-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L2AFS6Lqes6IsIQd3yNVfHTSFSqXsKXaNBV3UtGwltHgiULLR6NO3yyeFsR8TA7Y Nm4LDCXty49mYBX3ZEqtKg== 0000950134-01-503948.txt : 20010711 0000950134-01-503948.hdr.sgml : 20010711 ACCESSION NUMBER: 0000950134-01-503948 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010426 ITEM INFORMATION: FILED AS OF DATE: 20010710 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPRESO INC CENTRAL INDEX KEY: 0001108345 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 752849585 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-29883 FILM NUMBER: 1678415 BUSINESS ADDRESS: STREET 1: 652 SOUTHWESTERN BLVD CITY: COPPELL STATE: TX ZIP: 75019 BUSINESS PHONE: 9724620100 MAIL ADDRESS: STREET 1: 652 SOUTHWESTERN BLVD CITY: COPPELL STATE: TX ZIP: 75019 FORMER COMPANY: FORMER CONFORMED NAME: IMPRESO COM INC DATE OF NAME CHANGE: 20000302 8-K/A 1 d88937a2e8-ka.txt AMENDMENT NO. 2 TO FORM 8-K 1 - -------------------------------------------------------------------------------- U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 2 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 APRIL 26, 2001 (Date of earliest event reported) IMPRESO, INC. (Exact name of registrant as specified in its charter) DELAWARE 000-29883 75-2849585 (State or other jurisdiction (Commission File Number) (I.R.S. employer of incorporation) Identification Number)
652 SOUTHWESTERN BOULEVARD, COPPELL, TX 75019 (Address of principal executive offices) (972) 462-0100 (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- Impreso, Inc. hereby files Amendment No. 2 to its Form 8-K (date of report: April 26, 2001) filed with the Securities and Exchange Commission on May 11, 2001. This current report amends Exhibit 99.3. 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED The following audited financial statements, which are filed as Exhibit 99.2 to this report and are incorporated herein by reference thereto, were prepared to present the net assets and the revenues and expenses of the Sky Division of Durango-Georgia Converting, LLC ("Sky"), which did not have a separate legal status or existence, for the year ended December 31, 2000. The financial statements also include unaudited information for the six month periods ended February 29, 2000 and February 28, 2001. These statements are presented as if the Sky Division had existed as a separate entity during the periods encompassed by the statements. 1. Report of Independent Certified Public Accountants 2. Statements of Net Assets 3. Statements of Revenues and Expenses 4. Statements of Cash Flows 5. Notes to Financial Statements (b) PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information, which is filed as Exhibit 99.3 to this report and is incorporated herein by reference thereto, relates to the April 26, 2001 acquisition of Sky. The transaction will be accounted for as a purchase business combination. The pro forma amounts have been prepared based on certain purchase accounting and other pro forma adjustments (as described in the accompanying notes) to the historical financial statements of Impreso, Inc. The unaudited pro forma consolidated balance sheet at February 28, 2001, reflects our historical financial position at February 28, 2001, combined with the allocated purchase price of Sky as of December 31, 2000, with pro forma adjustments as if the acquisition had occurred on February 28, 2001. The unaudited pro forma consolidated statement of income for the six-month period ended February 28, 2001, reflects the historical results of operations of both companies with pro forma acquisition adjustments as if the acquisition had occurred on September 1, 2000. The unaudited Pro Forma consolidated statement of income for the year ended August 31, 2000, reflects the historical results of operations of both companies with pro forma acquisition adjustments as if the acquisition had occurred on September 1, 1999. The pro forma adjustments are described in the accompanying notes and give effect to events that are (a) directly attributable to the acquisition, (b) factually supportable, and (c) in the case of certain statement of income adjustments, expected to have a continuing impact. The unaudited pro forma condensed financial statements should be read in connection with our historical financial statements and related footnotes. The unaudited pro forma financial information presented is for information purposes only and does not purport to represent what our and Sky's financial position or results of operations as of the dates presented would have been had the acquisition in fact occurred on such date or at the beginning of the period indicated or to project our and Sky's financial position or results of operations for any future date or period. 