EX-99 2 exh992.htm EXH 99.2 FIN STMTS

Exhibit 99.2

 

 

 

THE TECH GROUP, INC. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

MARCH 26, 2005

 

 


 

 

THE TECH GROUP, INC. AND SUBSIDIARIES

 

 

Table of Contents

 

 

 

 

 

Unaudited Condensed Consolidated Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheet

 

3

 

 

 

Condensed Consolidated Statements of Operations

 

4

 

 

 

Condensed Consolidated Statements of Cash Flows

 

5

 

 

 

Notes to Condensed Consolidated Financial Statements

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 


 

 

 

The Tech Group, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(in thousands)

 

 

 

3/26/2005

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, including cash equivalents

 

$

780

 

Accounts receivable, net of allowance

 

 

21,059

 

Inventories

 

 

6,429

 

Deferred income taxes

 

 

35

 

Other current assets

 

 

6,225

 

Total current assets

 

 

34,528

 

 

 

 

 

 

Property, plant and equipment

 

 

89,127

 

Less accumulated depreciation and amortization

 

 

49,448

 

 

 

 

39,679

 

Investments in and advances to affiliated companies

 

 

253

 

Goodwill

 

 

8,003

 

Other intangible assets

 

 

852

 

Other assets

 

 

96

 

Total Assets

 

$

83,411

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

3,081

 

Current portion of capital lease obligations

 

 

444

 

Notes payable

 

 

132

 

Accounts payable

 

 

12,798

 

Accrued expenses:

 

 

 

 

Salaries, wages and benefits

 

 

3,566

 

Income taxes payable

 

 

1,395

 

Other current liabilities

 

 

5,057

 

Total current liabilities

 

 

26,473

 

Long-term debt, less current portion

 

 

12,285

 

Capital lease obligations

 

 

518

 

Deferred income taxes

 

 

129

 

Other long-term liabilities

 

 

403

 

Minority interest

 

 

1,214

 

Shareholders’ equity

 

 

42,389

 

Total Liabilities and Shareholders’ Equity

 

$

83,411

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

3

 


 

 

 

The Tech Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands)

 

 

 

 

Nine Months Ended

 

 

 

3/26/05

 

3/27/04

 

Net sales

 

$

100,158

 

$

68,959

 

Cost of goods sold

 

 

87,924

 

 

62,887

 

Gross profit

 

 

12,234

 

 

6,072

 

Selling, general and administrative expenses

 

 

9,810

 

 

7,760

 

Other expense, net

 

 

42

 

 

(960

)

Operating profit (loss)

 

 

2,382

 

 

(728

)

Interest expense, net

 

 

453

 

 

9

 

Income (loss) before income taxes and minority interest

 

 

1,929

 

 

(737

)

Provision for income taxes

 

 

323

 

 

21

 

Income (loss) before minority interest

 

 

1,606

 

 

(758

)

Minority interest

 

 

116

 

 

197

 

Net income (loss)

 

$

1,490

 

$

(955

)

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

4

 


 

 

 

The Tech Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

 

 

 

 

Nine Months Ended

 

 

 

3/26/05

 

3/27/04

 

Operating activities

 

 

 

 

 

 

 

Net income (loss)

 

$

1,490

 

$

(955

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,293

 

 

5,742

 

Provision for doubtful accounts

 

 

(170

)

 

(33

)

Provision for inventory allowances

 

 

(4

)

 

(64

)

Loss on disposal of property, plant and equipment

 

 

44

 

 

170

 

Minority interest in net income of consolidated subsidiary

 

 

116

 

 

197

 

Income from unconsolidated subsidiary

 

 

(16

)

 

(37

)

Deferred income taxes

 

 

—

 

 

(62

)

Deferred compensation

 

 

21

 

 

(946

)

Changes in operating assets and liabilities

 

 

 

 

 

 

 

Accounts receivable

 

 

(5,176

)

 

(2,513

)

Inventories

 

 

(1,429

)

 

(1,084

)

Prepaid expenses and other

 

 

262

 

 

(1,643

)

Accounts payable

 

 

1,430

 

 

(976

)

Accrued expenses

 

 

1,660

 

 

541

 

Net cash provided by (used in) operating activities

 

 

5,521

 

 

(1,663

)

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(6,839

)

 

(3,925

)

Proceeds from sale of property, plant and equipment

 

 

81

 

 

1,913

 

Acquisition of business, net of cash received

 

 

—

 

 

(2,000

)

Dividend received from investment

 

 

1,852

 

 

—

 

Increase in other assets

 

 

(667

)

 

—

 

Net cash used by investing activities

 

 

(5,573

)

 

(4,012

)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Payments on notes payable, long-term debt, and capital lease obligations

 

 

(4,999

)

 

(1,347

)

Proceeds from note payable and long-term debt

 

 

188

 

 

3,783

 

Net cash provided by (used in) financing activities

 

 

(4,811

)

 

2,436

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

530

 

 

300

 

Net decrease in cash and cash equivalents

 

 

(4,333

)

 

(2,939

)

Cash and cash equivalents, beginning of period

 

 

5,113

 

 

11,044

 

Cash and cash equivalents, end of period

 

$

780

 

$

8,105

 

 

See accompanying notes to condensed consolidated financial statements.

 

5

 


 

 

 

THE TECH GROUP, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 26, 2005

(In Thousands)

 

1.

The interim consolidated financial statements for the nine-month period ended March 26, 2005 should be read in conjunction with the consolidated financial statements and notes thereto of The Tech Group, Inc. and Subsidiaries, (“the Company”), appearing in the Company’s June 26, 2004 report.

 

These financial statements have been prepared pursuant to the requirements of a purchase and sale agreement between West Pharmaceutical Services, Inc. (“West”) and the Company. On May 20, 2005, West acquired the Company excluding the investment in The Tech Group Asia, Ltd.

 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements represent a carve-out of the acquired company from other interests of the seller.

 

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries in the United States, Puerto Rico, and Mexico and its majority owned subsidiary in Ireland (80%).

 

All significant intercompany accounts and transactions have been eliminated in consolidation.

 

In the opinion of management, the unaudited condensed consolidated financial statements, contain all adjustments, consisting only of normal recurring accruals and adjustments, necessary for a fair presentation of the Company’s financial position as of March 26, 2005 and the results of operations and cash flows for the periods ended March 26, 2005 and March 27, 2004. The results of operations for any interim period are not necessarily indicative of results for the full year.

 

2.

Inventories at March 26, 2005 were as follows:

 

 

 

3/26/05

 

Finished goods

 

$

3,823

 

Work in process

 

 

52

 

Raw materials

 

 

2,554

 

 

 

$

6,429

 

 

3.      Comprehensive income (loss) for the nine months ended March 26, 2005 and March 27, 2004 was as follows: 

 

 

3/26/05

 

3/27/04

 

Net income (loss)

 

$

1,490

 

$

(955

)

Foreign currency translation adjustments

 

 

2,382

 

 

401

 

Comprehensive income (loss)

 

$

3,872

 

$

(554

)

 

 

 

 

 

6