UNITED STATES
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) : September 25, 1997
Anicom, Inc.
-----------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-25364 36-3885212
- ---------------------------- ------------------ ----------------------
(State or Other Jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6133 North River Road, Suite 1000, Rosemont, IL 60018
- ------------------------------------------------ ---------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (847) 518-8700
<PAGE>
The undersigned registrant, in order to provide the financial statements
required to be included in the Current Report on Form 8-K dated July 25, 1997 in
connection with the acquisition of substantially all of the assets of Energy
Electric Cable ('Energy"), a division of Connectivity Products Incorporated
("CPI") by a wholly-owned subsidiary of the Registrant, hereby amends the
following item, or other portions of such Current Report on Form 8-K set forth
in the pages attached hereto.
Item 7. Financial Statements and Exhibits
The financial statements and information in the following table of contents and
attached hereto are hereby filed with the Commission in accordance with the
above referenced item.
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The following financial statements of the acquired business, Energy Electric
Cable, a division of Connectivity Products, Inc., are submitted herewith on the
indicated pages.
Page
Report of Independent Accountants
Statement of Assets, Liabilities and Divisional
Equity as of December 31, 1996
Statements of Revenue and Expenses for the years
ended December 31, 1996 and 1995
Statements of Cash Flows for the years ended
December 31, 1996 and 1995
Notes to Financial Statements
(b) Pro Financial Information
The following unaudited pro forma condensed combined
financial information of Anicom, Inc. and Energy
Electric Cable, a Division of Connectivity Products,
Inc. are submitted herewith on the indicated pages.
Pro forma Condensed Combined Financial Information
Pro forma Condensed Combined Balance Sheet, June 30, 1997
Notes to Pro forma Condensed Combined Balance Sheet,
June 30, 1997
Pro forma Condensed Combined Statement of Income for the
six months ended June 30, 1997
Notes to Pro forma Condensed Combined Statement of Income
for the six months ended June 30, 1997
Pro forma Condensed Combined Statement of Income for the
year ended December 31, 1996
Notes to Pro forma Condensed Combined Statement of Income
for the year ended December 31, 1996
<PAGE>
(c) Exhibits
2.1 * Asset Purchase Agreement, by and among Anicom, Inc., Reel
Acquisition Corp., and Connectivity Products
Incorporated, dated as of July 11, 1997. Registrant
agrees to furnish supplementally to the Commission, upon
request, a copy of any omitted schedule.
* Previously filed
<PAGE>
SIGNATURES
Pursuant to the regulations of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANICOM, INC.
Dated: September 25, 1997
By: /S/ DONALD C. WELCHKO
-------------------------------------
Donald C. Welchko
Vice President, Chief Financial Officer
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
<PAGE>
ENERGY ELECTRIC CABLE
A DIVISON OF CONNECTIVITY PRODUCTS INCORPORATED
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996
AND FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE>
Energy Electric Cable
a division of Connectivity Products Incorporated
Contents
Pages
Report of Independent Accountants 1
Financial Statements:
Statement of Assets, Liabilities and Divisional Equity 2
Statements of Revenue and Expenses 3
Statements of Cash Flows 4
Notes to Financial Statements 5-8
<PAGE>
Report of Independent Accountants
To Connectivity Products, Inc.:
We have audited the accompanying statement of assets, liabilities and divisional
equity of Energy Electric Cable, a division of Connectivity Products
Incorporated, as of December 31, 1996 and the related statements of revenue and
expenses, and cash flows for the years ended December 31, 1996 and 1995. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 the Energy Electric Cable, a
division of Connectivity Products Incorporated, as of December 31, 1996 and the
results of its operations and its cash flows for the years ended December 31,
1996 and 1995, in conformity with generally accepted accounting principles.
/S/ Coopers & Lybrand L.L.P.
