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 and Exchange Act of 1934

Date of Report (date of earliest event reported): February 28, 2005

DEVCON INTERNATIONAL CORP.

(Exact Name of Registrant as Specified in Its Charter)

Florida	000-07152	59-0671992
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1350 East Newport Center Drive, Suite 201

Deerfield Beach, Florida 33442

(Address of principal executive office)

Registrant’s telephone number, including area code (954) 429-1500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This current report on Form 8-K/A amends and supplements a current report on Form 8-K filed by Devcon International Corp., a Florida corporation (“Devcon”), through Devcon Security Services Corp. (“Devcon Security”), one of its wholly owned subsidiaries, on February 28, 2005 in connection with the acquisition on February 28, 2005 of certain net assets of the electronic security services operation of Adelphia Communications Corporation, a Delaware corporation (“Adelphia”).

Item 9.01 Financial Statements and Exhibits

a) Financial Statements of Businesses Acquired

The following financial statements filed as Exhibit 99.1 hereto are incorporated herein by reference:

	Exhibit 99.1 Page
Starpoint Limited Partnership — Historical Financial Information
Report of Independent Certified Public Accountants	1
Consolidated Balance Sheet	2
Consolidated Statement of Operations and Changes in Partners’ Capital	3
Consolidated Statements of Cash Flows	4
Consolidated Notes to Financial Statements	5

(b) Pro Forma Financial Information

The following financial statements filed as Exhibit 99.2 hereto are incorporated herein by reference:

	Exhibit 99.2 Page
Devcon International Corp. — Pro Forma Financial Data
Unaudited Consolidated Pro Forma Data - Basis of Presentation	1
Pro Forma Consolidated Balance Sheet as of December 31, 2004 (Unaudited)	2
Notes to Pro Forma Consolidated Balance Sheet (Unaudited)	3
Pro Forma Consolidated Statement of Operations for the Twelve Months Ended December 31, 2004 (Unaudited)	5
Notes to Pro Forma Consolidated Statement of Operations (Unaudited)	6

(c) Exhibits

Exhibit No.	Document
10.1	Asset Purchase Agreement, dated as of January 21, 2005, by and among Sellers, Adelphia and Devcon Security (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 27, 2005).
10.2	Credit Agreement, dated as of February 28, 2005, by and among Borrowers, Lenders and CIT, as Agent (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).

10.3	Form of Note issued by Borrowers to CIT (incorporated by reference to Exhibit 10.3 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).
10.4	Security Agreement, dated as of February 28, 2005, by and among Borrowers and CIT (incorporated by reference to Exhibit 10.4 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).
10.5	Pledge Agreement, dated as of February 28, 2005, by and between Devcon International Corp. and CIT (incorporated by reference to Exhibit 10.5 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).
10.6	Pledge Agreement, dated as of February 28, 2005, by and among Borrowers and CIT (incorporated by reference to Exhibit 10.6 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).
10.7	Amendment No. 1 to Asset Purchase Agreement (incorporated by reference to Exhibit 10.7 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2005).
23.1	Consent of Carr, Riggs & Ingram, LLC
99.1	Starpoint Limited Partnership Audited Financial Statements
99.2	Devcon International Corp. Unaudited Consolidated Pro Forma Data

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.

	DEVCON INTERNATIONAL CORP.
Date: May 16, 2005	By:	/s/ Stephen J. Ruzika
	Name:	Stephen J. Ruzika
	Title:	Chief Executive Officer and President

Exhibit Index

Exhibit Number	Description
23.1	Consent of Carr, Riggs & Ingram, LLC
99.1	Starpoint Limited Partnership Audited Financial Statements
99.2	Devcon International Corp. Unaudited Consolidated Pro Forma Data

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Registration No. 333-119158) and on Forms S-8 (Registration No. 33-32968, No. 33-59557 and No. 333-92231) of Devcon International Corp. of our report dated March 29, 2005 relating to the Consolidated financial statements of Starpoint, Limited Partnership, as of December 31, 2004 and for the year then ended, which appears in the Current Report on Form 8-K/A of Devcon International Corp. dated May 16, 2005.

