a price of 135p per share.
(pounds)526,180 of the amount standing to the credit of reserves was
capitalised and applied in paying up in full at par 10,523,603 ordinary
shares. All of the redeemable preference shares and deferred shares were
redeemed at par and the authorised share capital was reduced by
(pounds)1,468,767.
On 25 November 1993, all of the ordinary shares were listed on the London
Stock Exchange, issued as fully paid at a price of 135p per share.
Analysis of changes in share capital during the year:
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
At 4 January 1,700 1,700
Net cash outflow from financing (1,304) -
Capitalisation of reserves 767 -
----- -----
1,163 1,700
===== =====
</TABLE>
-43-
<PAGE>
22. RESERVES
<TABLE>
<CAPTION>
Share Capital Profit
premium redemption and loss
account reserve account
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Group
At 4 January 1993 140 - 499
Exchange difference on retranslation
of net assets of subsidiary
undertaking - - 13
Shares redeemed - 5 (50)
Arising on share issues 2,912 - -
Share issue costs (603) - -
Capitalisation of reserves (163) (5) (599)
Retained profit for the year - - 1,412
----- ----- -----
At 31 December 1993 2,286 - 1,275
===== ===== =====
Company
At 4 January 1993 140 - 37
Shares redeemed - 5 (50)
Arising on share issues 2,912 - -
Share issue costs (603) - -
Capitalisation of reserves (163) (5) (599)
Retained profit for the year - - 656
----- ----- -----
At 31 December 1993 2,286 - 44
===== ===== =====
</TABLE>
23. NET CASH INFLOW FROM SHARE MOVEMENTS
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
Nominal value of shares issued 170 -
Share premium 2,912 -
----- -----
3,082 -
Share issue costs (603) -
Shares redeemed (1,519) -
----- -----
960 -
===== =====
</TABLE>
-44-
<PAGE>
24. CAPITAL COMMITMENTS
<TABLE>
<CAPTION>
1993 1992
(pound) (pound)
(000) (000)
<S> <C> <C>
Group
Contracted for but not provided in the accounts 3 -
===== =====
Authorised by the directors but not contracted for 349 310
===== =====
</TABLE>
Company
The company had no capital commitments at the period end (1992: Nil).
25. PENSION COMMITMENTS
The group operates a defined contribution scheme for all qualifying
employees. The assets of the scheme are held separately from those of the
group in an independently administered fund.
-45-
<PAGE>
26. DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The Group's consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United Kingdom ("UK
GAAP") which differ from United States generally accepted accounting
principles ("US GAAP"). The principal differences as they apply to the
Group are summarised below:
However, these differences do not have any significant impact on profit for
the year ended December 31, 1993, or on shareholders equity at that date.
Deferred taxation
The Group provides for deferred taxation using the liability method only
where, in the opinion of the Directors, it is probable that the taxation
liability will crystallise within the foreseeable future. Under US
Statement of Financial Accounting Standards ("FAS") 109, deferred taxation
is computed using the liability method under which deferred taxation
liabilities on temporary differences are fully provided and future taxation
benefits are recognised as deferred taxation assets to the extent that
their realisation is more likely than not.
Ordinary dividends
In the consolidated financial statements, final Ordinary dividends are
provided for in the year in respect of which they are recommended by the
Board of Directors for approval by the shareholders. Under US GAAP,
dividends are not provided for until declared.
Consolidated statement of cash flows
The consolidated statements of cash flows prepared under UK GAAP, present
substantially the same information as that required under US GAAP by FAS
95, "Statement of Cash Flows". These Standards differ, however, with
regard to classification of items within the statements and as regards the
definition of cash and cash equivalents.
Under US GAAP,cash and cash equivalents would not include bank overdrafts
and borrowings with initial maturities of less than three months. Under UK
GAAP, cash flows are presented separately for operating activities, returns
on investments and servicing of finance, taxation investing activities and
financing activities. US GAAP, however, requires only three categories of
cash flow activity to be reported, operating, investing and financing.