Detroit, Michigan
September 9, 1997
<PAGE>
Energy Electric Cable
a division of Connectivity Products Incorporated
Statement of Assets, Liabilities and Divisional Equity
December 31, 1996
ASSETS
Current assets:
Cash $ 25,669
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $677,756 10,305,519
Related parties 63,064
Other 32,058
Inventories 7,918,661
Prepaid expenses and other assets 108,147
Deferred tax asset 305,831
---------------
Total current assets 18,758,949
Property, plant and equipment:
Machinery and equipment 1,260,868
Transportation equipment 45,797
Office equipment 420,844
Leasehold improvements 237,052
---------------
1,964,561
Less accumulated depreciation 866,405
---------------
1,098,156
Deposits and other assets 94,813
Due from CTI 75,000
---------------
$ 20,026,918
===============
LIABILITIES AND DIVISIONAL EQUITY
Current liabilities:
Accounts payable:
Trade $ 6,969,203
Related parties 1,335,699
Accrued liabilities 488,114
---------------
Total current liabilities 8,793,016
Deferred tax liability, noncurrent 116,812
Division equity and allocated debt 11,117,090
---------------
$ 20,026,918
===============
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Energy Electric Cable
a division of Connectivity Products Incorporated
Statements of Revenue and Expenses
for the years ended December 31, 1996 and 1995
1996 1995
Net sales $ 61,434,304 $ 57,791,936
Cost of goods sold 45,400,167 42,526,826
------------- -------------
Gross profit 16,034,137 15,265,110
Selling, general and administrative expenses 13,345,102 12,392,038
------------- -------------
Operating income 2,689,035 2,873,072
Other income (expenses):
Interest expense (581,573) (490,102)
Interest income 2,231 7,248
Other (4,526) 200
------------- -------------
Income before extraordinary item
and income taxes 2,105,167 2,390,418
Provision for income taxes 664,505 80,400
------------- -------------
Income before extraordinary item 1,440,662 2,310,018
Extraordinary item, loss on debt refinancing,
net of tax (120,979) --
------------- -------------
Net income $ 1,319,683 $ 2,310,018
============= =============
Pro forma information (unaudited):
Increase in tax provision before
extraordinary item $ 177,562 $ 875,767
============= =============
Pro forma income before extraordinary
item $ 1,263,100 $ 1,434,251
============= =============
Extraordinary item $ (72,587) --
============= =============
Pro forma net income $ 1,190,513 $ 1,434,251
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
Energy Electric Cable
a division of Connectivity Products Incorporated
Statements of Cash Flows
for the years ended December 31, 1996 and 1995
1996 1995
Cash flows from operating activities:
Net income $ 1,319,683 $ 2,310,018
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 219,764 191,645
Loss on sale of property, plant
and equipment 13,104 --
Deferred taxes (189,019) --
Changes in operating assets and
liabilities:
Decrease (increase)in:
Accounts receivable (1,118,507) (1,935,370)
Inventory 15,186 (3,611,028)
Prepaid expenses and other assets 52,217 (46,858)
Deposits and other assets (15,686) 12,615
and
other
assets
Increase in:
Accounts payable 685,825 2,599,052
Accrued expenses 104,756 107,388
----------- -------------
Net cash provided by operating activities 1,087,323 (372,538)
----------- -------------
Cash flows from investing activities,
purchases of property and equipment (339,231) (375,179)
----------- -------------
Cash flows from financing activities:
Increase (decrease) in Connectivity
Technology's net investment (832,102) 2,830,414
Distributions -- (1,838,000)
Payment of financing fees -- (155,545)
----------- -------------
Net cash provided by (used in)
financing activities (832,102) 836,869
----------- -------------
Net (decrease) increase in cash (84,010) 89,152
Cash, beginning of year 109,679 20,527
----------- -------------
Cash, end of year $ 25,669 $ 109,679
=========== =============
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Energy Electric Cable
a division of Connectivity Products Incorporated
Notes to Financial Statements
1. Organization:
Energy Electric Cable ("EEC") is a division of Connectivity Products
Incorporated ("CPI") and involved in the distribution of wire and cable for
the computer networking, security, signal and sound markets. CPI was formed
on October 3, 1995 as a result of the merger among BSCC Corporation, BSCC
Group, Energy Electric Cable, Inc. ("EEC, Inc." and predecessor of the
EEC division) and Energy Electric Assembly, Inc. Effective May 31, 1996,
Connectivity Technologies, Inc. ("CTI") acquired from CPI's stockholders 85
percent of its outstanding common stock.
On July 11, 1997, Anicom, Inc. ("Anicom") acquired for $27 million in cash
and $2 million of its common stock (subject to adjustments) certain assets
and liabilities (excluding debt and tax obligations) of the EEC division of
CPI.
