-----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, OGgLKFA0KuZHRotvW+Jii08bRL8enoka/fmiE/stqGsJ38dgTq9NmAaPJW0awQHT OoDD6V66HV+Qr07qNa7l7w== 0001035704-97-000451.txt : 19971210 0001035704-97-000451.hdr.sgml : 19971210 ACCESSION NUMBER: 0001035704-97-000451 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970730 ITEM INFORMATION: FILED AS OF DATE: 19971209 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: SEC FILE NUMBER: 000-21282 FILM NUMBER: 97734876 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 AMENDMENT NO. 2 TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A2 -------------------- 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 acquisition of certain assets from Professional Carpet Systems, Inc. and Old Dixie Supply Company (such assets are referred to herein as "Surface Doctor"). On August 14, 1996, the Company filed a Current Report on Form 8-K describing the transaction. On October 15, 1997, the Company filed a Form 8-K/A1 containing financial statements for Surface Doctor and pro forma financial information giving effect to the acquisition of Surface Doctor. In response to comments made by the staff of the Securities and Exchange Commission, certain changes have been made to such financial statements and pro forma financial information. (a) In accordance with Item 7(a)(1) of Form 8-K, the Company hereby files the following financial statements and related notes for Surface Doctor: (i) audited statements of net assets as of December 31, 1995 and 1994; (ii) audited statements of operations and audited statements of cash flows for the years ended December 31, 1995 and 1994; (iii) unaudited statement of net assets as of June 30, 1996; and (iv) unaudited statement of income and unaudited statement of cash flow for the six months ended June 30, 1996. (b) In accordance with Item 7(b)(2) of Form 8-K, the Company hereby files the following unaudited pro forma condensed financial information giving effect to the Company's acquisition of Surface Doctor: (i) balance sheet as of the quarter ended immediately prior to the acquisition (April 30, 1996 for the Company and June 30, 1996 for Surface Doctor); and (ii) statement of income covering the fiscal year ended immediately prior to the acquisition (the fiscal year ended October 31, 1995 for the Company and the fiscal year ended December 31, 1995 for Surface Doctor). (iii) statement of income for the six months ended immediately prior to acquisition (the six months ended April 30, 1996 for the Company and the six months ended June 30, 1996 for Surface Doctor). 2 3 (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.)
- ---------------- * Previously filed with the Company's Form 8-K filed on August 14, 1997. 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: December 9, 1997 By: /s/ Patrick L. Swisher ------------------------------ Patrick L. Swisher, President 3 4 SURFACE DOCTOR FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995 AND 1994 5 SURFACE DOCTOR C O N T E N T S Independent Auditor's Report Financial Statements Statements of Net Assets Statements of Operations Statements of Cash Flows Notes to Financial Statements 6 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. Blackwell, Poole & Company Atlanta, Georgia October 8, 1996 1 7 This sheet was intentionally left blank. 8 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 9 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 10 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 11 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 12 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 13 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. The Franchisees pay monthly royalties for ongoing support. At the end of training, the Franchisee is fully prepared to begin operations. SD recognizes interest income when earned which coincides in most cases when received. Some interest is recognized when received due to some non-performing loans. 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. 7 14 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 2. Summary of Significant Accounting Policies (continued) 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. These allocation methods were based on sales and payroll cost of each affiliated company. 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. 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. SD provided allowances for two specific international accounts that totaled approximately $44,000. 8 15 SURFACE DOCTOR NOTES TO FINANCIAL STATEMENTS 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 ======= =======
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 16 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 27,468 ------------------- Total Current Liabilities 192,626 Deferred Revenue 116,215 Net Assets 124,275 $ 433,116 ===================
17 SURFACE DOCTOR STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) Revenues Franchise Fees $ 270,970 Royalties 88,105 Supply Sales 318,155 Service Revenues 159,968 ------------------ Total Revenue 837,198 Costs and Expenses Costs of Revenues 320,683 Selling, General and Administrative Expenses 402,475 ------------------ Total Costs and Expenses 723,158 ------------------ Operating Income 114,040 Other Income 7,963 ------------------ Net Income $ 122,003 ==================
