-----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, C6aGS5xRj0eKhIBABhzhPpH5zh4DIpbZUW/s11j9nnxUK6uTNIbogNDhbf6EBNOK OgMLgiea1XYh2Qqg6TuxLw== 0000950144-98-007609.txt : 19980623 0000950144-98-007609.hdr.sgml : 19980623 ACCESSION NUMBER: 0000950144-98-007609 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980413 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980622 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEIST C H CORP CENTRAL INDEX KEY: 0000046653 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION SPECIAL TRADE CONTRACTORS [1700] IRS NUMBER: 160803301 STATE OF INCORPORATION: NY FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-10893 FILM NUMBER: 98651529 BUSINESS ADDRESS: STREET 1: 810 NORTH BELCHER ROAD CITY: CLEARWATER STATE: FL ZIP: 34625 BUSINESS PHONE: 8134615656 MAIL ADDRESS: STREET 1: 45 ANDERSON ROAD CITY: BUFFALO STATE: NY ZIP: 14225 8-K/A 1 C.H. HEIST CORP. FORM 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8 - KA CURRENT REPORT Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 13, 1998 --------------------- C.H. Heist Corp. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) New York 0-7907 16-0803301 - ---------------------- ---------------- ---------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 810 North Belcher Road, Clearwater, Florida 33765 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (813) 461-5656 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Exhibit Index: 3 2 Item 2: Acquisition or Disposition of Assets On April 13, 1998, Ablest Service Corp. ("Ablest"), a wholly owned subsidiary of C.H. Heist Corp. ("Company"), acquired Milestone Technologies, Inc., an Arizona corporation, ("Milestone") pursuant to a Stock Purchase Agreement ("Purchase Agreement"). Ablest intends to continue to operate Milestone as a separate company. Pursuant to the Purchase Agreement, Ablest purchased 100% of the common stock of Milestone from its shareholders for approximately $6.6 million paid in cash at closing and agreed to pay additional consideration based on the achievement of certain pre-established earnout targets for 1998. The purchase price was determined through negotiations and is expected to be assigned to the fair value of the assets and liabilities acquired with the excess being assigned to various intangible assets, primarily goodwill. Ablest used funds available to it under the Company's revolving line of credit to fund the cash paid at closing. The two former shareholders of Milestone have entered into two-year employment agreements with Ablest providing certain base and incentive compensation. Each shareholder of Milestone has also agreed not to compete with Ablest for three years from the date of closing. 2 3 Item 7: Financial Statements, Pro Forma Information and Exhibits Pages (a) Milestone Technologies, Inc. Financial Statements for the Years Ended November 30, 1997 and 1996 together with independent auditors' report thereon 5 - 13 (b) Pro Forma Financial Information: Unaudited pro forma condensed consolidated balance sheet as of March 29, 1998. 14 Unaudited pro forma condensed consolidated statement of operations for the thirteen week period ended March 29, 1998. 15 Unaudited pro forma condensed consolidated statement of earnings for the year ended December 28, 1997. 16 Notes to unaudited pro forma condensed consolidated financial statements. 17 - 18 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, thereunto duly authorized. Dated: June 19, 1998 C.H. Heist Corp. --------------------------- (Registrant) /s/ Mark P. Kashmanian --------------------------- Mark P. Kashmanian Treasurer, Chief Accounting Officer 4 5 Independent Auditors' Report The Board of Directors Milestone Technologies, Inc.: We have audited the accompanying balance sheet of Milestone Technologies, Inc. as of November 30, 1997, and the related statements of income and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 1997 financial statements referred to above present fairly, in all material respects, the financial position of Milestone Technologies, Inc. as of November 30, 1997, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. March 24, 1998 KPMG Peat Marwick LLP 5 6 Independent Auditors' Report The Board of Directors Milestone Technologies, Inc.: We have audited the accompanying balance sheet of Milestone Technologies, Inc. as of November 30, 1996, and the related statements of income and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Milestone Technologies, Inc. as of November 30, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Phoenix, Arizona March 8, 1998 Eide Helmeke PLLP 6 7 MILESTONE TECHNOLOGIES, INC. BALANCE SHEETS NOVEMBER 30, 1997 and 1996
