EX-99.4 2 a05-19824_5ex99d4.htm EXHIBIT 99

Exhibit 99.4

 

Crosstex International, Inc

Balance Sheet

July 31, 2005

 

Assets

 

2005

 

 

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

 

$

3,114,532

 

Receivables:

 

 

 

Trade accounts receivable, net of allowance for doubtful accounts and sales rebates of $145,000

 

4,386,531

  

Other

 

11,929

 

Inventories:

 

 

 

Raw materials

 

1,983,671

 

Work in process

 

45,009

 

Finished goods

 

4,604,256

 

Prepaid expenses

 

102,584

 

Prepaid income taxes

 

134,603

 

Deferred tax assets

 

271,972

 

 

 

 

 

Total current assets

 

14,655,087

 

 

 

 

 

Property, Plant and Equipment, net

 

7,864,407

 

 

 

 

 

Intangible and Other Assets:

 

 

 

Customer lists, net

 

20,833

 

Noncompete agreements, net

 

32,500

 

Goodwill

 

1,010,770

 

Note receivable - other

 

33,142

 

Note receivable - officer

 

324,577

 

Other

 

16,360

 

 

 

 

 

 

 

1,438,182

 

 

 

 

 

Total assets

 

$

23,957,676

 

 

1



 

Liabilities and Shareholders’ Equity

 

2005

 

 

 

 

 

Current Liabilities:

 

 

 

Current maturities of long-term debt

 

$

6,235,024

 

Current maturities of deferred compensation

 

804,867

 

Accounts payable

 

1,929,238

 

Accrued liabilities

 

720,874

 

Accrued compensation

 

1,185,911

 

Advances to officer’s and employees

 

209,259

 

 

 

 

 

Total current liabilities

 

11,085,173

 

 

 

 

 

Long-term debt, less current maturities

 

 

 

 

 

 

Deferred compensation - long term

 

 

 

 

 

 

Deferred taxes

 

746,133

 

 

 

 

 

Total liabilities

 

11,831,306

 

 

 

 

 

Shareholders’ Equity

 

 

 

Common stock, 500,000 shares authorized; 120,592 shares issued

 

2,836

 

Retained earnings

 

18,223,484

 

 

 

 

 

 

 

18,226,320

 

Less: treasury stock, 379,408 shares in 2005

 

(6,099,950

)

 

 

12,126,370

 

Total liabilities and shareholders’ equity

 

$

23,957,676

 

 

2



 

Crosstex International, Inc.

Statements of Income

Three Months Ended July 31, 2005 and 2004

 

 

 

2005

 

2004

 

 

 

 

 

 

 

Net sales

 

$

13,231,911

 

$

11,906,370

 

Cost of goods sold

 

8,591,255

 

7,612,034

 

 

 

 

 

 

 

Gross profit

 

4,640,656

 

4,294,336

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general and administrative

 

3,742,015

 

2,566,529

 

Depreciation and amortization

 

31,552

 

28,230

 

 

 

 

 

 

 

Operating income

 

867,089

 

1,699,577

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

Other (income) expense, net

 

 

 

Interest income

 

(827

)

(2,776

)

Interest expense

 

251,519

 

148,442

 

 

 

 

 

 

 

Income before income taxes

 

616,397

 

1,553,911

 

 

 

 

 

 

 

Provision for income taxes

 

282,000

 

583,000

 

 

 

 

 

 

 

Net income

 

$

334,397

 

$

970,911

 

 

3



 

Crosstex International, Inc.