2. Summary of Significant Accounting Policies:
a. Basis of Presentation: The financial statements reflect the
historical financial position, results of operations, and cash flows
of the EEC Division of CPI. For periods subsequent to October 3, 1995,
EEC was not a separate legal entity. The financial position and
results of operations, as presented herein, may not be the same as
would have occurred had EEC been an entity independent of CPI.
The 1995 and 1996 results of operations include all direct revenue and
costs related to EEC and its predecessor corporation, EEC, Inc. Costs
subsequent to October 3, 1995 (date of the merger and formation of
CPI) include an allocation of certain general corporate expenses and
interest expense specifically allocated to the EEC division of CPI.
The extraordinary item related to the loss on debt refinancing
represents an allocation of the total unamortized bonds fees of
$266,547, which were written off by CPI in 1996 in connection with its
debt refinancing. Outstanding liabilities related to the above
allocation as well as all allocated debt are included on the balance
sheet in division equity and allocated debt.
b. Pro Forma Adjustments: The pro forma tax provision and pro forma
net income reflect an additional tax provision for the periods prior
to May 31, 1996, computed on a stand-alone basis as if the EEC had
been a separate C-Corporation (and therefore, liable for federal
income taxes) since January 1, 1995.
<PAGE>
Notes to Financial Statements, Continued
2. Summary of Significant Accounting Policies, continued:
c. Inventories: Inventories are stated at the lower of cost or market,
with cost determined on the first-in, first-out basis. All inventory
is classified as finished goods.
d. Property, Plant and Equipment: Property, plant and equipment
are recorded at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the individual
assets (5 to 12 years for equipment and 3 to 10 years for leasehold
improvements). Costs of major renewals and additions are capitalized,
while expenditures for repairs and maintenance costs are expensed as
incurred. Upon retirement or disposal of property and equipment, the
cost and accumulated depreciation are removed from the accounts, and
any gain or loss is included in the determination of net income.
e. Income Taxes: Through May 31, 1996, CPI, as well as EEC,
Inc., had elected to be treated as an S-corporation, under
Section 1362 of the Internal Revenue Code. Accordingly, the income tax
provision for periods prior to May 31 represents primarily state and
local taxes which were the liabilities of EEC. There is no federal
income tax provision prior to May 31 since the income of EEC was
required to be reported in the stockholders' income tax returns.
Effective May 31, 1996, CPI became a C-Corporation and for periods
subsequent to that date was included in CTI's consolidated tax returns
and its provision for income taxes as well as that of EEC has been
computed on a stand-alone basis. Under the tax-sharing agreement with
CTI, EEC is required to make a payment for taxes to CTI only if CTI
has a current tax liability. All of CTI's current consolidated taxable
income is expected to be offset by available net operating loss
carryforwards and, therefore, no current tax liability is expected. As
a result, EEC's computed current tax provision has been credited to
division equity as a capital contribution.
f. 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 revenues and expenses during the reporting period. Actual
results could differ from those estimates.
3. Leases:
The division leases its facilities and certain shop equipment,
vehicles and office equipment under various operating leases which expire
on various dates through 2001. Management expects that in the normal course
of business, leases that expire will be renewed or replaced by other
leases.
<PAGE>
Notes to Financial Statements, Continued
3. Leases, continued:
Future minimum payments under the operating leases are summarized as
follows:
Years ending December 31:
1997 $ 773,426
1998 629,401
1999 554,588
2000 507,989
2001 396,387
Thereafter 668,335
----------------
Total minimum lease payments $ 3,530,126
================
Rent expense was approximately $800,530 and $638,196 for the years ended
December 31, 1996 and 1995, respectively.
