-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, qokb8mEMq/03WX9O9OgLgGdE9zWDGCthjUJxEXQAThJitharqlIH2GVb++R0C1GC /fsmsTqkUe5qyOxmRWcAwg== 0000898430-94-000727.txt : 19941007 0000898430-94-000727.hdr.sgml : 19941007 ACCESSION NUMBER: 0000898430-94-000727 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940729 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19941006 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACOBS ENGINEERING GROUP INC /DE/ CENTRAL INDEX KEY: 0000052988 STANDARD INDUSTRIAL CLASSIFICATION: 1600 IRS NUMBER: 954081636 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07463 FILM NUMBER: 94551837 BUSINESS ADDRESS: STREET 1: 251 S LAKE AVE CITY: PASADENA STATE: CA ZIP: 91101-3063 BUSINESS PHONE: 8184492171 8-K/A 1 FORM 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 8-K/A Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934 Date of Report (date of earliest event reported): July 29, 1994 ------------ JACOBS ENGINEERING GROUP INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 1-7463 95-4081636 - -------------------------------------------------------------------------------- (State of (Commission File (I.R.S. Employer Incorporation) File Number) Identification Number) 251 South Lake Avenue, Pasadena, California 91101 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (818) 449-2171 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Effective July 31, 1994, Jacobs Engineering Group Inc. (the "Company") purchased from CRSS Inc. ("CRSS") the engineering and construction management service businesses of CRSS (the "Business to be Acquired"). The cash purchase price was equal to the net book value of the Business to be Acquired on the closing date, plus $14.0 million. On the closing date, the Company paid CRSS $33.5 million; an amount equal to the estimated net book value of the Business to be Acquired on that date, plus $14.0 million. The net book value on the closing date of the Business to be Acquired is subject to an audit which will determine the final purchase price and any difference between that amount and the amount paid on the closing date will be settled between the parties. In the transaction, the Company purchased substantially all of the assets of CRS Sirrine Engineers, Inc. ("CRS Sirrine"), subject to certain assumed liabilities, all of the issued and outstanding equity securities of CRSS Constructors, Inc. and CRSS International, Inc. and the assets, subject to certain assumed liabilities, or all of the issued and outstanding equity securities, of certain insignificant subsidiaries of CRSS. Excluded from the businesses acquired were the assets and liabilities of four power plant projects of CRS Sirrine. These projects were either substantially complete or in the later stages of completion. Additionally, CRSS agreed to share in the future profit margin improvement or deterioration on certain projects defined in the purchase agreement. On August 5, 1994, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission (the "Commission") which described this transaction. That report indicated that the financial statements required by Rule 3-05 of Regulation S-X and the pro forma financial information required by Article 11 of Regulation S-X will be filed by the Company in accordance with the rules and regulations of the Commission. This form 8-K/A files all such financial statements. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired: Being filed herewith are the audited financial statements of the Business to be Acquired at June 30, 1994 and for the year then ended, together with the report thereon issued by Ernst & Young, independent auditors. (b) Pro forma financial information (of the Company and Business to be Acquired combined): Being filed herewith are the unaudited pro forma condensed combined balance sheet at June 30, 1994; the unaudited pro forma condensed combined statement of income for the year ended September 30, 1993; and the unaudited pro forma condensed combined statement of income for the nine months ended June 30, 1994. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment No. 1 to its Current Report on Form 8-K dated August 5, 1994 to be signed on its behalf by the undersigned thereunto duly authorized. Dated: October 6, 1994 JACOBS ENGINEERING GROUP INC. By: /s/ JOHN W. PROSSER, JR. _________________________ John W. Prosser, Jr. Senior Vice President Finance and Administration 3 [LETTERHEAD OF ERNST & YOUNG LLP] Report of Independent Auditors Board of Directors Jacobs Engineering Group Inc. We have audited the accompanying combined balance sheet of the Business to be Acquired From CRSS Services, Inc. (as defined in Note 1), as of June 30, 1994, and the related combined statements of operations and cash flows for the year then ended. These financial statements are the responsibility of the Company. 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. As described in Note 1, these financial statements reflect the financial position and operations of the Business to be Acquired From CRSS Services, Inc., which was sold to Jacobs Engineering Group Inc. on July 29, 1994. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of the Business to be Acquired From CR$S Services, Inc., at June 30, 1994, and the combined results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP July 29, 1994 1 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. COMBINED BALANCE SHEET June 30, 1994 (In Thousands) Assets Current assets: Receivables, net $53,582 Unbilled fees and job costs 7,676 Prepaid expenses and other assets 394 ------- Total current assets 61,652 Property and equipment, net 4,459 Deferred charges and other 2,438 ------- $68,549 ======= Liabilities and net assets Current liabilities: Accounts payable $37,449 Amounts billed in excess of revenues recognize on contracts in process 7,999 Other current liabilities 3,719 ------- Total current liabilities 49,167 Net assets 19,382 ------- $68,549 =======