/s/ Carr, Riggs & Ingram, LLC

Panama City, Florida

May 16, 2005

EX-99.1

Exhibit 99.1

Starpoint, Limited Partnership and Consolidated Subsidiaries

(Debtors-In-Possession)

Financial Statements

December 31, 2004

Table of Contents

	Page
Report of Independent Certified Public Accountants	1
Consolidated Balance Sheet	2
Consolidated Statement of Operations and Changes in Partners’ Capital	3
Consolidated Statement of Cash Flows	4
Consolidated Notes to Financial Statements	5

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Partners

Starpoint, Limited Partnership

We have audited the accompanying consolidated balance sheet of Starpoint, Limited Partnership (“Starpoint”) and its consolidated subsidiaries (collectively, the “Company”) (debtors-in-possession) as of December 31, 2004 and the related consolidated statements of operations and changes in partners’ capital, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 more fully described in Note 2, to the accompanying consolidated financial statements, on June 25, 2002, Starpoint, Limited Partnership and its subsidiaries, along with its parent company, Adelphia Communications Corporation filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. As more fully described in Note 10, on February 28, 2005, Devcon International Corp. completed the acquisition of the assets of Starpoint, Limited Partnership for approximately $40.2 million. The effects of this purchase by Devcon International Corp. on the Company’s operations have not been considered in these financial statements. Following this purchase, the Company had no continuing operations.

In our opinion, except for as noted in the above paragraph, the consolidated financial statements referred to above, present fairly, in all material respects, the financial position of Starpoint, Limited Partnership and its consolidated subsidiaries (debtors-in-possession) at December 31, 2004 and the results of their operations, and changes in partners’ capital and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Carr, Riggs & Ingram, LLC

Panama City, Florida

March 29, 2005

1

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets:
Cash and cash equivalents	$	141,421
Accounts receivable, net		1,487,956
Inventories		238,610
Prepaid expenses		110,546
Other current assets		74,544
Total current assets		2,053,077
Property and equipment, net		543,786
Customer contracts, net		8,857,173
Deposits		29,553
Total assets	$	11,483,589
Liabilities and partners’ capital
Current liabilities:
Accounts payable	$	154,940
Unearned deposits		282,207
Unearned monitoring revenue		2,500,795
Due to related party		56,709,653
Accrued expenses and other current liabilities		542,977
Total current liabilities		60,190,572
Liabilities subject to compromise		934,005
Total Liabilities		61,124,577
Partners’ capital (deficit)
General partner		(496,410	)
Limited partnership interests		(49,144,578	)
Total partners’ capital (deficit)		(49,640,988	)
Total liabilities and partners’ capital	$	11,483,589

See accompanying notes to financial statements.

2

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED STATEMENT OF OPERATIONS

AND CHANGES IN PARTNERS’ CAPITAL

YEAR ENDED DECEMBER 31, 2004

Revenues:
Monitoring	$	13,530,613
Installation		3,209,631
Service		3,135,175
Total revenue		19,875,419
Cost of revenue:
Monitoring		1,655,349
Installation		6,384,251
Service		3,560,293
Total cost of revenue		11,599,893
Gross profit		8,275,526
Operating expenses:
Selling, general and administrative		5,298,504
Depreciation and amortization		4,451,280
Total operating expenses		9,749,784
Loss from operations before reorganization items		(1,474,258	)
Other income (expense) before reorganization items:
Corporate allocations		(1,531,311	)
Interest expense		(7,544	)
Total other income (expense) before reorganization items		(1,538,855	)
Net loss before reorganization items		(3,013,113	)
Reorganization items:
Professional fees		(307,518	)
Total reorganization items		(307,518	)
Net loss		(3,320,631	)
Partners’ capital (deficit), beginning of year		(46,320,357	)
Partners’ capital (deficit), end of year	$	(49,640,988	)

See accompanying notes to financial statements.

3

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2004

Operating Activities:
Net loss before reorganization items	$	(3,013,113	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		247,638
Amortization		4,203,642
(Increase) decrease in:
Accounts receivable		91,917
Inventories		118,536
Deferred installation		1,707,397
Other current assets		(42,108	)
Increase (decrease) in:
Accounts payable		37,746
Accrued expenses		(83,061	)
Unearned monitoring revenue		(103,360	)
Net cash provided by operating activities before reorganization items		3,165,234
Operating cash flows used by reorganization items:
Professional fees paid for services rendered in connection with chapter 11 proceedings		(307,518	)
Net cash used by reorganization items		(307,518	)
Net cash provided by operating activities		2,857,716
Investing Activities:
Purchase of property and equipment		(29,408	)
Net cash used in investing activities		(29,408	)
Financing Activities:
Borrowings from parent company		11,394,978
Repayment of borrowings from parent company		(14,478,757	)
Net cash used in financing activities		(3,083,779	)
Net decrease in cash		(255,471	)
Cash and cash equivalents, beginning of year		396,892
Cash and cash equivalents, end of year	$	141,421

See accompanying notes to financial statements.