4. Income Taxes:
Prior to May 31, 1996, the Company was not liable for federal income taxes
and therefore essentially all taxes prior to 1996 were state and local
taxes. At May 31, 1996, when the Company became a C-Corporation, a net
deferred tax asset in the amount of $203,336 was established. The
components of the provision for income taxes for 1996 are as follows:
Federal:
Currently due $ 783,749
Deferred (14,318)
Deferred taxes established at May 31 (203,336)
State and local 98,410
----------------
$ 664,505
================
A reconciliation of the federal statutory income tax rate to the effective
tax rate follows:
Statutory rate 34.0 %
Taxes not required on income prior to May 31 (15.2)
Establish initial deferred tax liability 9.7
State taxes, net of federal benefit 3.1
---------
31.6 %
=========
<PAGE>
Notes to Financial Statements, Continued
4. Income Taxes, continued:
Net deferred taxes on the balance sheet are comprised of the following:
Deferred tax assets:
Accounts receivable $ 230,427
Inventory 75,404
-------------
305,831
Deferred tax liability, propert plant
and equipment 116,812
-------------
$ 189,019
=============
5. Related Party Transaction:
During 1995 and 1996, EEC purchased approximately $7 million and
$10.8 million, respectively, of inventory from BSCC Corporation and the
BSCC division of CPI.
6. Contingencies:
CPI is a party to various legal proceedings and administrative actions, all
of which management believes to be of an ordinary or routine nature
incident to its operations. In the opinion of management, such proceedings
will not, individually or in the aggregate, have a material impact on EEC's
financial position.
<PAGE>
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
<PAGE>
Anicom, Inc., Energy Electric Cable, a division of CPI and Other Acquisitions
Pro Forma Condensed Combined Financial Information
(Unaudited)
The unaudited pro forma condensed combined financial information give effect, on
a purchase accounting basis, to the Asset Purchase Agreement by and between
Anicom, Inc., Reel Acquisition Corp. (hereinafter referred to as "Anicom"), and
Connectivity Products, Inc. and certain other acquisitions completed by Anicom
during 1996.
The unaudited pro forma condensed combined balance sheet at June 30, 1997
assumes that the acquisition of Energy occurred on June 30, 1997. The unaudited
pro forma condensed combined statements of income for the six months ended June
30, 1997 and the year ended December 31, 1996 assume that the acquisition of
Energy occurred on January 1, 1996. The purchase price consisted of $27 million
in cash and 190,476 shares of Anicom's common stock, $.001 par value per share.
The sources of the cash used to fund the purchase price were (i) $17 million
provided by the liquidation of marketable securities and (ii) $10 million in
cash borrowed under Anicom's Revolving Credit Facility. The marketable
securities represent the residual proceeds of the second quarter 1997 issuance
of 27,000 shares of convertible preferred stock. As the Energy acquisition was
substantially funded by the convertible preferred stock offering,, the unaudited
pro forma combined statements assume that this offering occurred on January 1,
1996.
The unaudited pro forma condensed combined statements of operations also assume
that Anicom's 1996 acquisitions of Northern Wire & Cable, Inc. ("Northern") and
Norfolk Wire & Electronics, Inc. ("Norfolk") occurred on January 1, 1996. As
these acquisitions were substantially funded by the November 1995 follow-on
offering of 3,450,000 shares of common stock (including 450,000 shares for the
underwriters' overallotment), the unaudited pro forma combined statements assume
that this offering occurred on January 1, 1996.
The unaudited pro forma adjustments are based on preliminary assumptions of the
allocation of the purchase price and are subject to revision upon final
settlement of all purchase price adjustments and the completion of evaluations
and other studies of the fair value of all assets acquired and liabilities
assumed. Actual purchase accounting adjustments may differ from the pro forma
adjustments presented herein.
The unaudited pro forma condensed combined statements are not necessarily
indicative of the results that actually would have occurred if the transactions
described above had been effective since the assumed dates, nor are the
statements indicative of future combined financial position or earnings.
Anicom's future financial statements will reflect the acquisition of Energy as
of July 1, 1997.
The pro forma condensed combined financial statements should be read in
conjunction with the consolidated financial statements of Anicom as filed with
the Securities and Exchange Commission in its Form 10-KSB for the year ended
December 31, 1996 and Current Report on Form 10-Q for the six months ended June
30, 1997.