See accompanying notes. 2 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. COMBINED STATEMENT OF OPERATIONS Year ended June 30. 1994 (In Thousands) Gross revenues $371,752 Subcontract and procurement costs 220,084 -------- Operating revenues 151,668 Costs and expenses: Direct 81,917 Operating 69,067 -------- 150,984 -------- Operating income 684 Nonoperating income 184 -------- Net earnings $ 868 ========
See accompanying notes. 3 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. COMBINED STATEMENT OF CASH FLOWS Year ended June 30, 1994 (In Thousands) Operating activities Net earnings $ 868 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,573 Decrease in provision for losses on accounts receivable (258) Increase in receivables (8,835) Decrease in unbilled fees and job costs 2,329 Increase in prepaid expenses and other assets (264) Increase in accounts payable 27,727 Decrease in amounts billed in excess of revenues recognized on contracts in process (5,693) Decrease in other current liabilities (377) Other operating activities (176) -------- Net cash provided by operating activities 17,894 INVESTING ACTIVITIES Additions to property and equipment (2,178) Increase in investment in joint projects (1,481) -------- Net cash used in investing activities (3,659) Financing activities Dividends and cash distributions to CRSS Inc. (28,377) -------- Net cash used in financing activities (28,377) -------- Net decrease in cash and cash equivalents (14,142) Cash and cash equivalents at beginning of period 14,142 -------- Cash and cash equivalents at end of period $ - ========
See accompanying notes. 4 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS June 30, 1994 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENT PRESENTATION The accompanying financial statements represent the combined financial position, operating results, and cash flows of all of the issued and outstanding equity securities of CRSS Constructors, Inc., CRSS International, Inc., and CRSS of New York, Inc., and substantially all the assets of CRS Sirrine Engineers, Inc. ("Engineers"), CRSS Civil Engineers, Inc. ("Civil Engineers"), and CRSS of Illinois, Inc. ("Illinois"), subject to agreed upon liabilities of Engineers, CRSS Enterprises, Inc., Civil Engineers, and Illinois, collectively referred to as the "Business to be Acquired From CRSS Services, Inc.," which was sold to Jacobs Engineering Group Inc. ("Jacobs") as part of the Purchase Agreement between Jacobs and CRSS Inc. dated July 29, 1994. The entities referred to above as the Business to be Acquired From CRSS Services, Inc., are wholly owned subsidiaries of CRSS Services, Inc. ("Services"), which is a wholly owned subsidiary of CRSS Inc. The accompanying financial statements have been prepared on the historical cost basis of accounting reflected in the financial and accounting records of Services. The operating results and financial position of the Business to be Acquired From CRSS Services, Inc., presented in the accompanying financial statements do not necessarily reflect the operating results and financial position which would have occurred had the Business to be Acquired from CRSS Services, Inc., been an unaffiliated, stand-alone entity for the fiscal year ended June 30, 1994. The Business to be Acquired From CRSS Services, Inc., provides comprehensive engineering, construction management, and program management services to industrial, institutional, commercial, and public sector clients in both the domestic and international markets. All significant intercompany transactions and balances have been eliminated. REVENUE RECOGNITION Revenues earned on long-term contracts are reported using the percentage-of- completion method, based primarily on contract costs incurred to date versus total anticipated contract costs. Where a single contract has both design and construction as identifiable 5 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) segments, revenue recognition is segmented resulting in market levels of profitability for each segment. Where there is a change in the estimate to complete a project, the Business to be Acquired From CRSS Services, Inc., follows the "cumulative catch-up" method. Charges are made to operations for estimated losses when such losses become known. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost. Depreciation is computed primarily on the straight-line method over the estimated useful lives of the related assets. Maintenance and repairs are charged to expense as incurred; improvements are capitalized. JOINT PROJECTS The Business to be Acquired From CRSS Services, Inc., is involved in several associations with unrelated parties formed for the purpose of undertaking a single, agreed-upon project. The joint projects generally maintain contract- related trade receivables, payables, and cash without any long-term assets or liabilities and require little, if any, initial investment by the Business to be Acquired From CRSS Services, Inc. The Company's share of joint project operations is included within the combined financial statements. INCOME TAXES The Business to be Acquired From CRSS Services, Inc., is not a separate taxable entity for federal or state income tax purposes. The operations of the Business to be Acquired From CRSS Services, Inc., are included in the CRSS Inc. consolidated federal income tax return and various state returns. No portion of Services' or CRSS Inc.'s income tax expense has been allocated to the Business to be Acquired From CRSS Services, Inc. All income taxes payable and deferred income tax accounts related to the Business to be Acquired From CRSS Services, Inc., were retained by Services and CRSS Inc. EARNINGS PER SHARE Earnings per share information has been omitted since the Business to be Acquired From CRSS Services, Inc., has no publicly traded equity securities. 6 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) 2. GEOGRAPHIC DATA AND MAJOR CUSTOMERS Operations by geographic area for the fiscal year ended June 30, 1994 are as follows:
United States Foreign Consolidated --------------------------------------- (In Thousands) Gross revenues $367,798 $3,954 $371,752 Operating revenues 147,804 3,864 151,668 Operating income 305 379 684 Identifiable assets 68,549 - 68,549
Revenues from government agencies for the fiscal year ended June 30, 1994 are as follows:
Domestic Foreign ------------------------ Gross revenues $122,471 $352 Operating revenues 44,254 344
The Business to be Acquired From CRSS Services, Inc., had two major projects during fiscal 1994, which accounted for approximately 50% of the combined gross revenues and approximately 18% of the combined operating revenues. The two major projects include the engineering design, procurement, and construction of a wafer fabrication facility in Austin, Texas, for Advanced Micro Devices and construction management services for the Orange County Civic Center in Orlando, Florida. 7 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) 2. GEOGRAPHIC DATA AND MAJOR CUSTOMERS (CONTINUED) The gross and operating revenues contributed by these two projects during the fiscal year ended June 30, 1994 are as follows:
Gross Revenues Operating Revenues Dollars % of Total Dollars % of Total -------- ---------- ------- ---------- (In Thousands) Advanced Micro Devices $137,694 37% $24,324 16% Orange County Civic Center 47,240 13% 2,243 2% -------- ---------- ------- ---------- $184,934 50% $26,567 18% ======== ========== ======= ==========
3. RECEIVABLES Receivables as of June 30, 1994 consist of the following (in thousands): Trade receivables $47,701 Retainage 7,197 Other 225 ------- 55,123 Less allowance for doubtful accounts (1,541) ------- $53,582 =======
The balance billed, but not paid, pursuant to retainage provisions in service contracts will be due upon completion of the contracts and acceptance of the projects by the owner. Retainage balances at June 30, 1994 are scheduled to be collected as follows (in thousands): YEAR ENDED JUNE 30 1995 $6,645 1996 526 1997 23 1998 - 1999 3 ------ $7,197 ======
8 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) 4. PROPERTY AND EQUIPMENT Property and equipment as of June 30, 1994 consist of the following (in thousands): Machinery and equipment $ 17,784 Buildings and leasehold improvements 619 Furniture and fixtures 2,436 -------- 20,839 Less accumulated depreciation (16,380) -------- $ 4,459 ========
Machinery and equipment consists primarily of computer equipment and software utilized in providing engineering, design, and construction services. 5. LEASE COMMITMENTS The Business to be Acquired From CRSS Services, Inc., leases the majority of its office facilities and certain equipment under operating lease agreements. Certain leases contain renewal options and escalation clauses. Total rental expense for all operating leases amounted to approximately $9,359,000 in fiscal 1994. There was no sublease rental income during fiscal 1994. The following is a schedule of future noncancelable minimum lease payments under leases with an initial remaining term of more than one year (in thousands): Year ended June 30 1995 $3,701 1996 2,772 1997 1,987 1998 1,865 1999 1,802 2000 and thereafter 751 ------- $12,878 =======
9 BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) 6. CHANGE IN NET ASSETS (Dollars in Thousands) Net assets as of June 30, 1993 $ 46,892 Fiscal 1994 net earnings 868 Cash dividends and distributions to CRSS Inc. (28,378) -------- Net assets as of June 30, 1994 $ 19,382 ========