Cash flows from taxation and returns on investments and servicing of
finance shown under UK GAAP would, with the exception of dividends paid, be
included as operating activities under US GAAP. The payment of dividends
would be included as a financing activity under US GAAP. Under US GAAP,
capitalised interest is treated as part of the cost of the asset to which
it relates and thus included as part of investing cash flows, under UK GAAP
all interest is treated as part of returns on investments and servicing of
finance.
Concentrations of credit risk
Potential concentrations of credit risk to the Group consist principally of
short term cash investments, trade loans and trade receivables.
The Group only deposits short term cash surpluses with high credit quality
banks and institutions and, by policy, limits the amount of credit exposure
to any one bank or institution. Trade receivables comprise a large,
widespread customer base.
<PAGE>
At December 31, 1993, the Group did not consider there to be any
significant concentration of credit risk.
Segmental information
The total assets of the Group split by geographical location are as
follows:
<TABLE>
<CAPTION>
1993
(pound)
(000)
<S> <C>
United Kingdom 7,913
United States 912
-----
8,825
=====
</TABLE>
<PAGE>
[LOGO]
REPORT OF THE INDEPENDENT AUDITORS
to the Board of Directors Lilliput Group plc
We have audited the accompanying consolidated balance sheet of Lilliput
Group plc as of December 31, 1993 and the related consolidated statements
of income, total recognised gains and losses 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 audits.
We conducted our audit in accordance with United Kingdom auditing standards
which do not differ in any significant respect from United States generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurances 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 the
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 consolidated financial statements referred to above
present fairly, in all material respect, the consolidated financial
position of Lilliput Group plc at December 31, 1993, and the consolidated
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United
Kingdom which differ in certain respects from those followed in the United
States (see Note 26 of Notes to the Accounts).
/s/Ernst & Young
Ernst & Young
Chartered Accountants
Manchester, England
April 13, 1994 except for
Note 26-Differences between UK and United States Generally
Accepted Accounting Principles, as to which the date is
December 9, 1994
<PAGE>
[LOGO]
CONSENT OF INDEPENDENT AUDITORS
to the Board of Directors and Shareholders of Stanhome Inc.:
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No 2-97934, No 33-11415, No 33-42974 and No 33-50723) of Stanhome
Inc. of our report dated 13 April 1994 except for Note 26 - Differences
between UK and US Generally Accepted Accounting Principles, as to which the
date is 9 December 1994, with respect to the consolidated financial
statements of Lilliput Group plc as at 31 December 1993 and for the year
then ended, included in Amendment No 1 to the Current Report (Form 8-K/A)
dated 14 December 1994 of Stanhome Inc. filed with the Securities and
Exchange Commission in relation to the Form 8-K filed by Stanhome Inc.
dated 14 October 1994.