4

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Organization - Starpoint, Limited Partnership has one General Partner, West Boca Acquisition Limited Partnership, a Delaware limited partnership, owning a one percent general partner interest. The remaining 99% is limited partner interests. Starpoint, Limited Partnership’s general and limited partners are wholly owned by Adelphia Communications Corporation (“Adelphia” or “Parent”).

Partnership Interests and Allocations of Income - Each partner has an undivided interest in the partnership equal to its partnership interest. All profits, losses, and credits are allocated to the partners in accordance with their partnership interest.

Basis of Presentation - The consolidated financial statements include the consolidated accounts of Starpoint, Limited Partnership, a company organized under the laws of Pennsylvania, and its subsidiaries (hereinafter collectively referred to as the “Company” or “Starpoint”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation - The consolidated financial statements include the accounts of Starpoint, Limited Partnership and its subsidiaries. The Company consolidates companies which it owns or controls more than fifty percent of the voting shares unless control is likely to be temporary. All significant intercompany balances and transactions have been eliminated in consolidation.

Business - The Company markets, sells and installs commercial and residential security alarm systems and provides central station monitoring services primarily in Florida and New York.

Revenue Recognition - Monitoring revenues are recognized monthly as services are provided pursuant to the terms of customer contracts, in which contract prices are fixed and determinable. The Company assesses the customer’s ability to meet the terms of the contract, including payment terms, before entering into contracts. Amounts collected in advance from customers for monitoring and related services are deferred and recognized as income over the applicable monitoring period, which is generally one year or less. The direct costs of acquiring new subscribers are deferred and recognized over the estimated term of the subscriber relationship, which is generally eight years. When a subscriber is identified for disconnection, any unamortized deferred revenues and deferred costs are recognized at that time.

Revenue from the sale of products is recognized according to the terms of the sales arrangement, which is customarily when the products reach the free-on-board shipping point. Revenue from the sale of services is recognized as services are rendered.

Advertising - The Company expenses all advertising costs in the period in which they are incurred. Advertising expense was $71,079 for the year ended December 31, 2004.

5

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies (Continued)

Cash and Cash Equivalents - All highly liquid investments purchased with maturities of three months or less from the time of purchase are considered to be cash equivalents.

Accounts Receivable - The Company reports trade receivables at net realizable value. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables and, once these receivables are determined to be uncollectible, they are written off through a charge against the allowance. The Company charges no late fees or interest on delinquent accounts. Accounts substantially in arrears are sent to a collection agency.

The allowance for doubtful accounts receivable reflects the best estimate of probable losses inherent in the receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts, and other currently available evidence.

Inventories - Inventories are recorded at the lower of cost (primarily first-in, first-out) or market value. Inventories include purchased parts and accessories used for installation and maintenance of security systems. Provisions for potentially obsolete or slow moving inventory is made based on analysis of inventory levels and forecasts.

Customer Contracts - Pools of customer monitoring contracts are acquired periodically from vendors primarily in Florida. Acquired customer contracts are recorded at cost which management believes best approximates fair value at the date of acquisition.

Customer contracts are amortized over the term that such contracts are expected to remain customers of the Company, approximately eight years. This amortization period takes into consideration the average estimated life and historical and projected attrition rates determined from actual experience and a recent attrition study. The Company on an ongoing basis conducts comprehensive reviews of its attrition experience and adjusts the estimated lives of customer contracts. Revenues resulting from the installation of Company-owned security systems or systems that are priced lower than otherwise would be priced because of an accompanying service agreement, are deferred and amortized over the estimated lives of the customer contracts, including extensions. Direct incremental costs related to these installations are deferred to the extent of the deferred revenue.

During the first six months after the purchase of the customer contracts, any cancellation of monitoring service, including those that result from customer payment delinquencies, results in a chargeback by the Company to the dealer of the full amount of the contract purchase price. The nonrefundable charge to the dealer is retained by the Company in the event of customer cancellation. The Company records the chargeback amount from the dealer as a reduction of the previously recorded intangible asset.

6

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies (Continued)

Property and Equipment - Property and equipment are recorded at cost. Maintenance and repair expenses are charged to expense as incurred, renewals and betterments are capitalized. For the year ended December 31, 2004, the Company capitalized no interest. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets, generally as follows:

Improvements	10 years
Vehicles	5 to 10 years
Other, machinery, equipment, furniture and fixtures	5 to 10 years

Long-Lived Assets - The Company periodically evaluates the net realizable value of long-lived assets, including property and equipment and amortizable intangible assets, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and estimated future undiscounted cash flows of the underlying asset. An impairment in the carrying value of an asset is recognized whenever anticipated future cash flows (undiscounted) from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value. Fair values are based on assumptions considering the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.