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Unaudited Condensed Combined Balance Sheet
June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Historic Pro Forma
----------------------------- -------------------------------
Anicom Energy Adjustments Combined
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,638 $ 32 $ (289) B $ 1,381
Marketable securities 16,711 (16,711) B --
Accounts receivable, net 38,895 12,074 50,969
Inventory, primarily finished goods 31,046 6,078 37,124
Deferred income taxes 1,799 342 D 2,141
Other current assets 2,095 48 2,143
-------------- ------------- ------------- ------------
Total current assets 92,184 18,232 (16,658) 93,758
Property and equipment, net 3,670 1,204 (56) E 4,818
Goodwill, net 33,140 18,977 G 52,117
Deferred income taxes 380 D 380
Other assets, primarily notes receivable 1,189 1,189
-------------- ------------- ------------- -------------
Total assets $ 130,183 $ 19,436 $ 2,643 $ 152,262
============== ============= ============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 32,760 $ 7,016 $ 39,776
Accrued expenses 1,590 976 $ (413) A 3,653
1,500 C
Long-term debt, current portion 2,090 2,090
-------------- ------------- ------------- --------------
Total current liabilities 36,440 7,992 1,087 45,519
Long-term debt, net of current portion 1,863 10,000 B 11,863
Deferred income taxes _ 1,105 (1,105) A --
Other liabilities 866 1,000 C 1,866
-------------- ------------- ------------- --------------
Total liabilities 39,169 9,097 10,602 59,248
-------------- ------------- ------------- --------------
Stockholders' Equity:
Convertible preferred stock, Series A, 27,000 27,000
Common stock 8 8
Additional paid-in capital 58,776 2,000 B 60,776
Retained earnings 5,230 5,230
Division equity and allocated debt 10,339 7,953 A --
(18,292) F
-------------- ------------- ------------- --------------
Total stockholders' equity 91,014 10,339 (8,339) 93,014
-------------- ------------- ------------- --------------
Total liabilities and stockholders' equity $ 130,183 $ 19,436 $ 2,263 $ 152,262
============== ============= ============= =============
</TABLE>
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Notes to Unaudited Condensed Combined Balance Sheet
June 30, 1997
The unaudited balance sheets as of June 30, 1997 have been combined to reflect
the pro forma impact of the acquisition of Energy by Anicom as if the
transaction had occurred on June 30, 1997.
The following is a summary of the adjustments reflected in the pro forma
condensed combined balance sheet:
A - Eliminate Energy assets not acquired by and liabilities not assumed by
Anicom.
B - The purchase price, exclusive of related fees and expenses, of $29 million
based on the terms and conditions of the Asset Purchase Agreement, by and among
Anicom, Inc., Reel Acquisition Corp., and Connectivity Products, Incorporated,
dated as of July 11, 1997. The purchase price consisted of $2 million (190,476
shares) of Anicom common stock,$.001par value and $27 million of cash provided
by the liquidation of marketable securities and borrowings under Anicom's
Revolving Credit Facility.
C - Record estimated transaction and business integration costs.
D - Record deferred tax asset related to business integration costs.
E - Adjust historical cost of acquired assets to estimated fair value on the
date of acquisition.
F - Eliminate the net equity of Energy.
G - To record the amount by which the purchase price exceeds the fair market
value of assets acquired, less liabilities assumed and transaction costs
associated with the acquisition.
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Unaudited Condensed Combined Statement of Income
for the six months ended June 30, 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historic Pro Forma
------------------------------------ -----------------------------------
<S> <C> <C> <C> <C>
Anicom Energy Adjustments Combined
Net sales $ 97,491 $ 35,073 $ 132,564
Cost of sales 74,956 25,613 100,569
----------------- ----------------- ----------------
Gross profit 22,535 9,460 31,995
Selling, general and administrative 19,335 7,947 $ 237 A 27,519
----------------- ----------------- ----------------- ----------------
Income from operations 3,200 1,513 (237) 4,476
----------------- ----------------- ----------------- ----------------
Other income (expense):
Interest income 170 170
Interest expense (195) (283) 283 B (503)
(308)C
----------------- ----------------- ----------------- ----------------
Total other income (expense) (25) (283) (25) (333)
----------------- ----------------- ----------------- ----------------
Income before income taxes 3,175 1,230 (262) 4,143
Provision for income taxes 1,206 492 (124) E 1,574
----------------- ----------------- ----------------- ----------------
Net income $ 1,969 $ 738 $ (138) $ 2,569 D
================= ================= ================= ================
Earnings per common share and share equivalent:
Primary and fully diluted $ .12 $ .13 D
================= ================
Weighted average common shares and share
equivalents outstanding:
Primary 16,255 19,347 D
================= ================
Fully diluted 17,131 19,644 D
================= ================
</TABLE>
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Notes to Unaudited Condensed Combined Statement of Income
for the six months ended June 30, 1997
The following is a summary of the adjustments reflected in the unaudited pro
forma condensed combined statement of operations:
A - Earnings effect of Energy goodwill amortization using a 40 year recovery
period.