/s/Ernst & Young
Ernst & Young
Chartered Accountants
Manchester
9 December 1994
<PAGE>
LILLIPUT GROUP plc
INTERIM RESULTS FOR THE NINE MONTHS ENDED
30 SEPTEMBER 1994
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP PROFIT AND LOSS ACCOUNT
(Unaudited)
<CAPTION>
Nine Months Ended Year Ended
----------------- ----------
30 September 30 September 31 December
1994 1993 1993
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Turnover 11,772 11,600 16,506
Cost of sales (6,000) (5,781) (8,117)
------- ------- -------
Gross profit 5,772 5,819 8,389
Distribution costs (2,188) (2,037) (2,940)
Administrative expenses (2,277) (1,765) (2,398)
------- ------- -------
(4,466) (3,802) (5,338)
------- ------- -------
Operating profit 1,307 2,017 3,051
------- ------- -------
Interest receivable 144 57 95
Interest payable (40) (54) (71)
------- ------- -------
104 3 24
------- ------- -------
Profit on ordinary activities
before taxation 1,411 2,020 3,075
Tax on profit on ordinary
activities (601) (761) (1,094)
------- ------- -------
Profit on ordinary activities
after taxation 810 1,259 1,981
Preference dividends - (86) (156)
------- ------- -------
Profit attributable to
equity shareholders 810 1,173 1,825
Ordinary dividends (384) - (413)
------- ------- -------
Retained profit for the period 426 1,173 1,412
======= ======= =======
Earnings per ordinary
share (note 3) 3.5p 6.3p 9.5p
</TABLE>
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Unaudited)
<CAPTION>
Nine Months Ended Year Ended
----------------- ----------
30 September 30 September 31 December
1994 1993 1993
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Profit on ordinary activities
after taxation 810 1,259 1,981
Exchange differences on
retranslation of net assets
of subsidiary undertaking (26) - 13
----- ----- -----
Total recognised gains and losses
relating to the period 784 1,259 1,994
===== ===== =====
Reconciliation of shareholders'
funds
Total recognised gains and losses 784 1,259 1,994
Dividends (384) (86) (569)
Other movements
New shares issued - - 3,082
Share issue costs - - (603)
Shares redeemed - (50) (1,519)
----- ----- -----
400 1,123 2,385
Shareholders' funds at
beginning of period 4,724 2,339 2,339
----- ----- -----
Shareholders' funds at
end of period 5,124 3,462 4,724
===== ===== =====
</TABLE>
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP BALANCE SHEET
(Unaudited)
<CAPTION>
30 September 30 September 31 December
1994 1993 1993
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Fixed assets
Tangible assets 1,750 1,881 1,801
Current assets
Stocks 1,108 798 858
Debtors 2,800 2,908 2,145
Cash at bank and in hand 3,674 1,824 4,021
------ ------ ------
7,582 5,530 7,024
Creditors: amounts falling due
within one year 3,569 3,277 3,439
------ ------ ------
Net current assets 4,013 2,253 3,585
------ ------ ------
Total assets less
current liabilities 5,763 4,134 5,386
Creditors: amounts falling due
after more than one year (618) (670) (641)
Provision for liabilities
and charges (21) (2) (21)
------ ------ ------
5,124 3,462 4,724
====== ====== ======
Capital and reserves
Called up share capital 1,163 1,700 1,163
Share premium account 2,286 140 2,286
Profit and loss account 1,675 1,622 1,275
------ ------ ------
5,124 3,462 4,724
====== ====== ======
</TABLE>
<PAGE>
<TABLE>
LILLIPUT GROUP plc
GROUP STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended Year Ended
----------------- ----------
30 September 30 September 31 December
1994 1993 1993
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Net cash inflow from operating
activities (note 2) 1,045 1,269 3,383
Returns on investment and
servicing of finance
Interest received 144 57 95
Interest paid (40) (54) (71)
Dividends paid (140) (288) (631)
------ ------ ------
Net cash outflow from returns
on investments and
servicing of finance (36) (285) (607)
------ ------ ------
Taxation
Corporation tax paid (981) (90) (612)
Investing activities
Payments to acquire
tangible fixed assets (347) (241) (319)
Receipts from sales of
tangible fixed assets 25 - 23
------ ------ ------
Net cash outflow from
investing activities (322) (241) (296)
------ ------ ------
Net cash (outflow)/inflow
before financing (294) 653 1,868
====== ====== ======
Financing
Issue of ordinary share capital - - (3,082)
Redemption of share capital - 50 1,519
Share issue costs - - 603
Repayment of long term loans 22 (8) 1
Repayments of capital element of
finance lease rentals 31 30 51
------ ------ ------
Net cash outflow/(inflow)
from financing 53 72 (908)
(Decrease)/increase in cash
and cash equivalents (347) 581 2,776
------ ------ ------
(294) 653 1,868
====== ====== ======
</TABLE>
<PAGE>
LILLIPUT GROUP plc
NOTES TO THE INTERIM ACCOUNTS
AT 30 SEPTEMBER 1994
(Unaudited)
1. BASIS OF PREPARATION
The interim accounts have been prepared on the basis of the accounting
policies set out in the Group's 1993 Annual Report. Fixed annual charges
are apportioned to the interim period on the basis of time elapsed. Other
expenses are accrued in accordance with the same principles used in the
preparation of the annual accounts. The taxation charge is calculated by
applying the directors' best estimate of the annual effective tax rate to
the profit for the period.
2. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
----------------- ----------
30 September 30 September 31 December
1994 1993 1993
(pound) (pound) (pound)
(000) (000) (000)
<S> <C> <C> <C>
Operating profit 1,307 2,017 3,051
Depreciation charges 371 223 368
Profit on sale of tangible
fixed assets - - (11)
------ ------ ------
1,678 2,240 3,408
Increase in stocks (250) (381) (441)
Increase in debtors (655) (889) (108)
Increase in creditors 272 299 524
------ ------ ------
1,045 1,269 3,383
====== ====== ======
</TABLE>
3. EARNINGS PER ORDINARY SHARE
Earnings per ordinary share are based on the profit attributable to equity
shareholders for the period and on 23,269,420 (1993: 18,716,189) ordinary
shares, being the weighted average number of ordinary shares in use, as
adjusted, during the period.
4. PAYMENT OF DIVIDEND
The interim dividend of 1.65p per share will be paid on 14 October 1994 to
holders of ordinary shares on the register at the close of business on 29
September 1994 (23,269,420 shares or (pounds)384,000).
<PAGE>
5. DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The Group's consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United Kingdom which
differ from United States generally accepted accounting principles. The
principal accounting and financial reporting differences as they apply to
the Group consist of the following:
Accounting for deferred taxation
Accounting for Ordinary dividends
Classification and definition of items included in the
consolidated statement of cash flows
Disclosure of concentration of credit risks
Disclosure of business segmental information
The above differences do not have a significant impact on profit for the
nine months ended 30 September 1994, or on shareholders equity at that
date.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
STANHOME INC. AND LILLIPUT GROUP plc
SEPTEMBER 30, 1994
The historical condensed consolidated balance sheets of Stanhome Inc. and
Lilliput Group plc ("Lilliput") have been consolidated into a pro forma
condensed consolidated balance sheet using the consolidated balance sheet
at the end of the third quarter of the fiscal year for each entity
(September 30, 1994 for both). The Lilliput balance sheet has been
translated to U.S. dollars, using FASB 52 guidelines, and reclassified to
the Stanhome Inc. reporting format. An exchange rate of 1.5795 dollars per
pound was used. The pro forma condensed consolidated balance sheet has
been prepared assuming the transaction was consummated at the balance sheet
date and includes adjustments which give effect to events that are
attributable to the transaction whether they have a continuing or non
recurring impact. The excess of the purchase price over the net book value
acquired was recorded as goodwill, in other assets. The adjustment of the
allocation of the purchase price may change as a result of future
determinations as to the fair value of the net assets acquired, but the
Company believes that there is not a substantial difference between fair
value and net book value of the net assets acquired. This statement should
be read in conjunction with the historical consolidated financial
statements of Stanhome Inc. included in its latest Form 10-Q and Lilliput
included in this Form 8-K/A.
