-----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, MLI2hXoojPJNje9ABpjgQ1DiOgKZQXeJytqrGYLjTw26fGPMAOtfrv8oCqZqZIkE /nWEDP3nzlOlttGZ8BHjYQ== 0000950134-96-005409.txt : 19961016 0000950134-96-005409.hdr.sgml : 19961016 ACCESSION NUMBER: 0000950134-96-005409 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960730 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWISHER INTERNATIONAL INC CENTRAL INDEX KEY: 0000808356 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 561541396 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21282 FILM NUMBER: 96643661 BUSINESS ADDRESS: STREET 1: 6849 FAIRVIEW RD STREET 2: STE 200 CITY: CHARLOTTE STATE: NC ZIP: 28210 BUSINESS PHONE: 7043647707 MAIL ADDRESS: STREET 1: 6849 FAIRVIEW RD STREET 2: STE 200 CITY: CHARLOTTE STATE: NC ZIP: 28210 8-K/A 1 FORM 8-K AMENDMENT NO. 1 DATED 7/30/96 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A1 ____________________ CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): Commission File Number: JULY 30, 1996 0-21282 ____________________ SWISHER INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) NEVADA 56-1541396 (State of incorporation) (I.R.S. Employer Identification Number) 6849 FAIRVIEW ROAD CHARLOTTE, NORTH CAROLINA 28210 704/364-7707 ------------------------------- (Address of principal executive offices and telephone number) 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS On July 30, 1996, Swisher International, Inc. (the "Company") completed the purchase of certain assets (such assets are referred to herein as "Surface Doctor") from Professional Carpet Systems, Inc. and Old Dixie Supply Company. On or about August 9, 1996, the Company filed a Current Report on Form 8-K describing the asset purchase transaction. Such report did not contain separate financial statements for Surface Doctor or pro forma financial information giving effect to the purchase of Surface Doctor. The financial statements and pro forma financial information required by Item 7 of Form 8-K are therefore filed with this report. (a) In accordance with Item 7(a)(1), the Company hereby files the required financial statements of Surface Doctor as an amendment to the initial report on Form 8-K. (b) In accordance with Item 7(b)(2), the Company hereby files the required pro forma financial statements as an amendment to the initial report on Form 8-K. (c) The following exhibits are furnished herewith in accordance with the provisions of Item 601 of Regulation S-K:
Reg. S-K Exhibit No. Description Item No. ----------- ----------- -------- * 2.1 Asset Purchase Agreement by and among the Company, 2 Professional Carpet Systems, Inc. and Old Dixie Supply Company, dated July 30, 1996, including the Option and Registration Rights Agreements attached thereto as Exhibits 2.1(b), 3.1 and 3.2, respectively. (Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and schedules are listed in the Asset Purchase Agreement and will be furnished supplementally upon request by the Commission.) o 99.3 Financial Statements of Surface Doctor 99 o 99.4 Pro Forma Financial Statements 99
- ---------------- * Previously filed. o Filed herewith. 3 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. SWISHER INTERNATIONAL, INC. Date: October 11, 1996 By: /s/ W. TOM REEDER ---------------------------------- W. Tom Reeder, Vice President -3- 4 EXHIBIT INDEX Exhibit No. Description ----------- ----------- * 2.1 Asset Purchase Agreement by and among the Company, Professional Carpet Systems, Inc. and Old Dixie Supply Company, dated July 30, 1996, including the Option and Registration Rights Agreements attached thereto as Exhibits 2.1(b), 3.1 and 3.2, respectively. (Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and schedules are listed in the Asset Purchase Agreement and will be furnished supplementally upon request by the Commission.) o 99.3 Financial Statements of Surface Doctor o 99.4 Pro Forma Financial Statements - ---------------- * Previously filed. o Filed herewith. EX-99.3 2 FINANCIAL STATEMENTS 1 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS The following financial statements, pro forma financial information and exhibits are filed as an amendment to Form 8-K filed on or about October 14, 1996. (a) Financial statements of the business acquired, prepared pursuant to Rule 3.05 of Regulation S-X and provided to Swisher International, Inc. by Professional Carpet Systems, Inc.