Accrued Product Warranty - Generally, the Company accrues estimated product warranty costs at the time of sale when material. Any additional amounts are recorded when such costs are probable and can be reasonably estimated. Manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Generally, one year manufacturers product warranties are implicit in the sale; however, the customer may purchase a one year extended warranty that can be renewed annually over the life of the equipment. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. At December 31, 2004, the Company has not recorded a reserve for estimated warranty expenses since the amounts are not considered significant.

In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company’s financial position, results of operations or cash flows.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make extensive use of 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 revenues and expenses during the reporting period. Actual results could differ from these estimates.

7

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies (Continued)

Income Taxes - The Partnership is not a taxpaying entity for federal or state income tax purposes. Accordingly, a provision for income taxes has not been recorded in the accompanying financial statements. Partnership income or losses are reflected in the partners’ individual or corporate income tax returns in accordance with their ownership percentages. The partnership’s tax bases approximates the reported book bases of the partnership’s assets and liabilities.

Vacation Policy - Each full time employee who has successfully completed his or her probationary period of ninety days and has less than five years of continuous service with the Company is entitled to ten days of paid vacation per year. Employees with more than five years and less than ten years of service are entitled to fifteen days of vacation with pay. Those with more than ten years of service are entitled to twenty days of vacation with pay each year. Employees can carry five days of accrued vacation from year to year.

Accounting Pronouncements - During 2004, the Company adopted FASB Interpretation No. (“FIN”) 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees.” FIN 45 requires increased disclosure of guarantees, including those for which likelihood of payment is remote, and product warranty information. FIN 45 also requires that guarantors recognize a liability for certain types of guarantees equal to the fair value of the guarantee upon its issuance. The adoption of FIN 45 did not have a material impact on the results of operations or financial position.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (FIN 46). FIN 46 addresses whether business enterprises must consolidate the financial statements of entities known as “variable interest entities”. A variable interest entity is defined by FIN 46 to be a business entity which has one or both of the following characteristics: (1) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional support from other parties, which is provided through other interests that will absorb some or all of the expected losses at the entity; and (2) the equity investors lack one or more of the following essential characteristics of a controlling financial interest; (a) direct or indirect ability to make decisions about the entity’s activities through voting rights or similar rights, (b) the obligation to absorb the expected losses of the entity if they occur, which makes it possible for the entity to finance its activities, or (c) the right to receive the expected residual returns of the entity if they occur, which is the compensation for risk of absorbing expected losses. The Company adopted FIN 46’s accounting provisions for the year ended December 31, 2003. The adoption of this new standard did not have a material impact on results of operations or financial position.

In December 2003, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” which supersedes SAB 101, “Revenue Recognition in Financial Statements.” SAB 104’s primary purpose is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superseded as a result of the issuance of EITF 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.” The issuance of SAB 104 reflects the concepts contained in EITF 00-21. The other revenue recognition concepts contained in SAB 101 remain largely unchanged. The issuance of SAB 104 did not have a material impact on the Company’s results of operations, financial position or cash flows.

8

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 2 - Bankruptcy

On June 25, 2002 (the “Petition Date”), the parent company, Adelphia Communications Corporation along with its subsidiaries, including Starpoint, Limited Partnership, filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court. Under Chapter 11, certain claims against the Debtor in existence prior to the filing of the petitions for relief under the federal bankruptcy laws are stayed while the Debtor continues business operations as debtor-in-possession. These claims are reflected in the December 31, 2004, consolidated balance sheet as “liabilities subject to compromise.” Additional claims (liabilities subject to compromise) may arise subsequent to the filing date resulting from rejection of executor contract, including leases, and from the determination by the court (or agreed to by parties in interest) of allowed claims for contingencies and other disputed amounts. Claims secured against the Debtor’s assets (“secured claims”) also are stayed, although the holders of such claims have the right to move the court for relief from the stay.

The Debtor received approval from the Bankruptcy Court to pay or otherwise honor certain of its prepetition obligations including, but not limited to, employee wages, salaries, commissions, incentive compensation and other related benefits.

Note 3 - Property and Equipment

Property and equipment consisted of the following at December 31, 2004.

Leasehold improvements	$	409,308
Vehicles		822,378
Furniture and fixtures		153,001
Equipment		2,320,222
Total		3,704,909
Less accumulated depreciation		(3,161,123	)
Net property and equipment	$	543,786

Note 4 - Customer Contracts

The Company purchases various pools of monitoring contracts from security companies in Florida and New York based on multiples of the recurring monthly revenues. There were no acquisitions or sales of customer contracts in 2004. Customer contracts at December 31, 2004 are summarized as follow:

Customer contracts	$	13,060,815
Less accumulated amortization		(4,203,642	)
Net customer contracts	$	8,857,173

During the year ended December 31, 2003 an impairment test was performed on the book value of the customer contracts. This test resulted in an impairment charge to the operations of that year. An analysis of the estimated average customer lives was performed in conjunction with this impairment test that resulted in no change to the amortization period of approximately eight years.