B - Eliminate interest expensed allocated to Energy by CPI.
C - Recognize interest expense on $10 million borrowings against Anicom's
Revolving Credit Facility used, in part, to fund the Energy acquisition.
D - Effective September 23, 1997, the remaining outstanding Convertible
Preferred Stock was converted into common stock. Based on this, Pro forma
earnings per share and weighted average common shares and share equivalents
outstanding assume full conversion of the $27 million Convertible Preferred
Stock on January 1, 1996.
E - Adjustment of income tax provision to reflect the approximate effective tax
rate of Anicom on the combined results.
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Unaudited Condensed Combined Statement of Income
for the year ended December 31, 1996
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historic Pro Forma
------------------------------------- -----------------------------
<S> <C> <C> <C> <C> <C>
Anicom Energy Other Adjustments Combined
Acquisitions
Net sales $ 115,993 $ 61,434 $ 30,775 $ 208,202
Cost of sales 87,442 45,400 23,119 155,961
----------- ---------- -------------- ------------ -----------
Gross profit 28,551 16,034 7,656 52,241
Selling, general and administrative 24,615 13,345 7,469 $ 474 A 46,087
183 B
----------- ----------- -------------- -------------- ------------
Income from operations 3,936 2,689 187 (658) 6,154
----------- ----------- -------------- -------------- ------------
Other income (expense):
Interest income 565 2 20 587
Interest expense (256) (582) (274) 582 C (904)
113 D
129 E
(616)F
Other (4) 12 8
----------- ----------- -------------- -------------- ------------
Total other income (expense) 309 (584) ) (242) 208 (309)
----------- ----------- -------------- -------------- ------------
Income before income taxes 4,245 2,105 (55) (449) 5,845
Provision for income taxes 1.622 664 89 (154) G 2,221
----------- ----------- -------------- -------------- ------------
Net income before extraordinary loss 2,623 1,441 (145) (295) 3,624
Extraordinary loss on debt refinancing -- (121) -- 121 H --
----------- ----------- -------------- -------------- ------------
Net income $ 2,623 $ 1,320 $ (145) $ (174) $ 3,624
=========== =========== ============== ============== ============
Earnings per common share and share equivalent:
Primary and fully diluted $ .19 $ .21
=========== ============
Weighted average common shares and share
equivalents outstanding:
Primary 13,579 17,291
=========== ============
Fully diluted 13,843 17,552
=========== ============
</TABLE>
<PAGE>
Anicom, Inc. and Energy Electric Cable, a Division of CPI
Notes to Unaudited Condensed Combined Statement of Income
for the year ended December 31, 1996
The following is a summary of the adjustments reflected in the unaudited pro
forma condensed combined statement of operations:
A - Earnings effect of Energy goodwill amortization using a 40 year recovery
period.
B - Earnings effect of Other Acquisitions goodwill using a 40 year recovery
period.
C - Eliminate interest expensed allocated to Energy by CPI.
D - In connection with the asset purchase of Northern, Anicom assumed up to $6.5
million of Northern's outstanding bank debt. Immediately after the closing of
this transaction, Anicom retired the outstanding bank debt assumed from
Northern. Interest expense has been adjusted to give effect to the retirement of
this debt as if such transactions had occurred on January 1, 1996.
E - In connection with the merger of Norfolk, Anicom assumed approximately $2.5
million of Norfolk's outstanding bank debt. Immediately after the closing of
this transaction, Anicom retired the outstanding bank debt assumed from Norfolk.
Interest expense has been adjusted to give effect to the retirement of this debt
as if such transactions had occurred on January 1, 1996.
F - Recognize interest expense on $10 million borrowings against Anicom's
Revolving Credit Facility used, in part, to fund the Energy acquisition.
G - Adjustment of income tax provision to reflect the approximate effective tax
rate of Anicom on the combined results.
H - Historical Energy amount represents portion of extraordinary loss on debt
restructuring incurred by CPI and allocated to Energy. As this amount is not
relevant to the operations of the business acquired by Anicom, the amount has
been eliminated.