1. Unaudited Pro Forma Consolidated Balance Sheet 2 3 2. Unaudited Pro Forma Consolidated Statement of Income 3. Notes to Unaudited Pro Forma Consolidated Financial Statements (c). EXHIBITS: 2.1 Asset Purchase Agreement by and between TST/Impreso, Inc. and Durango Georgia Converting LLC dated as of April 5, 2001* 99.1 Impreso, Inc. Press Release issued April 30, 2001 announcing the closing of the purchase* 99.2 Audited financial statements of the Sky Division of Durango-Georgia Converting, LLC listed in Item 7 (a) of this report (filed herewith) 99.3 Unaudited Pro Forma Financial Statements of Impreso, Inc. and Subsidiaries listed on Item 7 (b) of this report (filed herewith) * Previously filed 3 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IMPRESO, INC. (registrant) Dated: July 10, 2001 /s/ Marshall Sorokwasz ---------------------------------- Marshall Sorokwasz, Chairman of the Board, Chief Executive Officer, President, and Director /s/ Susan Atkins ---------------------------------- Susan Atkins, Chief Financial Officer and and Vice President 4 5 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 2.1 Asset Purchase Agreement by and between TST/Impreso, Inc. and Durango Georgia Converting LLC dated as of April 5, 2001* 99.1 Impreso, Inc. Press Release issued April 30, 2001 announcing the closing of the purchase* 99.2 Audited financial statements of the Sky Division of Durango- Georgia Converting, LLC listed in Item 7 (a) of this report. 99.3 Unaudited Pro Forma Financial Statements of Impreso, Inc. and subsidiaries listed on Item 7 (b) of this report.
* Previously filed EX-99.2 2 d88937a2ex99-2.txt FINANCIAL STATEMENTS OF SKY DIVISION OF DURANGO 1 EXHIBIT 99.2 FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS SKY DIVISION OF DURANGO GEORGIA CONVERTING LLC December 31, 2000 2 CONTENTS
Page ---- Report of Independent Certified Public Accountants 3 Financial Statements Statements of Net Assets 4 Statements of Revenues and Expenses 5 Statements of Cash Flows 6 Notes to Financial Statements 7 - 14
3 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors IMPRESO, INC. We have audited the accompanying statement of net assets of the Sky Division of Durango Georgia Converting LLC (the "Division" - see Note B) as of December 31, 2000, and the related statements of revenues and expenses and cash flows for the year then ended. These financial statements are the responsibility of the Division's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 B, the accompanying financial statements were prepared to present the net assets and the revenues and expenses of the Division, which does not have a separate legal status or existence, and are not intended to be a complete presentation of the assets and liabilities or results of operations of the Division. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets of the Division as of December 31, 2000, and its revenues and expenses and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Grant Thornton LLP Edison, New Jersey June 27, 2001 -3- 4 Sky Division of Durango Georgia Converting LLC STATEMENTS OF NET ASSETS
DECEMBER 31, February 28, ASSETS 2000 2001 ----------- ----------- (unaudited) CASH $ 630,149 $ -- ACCOUNTS RECEIVABLE (less allowance for doubtful accounts of $493,000 and $166,000) 3,763,885 4,880,668 INVENTORY 9,090,315 9,739,700 PREPAID EXPENSES 113,068 140,741 PROPERTY, PLANT AND EQUIPMENT, net 322,622 364,468 ----------- ----------- Total assets 13,920,039 15,125,577 ----------- ----------- LIABILITIES ACCOUNTS PAYABLE 1,816,115 2,087,869 CASH OVERDRAFT -- 556,191 ACCRUED LIABILITIES 1,158,261 1,633,141 ----------- ----------- Total liabilities 2,974,376 4,277,201 COMMITMENTS AND CONTINGENCIES (Note H) ----------- ----------- NET ASSETS (Note B) $10,945,663 $10,848,376 =========== ===========
The accompanying notes are an integral part of these statements. -4- 5 Sky Division of Durango Georgia Converting LLC STATEMENTS OF REVENUES AND EXPENSES
Period from Period from September 1, September 1, YEAR ENDED 2000 to 1999 to DECEMBER 31, February 28, February 29, 2000 2001 2000 ------------ ------------ ------------ (unaudited) (unaudited) Net revenues $ 42,701,604 $ 22,090,276 $ 17,868,834 Costs of goods sold 36,372,178 18,612,407 16,207,583 ------------ ------------ ------------ Gross margin 6,329,426 3,477,869 1,661,251 Selling and administrative expenses 6,449,827 3,441,914 3,111,471 ------------ ------------ ------------ Operating (loss) income (120,401) 35,955 (1,450,220) Other income, principally sale of scrap paper 403,060 197,937 226,063 ------------ ------------ ------------ Excess (deficiency) of revenues over expenses before allocated income tax benefit (expense) 282,659 233,892 (1,224,157) Allocated income tax benefit (expense) (110,041) (81,862) 428,455 ------------ ------------ ------------ Excess (deficiency) of revenues over expenses $ 172,618 $ 152,030 $ (795,702) ============ ============ ============