<PAGE>
<TABLE>
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1994
(In Thousands)
<CAPTION>
Lilliput Adjustments
Stanhome Inc. Group plc Increase
(Historical) (Historical) (Decrease) Pro Forma
------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and certificates of deposit $ 11,138 $ 5,803 $ - $ 16,941
Marketable securities, at cost (which
approximates market value) 20,523 - ( 16,800)(g) 3,723
Notes and accounts receivable, net 160,538 4,055 - 164,593
Inventories 107,848 1,750 - 109,598
Prepaid advertising 47,308 - - 47,308
Other prepaid expenses 7,048 368 - 7,416
-------- -------- -------- --------
Total current assets 354,403 11,976 ( 16,800) 349,579
-------- -------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost 108,717 5,261 ( 2,497)(f) 111,481
Less - Accumulated depreciation and
amortization 64,675 2,497 ( 2,497)(f) 64,675
-------- -------- -------- --------
44,042 2,764 - 46,806
-------- -------- -------- --------
OTHER ASSETS:
Intangibles
Goodwill, net 42,017 - 53,907 (f) 95,924
Product lines and other, net 17,737 - - 17,737
Other 11,003 - - 11,003
-------- -------- -------- --------
Total other assets 70,757 - 53,907 124,664
-------- -------- -------- --------
$469,202 $ 14,740 $ 37,107 $521,049
======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $ 19,364 $ 1,027 $ 60,000 (f) $ 63,591
( 16,800)(g)
Accounts payable 51,882 1,596 - 53,478
Federal, state and foreign taxes 32,749 960 - 33,709
Other accrued expenses 74,777 3,064 2,000 (f) 79,841
-------- -------- -------- --------
Total current liabilities 178,772 6,647 45,200 230,619
-------- -------- -------- --------
LONG-TERM LIABILITIES:
Foreign employee severance obligations 13,602 - - 13,602
Pensions 8,099 - - 8,099
-------- -------- -------- --------
Total long-term liabilities 21,701 - - 21,701
-------- -------- -------- --------
SHAREHOLDERS' EQUITY
Common stock 3,154 1,837 ( 1,837)(f) 3,154
Capital in excess of par value 37,071 3,611 ( 3,611)(f) 37,071
Retained earnings 356,815 2,645 ( 2,645)(f) 356,815
Cumulative translation adjustments ( 25,167) - - ( 25,167)
-------- -------- -------- --------
371,873 8,093 ( 8,093) 371,873
Less: Shares held in treasury, at cost 103,144 - - 103,144
-------- -------- -------- --------
Total shareholders' equity 268,729 8,093 ( 8,093) 268,729
-------- -------- -------- --------
$469,202 $ 14,740 $ 37,107 $521,049
======== ======== ======== ========
<FN>
See Notes to Pro Forma Financial Information.
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
STANHOME INC. AND LILLIPUT GROUP plc
FOR THE YEAR ENDED DECEMBER 31, 1993
The historical condensed consolidated statements of income of Stanhome Inc.
and Lilliput Group plc ("Lilliput") for the year ended December 31, 1993
have been consolidated into a pro forma condensed consolidated statement of
income. The Lilliput income statement has been converted to U.S. dollars,
using FASB 52 guidelines, and reclassified to the Stanhome Inc. reporting
format. An exchange rate of 1.5100 dollars per pound was used. The pro
forma adjustments have been computed assuming the transaction was
consummated at the beginning of the year and include adjustments which give
effect to events that are attributable to the transaction and that are
expected to have a continuing impact. This statement should be read in
conjunction with the historical consolidated financial statements of
Stanhome Inc. included in its latest Form 10-K and Lilliput included in
this Form 8-K/A.