Item Page - ---- ---- Audited Financial Statements of Surface Doctor Report of Blackwell, Poole & Company, Certified Public Accountants 1 Statements of Net Assets - December 31, 1995 and 1994 2-3 Statements of Operations - Years ended December 31, 1995 and 1994 4 Statements of Cash Flows - Years ended December 31, 1995 and 1994 5 Notes to Financial Statements 6-9 Unaudited Interim Financial Statements of Surface Doctor Statements of Net Assets - July 31, 1996 10 Statements of Income - Seven months ended July 31, 1996 and 1995 11 Statements of Cash Flows - Seven months ended July 31, 1996 and 1995 12 (b) Pro forma financial information required pursuant to Article 11 of Regulation S-X: Pro Forma Condensed Combined Statement of Income - Year Ended October 31, 1995 13 Pro Forma Condensed Combined Statement of Income - Nine months Ended July 31, 1996 14 Notes to Pro Forma Condensed Combined Financial Statements 15
The Unaudited pro forma condensed combined statements of income for the year ended October 31, 1995 and nine months ended July 31, 1996, give the effect the acquisition of Surface Doctor by Swisher International, Inc. as if the acquisition, accounted for as a purchase, had occurred on November 1, 1994. The pro forma information is based on historical financial statements Surface Doctor and Swisher International, Inc. after giving effect to the proposed transactions using the purchase method of accounting and the assumptions and adjustments in the accompanying notes to the pro forma financial statements. 2 The pro forma statements have been prepared by Swisher International, Inc. based upon the financial statements of Surface Doctor (filed with this report under Item 7(a)) which have been provided by Professional Carpet Systems, Inc. These pro forma statements may not be indicative of the results that actually would have occurred if the combinations had been in effect on the dates indicated or which may be obtained in the future. The pro forma financial statements should be read in conjunction with the audited financial statements and notes of Surface Doctor and the audited statements of Swisher International, Inc. 3 [BLACKWELL, POOLE & COMPANY LETTERHEAD] Independent Auditor's Report The Board of Directors Professional Carpet Systems, Inc. Atlanta, Georgia We have audited the accompanying statements of net assets of Surface Doctor (as described in Note 1) as of December 31, 1995 and 1994, and the related statements of operations and cash flows for the years then ended. These financial statements are the responsibility of the Surface Doctor's management. Our responsibility is to express an opinion on these financial statements based on our audits. As discussed in Note 1, Surface Doctor is a part of Professional Carpet Systems, Inc. and affiliated companies and has no separate legal status or existence. We conducted our audits 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 audits provide 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 Surface Doctor as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ BLACKWELL, POOLE & COMPANY Blackwell, Poole & Company Certified Public Accountants October 8, 1996 1 4 SURFACE DOCTOR STATEMENTS OF NET ASSETS DECEMBER 31, 1995 AND 1994 ASSETS
December December 31, 1995 31, 1994 ----------- ----------- Current Assets Accounts Receivable, Less Allowance for Doubtful Accounts of $22,900 and $16,210 for 1995 and 1994 $ 93,769 $ 85,747 Notes Receivable, Less Allowance for Doubtful Notes of $20,000 and $6,715 for 1995 and 1994 (Notes 3 and 4) 48,996 98,834 Inventory (Note 2) 74,831 55,005 Prepaid Expenses 20,238 13,203 ----------- ----------- Total Current Assets 237,834 252,789 Property and Equipment, net (Notes 2 and 5) 109,246 107,938 Other Assets Notes Receivable, Less Allowance for Doubtful Notes of $20,472 and $4,000 for 1995 and 1994 (Notes 3 and 4) 51,248 47,986 Other 12,126 9,710 ----------- ----------- Total Other Assets 63,374 57,696 ----------- ----------- $ 410,454 $ 418,423 =========== ===========
See Accompanying Notes to Financial Statements 2 5 LIABILITIES AND NET ASSETS