Assets 1997 1996 ------ ---- ---- Current assets: Cash and cash equivalents $ 1,032,263 $ 77,582 Accounts receivable - trade, net 1,002,517 942,045 Accounts receivable - unbilled 226,794 126,142 Other 17,094 20,998 ---------------- -------------- Total current assets 2,278,668 1,166,767 ---------------- -------------- Equipment, Net Furniture and office equipment 47,494 58,062 Accumulated depreciation (24,239) (34,612) ---------------- -------------- 23,255 23,450 ---------------- -------------- Other assets 4,650 3,841 ---------------- -------------- $ 2,306,573 $ 1,194,058 ================ ============== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Notes payable to bank $ 0 $ 10,680 Accounts payable 2,789 11,367 Accrued payroll and payroll taxes 288,075 215,799 Accrued pension expense 20,000 14,000 Due to former stockholders 0 38,250 Income taxes payable 427,809 0 Deferred income taxes 356,000 350,000 ---------------- -------------- Total current liabilities 1,094,673 640,096 ---------------- -------------- Stockholders' equity: Common stock, no par value, authorized 1,000,000 shares; 500,000 shares issued 90,918 90,918 Additional paid-in capital 45,000 45,000 Retained earnings 1,220,482 562,544 ---------------- -------------- 1,356,400 698,462 Treasury stock, at cost, 120,000 shares (144,500) (144,500) ---------------- -------------- Total stockholders' equity 1,211,900 553,962 ---------------- -------------- $ 2,306,573 $ 1,194,058 ================ ==============
See notes to financial statements. 7 8 MILESTONE TECHNOLOGIES, INC. STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED NOVEMBER 30, 1997 AND 1996
1997 1996 ---- ---- Revenue $ 9,026,323 $ 6,443,971 ------------------ --------------- Operating Expenses Consulting salaries and associated costs 6,918,676 4,871,766 General and administrative 1,005,001 1,223,613 ------------------ --------------- 7,923,677 6,095,379 ------------------ --------------- Operating income 1,102,646 348,592 ------------------ --------------- Other income (expense) Interest income 2,660 18 Interest expense (922) (12,521) Loss on disposal of equipment (1,928) 0 Miscellaneous 1,482 3,734 ------------------ --------------- 1,292 (8,769) ------------------ --------------- Income before income taxes 1,103,938 339,823 Income Taxes 446,000 130,000 ------------------ --------------- Net Income 657,938 209,823 Retained earnings, beginning of year 562,544 352,721 ------------------ --------------- Retained earnings, end of year $ 1,220,482 $ 562,544 ================== ===============
See notes to financial statements. 8 9 MILESTONE TECHNOLOGIES, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED NOVEMBER 30, 1997 AND 1996
1997 1996 ----------------- -------------- Cash flows from operating activities: Net income $ 657,938 $ 209,823 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,010 5,664 Deferred income taxes 6,000 119,000 Loss on disposal of equipment 1,928 0 Change in Accounts receivable - trade (60,472) (441,477) Accounts receivable - unbilled (100,652) 65,498 Other assets 3,095 (18,498) Accounts payable (8,578) 11,367 Accrued payroll and payroll taxes 72,276 89,779 Accrued pension expense 6,000 14,000 Income taxes payable 427,809 (335) ----------------- -------------- Total adjustments 354,416 (155,002) ----------------- -------------- Net cash provided by operating activities 1,012,354 54,821 ----------------- -------------- Cash flows from investing activities Purchase of equipment (8,743) (15,603) ----------------- -------------- Cash flows from financing activities Increase (decrease) in note payable to bank (10,680) 10,566 Payments to former stockholders (38,250) (35,750) ----------------- -------------- Net cash used in financing activities (48,930) (25,184) ----------------- -------------- Net increase in cash and cash equivalents 954,681 14,034 Cash and cash equivalents, beginning of year 77,582 63,548 ----------------- -------------- Cash and cash equivalents, end of year $ 1,032,263 $ 77,582 ================= ==============
See notes to financial statements 9 10 MILESTONE TECHNOLOGIES, INC. STATEMENTS OF CASH FLOWS, CONTINUED
1997 1996 ---------------- ------------- Supplemental disclosures of cash flow information: Cash paid for interest $ 922 $ 12,521 ================ ============= Cash paid for income taxes $ 6,678 $ 17,512 ================ ============= Supplemental schedule of non-cash investing and financing activities Increase in amount due to former stockholders for purchase of 25,000 shares of treasury stock $ 0 $ 27,500 ================ =============