9

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 5 - Accounts receivable

The Company’s trade receivables at December 31, 2004 are as follows:

Gross trade accounts receivable	$	1,713,458
Less allowance for doubtful accounts		(225,502	)
Net trade accounts receivable	$	1,487,956

Note 6 - Global Overhead Allocations

Adelphia, the parent company, provides administrative services and incurs certain direct costs, on behalf of Starpoint. Payroll, legal, accounting, equipment related expenses, and reorganization costs are incurred by Adelphia and charged back to Starpoint. The total charges for the year ended December 31, 2004 were $1,838,829, including $307,518 in reorganization items.

Note 7 - Employee and Retiree Benefits

Employees of Starpoint, Limited Partnership participate in a defined contribution plan sponsored by its parent company. Participants may contribute from 1% to 25% of their compensation each year on a pre-tax basis, subject to IRS limitations. The Company matches an amount equal to 100% of the first 3%, plus 50% of the next 2%, of a participant’s contribution. Employees participating in the plan are vested immediately. Company matching contributions for the year ended December 31, 2004 were $92,076.

Note 8 - Due to Related Party

Due to related party represents global overhead allocations and other advances from its parent, Adelphia. The amounts are repaid periodically as cash flow permits. The activity during the year is summarized as follows:

Balance December 31, 2003	$	59,793,432
Draws		11,394,978
Repayments		(14,478,757	)
Balance December 31, 2004	$	56,709,653

Note 9 - Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. At December 31, 2004, the Company had $188,236 in excess of the limits of FDIC coverage. The Company has not experienced any losses in such accounts.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade receivables from a large number of customers, including both residential and commercial customers. The Company extends credit to its customers in the normal course of business, performs periodic credit evaluations and maintains allowances for the potential credit losses. The Company does not believe a significant risk of loss from a concentration of credit risk exists.

10

STARPOINT, LIMITED PARTNERSHIP AND SUBSIDIARIES

(Debtors-In-Possession)

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

Note 10 - Subsequent Event

On February 28, 2005, Devcon International Corp. (“Devcon”), through Devcon Security Services Corp. (“Devcon Security”), one of its indirect wholly-owned subsidiaries, completed the acquisition of all of the assets of Starpoint, Limited Partnership for approximately $40,200,000 in cash. The transaction received approval by the United States Bankruptcy Court. The balance of the amounts due to the parent company as of the disposition date was absorbed by the parent company. The effects of this purchase by Devcon on the Company’s operations have not been considered in these financial statements.

11

EX-99.2

Exhibit 99.2

Devcon International Corp.

UNAUDITED CONSOLIDATED PRO FORMA DATA

BASIS OF PRESENTATION

The following unaudited pro forma consolidated balance sheet and statements of operations combine the historical consolidated financial statements of the Company and Starpoint Limited Partnership and Subsidiaries (“Starpoint”). On February 28, 2005, we acquired substantially all of the operating assets of Starpoint for $40.2 million in cash, plus transaction costs, which amounted to approximately $0.5 million. We have recorded the acquisition using the purchase method of accounting. We have utilized $24.6 million of the $35.0 million available under our credit agreement (the “Credit Agreement”), dated as of February 28, 2005, to pay a portion of the cash purchase price for the acquisition; the balance of the purchase price, including payment of transaction costs, was satisfied by using cash on hand.

We derived the audited pro forma consolidated balance sheet and statements of operations data from our audited consolidated financial statements for the twelve months ended December 31, 2004 and the audited financial statements of Starpoint for the twelve months ended December 31, 2004. The financial statements used in preparing the pro forma financial data are summarized and should be read in conjunction with our complete historical consolidated financial statements filed in Form 10-K, on April 15, 2005.

The pro forma consolidated balance sheet as of December 31, 2004, gives effect to the purchase of Starpoint using the purchase method of accounting as if the acquisition and the borrowings under the Credit Agreement to finance the acquisition had been consummated on December 31, 2004. The pro forma consolidated statement of operations for the year ended December 31, 2004 gives effect to the acquisition using the purchase method of accounting as if the acquisition and the Credit Agreement had been consummated at January 1, 2004. The pro forma consolidated balance sheet and pro forma consolidated statements of operations also give effect to certain adjustments that are directly attributable to the acquisition of Starpoint.