December December 31, 1995 31, 1994 ------------ ----------- Current Liabilities Accounts Payable $ 27,747 $ 106,450 Accrued Expenses 9,131 16,105 Advertising Fund (Note 2) 15,201 1,584 ------------ ----------- Total Current Liabilities 52,079 124,139 Deferred Revenue (Note 6) 58,495 54,170 Net Assets 299,880 240,114 ------------ ----------- $ 410,454 $ 418,423 ============= ===========
See Accompanying Notes to Financial Statements 3 6 SURFACE DOCTOR STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1995 AND 1994
December December 31, 1995 31, 1994 ------------ ------------ Revenues Franchise Fees (Note 2) $ 920,603 $ 695,175 Royalties 133,490 21,283 Supply Sales 507,739 101,091 Service Revenues 335,373 465,977 ------------ ------------- Total Revenues 1,897,205 1,283,526 Costs and Expenses Costs of Revenues (Note 2) 645,093 466,011 Selling, General and Administrative Expenses (Note 2) 1,034,864 951,393 ------------ ------------- Total Costs and Expenses 1,679,957 1,417,404 ------------ ------------- Operating Income (Loss) 217,248 (133,878) Other Income 11,072 1,247 ------------ ------------- Net Income (Loss) $ 228,320 $ (132,631) ============ =============
See Accompanying Notes to Financial Statements 4 7 SURFACE DOCTOR STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1995 AND 1994
December December 31, 1995 31, 1994 ------------ ------------- OPERATING ACTIVITIES Net Income (Loss) $ 228,320 $ (132,631) Adjustment to Reconcile Net Income to Cash Provided by Operating Activities: Depreciation and Amortization 29,203 15,719 Provision for Bad Debts 68,080 28,628 Changes in Current Assets and Current Liabilities: Accounts Receivable (41,345) (103,660) Inventories (19,826) (55,005) Prepaid Expenses (7,035) 1,025 Accounts Payable (78,703) 106,301 Advertising Fund 13,617 1,584 Accrued Expenses (6,974) 16,105 Deferred Revenue 4,325 53,170 ------------ ------------- CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 189,662 (68,764) ------------ ------------- INVESTING ACTIVITIES: Capital Expenditures (30,218) (123,565) Increase in Other Assets (2,709) (9,239) Net Decrease (Increase) in Notes Receivable 11,819 (157,535) ------------ ------------- CASH USED FOR INVESTING ACTIVITIES (21,108) (290,339) ------------ ------------- FINANCING ACTIVITIES Net Increase (Decrease) in Net Assets (168,554) 359,103 ------------ ------------- CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (168,554) 359,103 ------------ ------------- NET CHANGE IN CASH - - CASH, BEGINNING OF YEAR - - ------------ ------------- CASH, END OF YEAR $ - $ - ============ =============
See Accompanying Notes to Financial Statements 5 8 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 1. Business Surface Doctor ("SD") is a division of the affiliated companies Professional Carpet Systems, Inc. ("PCS"), First American Operations, Inc. ("FAO") and Old Dixie Supply Company ("ODS"). SD has no separate legal status or existence. SD operates and franchises a resurfacing process. SD specializes in resurfacing appliances, counter tops and fixtures. The SD franchisees may market these services, based on designated marketing areas throughout the world, to the apartment industry, hotels, homeowners and commercial customers. Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. SD was sold to Swisher International, Inc. effective July 1, 1996. 2. Summary of Significant Accounting Policies BASIS OF PRESENTATION The accompanying financial statements include the accounts of SD as described above. Revenues and direct costs are recorded based on actual amounts. Selling, general and administrative expenses were allocated based on best estimates available. INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or market. PROPERTY, EQUIPMENT, DEPRECIATION AND AMORTIZATION Property and equipment are stated at cost. Depreciation and amortization are computed over the estimated useful lives of the assets on a straight-line basis for financial reporting and accelerated methods for income tax purposes. Expenditures for maintenance, repairs, renewals, and betterments that do not materially prolong the useful lives of the assets are expensed as incurred