The accompanying notes are an integral part of these statements. -5- 6 Sky Division of Durango Georgia Converting LLC STATEMENTS OF CASH FLOWS
Period from Period from September 1, September 1, YEAR ENDED 2000 to 1999 to DECEMBER 31, February 28, February 29, 2000 2001 2000 ------------ ------------ ------------ (unaudited) (unaudited) Cash flows from operating activities Excess (deficiency) of revenues over expenses $ 172,618 $ 152,030 $ (795,702) Adjustments to reconcile excess (deficiency) of revenues over expenses to net cash provided by (used in) operating activities Change in allowance for doubtful accounts (116,829) 20,716 -- Depreciation 18,301 12,690 3,856 (Increase) decrease in assets Accounts receivable (1,294,758) (936,243) 322,604 Inventories 634,105 (284,986) (107,557) Prepaid expenses (17,485) 70,676 244,252 Increase (decrease) in liabilities Accounts payable 820,038 356,544 (1,232,258) Accrued liabilities 669,814 797,227 (271,912) ----------- ----------- ----------- Net cash provided by (used in) operating activities 885,804 188,654 (1,836,717) ----------- ----------- ----------- Cash flows from investing activities Capital expenditures (60,421) (105,015) -- ----------- ----------- ----------- Cash flows from financing activities Intercompany funding with Durango Georgia Converting LLC, net (195,234) (734,231) 724,379 Cash overdraft -- 556,191 369,266 ----------- ----------- ----------- Net cash (used in) provided by financing activities (195,234) (178,040) 1,093,645 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH 630,149 (94,401) (743,072) Cash at beginning of period -- 94,401 743,072 ----------- ----------- ----------- Cash at end of period $ 630,149 $ -- $ -- =========== =========== ===========
The accompanying notes are an integral part of these statements. -6- 7 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE A - BUSINESS AND OWNERSHIP HISTORY The Sky Division of Durango Georgia Paper Company (the "Division") was previously an operating division of the Gilman Pulp and Paper Division ("Gilman Pulp and Paper") of the Gilman Investment Company. On December 16, 1999, the net assets and business of Gilman Pulp and Paper were acquired in a purchase transaction by Durango Georgia Paper Company ("Durango"). Durango is an indirect subsidiary of Corporation Durango S.A. de C.V., a Mexican company. Through December 31, 2000, the Division conducted business as an operating entity of Durango Georgia Converting LLC, a Delaware limited liability company, an indirect wholly-owned subsidiary of Durango. On April 26, 2001, pursuant to the Asset Purchase Agreement between Durango and TST Impreso, Inc. ("TST Impreso"), the Division's net assets and business were acquired by TST Impreso. The price paid by TST Impreso was $12,340,231, of which (i) $11,399,653 in cash was paid at closing; (ii) $300,000 will be paid in twenty quarterly installments of $15,000 each plus accrued interest and (iii) $640,578 will be paid in twenty-five monthly installments of $16,024 with a final payment of $239,976. The purchase agreement also contains a mechanism whereby the purchase price may be adjusted based upon any variance between the actual net assets acquired at the acquisition date and a specified amount. No determination of the purchase price adjustment has been made to date. The Division operates as a converter of rolled paper into office paper products, with sales being principally to office product wholesalers primarily in the northeast United States. All significant intercompany balances have been eliminated. NOTE B - BASIS OF PRESENTATION The accompanying financial statements present, on a historical basis, the statement of net assets and the statement of revenues and expenses of the Division for the year ended December 31, 2000. The Division was part of Durango, and does not have a separate legal existence. The Division's results of operations have historically been commingled with those of Durango. In addition, Durango has unsecured loans incurred for business acquisitions and working capital purposes. These statements are presented as if the Division had existed as a separate entity during the period presented. The accompanying financial statements are not intended to be a complete presentation of the assets, liabilities or the results of operations of the Division, but rather the net assets of the Division in existence at December 31, 2000. Intercompany balances with other Durango entities, including income taxes payable and deferred income taxes allocated to the Division (Note C-2), have been excluded from the assets and liabilities included in the accompanying financial statements. -7- 8 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE B (CONTINUED) On December 17, 1999, the Division adjusted the historical book value of its assets and liabilities to their fair values, based upon the allocated purchase price paid by Durango of $10,420,000 to Gilman Investment Company for the Division. As part of this adjustment the carrying amount of property, plant and equipment was adjusted from approximately $2,000,000 to $280,000. The Division relies on working capital funding provided by Durango to sustain operations. NOTE C - SUMMARY OF ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows: 1. Revenue Recognition Revenue from sales of paper products is recognized at the time the goods are shipped. 