See notes to financial statements. 10 11 MILESTONE TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED NOVEMBER 30, 1997 AND 1996 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Milestone Technologies, Inc. is engaged in the business of providing temporary computer consultants and programmers to companies primarily in the Phoenix, Arizona metropolitan area. CASH EQUIVALENTS The Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. EQUIPMENT Equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, which ranges from 5 to 10 years. REVENUE AND COST RECOGNITION Revenue and the associated costs are recognized in the period that the services are provided. Accounts receivable - unbilled represent revenue for services provided but not yet billed. Costs associated with this unbilled revenue are reflected as expenses. INCOME TAXES Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Cash basis reporting is primarily used for income tax reporting purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. ESTIMATES Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expense. Actual results could differ from these estimates. 11 12 NOTES TO FINANCIAL STATEMENTS NOTE 2 - ACCOUNTS RECEIVABLE - TRADE Accounts receivable - trade consists of the following at November 30,:
1997 1996 ------------- ----------- Accounts receivable - trade $ 1,042,517 $ 982,045 Allowance for doubtful accounts (40,000) (40,000) ------------- ----------- $ 1,002,517 $ 942,045 ============= ===========
NOTE 3 - NOTE PAYABLE TO BANK At November 30, 1997 the Company has a $400,000 revolving line of credit with a financial institution. Outstanding borrowings bear interest at prime plus 1%, are secured by substantially all Company assets and personal guarantees of its stockholders and have a maturity date of April 30, 1998. At November 30, 1996, $10,680 was outstanding under this line of credit. NOTE 4 - PENSION PLAN The Company has a 401(k) profit sharing plan. The plan, covering substantially all full-time employees meeting certain minimum requirements, allows for employees to contribute up to $9,500 of pre-tax covered compensation into their individual account. The Company will make discretionary contributions to the plan in an amount to be determined from year to year. Expense under this plan was $19,345 and $16,365 in fiscal 1997 and 1996, respectively. NOTE 5 - INCOME TAXES Income tax expense consists of the following:
Current Deferred Total ------------ ----------- ------------ For the Year ended November 30, 1997 U.S. Federal $ 348,000 $ (2,000) $ 346,000 State 92,000 8,000 100,000 ------------ ----------- ------------ $ 440,000 $ 6,000 $ 446,000 ============ =========== ============ For the Year ended November 30, 1996 U.S. Federal $ 6,000 $ 92,000 $ 98,000 State 5,000 27,000 32,000 ------------ ----------- ------------ $ 11,000 $ 119,000 $ 130,000 ============ =========== ============
12 13 NOTES TO FINANCIAL STATEMENTS The provision for income taxes differs from "expected" taxes (computed by applying the U.S. Federal corporate rate of 34% to income before income taxes) as follows at November 30,:
1997 1996 ----------- ----------- Computed "expected" provision $ 375,338 $ 115,540 Increase resulting from State income taxes 66,000 21,120 Other 4,662 (6,660) ----------- ----------- $ 446,000 $ 130,000 =========== ===========
At November 30, 1997 and 1996, the tax effects of temporary differences that give rise to deferred taxes are primarily related to cash basis accounting used for income tax reporting purposes. NOTE 6 - MAJOR CUSTOMERS Approximately 56% and 53% of the Company's revenue in fiscal 1997 and 1996, respectively, was from three customers. At November 30, 1997 and 1996, $454,742 and $594,904, respectively, was owed to the Company by these customers. NOTE 7 - OPERATING LEASE COMMITMENTS The Company leases office space under a noncancelable operating lease. The lease expires in August 2001. Future minimum lease payments under this operating lease are as follows at November 30, 1997: Fiscal year ending - ------------------ 1998 $ 43,222 1999 52,775 2000 54,173 2001 41,416 ------------ $ 191,586 ============
Rent expense totaled $40,699 and $35,967 for the year ending November 30, 1997 and 1996, respectively. 13 14 C.H. HEIST CORP. AND SUBSIDIARIES Pro Forma Condensed Consolidated Balance Sheet As of March 29, 1998 - Unaudited (In thousands)