during the year. The estimated useful lives for each class of property and equipment are as follows: Vehicles 5 years Equipment 7 years Leasehold Improvements Term of Lease 6 9 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 2. Summary of Significant Accounting Policies (continued) REVENUE RECOGNITION Franchise sales are recognized when SD has performed all material services and obligations of the franchise contract, which generally coincides with the completion of all training by the franchisee. Certain franchise sales have been deferred until SD has substantially performed all of its obligations under the franchise agreement. Royalty fees are recognized as revenue as the fees are earned. Service revenues from SD owned operations are recognized when the services are performed. SD recognizes interest income when payments are received. SD reports change in present value of the expected future cash flows related to impaired notes receivable as an increase or decrease in bad debt expense. ADVERTISING FUND SD franchises are required to contribute a fixed monthly amount for local, regional and national advertising to a fund that is maintained and accounted for by SD. The funds are disbursed by SD at its discretion. INCOME TAXES PCS and FAO elected to be taxed under Subchapter S of the Internal Revenue Code. Accordingly, taxable income of the SD divisions of PCS and FAO are taxable to the stockholder who is responsible for payment of taxes thereon. Effective January 1, 1995, ODS elected to be taxed under Subchapter S of the Internal Revenue Code. The election was approved by the Internal Revenue Service in 1994; therefore, no deferred income taxes were provided for the year ended December 31, 1994. Taxable income of the SD division of ODS for the year ended December 31, 1995, is taxable to the stockholder who is responsible for payment of taxes thereon. MANAGEMENT ALLOCATIONS Included in selling, general and administrative expenses for the years ended December 31, 1995 and 1994 are management charges from PCS, FAO and ODS. These charges represent allocation of corporate expenses which are based on various allocation methods. Management believes that the above allocations are reasonable and result in costs that are not materially different from those which would have been incurred on a stand alone basis. 7 10 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 2. Summary of Significant Accounting Policies (continued) CONCENTRATIONS OF CREDIT RISK Financial instruments which potentially subject SD to concentrations of credit risk consist principally of accounts receivable and notes receivable. Accounts receivable credit risks are limited due to the large number of customers comprising SD's customer base and their dispersion across many different geographic areas. Notes receivable credit risks are limited due to SD requiring collateral and substantial down payments. 3. Notes Receivable SD has notes receivable from its franchises that were issued in conjunction with the sales of the individual franchises. These notes are due in years ranging from 1996 to 2002 and bear interest at rates ranging from 8% to 12%. The notes are primarily collateralized by all right, title, and interest in the franchise granted, the proceeds upon any sale of the franchise and all accounts receivable of the franchise company. Notes receivable amounted to $140,716 and $157,535, less an allowance for doubtful notes of $40,472 and $10,715 at December 31, 1995 and 1994, respectively. 4. Impaired Notes Receivable As of December 31, 1995 and 1994, the recorded investment in impaired notes receivable was $29,700, and $5,000 (with allowances for doubtful notes of $29,700 and $5,000) respectively. Following is a summary of the activity in the allowance for doubtful notes accounts:
December December 31, 1995 31, 1994 --------------- --------------- Balance Beginning of Year $ 10,715 $ - Additions Charged to Operations 34,757 10,715 Write-Offs (5,000) - --------------- --------------- Balance End of Year $ 40,472 $ 10,715 =============== ===============