2. Income Taxes The Division's results of operations have been included in the consolidated Federal income tax return filed by Durango. Income tax expense has been included in the accompanying financial statements calculated on a separate company basis under a tax sharing arrangement with Durango. Income taxes payable and deferred income taxes are not presented, as they are part of the intercompany accounts with Durango, which are excluded from the assets and liabilities included in the accompanying financial statements. -8- 9 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE C (CONTINUED) The components of the allocated income tax provision for the year ended December 31, 2000 are as follows: Current Federal $146,762 State 5,250 -------- 152,012 Deferred Federal (40,434) State (1,537) -------- (41,971) -------- $110,041 ========
Allocated deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the allocated deferred income taxes, which are recorded on the books of Durango, are as follows: Property, plant and equipment $179,687 Accruals 1,537 Accounts receivable 58,800 -------- $240,024 ========
3. Property, Plant and Equipment Property, plant and equipment are stated at the estimated net fair value as computed on December 17, 1999 (see Note B), unless purchased subsequent thereto, in which case property, plant and equipment are stated at cost. Depreciation has been provided for in amounts sufficient to relate the cost of depreciable assets to operations on the straight-line method over their estimated lives ranging from eight to forty years. Maintenance and repairs are charged to expense as incurred. Major repairs and improvements, which extend the lives of the related assets, are capitalized and depreciated at applicable straight-line rates. -9- 10 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE C (CONTINUED) 4. Inventories Inventory costs are stated at the lower of cost (determined by the weighted-average and first-in, first-out methods) or net realizable value. 5. Concentration of Credit or Market Risk Statement of Financial Accounting Standards No. 105 ("SFAS No. 105") requires the disclosure of significant concentration of credit or market risk, regardless of the degree of such risk. Financial instruments as defined by SFAS No. 105, which potentially subject the Division and its subsidiaries to concentrations of risk, consist principally of cash and accounts receivable. The Division manages the credit risk by selling primarily to well-established companies, performing ongoing credit evaluations and making frequent contact with customers. The Division maintains cash in checking and savings accounts, which, at times, may exceed the Federally insured limits. The Division has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk on its cash balances. 6. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. 7. Fair Value of Financial Instruments Statement of Financial Accounting Standards No. 107 ("SFAS No. 107") requires the disclosure of the fair value of financial instruments, both assets and liabilities, that are recognized or unrecognized on the balance sheet. The carrying amount of cash, accounts receivable, and accounts payable approximates fair value because of the short maturities of those instruments. -10- 11 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE C (CONTINUED) 8. Cost Sharing Allocations The accompanying financial statements include an allocable portion of shared costs incurred by Durango on behalf of all of its operating divisions. Allocated costs charged to the Division as a percentage of corporate office, general and administrative expenses using a consistent methodology, include salaries, legal and professional fees, and other general and administrative costs. 9. Unaudited Interim Information The accompanying unaudited financial information for the period from September 1, 2000 to February 28, 2001 has been prepared and presented in conformity with accounting principles generally accepted in the United States of America, applicable to interim financial information. Accordingly, it does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal, recurring adjustments considered necessary for fair presentation, have been included. The accounting principles used to prepare the unaudited interim financial information are consistent with those used to prepare the audited financial statements. NOTE D - SIGNIFICANT CUSTOMERS A significant portion of the Division's sales is to two key customers, accounting for more than ten percent of sales. Such key customers accounted for approximately 20% and 11%, respectively, of the Division's sales for the year ended December 31, 2000. Accounts receivable from these two customers approximated 31% and 5%, respectively, of total accounts receivable at December 31, 2000. -11- 12 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE E - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following:
DECEMBER 31, February 28, 2000 2001 ---------- ----------- (unaudited) Land $ 27,649 $ 27,649 Buildings 122,212 122,212 Machinery and equipment 170,993 217,344 Furniture and fixtures 20,701 20,701 --------- --------- 341,555 387,906 Less accumulated depreciation (18,933) (23,438) --------- --------- $ 322,622 $ 364,468 ========= =========
NOTE F - INVENTORY The composition of inventory is as follows:
DECEMBER 31, February 28, 2000 2001 ---------- ---------- (unaudited) Raw materials $3,850,029 $4,160,164 Finished goods 5,240,286 5,579,536 ---------- ---------- $9,090,315 $9,739,700 ========== ==========
NOTE G - TRANSACTIONS WITH GROUP COMPANIES The Company enters into various transactions with group companies during the year as follows: 1. Purchases and Sales The Division purchased approximately $3,015,000 of raw materials from an affiliated company, and sold approximately $24,000 of paper products to Durango, during the year ended December 31, 2000. -12- 13 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE G (CONTINUED) 2. Selling, General and Administrative Charges The Division was allocated approximately $122,000 of selling, general and administrative charges from Durango, during the year ended December 31, 2000. NOTE H - COMMITMENTS AND CONTINGENCIES 1. Operating Leases The Division leases certain equipment and vehicles under operating leases expiring at various dates through 2003. Prior to the purchase in April 2001 of the Division by TST Impreso, Durango prepaid the Division's equipment lease and took possession of the applicable equipment. Accordingly, lease commitments of $16,024 per month through March 2003 ceased in April 2001. The approximate minimum annual rental commitments under operating leases in effect at December 31, 2000 are as follows: Year ended December 31, 2001 $200,000 2002 196,000 2003 48,000 -------- Total minimum payments $444,000 ========
The annual rental expense for 2000 was approximately $214,000. NOTE I - ACCRUED LIABILITIES The composition of accrued liabilities is as follows:
December 31, 2000 ------------ Salaries, wages and commissions $ 118,113 Accruals for inventory purchases 964,149 Other accrued expenses 75,999 ---------- $1,158,261 ==========
-13- 14 Sky Division of Durango Georgia Converting LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 NOTE J - EMPLOYEE BENEFIT PLAN The Division has a deferred compensation plan under Section 401(k) of the Internal Revenue Code. Pursuant to terms of the plan, eligible salaried employees can defer a portion of their income through contributions to the plan and the Division will match a percentage of the participant's contribution, subject to Internal Revenue Service limitations. For the year ended December 31, 2000, no amounts were matched by the Division. Participants can invest in a variety of participant-directed investment options. Certain management employees of the Division participate in the defined benefit plan and postretirement benefit plan of Gilman Investment Company pursuant to the December 17, 1999 Purchase Agreement. Durango and the Division have no obligations with respect to such plans. -14- EX-99.3 3 d88937a2ex99-3.txt UNAUDITED PRO FORMA FINANCIAL STATEMENTS 1 EXHIBIT 99.3 ITEM 7(b)1. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 2001 (Unaudited) (In Thousands)
PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 2/28/2001 2/28/2001 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- ASSETS Current assets: Cash and cash equivalents 168 (556) 556(a) 168 Trade accounts receivable, net of allowance 7,759 4,881 -- 12,640 Investments in marketable securities 11 -- -- 11 Inventories 22,643 9,740 -- 32,383 Prepaid expenses and other 701 141 -- 842 Deferred income tax assets 63 -- -- 63 ------------- ------------- ------------- ------------- Total current assets 31,345 14,206 556 46,107 ------------- ------------- ------------- ------------- Property, plant and equipment, at cost 18,800 388 1,411(a) 20,599 Less accumulated depreciation and amortization (10,263) (24) 24(a) (10,263) ------------- ------------- ------------- ------------- Net property and equipment 8,537 364 1,435 10,336 ------------- ------------- ------------- ------------- Other assets 89 -- 85(c) 174 ------------- ------------- ------------- ------------- Total assets 39,971 14,570 2,076 56,617 ============= ============= ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 9,432 2,088 -- 11,520 Accrued liabilities 1,284 1,633 -- 2,917 Current maturities of long-term debt 319 -- 312(b) 631 Line of credit 10,667 -- -- 10,667 Current maturities of prepetition debt 7 -- -- 7 ------------- ------------- ------------- ------------- Total current liabilities 21,709 3,721 312(a) 25,742 Deferred income tax liability 788 -- -- 788 Long-term debt, net of current maturities 3,469 -- 12,613(b) 16,082 Long-term portion of prepetition debt, net of current maturities 249 -- -- 249 ------------- ------------- ------------- ------------- Total liabilities 26,215 3,721 12,925 42,861 ------------- ------------- ------------- ------------- Stockholders' equity: Preferred stock -- -- -- -- Common stock 53 -- -- 53 Sky's parent investment -- 10,849 (10,849)(a) -- Treasury stock (39) -- -- (39) Additional paid-in capital 6,320 -- -- 6,320 Retained earnings 7,422 -- -- 7,422 ------------- ------------- ------------- ------------- Total stockholders' equity 13,756 10,849 (10,849) 13,756 ------------- ------------- ------------- ------------- Total liabilities and stockholders' equity 39,971 14,570 2,076 56,617 ============= ============= ============= =============
The accompanying notes are an integral part of these condensed financial statements. 2 EXHIBIT 99.3 ITEM 7(b)2. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED) (IN THOUSANDS)
PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 2/28/2001 2/28/2001 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- Net sales 42,540 22,090 -- 64,630 Cost of sales 37,795 18,612 -- 56,407 ------------- ------------- ------------- ------------- Gross profit 4,745 3,478 -- 8,223 ------------- ------------- ------------- ------------- Other costs and expenses: Selling, general and administrative 3,638 3,442 (74)(e) 7,006 Interest expense 730 -- 502(b) 1,242 10(c) Other income, net (94) (198) -- (292) ------------- ------------- ------------- ------------- Total other costs and expenses 4,274 3,244 512 7,956 ------------- ------------- ------------- ------------- Income (loss) before income tax expense 471 234 (512) 267 ------------- ------------- ------------- ------------- Income tax expense (benefit): Current 162 82 (174)(d) 70 Deferred 19 -- -- 19 ------------- ------------- ------------- ------------- Total income tax expense (benefit) 181 82 (174) 89 ------------- ------------- ------------- ------------- Net income (loss) $ 290 152 (338) 178 ============= ============= ============= ============= Net income (loss) per share (basic and diluted) $ 0.05 $ 0.03 ============= ============= Weighted average shares outstanding 5,284 5,284 ============= =============
The accompanying notes are an integral part of these condensed financial statements. 3 EXHIBIT 99.3 ITEM 7(b)3. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED AUGUST 31, 2000 (UNAUDITED) (IN THOUSANDS)
PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 8/31/2000 8/31/2000 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- Net sales 74,118 40,852 -- 114,970 Cost of sales 64,625 34,695 -- 99,320 ------------- ------------- ------------- ------------- Gross profit 9,493 6,157 -- 15,650 ------------- ------------- ------------- ------------- Other costs and expenses: Selling, general and administrative 6,838 6,899 (70)(e) 13,667 Interest expense 1,304 -- 1,001(b) 2,325 20(c) Other income, net (138) (423) -- (561) ------------- ------------- ------------- ------------- Total other costs and expenses 8,004 6,476 951 15,431 ------------- ------------- ------------- ------------- Income (loss) before income tax expense 1,489 (319) (951) 219 ------------- ------------- ------------- ------------- Income tax expense (benefit): Current 534 (108) (323)(d) 103 Deferred 23 -- -- 23 ------------- ------------- ------------- ------------- Total income tax expense (benefit) 557 (108) (323) 126 ------------- ------------- ------------- ------------- Net income (loss) $ 932 (211) (628) 93 ============= ============= ============= ============= Net income (loss) per share (basic and diluted) $ 0.18 $ 0.02 Weighted average shares outstanding 5,293 5,293 ============= =============
The accompanying notes are an integral part of these condensed financial statements. 4 EXHIBIT 99.3 ITEM 7(b)4. IMPRESO, INC. NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) a) To record purchase adjustments necessary to reflect fair value of assets acquired and liabilities assumed and to eliminate equity of acquired entity. b) To record acquisition indebtedness and the related interest expense. c) To record deferred financing costs related to acquisition indebtedness and the related amortization expense. d) To adjust the provision for income taxes for the effect of the preceding pro forma adjustments. e) To eliminate intercompany expenses allocated to Sky Division by Durango Georgia Converting LLC -----END PRIVACY-ENHANCED MESSAGE-----