March 29, Feb. 28, Pro Forma March 29, 1998 1998 Adjustments 1998 Assets C.H. Heist Milestone (note 2) Pro Forma ------- ------------ ---------- ----------- ---------- Current assets: Cash and cash equivalents $ 1,902 992 2,894 Receivables 16,062 856 16,918 Services in progress 1,004 262 1,266 Income taxes receivable 497 - (192) (d) 305 Parts and supplies 1,239 - 1,239 Prepaid expenses 865 10 875 Deferred income taxes 807 - (364) (d) 443 --------- -------- --------- -------- Total current assets 22,376 2,120 (556) 23,940 --------- -------- --------- -------- Property, plant and equipment, at cost 54,228 47 54,275 Less accumulated depreciation 37,195 25 37,220 --------- -------- --------- -------- Net property, plant and equipment 17,033 22 17,055 --------- -------- --------- -------- Deferred income taxes 179 - 179 Intangible assets, net 3,309 - 5,453 (a) 8,762 Other assets 219 8 227 --------- -------- --------- -------- $ 43,116 2,150 4,897 50,163 ========= ======== ========= ======== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Current installments of long-term debt $ 33 - 33 Accounts payable 2,726 199 2,925 Accrued expenses 4,078 - 4,078 Income taxes payable - 192 (192) (d) - Deferred income taxes - 364 (364) (d) - --------- -------- --------- -------- Total current liabilities 6,837 755 (556) 7,036 Long-term debt, excluding current installments 8,300 - 6,848 (b) 15,148 Deferred incentive compensation 466 - 466 Deferred income taxes 398 - 398 --------- -------- --------- -------- Total liabilities 16,001 755 6,292 23,048 --------- -------- --------- -------- Stockholders' equity: Common stock 158 91 (91) (c) 158 Additional paid-in capital 4,277 45 (45) (c) 4,277 Retained earnings 25,389 1,403 (1,403) (c) 25,389 Accumulated other comprehensive losses (1,471) - (1,471) --------- -------- --------- -------- 28,353 1,539 (1,539) 28,353 Less cost of common stock in treasury (1,238) (144) 144 (c) (1,238) --------- -------- --------- -------- Total stockholders' equity 27,115 1,395 (1,395) 27,115 --------- -------- --------- -------- $ 43,116 2,150 4,897 50,163 ========= ======== ========= ========
See notes to unaudited pro forma financial statements. 14 15 C.H. HEIST CORP. AND SUBSIDIARIES Pro Forma Condensed Consolidated Statement of Operations For the Thirteen Week Period Ended March 29, 1998 - Unaudited (In thousands, except share data)
Thirteen week period ended -------------------------------------------------------------- March 29, Feb. 28, Pro Forma March 29, 1998 1998 Adjustments 1998 C.H. Heist Milestone (note 3) Pro Forma ----------- ---------- ----------- ------------ Net service revenues $ 28,168 2,839 31,007 Cost of services 20,569 2,288 22,857 ---------- ---------- --------- -------- Gross profit 7,599 551 8,150 Selling, general and administrative expenses 8,319 255 (19) (a) 8,555 ---------- ---------- --------- -------- Operating income (loss) (720) 296 19 (405) ---------- ---------- --------- -------- Other income (expense): Interest expense, net (105) 9 (109) (b) (205) Amortization (77) - (72) (c) (149) Miscellaneous, net 12 - 12 ---------- ---------- --------- -------- Total other income (expense) net (170) 9 (181) (342) ---------- ---------- --------- -------- Earnings (loss) before income taxes (890) 305 (162) (747) Income tax expense (benefit) (397) 122 (39) (d) (314) Net earnings (loss) $ (493) 183 (123) (433) ========== ========== ========= ======== Basic and diluted loss per share $ (.17) (.15) ========== ======== Weighted average number of common shares outstanding 2,877,758 2,877,758 ========== =========
See notes to unaudited pro forma financial statements 15 16 C.H. HEIST CORP. AND SUBSIDIARIES Pro Forma Condensed Consolidated Statement of Earnings For the Year Ended December 28, 1997 - Unaudited (In thousands, except share data)
Year Ended -------------------------------------------------------------- Dec. 28, Nov. 30, Pro Forma Dec. 28, 1997 1997 Adjustments 1997 C.H. Heist Milestone (note 3) Pro Forma ----------- ----------- ----------- --------- Net service revenues $ 119,516 9,026 128,542 Cost of services 85,290 6,918 92,208 --------- -------- --------- ---------- Gross profit 34,226 2,108 36,334 Selling, general and administrative expenses 31,153 1,005 (155) (a) 32,003 --------- -------- --------- ---------- Operating income 3,073 1,103 155 4,331 --------- -------- --------- ---------- Other income (expense): Interest expense, net (650) 1 (399) (b) (1,048) Amortization (247) - (290) (c) (537) Miscellaneous, net (172) - (172) --------- -------- --------- ---------- Total other income (expense) net (1,069) 1 (689) (1,757) --------- -------- --------- ---------- Earnings before income taxes 2,004 1,104 (534) 2,574 Income tax expense 1,106 446 (116) (d) 1,436 --------- -------- --------- ---------- Net earnings $ 898 658 (418) 1,138 ========= ======== ========= ========== Basic and diluted earnings per share $ .31 .40 ========= ========== Weighted average number of common shares outstanding 2,876,505 2,876,505 ========= ==========