7. CONTINGENCIES The operating subsidiaries of the Business to be Acquired From CRSS Services, Inc., are defendants in a number of lawsuits involving claims typical of those filed against the engineering and construction professions, alleging primarily professional errors, omissions, and/or delays. CRSS Inc. has agreed to indemnify Jacobs against legal claims arising from any acts, errors, or omissions prior to August 1, 1994. As such, the Business to be Acquired From CRSS Services, Inc. combined financial statements do not include any provisions for uninsured losses. A substantial portion of the Business to be Acquired From CRSS Services, Inc. contracts are with and through various federal and state agencies whose contracts are subject to audit and/or renegotiation in accordance with applicable legislation. The Business to be Acquired From CRSS Services, Inc., is of the opinion that its contractual relationships with these agencies are in accordance with the requirements of such regulations. CRSS Inc. and Jacobs have agreed to share in the future profit margin improvement or deterioration of certain projects. 10 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS Introductory Paragraphs: Effective July 31, 1994, Jacobs Engineering Group Inc. (the "Company") purchased from CRSS Inc. ("CRSS") the engineering and construction management service businesses of CRSS (the "Business to be Acquired"). The cash purchase price was equal to the net book value of the Business to be Acquired on the closing date, plus $14.0 million. On the closing date, the Company paid CRSS $33.5 million, an amount equal to the estimated net book value of the Business to be Acquired on that date, plus $14.0 million. The net book value on the closing date of the Business to be Acquired is subject to an audit which will determine the final purchase price and any difference between that amount and the amount paid on the closing date will be settled between the parties. A draft balance sheet of the Business to be Acquired as of the closing date indicates that the net book value of its assets were $24.7 million at that date,which would indicate a cash purchase price of $38.7 million. In the transaction, the Company purchased substantially all of the assets of CRS Sirrine Engineers, Inc. ("CRS Sirrine"), subject to certain assumed liabilities, all of the issued and outstanding equity securities of CRSS Constructors, Inc. and CRSS International, Inc. and the assets, subject to certain assumed liabilities, or all of the issued and outstanding equity securities, of certain insignificant subsidiaries of CRSS. Excluded from the businesses acquired were the assets and liabilities of four power plant projects of CRS Sirrine. These projects were either substantially complete or in the later stages of completion. Additionally, CRSS agreed to share in the future profit margin improvement or deterioration on certain projects defined in the purchase agreement. The accompanying unaudited pro forma condensed combined financial statements present, in columnar form, the condensed historical financial statements of the Company and the Business to be Acquired, pro forma adjustments and the pro forma results. The columns titled "Jacobs Engineering (as reported)" were prepared from audited and unaudited financial statements filed with the Commission. The columns titled "Businesses Acquired (historical)" were prepared from the unaudited books and records of the Business to be Acquired, and excludes corporate allocations of general and administrative expenses which historically were charged to the Business to be Acquired by CRSS. The most recent fiscal year of CRSS prior to the transaction ended June 30, 1994. Accordingly, the historical financial information of the businesses acquired has been adjusted to conform to the Company's fiscal year end of September 30, 1993. The historical financial information of the businesses acquired has also been adjusted to exclude the assets, liabilities and results of operations of the four power projects not acquired by the Company. 11 JACOBS ENGINEERING GROUP INC. PRO FORMA CONDENSED COMBINED BALANCE SHEET June 30, 1994 (unaudited)
Jacobs Businesses Engineering Acquired Pro forma Pro forma (as reported) (historical) Adjustments Combined ------------- ------------ ----------- ----------- Assets: Current assets: Cash and cash equivalents $ 13,904,300 $ - ($8,382,000) (a) $ 5,522,300 Marketable securities 3,096,900 - - 3,096,900 Receivables 221,342,200 61,258,000 - 282,600,200 Deferred income taxes 20,349,900 - - 20,349,900 Prepaid expenses and other 3,681,900 394,000 - 4,075,900 ------------ ----------- ------------ ------------ Total current assets 262,375,200 61,652,000 (8,382,000) 315,645,200 Property, equipment and improvements, net 54,387,100 4,459,000 - 58,846,100 Other assets, net 51,856,000 2,438,000 14,000,000 (b) 68,294,000 ------------ ----------- ------------ ------------ $368,618,300 $68,549,000 $ 5,618,000 $442,785,300 ============ =========== ============ ============ Liabilities and Stockholders' Equity: Current liabilities: Notes payable to banks $ 9,279,700 $ - $ - $ 9,279,700 Accounts payable 36,321,600 37,449,000 - 73,770,600 Accrued liabilities 77,100,800 3,719,000 - 80,819,800 Customers' advances in excess of related revenues 25,932,700 7,999,000 - 33,931,700 Income taxes payable 7,705,300 - - 7,705,300 ------------ ----------- ------------ ------------ Total current liabilities 156,340,100 49,167,000 - 205,507,100 Long-term debt - - 25,000,000 (c) 25,000,000 Deferred gains on real estate transactions 2,906,500 - - 2,906,500 Other deferred liabilities 9,566,900 - - 9,566,900 Stockholders' equity: Preferred stock - - - - Common stock 24,975,500 - - 24,975,500 Additional paid-in capital 34,798,000 - - 34,798,000 Retained earnings 139,298,000 19,382,000 (19,382,000) (d) 139,298,000 Cumulative foreign currency translation adjustment 733,300 - - 733,300 ------------ ----------- ------------ ------------ Total stockholders' equity 199,804,800 19,382,000 (19,382,000) 199,804,800 ------------ ----------- ------------ ------------ $368,618,300 $68,549,000 $ 5,618,000 $442,785,300 ============ =========== ============ ============