The unaudited pro forma condensed consolidated financial statements have been prepared based upon currently available information and assumptions that are deemed appropriate by the Company’s management. We are providing the pro forma consolidated financial information for illustrative purposes only. The companies may have performed differently had they been combined during the periods presented. You should not rely on the unaudited pro forma consolidated financial information as being indicative of the historical results that would have been achieved had the companies actually been combined during the periods presented or the future results that the combined company will experience. The unaudited pro forma consolidated statements of operations do not give effect to any cost savings or operating synergies expected to result from the acquisition or the costs to achieve such cost savings or operating synergies.

1

Devcon International Corp.

Pro Forma Consolidated Balance Sheet

As of December 31, 2004

(unaudited)

	Devcon International Corporation		Starpoint Limited Partnership [A]		Subtotal		Pro-forma Adjustments		Notes	Pro-forma
Assets
Cash and cash equivalents	34,928,162		141,421		35,069,583		(17,362,104	)	(1)    (3)	17,707,479
Accounts Receivable-Trade, Net	8,129,024		1,487,956		9,616,980					9,616,980
Accounts Receivable, related party, net	1,046,282				1,046,282					1,046,282
Notes receivable	2,611,647				2,611,647					2,611,647
Notes receivable, related party	774,622				774,622					774,622
Costs and estimated earning in excess of billings	1,130,184				1,130,184					1,130,184
Inventories	3,324,237		238,610		3,562,847					3,562,847
Prepaid Expenses	746,991		110,546		857,537		(110,546	)	(1)	746,991
Prepaid taxes	4,401,480		—		4,401,480					4,401,480
Other Current Assets	4,427,077		74,544		4,501,621					4,501,621
Total Current Assets	61,519,706		2,053,077		63,572,783		(17,472,650	)		46,100,133
Property, plant and equipment, net					—					—
Land	1,485,068				1,485,068					1,485,068
Buildings	846,871				846,871					846,871
Leasehold improvements	2,515,280		409,309		2,924,589		(409,309	)	(4)	2,515,280
Equipment	49,356,786		3,142,599		52,499,385		(2,829,599	)	(1)    (4)	49,669,786
Furniture and fixtures	948,238		153,001		1,101,239		(153,001	)	(4)	948,238
Construction in process	2,019,324				2,019,324					2,019,324
Total Property Plant and equipment	57,171,567		3,704,909		60,876,476		(3,391,909	)		57,484,567
Less accumulated depreciation	(29,426,485	)	(3,161,123	)	(32,587,608	)	3,161,123		(1)	(29,426,485	)
Total property, plant and equipment, net	27,745,082		543,786		28,288,868		(230,786	)		28,058,082
Investments in unconsolidated joint ventures and affiliates, net	362,434				362,434					362,434
Notes receivable	1,318,079				1,318,079					1,318,079
Notes receivable, related party	2,000,385				2,000,385					2,000,385
Intangible assets, net of amortization	4,320,815		8,857,173		13,177,988		12,286,827		(1)    (2)	25,464,815
Goodwill	1,114,524				1,114,524		20,729,129		(2)	21,843,653
Other long term assets	3,284,044		29,553		3,313,597		996,761		(1)    (5)	4,310,358
Total Assets	101,665,069		11,483,589		113,148,658		16,309,281			129,457,939
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts Payable, trade and other	4,928,500		154,940		5,083,440					5,083,440
Accrued Expenses and other liabilities	5,422,120		825,184		6,247,304		(288,049	)	(1)	5,959,255
Unearned monitoring revenue	406,653		2,500,795		2,907,448					2,907,448
Accrued expense, retirement and severance	948,212				948,212					948,212
Current installments of long term debt	80,094				80,094					80,094
Current installments of long term debt, related party	1,725,000		56,709,653		58,434,653		(56,709,653	)	(1)	1,725,000
Billings in excess of costs and estimated earnings	206,130				206,130					206,130
Billing in excess of costs and estimated earnings, related party	538,451				538,451					538,451
Deferred tax liability	4,080,000				4,080,000					4,080,000
Income tax payable	1,125,204				1,125,204					1,125,204
Total Current Liabilities	19,460,364		60,190,572		79,650,936		(56,997,702	)		22,653,234
Liabilities subject to compromise	—		934,005		934,005		(934,005	)	(1)	—
Long tern debt, excluding current installments	564,440		—		564,440		24,600,000		(3)    (6)	25,164,440
Retirement and severance	—		—		—					—
Deferred Tax Liability	4,012,596		—		4,012,596					4,012,596
Other Long Term Liabilities	644,751		—		644,751					644,751
Total Liabilities	24,682,151		61,124,577		85,806,728		(33,331,707	)		52,475,021
Shareholders’ Equity
Common Stock	575,305				575,305					575,305
Additional Paid-in Capital	29,789,727				29,789,727					29,789,727
Retained Earnings	48,106,129		(49,640,988	)	(1,534,859	)	49,640,988		(1)	48,106,129
Accumulated other comprehensive loss	(1,389,665	)			(1,389,665	)				(1,389,665	)
Treasury stock, at cost	(98,578	)			(98,578	)				(98,578	)
Total Shareholders’ Equity	76,982,918		(49,640,988	)	27,341,930		49,640,988			76,982,918
Commitments and contingencies	—
Total Liabilities and Shareholders’ Equity	101,665,069		11,483,589		113,148,658		16,309,281			129,457,939