See notes to unaudited pro forma financial statements 16 17 C.H. HEIST CORP. AND SUBSIDIARIES Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements NOTE 1 - Basis of Presentation The unaudited pro forma condensed consolidated balance sheet reflects the historical financial position of C.H. Heist Corp. (the "Company") as of March 29, 1998, and on a pro forma basis assuming the acquisition of Milestone Technologies, Inc. ("Milestone") had been consummated on that date. The unaudited pro forma condensed consolidated statements of operations reflect the historical results of operations of the Company for the thirteen week period ended March 29, 1998 and for the year ended December 28, 1997, and on a pro forma basis assuming the acquisition of Milestone had been consummated as of the beginning of the periods presented. The Company has reclassified branch expenses that are not directly attributable to the services it performs from cost of services to selling, general and administrative expenses to conform to the 1998 classification. The effect of this reclassification was to lower cost of services and increase selling, general and administrative expenses by $15,397,000 for the year ended December 28, 1997. Management believes that its current presentation is generally more consistent with the industry practice. Milestone uses a November 30th fiscal year end and therefore the accompanying unaudited pro forma financial statements include their results of operations and financial position for comparable periods. Those periods include the historical financial position as of February 28, 1998 and the historical results of operations for the thirteen weeks ended February 28, 1998 and the year ended November 30, 1997. The purchase method of accounting has been used for this acquisition and in the preparation of the pro forma condensed consolidated financial statements. The Company records any contingent consideration as additional goodwill when earned. Management believes that the assumptions used in preparing these unaudited pro forma condensed consolidated statements provide a reasonable basis of presenting all of the significant effects of the acquisition of Milestone. The pro forma condensed consolidated financial statements do not purport to be indicative of the actual results that would have occurred had the acquisition been consummated on or as of the dates assumed, and are not necessarily indicative of the future results of operations which will be obtained as a result of the acquisition. NOTE 2 - Adjustments to the Pro Forma Condensed Consolidated Balance Sheet (a) To reflect the goodwill, intangible assets and acquisition related costs that arise 17 18 under purchase accounting as a result of the acquisition. (b) To reflect the total additional long-term debt necessary for the consummation of the transaction including the consideration paid to shareholders of Milestone and acquisition related costs. (c) To reflect the elimination of Milestone's equity. (d) To reclassify certain liabilities to conform to the consolidated presentation of the Company. Note 3 - Adjustments to the Pro Forma Condensed Consolidated Statement of Operations and Earnings (a) To reduce compensation expense of the former owners of Milestone to the level agreed upon in their respective employment agreements with Ablest Service Corp. (b) To reflect increased interest expense the Company would have incurred because of additional long-term debt necessary to consummate the acquisition at the Company's average borrowing rate for each period (6.8% for both periods) and to eliminate the interest income from Milestone's investments that were liquidated immediately following the acquisition. (c) To reflect amortization expense over the estimated useful lives of 30 years for goodwill and 3 to 5 years for other intangible assets (customer and employee lists and non-compete agreements). (d) To reflect the estimated income tax effects of the acquisition and the pro forma adjustments. 18 -----END PRIVACY-ENHANCED MESSAGE-----