<PAGE>
<TABLE>
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1993
(In thousands, except per share amounts)
<CAPTION>
Lilliput Adjustments
Stanhome Inc. Group plc Increase
(Historical) (Historical) (Decrease) Pro Forma
------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
NET SALES $750,663 $ 23,056 $ - $773,719
COST OF SALES 304,660 11,349 - 316,009
-------- -------- -------- --------
GROSS PROFIT 446,003 11,707 - 457,710
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 363,451 7,100 100 (a) 370,651
RESTRUCTURING CHARGE 17,000 - - 17,000
-------- -------- -------- --------
OPERATING PROFIT 65,552 4,607 ( 100) 70,059
Interest expense ( 2,011) ( 107) ( 3,483)(b) ( 5,601)
Other income, net 2,599 143 ( 1,372)(c) 1,370
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 66,140 4,643 ( 4,955) 65,828
Income taxes 33,007 1,652 ( 1,207)(e) 33,452
-------- -------- -------- --------
NET INCOME 33,133 2,991 ( 3,748) 32,376
Preference dividends - ( 235) 235 (d) -
-------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 33,133 $ 2,756 ($ 3,513) $ 32,376
======== ======== ======== ========
EARNINGS PER COMMON SHARE:
Primary $1.68 $1.64
Fully diluted $1.67 $1.64
AVERAGE SHARES:
Primary 19,749 19,749
Fully diluted 19,791 19,791
<FN>
See Notes to Pro Forma Financial Information.
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
STANHOME INC. AND LILLIPUT GROUP plc
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
The historical condensed consolidated statements of income of Stanhome Inc.
and Lilliput Group plc ("Lilliput") for the nine months ended September 30,
1994 have been consolidated into a pro forma condensed consolidated
statement of income. The Lilliput income statement has been converted to
U.S. dollars, using FASB 52 guidelines, and reclassified to the Stanhome
Inc. reporting format. An exchange rate of 1.5305 dollars per pound was
used. The pro forma adjustments have been computed assuming the
transaction was consummated at the beginning of the nine month period and
include adjustments which give effect to events that are attributable to
the transaction and that are expected to have a continuing impact. This
statement should be read in conjunction with the historical consolidated
financial statements of Stanhome Inc. included in its latest Form 10-Q and
Lilliput included in this Form 8-K/A.
<PAGE>
<TABLE>
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(In thousands, except per share amounts)
<CAPTION>
Lilliput Adjustments
Stanhome Inc. Group plc Increase
(Historical) (Historical) (Decrease) Pro Forma
------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
NET SALES $553,616 $ 16,067 $ - $569,683
COST OF SALES 229,324 8,493 - 237,817
-------- -------- -------- --------
GROSS PROFIT 324,292 7,574 - 331,866
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 266,500 5,574 75 (a) 272,149
-------- -------- -------- --------
OPERATING PROFIT 57,792 2,000 ( 75) 59,717
Interest expense ( 514) ( 61) ( 2,642)(b) ( 3,217)
Other income, net 2,124 221 ( 974)(c) 1,371
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 59,402 2,160 ( 3,691) 57,871
Income taxes 26,544 920 ( 915)(e) 26,549
-------- -------- -------- --------
NET INCOME $ 32,858 $ 1,240 ($ 2,776) $ 31,322
======== ======== ======== ========
EARNINGS PER COMMON SHARE:
Primary and fully diluted $1.67 $1.60
===== =====
AVERAGE SHARES:
Fully diluted 19,619 19,619
<FN>
See Notes to Pro Forma Financial Information.
</TABLE>
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
(a) Reflects additional corporate general and administrative expense as
a result of the acquisition.
(b) Reflects additional interest expense on borrowings incurred to
finance the acquisition.
(c) Reflects amortization over a forty year period of goodwill which
resulted from the excess of acquisition costs over the net book value
acquired.
(d) The year 1993 Lilliput preferred dividends were eliminated as
intercompany dividends after the acquisition.
(e) Reflects the tax effects of above entries (a) and (b).
(f) Reflects the total purchase price of $62,000,000, including
transaction fees, for all of the Lilliput Group plc common stock,
comprised from short-term bank loans. The transaction fees were
accrued as at the acquisition date. The excess of acquisition costs
over the net book value acquired was recorded as goodwill, in other
assets. The property, plant and equipment acquired is presented on
a net basis.
(g) Reflects the elimination of Lilliput stock purchased by Stanhome Inc.
in September, in conjunction with Stanhome's cash offer for all the
shares of Lilliput, and the related short-term borrowing.
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