Statements of Cash Flows

Three Months Ended July 31, 2005 and 2004

 

 

 

2005

 

2004

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

 

$

334,397

 

$

970,911

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

  

 

  

Depreciation

 

286,309

 

277,752

 

Intangibles amortization

 

6,666

 

6,666

 

Deferred income taxes

 

32,500

 

 

Deferred financing costs amortization

 

40,013

 

2,305

 

Deferred compensation

 

(5,300

)

9,900

 

Change in working capital components, net of effects of business combinations:

 

 

 

 

 

 

Trade accounts receivable

 

(61,677

)

375,965

 

Inventories

 

(116,912

)

(1,172,935

)

Prepaid expenses and other current assets

 

179,717

 

561,393

 

Accounts payable and accrued liabilities

 

1,964,983

 

(237,894

)

 

 

 

 

 

 

Net cash provided by operating activities

 

2,660,696

 

794,063

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Purchase of leasehold improvements and equipment

 

(52,616

)

(183,631

)

Payment for acquisition of businesses

 

(647,000

)

 

Payments received on note receivable

 

2,873

 

1,813

 

Purchase of intangibles

 

(60,769

)

 

 

 

 

 

 

 

Net cash (used in) investing activities

 

(757,512

)

(181,818

)

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Payments on long-term debt

 

(1,224,309

)

(338,613

)

Cash dividends

 

(150,740

)

 

 

 

 

 

 

 

Net cash (used in) financing activities

 

(1,375,049

)

(338,613

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

528,135

 

273,632

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

Beginning

 

2,586,397

 

1,106,342

 

 

 

 

 

 

 

Ending

 

$

3,114,532

 

$

1,379,974

 

 

4



 

 

 

2005

 

2004

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

Cash payments (receipts) for:

 

 

 

 

 

Interest

 

$

183,206

 

$

147,807

 

 

 

 

 

 

 

Income taxes

 

$

99,374

 

$

15,798

 

 

 

 

 

 

 

Supplemental Schedule of Noncash Investing and Financing Activities

 

 

 

 

 

Acquisition of businesses:

 

 

 

 

 

Fair value of net assets acquired:

 

 

 

 

 

Working capital assets

 

$

97,000

 

$

 

Machinery and equipment

 

100,000

 

 

Goodwill

 

450,000

 

 

 

 

 

 

 

 

Net cash purchase price

 

$

647,000

 

$

 

 

5



 

Crosstex International, Inc.

Notes to financial statements

 

Note 1.                                  Basis of Presentation

 

The financial information as of July 31, 2005 and for the three month periods ended July 31, 2005 and 2004 is unaudited; however, such financial information includes all adjustments (consisting solely of normal recurring adjustments), which, in the opinion of management, are necessary for the fair presentation of the financial information in conformity with accounting principles generally accepted in the United States of America.

 

The results of operations for the three month periods ended July 31, 2005 and 2004 are not necessarily indicative of the operating results for the full year or any other interim period.

 

In connection with the terms of the stock purchase agreements among Cantel Medical Corp., the Company and the shareholders of the Company, and as a condition of the closing, the Company was required to repay the outstanding bank debt and the deferred compensation obligations to officers.  As a result, at July 31, 2005, the Company has classified its bank debt and deferred compensation obligations as current liabilities.  In addition, the portion of the deferred tax asset related to deferred compensation obligations was also classified as a current deferred tax asset.

 

Note 2.                                  Acquisitions

 

In May 2005, the Company purchased certain assets, including intangibles, of a manufacturer and distributor of rubber tips that attach to dental suction tubes.  The purchase price was approximately $647,000.  The fair value of the assets acquired consisted of $97,000 in inventory and $100,000 in machinery and equipment.  The excess purchase price of $450,000 was assigned to goodwill.

 

In addition, the Company paid approximately $60,000 in connection with a prior acquisition and the amount was assigned to goodwill.

 

Note 3.                                  Notes Payable

 

During the quarter ended July 31, 2005, the Company repaid one of the notes payable-treasury stock which amounted to approximately $900,000.  The other note payable-treasury stock was repaid in connection with the acquisition described in Note 1 above.

 

Note 4.                                  Income Tax Matters

 

Included in the provision for income taxes is an estimated provision of approximately $60,000 relating to a tax assessment resulting from an IRS examination for the years ended April 30, 2004 and 2003.

 

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