8 11 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 5. Property and Equipment Property and equipment consisted of the following
December December 31, 1995 31, 1994 -------------- -------------- Vehicles $ 74,678 $ 74,678 Equipment 64,926 48,588 Leasehold Improvements 23,029 9,149 Less accumulated depreciation and amortization (53,387) (24,477) -------------- -------------- $ 109,246 $ 107,938 ============== ==============
6. Deferred Revenue Deferred revenue at December 31, 1995 and 1994 represents certain franchise sales that have been deferred until SD has substantially performed all of its obligations under the franchise agreement. 9 12 SURFACE DOCTOR STATEMENT OF NET ASSETS JUNE 30, 1996 (UNAUDITED) Current Assets Accounts Receivable, Less Allowance for Doubtful Accounts of $31,747 $ 120,543 Notes Receivable, Less Allowance for Doubtful Notes of $4,000 21,000 Inventories 83,426 Prepaid Expenses 40,504 ----------------- Total Current Assets 265,473 Property and Equipment, Net 93,243 Other Assets Notes Receivable, Less Allowance for Doubtful Notes of $10,903 58,784 Other 15,616 ----------------- Total Other Assets 74,400 ----------------- $ 433,116 ================= Current Liabilities Accounts Payable $ 159,281 Accrued Expenses 5,877 Advertising Fund 27,468 ----------------- Total Current Liabilities 192,626 Deferred Revenue 116,215 Net Assets 124,275 ----------------- $ 433,116 =================
10 13 SURFACE DOCTOR STATEMENTS OF INCOME (UNAUDITED)
Six Months Ended Seven Months Ended June 30, 1996 July 31, 1995 ------------------- ------------------- Revenues Franchise Fees $ 270,970 $ 575,810 Royalties 88,105 66,608 Supply Sales 318,155 271,491 Service Revenues 159,968 190,096 ------------------- ------------------- Total Revenues 837,198 1,104,005 Costs and Expenses Costs of Revenues 320,683 379,411 Selling, General and Administrative Expenses 402,475 584,362 ------------------- ------------------- Total Costs and Expenses 723,158 963,773 ------------------- ------------------- Operating Income 114,040 140,232 Other Income 7,963 8,381 ------------------- ------------------- Net Income $ 122,003 $ 148,613 =================== ===================
11 14 SURFACE DOCTOR STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended Seven Months Ended June 30, 1996 July 31, 1995 ------------------- ------------------- OPERATING ACTIVITIES Net Income $ 122,003 $ 148,614 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Depreciation and Amortization 17,477 14,882 Provision for Bad Debts 23,208 30,629 Changes in Current Assets and Current Liabilities Accounts Receivable (44,220) (36,769) Inventories (8,595) (51,465) Prepaid Expenses (20,265) (783) Accounts Payable 131,534 (9,029) Advertising Fund 12,267 13,837 Accrued Expenses (3,254) (3,617) Deferred Revenue 57,720 28,515 ------------------- ------------------- CASH PROVIDED BY OPERATING ACTIVITIES 287,875 134,814 ------------------- ------------------- INVESTING ACTIVITIES Capital Expenditures (1,300) (1,008) Increase in Other Assets (3,665) - Net Decrease in Notes Receivable 14,698 45,369 ------------------- ------------------- CASH PROVIDED BY INVESTING ACTIVITIES 9,733 44,361 ------------------- ------------------- FINANCING ACTIVITIES Decrease in Net Assets (297,608) (179,175) ------------------- ------------------- CASH USED FOR FINANCING ACTIVITIES (297,608) (179,175) ------------------- ------------------- DECREASE IN CASH - - CASH, BEGINNING OF PERIOD - - ------------------- ------------------- CASH, END OF PERIOD $ - $ - =================== ===================
12 EX-99.4 3 PRO FORMAS 1 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED) YEAR ENDED OCTOBER 31, 1995