[A] Represents the balance sheet for Starpoint Limited Partnership and its Consolidated Subsidiaries (Debtors-In-Possession), which we acquired on February 28, 2005, as of December 31, 2004.

2

Devcon International Corp.

Notes to Pro Forma Consolidated Balance Sheet

(unaudited)

(1) To reflect assets not acquired and liabilities not assumed in the acquisition.

(2) The account balances of Starpoint are stated at historical cost. To apply purchase accounting to the acquisition, several of the asset classifications need to be adjusted to state the balances at estimated fair value. The preliminary purchase price allocation is based upon management’s best estimates of fair value and is therefore subject to adjustment. Upon completion of an independent valuation, the purchase price allocation will be finalized and the resulting adjustments will be applied to the assets and liabilities.

The preliminary purchase price allocation is as follows:

Purchase Price Allocation

Accounts Receivable	$	1,487,956
Inventory		238,610
Other Current Assets		74,544
Liabilities Assumed		(3,163,317	)
Net Fixed Assets		313,000
Contractual Agreements		7,240,000
Customer Relationships		13,904,000
Goodwill		20,729,129

(3) The amount paid to Adelphia for the purchase of Starpoint was $40,274,371, calculated at February 28, 2005. This represents the contractual purchase price of $41,636,578 and a working capital adjustment of $(1,362,207). The final working capital adjustment will be calculated based on balances that exist as of the date of closing.

The sources and uses of cash for this transaction are as follows:

Transaction Sources and Uses

Uses:
Gross Purchase Price of Assets	$	41,636,578
Working Capital Adjustment		(1,362,207	)
Transaction Expenses		549,551
Loan Origination Expenses		996,761
Total Uses	$	41,820,683
Sources:
Senior Bank Debt	$	24,600,000
Cash		17,220,683
Total Sources	$	41,820,683

3

Devcon International Corp.

Notes to Pro Forma Consolidated Balance Sheet (continued)

(unaudited)

(4) A fixed asset reconciliation is provided as the fixed assets acquired and/or assumed did not include all of the fixed assets on the books of Starpoint and, in applying purchase accounting, certain fixed asset classifications needed to be adjusted to state the balances at estimated fair value.

Fixed Asset Reconciliation

	Per Starpoint Balance Sheet			Adjustment for Fixed Assets Not Acquired			Adjustment of Fixed Assets to Fair Market Value			Pro Forma Fixed Assets
Leasehold Improvements	$	409,309		$	—		$	(409,309	)	$	—
Equipment		3,142,599			(822,378	)		(2,007,221	)		313,000
Furniture and Fixtures		153,001			—			(153,001	)		—
Less: Accumulated Depreciation		(3,161,123	)		747,636			2,413,487			—
Total Property, Plant and Equipment	$	543,786		$	(74,742	)	$	(156,044	)	$	313,000

(5) The fees associated with the new Credit Agreement totaled $996,761.

(6) The acquisition resulted in new long-term debt of $24,600,000.

4

Devcon International Corp.

Pro Forma Consolidated Statement of Operations

For the Twelve Months Ending December 31, 2004

(unaudited)