See accompanying notes. 12 JACOBS ENGINEERING GROUP INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1993 (unaudited)
Jacobs Businesses Engineering Acquired Pro forma Pro forma (as reported) (historical) Adjustments Combined --------------- ------------- -------------- ---------------- Revenues $ 1,142,926,100 $ 273,450,000 $ - $ 1,416,376,100 Costs and expenses: Direct costs of contracts (995,350,000) (221,364,400) - (1,216,714,400) Selling, general and administrative expenses (101,519,400) (53,781,600) (466,700)(e) (155,767,700) Interest income (expense), net 1,304,300 21,000 (2,130,500)(f) (805,200) Other income (expense) net 1,977,400 (27,000) - 1,950,400 --------------- ------------- ----------- --------------- Total costs and expenses (1,093,587,700) (275,152,000) (2,597,200) (1,371,336,900) --------------- ------------- ----------- --------------- Income before taxes 49,338,400 (1,702,000) (2,597,200) 45,039,200 Provision for income taxes (20,668,400) - 1,801,200(g) (18,867,200) --------------- ------------- ----------- --------------- Net income $ 28,670,000 $ (1,702,000) $ (796,000) $ 26,172,000 =============== ============= =========== =============== Earnings per share $ 1.15 $ 1.05 =============== =============== Weighted average shares outstanding 24,964,500 24,964,500 =============== ===============
See accompanying notes. 13 JACOBS ENGINEERING GROUP INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
Jacobs Businesses Engineering Acquired Pro forma Pro forma (as reported) (historical) Adjustments Combined ------------- ------------ ----------- --------------- Revenues $ 797,024,300 $ 301,443,000 $ - $ 1,098,467,300 Costs and expenses: Direct costs of contracts (691,750,000) (261,650,100) - (953,400,100) Selling, general and administrative expenses (69,649,300) (38,771,900) (350,000)(e) (108,771,200) Interest income (expense), net 409,900 1,700 (1,597,900)(f) (1,186,300) Other income (expense), net 520,800 (16,000) - 504,800 ------------- ------------- ----------- --------------- Total costs and expenses (760,468,600) (300,436,300) (1,947,900) (1,062,852,800) ------------- ------------- ----------- --------------- Income before taxes 36,555,700 1,006,700 ( 1,947,900) 35,614,500 Provision for income taxes (14,700,700) - 378,200 (g) (14,322,500) ------------- ------------- ----------- --------------- Net income $ 21,855,000 $ 1,006,700 $(1,569,700) $ 21,292,000 ============= ============= =========== =============== Earnings per share $0.87 $0.85 ============= =============== Weighted average shares outstanding 25,135,500 25,135,500 ============= ===============
See accompanying notes. 14 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (a) This adjustment reflects the pro forma effect on cash at June 30, 1994 giving effect to the $8.4 million of cash used by the Company to acquire the businesses. (b) This adjustment reflects the pro forma goodwill amount at June 30, 1994. The goodwill amount was assumed to be $14.0 million (the premium paid over the net book value of the acquired businesses) and does not include other costs of the acquisition, nor any adjustments that may occur as a result of the allocation of the purchase price which will be completed in accordance with APB Opinion No. 16, as amended. (c) In connection with the acquisition, the Company amended one of its existing short-term credit facilities to increase the borrowing capacity thereunder. The Company then borrowed $25.0 million under the amended facility to complete the purchase of the acquired businesses. The Company expects to enter into a definitive, three-year revolving credit agreement to replace that portion of the amended facility used to finance the acquisition. This pro forma adjustment reflects the effect of that financing on the June 30, 1994 balance sheet. (d) This adjustment eliminates the equity of the businesses acquired as of the date of acquisition. (e) These adjustments reflect the pro forma amortization of goodwill (which is assumed to be amortized over a 30-year period). (f) These adjustments reflect the pro forma effects on net interest expense as a result of the estimated $38.7 million cash purchase price. (g) These adjustments reflect the pro forma effects on consolidated income tax expense due to the results of operations of the Business to be Acquired, the pro forma amortization of goodwill and the pro forma interest expense associated with the acquisition indebtedness. 15 -----END PRIVACY-ENHANCED MESSAGE-----