Pro Forma Adjustments Swisher Surface Increase Pro Forma International, Inc. Doctor (Decrease) Combined ------------------- ------------- --------------- ------------- Revenues Product Sales to Franchisees $ 2,359,461 $ 507,739 $ - $ 2,867,200 Service Fees 1,382,852 - - 1,382,852 Royalties 1,192,336 133,490 - 1,325,826 Marketing Fees 45,864 - - 45,864 Revenue from Company Owned Operations 1,775,585 335,373 - 2,110,958 Initial franchise sales 934,118 920,603 - 1,854,721 Other Income 272,318 11,072 - 283,390 --------------- ------------- --------------- ------------- Total Revenues 7,962,534 1,908,277 - 9,870,811 Costs and Expenses Cost of Revenues 4,054,660 645,093 - 4,699,753 Selling, General and Administrative 3,124,145 1,034,864 19,574 (a) 4,178,583 Interest Expense 162,110 - - 162,110 --------------- ------------- --------------- ------------- Total Costs and Expenses 7,340,915 1,679,957 19,574 9,040,446 Income Before Taxes 621,619 228,320 (19,574) 830,365 --------------- ------------- --------------- ------------- Income Tax Expense 246,000 - 82,664 (a) 328,664 --------------- ------------- --------------- ------------- Net Income $ 375,619 $ 228,320 $ (102,238) $ 501,701 =============== ============= =============== ============= Net Income per Common Share $ 0.20 $ 0.24 =============== ============= Weighted Average Number of Common Shares and Common Share Equivalents Outstanding 1,904,258 200,000 (b) 2,104,258 =============== =============== =============
See notes to unaudited pro forma condensed combined financial statements. 13 2 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED) NINE MONTHS ENDED JULY 31, 1996
Pro Forma Adjustments Swisher Surface Increase Pro Forma International, Inc. Doctor (Decrease) Combined ------------------- ------------- --------------- ------------- Revenues Product Sales to Franchisees $ 2,325,088 $ 410,569 $ - $ 2,735,657 Service Fees 1,251,738 - - 1,251,738 Royalties 1,169,552 115,950 - 1,285,502 Marketing Fees 34,622 - - 34,622 Revenue from Company Owned Operations 1,882,225 219,498 - 2,101,723 Initial franchise sales 382,781 396,493 - 779,274 Other income 425,969 7,325 - 433,294 --------------- ------------- --------------- ------------- Total Revenues 7,471,975 1,149,835 - 8,621,810 Costs and Expenses Cost of Revenues 3,746,761 411,132 - 4,157,893 Selling, General and Administrative 3,037,387 543,157 14,631 (a) 3,595,175 Interest Expense 184,806 - - 184,806 --------------- ------------- --------------- ------------- Total Costs and Expenses 6,968,954 954,289 14,631 7,937,874 Income Before Income Taxes and Non-Recurring Items 503,021 195,546 (14,631) 683,936 --------------- ------------- --------------- ------------- Non-Recurring Item 77,466 - - 77,466 --------------- ------------- --------------- ------------- Income Tax Expense 227,487 - 70,899 (a) 298,386 --------------- ------------- --------------- ------------- Net Income $ 353,000 $ 195,546 $ (85,530) $ 463,016 =============== ============= =============== ============= Net Income per Common Share $ 0.19 $ 0.23 =============== ============= Weighted Average Number of Common Shares and Common Share Equivalents Outstanding 1,853,015 133,020 (b) 1,986,035 =============== =============== =============
See notes to unaudited pro forma condensed combined financial statements. 14 3 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENT (a) The following proforma adjustments are incorporated in the pro forma condensed combined statements of income:
Year Ended Nine Months October 31, Ended July 31, 1995 1996 ----------- -------------- 1. Increase in amortization expense resulting from goodwill. $ (17,241) $ (12,931) 2. Increase in amortization expense resulting from adjustment to carrying amount of trademarks. (2,333) (1,700) 3. Decrease in income tax expense associated with 1 and 2 above. 7,751 5,734 4. Increase in income tax expense resulting from the change of Surface Doctor from S-Corporation to C-Corporation status. (90,415) (76,633) ----------- ---------- $ (102,238) $ (85,530) =========== ==========
(b) Represents the issuance of 200,000 shares of Swisher International, Inc. stock in exchange for the assets of Surface Doctor. (c) Operations of Surface Doctor for the period November 1, 1995, through December 31, 1995, are included in both the pro forma statements of income for the year ended December 31, 1995, and the nine months ended July 31, 1996. Revenues and net income for this period, derived from statements of income provided by Professional Carpet Systems, Inc., amounted to $305,312 and $73,543, respectively. 15 -----END PRIVACY-ENHANCED MESSAGE-----