	Devcon International Corporation			Starpoint Limited Partnership [A]			Subtotal			Pro-forma Adjustments			Notes	Pro-forma
Revenue
Materials Revenue		41,061,332						41,061,332							41,061,332
Materials revenue, related party		1,918,593						1,918,593							1,918,593
Construction revenue		14,657,257						14,657,257							14,657,257
Construction revenue, related party		10,394,281						10,394,281							10,394,281
Security revenue		943,080			19,875,419			20,818,499							20,818,499
Other revenue		183,938						183,938							183,938
Total revenue		69,158,481			19,875,419			89,033,900			—				89,033,900
Cost of Sales
Cost of Materials		(36,083,264	)					(36,083,264	)						(36,083,264	)
Cost of Construction		(17,547,373	)					(17,547,373	)						(17,547,373	)
Cost of Security		(648,200	)		(11,599,893	)		(12,248,093	)		2,258,630		(1)		(9,989,463	)
Cost of other		(156,362	)					(156,362	)						(156,362	)
Gross profit		14,723,282			8,275,526			22,998,808			2,258,630				25,257,438
Operating Expenses:
Selling, general and administrative		(15,141,900	)		(11,281,095	)		(26,422,995	)				(2)		(26,422,995	)
Severance and retirement		(1,655,968	)					(1,655,968	)						(1,655,968	)
Impairment of assets		(621,926	)					(621,926	)						(621,926	)
Gain on sales of businesses		—						—							—
Operating (loss), as revised		(2,696,512	)		(3,005,569	)		(5,702,081	)		2,258,630				(3,443,451	)
Other Income (Expense)		71,300						71,300							71,300
Joint venture equity earnings		(164,051	)					(164,051	)						(164,051	)
Interest income, receivables		2,631,398						2,631,398							2,631,398
Interest income, banks		265,491						265,491							265,491
Interest expense					(7,544	)		(7,544	)		(2,050,127	)	(3)		(2,057,671	)
Other Income (Expense)		—						—							—
Gain on Antigua Note		10,970,012						10,970,012							10,970,012
Income (Loss) Before Income Taxes		11,077,638			(3,013,113	)		8,064,525			1,739,814				8,273,028
Income tax (expense) benefit		(440,766	)					(440,766	)		953,567		(4)		512,801
Net income (loss)	$	10,636,872		$	(3,013,113	)	$	7,623,759		$	1,162,071			$	8,785,830
Income (Loss) Per Common Share - Basic	$	2.44												$	2.01
Income (Loss) Per Common Share - Diluted	$	2.09												$	1.72
Weighted Average Number of Shares Outstanding:
Basic		4,363,476													4,363,476
Diluted		5,096,566													5,096,566

[A] Represents the actual results of operations for Starpoint Limited Partnership and its Consolidated Subsidiaries (Debtors-In-Possession), which we acquired on February 28, 2005, as of December 31, 2004.

5

Devcon International Corp.

Notes to Pro Forma Consolidated Statement of Operations

(unaudited)

(1) Adjustments were made to asset balances in applying purchase accounting. The following summarizes the adjustment required for depreciation and amortization expense:

Proforma Depreciation and Amortization Adjustments

	Existing			Proforma			Adjustment
Depreciation Expense	$	(247,638	)	$	(78,250	)	$	169,388
Amortization Expense		(4,203,642	)		(2,114,400	)		2,089,242
Total Depreciation and Amortization Expense	$	(4,451,280	)	$	(2,192,650	)	$	2,258,630
Proforma Depreciation Expense:
Gross Net Fixed Assets	$	313,000
Remaining Life		4 years
Proforma Depreciation Expense	$	(78,250	)
Proforma Amortization Expense
New Intangible Assets	$	21,144,000
Remaining Life		10 years
Proforma Amortization Expense	$	(2,114,400	)

(2) Starpoint recorded a corporate allocation of $1,531,311. Since the acquisition was an acquisition of assets, this expense is not being assumed, however this is not included as a proforma adjustment.

6

Devcon International Corp.

Notes to Pro Forma Consolidated Statement of Operations (continued)

(unaudited)

(3) The $24,600,000 of long-term debt is issued under the Credit Agreement at an assumed rate of 7.5%. The Credit Agreement contains provisions regarding unused commitment fees. The overall impact on proforma interest expense is shown as follows:

Proforma Interest Expense Calculation

Interest Rate Calculation
3-Month LIBOR		3.25	%
Borrowing Spread		4.25	%
Interest Rate		7.00	%
Cash Interest Expense Calculation
Outstanding Balance of Credit Agreement	$	24,600,000
Interest Rate		7.00	%
Cash Interest Expense	$	(1,845,000	)
Unused Fee Calculation
Face Amount of Credit Agreement	$	35,000,000
Outstanding Balance of Credit Agreement		24,600,000
Unused Portion of Credit Agreement	$	10,400,000
Unused Fee		0.375	%
Unused Fee	$	(39,000	)
Amortization of Loan Origination Costs
Loan Origination Costs	$	996,761
Amortization Period		6 years
Annual Amortization of Loan Origination Costs	$	(166,127	)
Total Proforma Interest Expense	$	(2,050,127	)

(4) Starpoint did not record federal and state income tax expense. We are currently in a federal taxable position and accordingly calculated a proforma income tax expense based upon an effective rate of 34%.

7