18 SURFACE DOCTOR STATEMENT OF CASH FLOW FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) OPERATING ACTIVITIES Net Income $ 122,003 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Depreciation and Amortization 17,477 Provision for Bad Debts 23,208 Changes in Current Assets and Current Liabilities: Accounts receivable (44,220) Inventories (8,595) Prepaid Expense (20,265) Accounts Payable 131,534 Advertising Fund 12,267 Accrued Expenses (3,254) Deferred Revenue 57,720 ------------------- CASH PROVIDED BY OPERATING ACTIVITIES 287,875 ------------------- INVESTING ACTIVITIES Capital Expenditures (1,300) Increase in Other Assets (3,665) Net Decrease in Notes Receivable 14,698 ------------------- CASH PROVIDED BY INVESTING ACTIVITIES 9,733 ------------------- FINANCING ACTIVITIES Decrease in Net Assets (297,608) ------------------- CASH USED FOR FINANCING ACTIVITIES (297,608) ------------------- DECREASE IN CASH - CASH, BEGINNING OF PERIOD - ------------------- CASH, END OF PERIOD $ - ===================
19 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
Pro Forma Swisher Surface Adjustments International Inc. Doctor Increase Pro Forma April 30, 1996 June 30, 1996 (Decrease) Combined ------------------ ------------- ----------- ----------- ASSETS Current Assets Cash and cash equivalents $ 775,476 $ -- $ (20,000) $ 755,476 Cash, restricted 700,000 -- -- 700,000 Accounts receivable, franchisees, net of allowance for doubtful accounts $ 114,391 1,356,586 120,543 96 1,477,225 Other receivables 337,323 -- -- 337,323 Current portion of notes receivable 614,890 21,000 -- 635,890 Inventories 96,769 83,426 (8,426) 171,769 Prepaid expenses 168,188 40,504 -- 208,692 Prepaid advertising costs 170,821 -- -- 170,821 ----------- ----------- ----------- ----------- TOTAL CURRENT ASSETS 4,220,053 265,473 (28,330) 4,457,196 ----------- ----------- ----------- ----------- Property and equipment, Net 603,620 93,243 (37,010) 659,853 ----------- ----------- ----------- ----------- Other Assets Notes receivable 2,113,281 58,784 (97) 2,171,968 Intangible assets, net 1,016,096 -- 814,963 1,831,059 Other assets -- 15,616 (15,616) -- ----------- ----------- ----------- ----------- 3,129,377 74,400 799,250 4,003,027 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 7,953,050 $ 433,116 $ 733,910 $ 9,120,076 =========== =========== =========== ===========
20 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
Pro Forma Swisher Surface Adjustments International Inc. Doctor Increase Pro Forma April 30, 1996 June 30, 1996 (Decrease) Combined ------------------ ------------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current maturities of long-term debt $ 1,113,316 $ -- $ -- $ 1,113,316 Accounts payable 678,671 159,281 (105,000) 732,952 Accrued expenses 120,946 5,877 (5,877) 120,946 Advertising fund -- 27,468 -- 27,468 Deferred revenue 175,986 116,215 -- 292,201 Income taxes payable 99,195 -- -- 99,195 ----------- ----------- ----------- ----------- TOTAL CURRENT LIABILITIES 2,188,114 308,841 (110,877) 2,386,078 Long-Term Debt, less current maturities 969,052 -- -- 969,052 Deferred income taxes 85,124 -- -- 85,124 ----------- ----------- ----------- ----------- TOTAL LIABILITIES 3,242,290 308,841 (110,877) 3,440,254 ----------- ----------- ----------- ----------- Stockholders' Equity Preferred stock, par value $.10; authorized 1,500,000 shares; none issued -- -- -- -- Series A Junior Participation Preferred Stock par value $1.00; authorized 100,000 shares; none issued -- -- -- -- Common stock, par value $.01; authorized 15,000,000 shares; 1,735,799 shares issued and outstanding at April 30, 1996 17,357 -- 2,000 19,357 Additional paid-in capital 3,039,599 124,275 842,787 4,006,661 Retained earnings 1,653,804 -- -- 1,653,804 ----------- ----------- ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 4,710,760 124,275 844,787 5,679,822 ----------- ----------- ----------- ----------- TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES $ 7,953,050 $ 433,116 $ 733,910 $ 9,120,076 =========== =========== =========== ===========
21 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
Swisher Surface Pro Forma International Inc. Doctor Adjustments Year End Year End Increase Pro Forma October 31, 1995 (c)December 31, 1995 (c)(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 -- 81,522 (a) 327,522 ---------- ---------- ---------- ---------- Net Income $ 375,619 $ 228,320 $ (101,096) $ 502,843 ========== ========== ========== ========== 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 ========== ========== ==========
22 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
Swisher Surface Pro Forma International Inc. Doctor Adjustments Six Months Ended Six Months Ended Increase Pro Forma April 30, 1996 (c)June 30, 1996 (c)(Decrease) Combined ----------------- ---------------- ------------- ---------- Revenues Product Sales to Franchisees $1,380,094 $ 318,155 $ -- $1,698,249 Service Fees 806,803 -- -- 806,803 Royalties 749,024 88,105 -- 837,129 Marketing Fees 22,594 -- -- 22,594 Revenue from Company Owned Operations 1,280,709 159,968 -- 1,440,677 Initial franchise sales 287,161 270,970 -- 558,131 Other Income 132,918 7,963 -- 140,881 ---------- ---------- ---------- ---------- Total Revenues 4,659,303 845,161 -- 5,504,464 ---------- ---------- ---------- ---------- Costs and Expenses Cost of Revenues 2,350,775 320,683 -- 2,671,458 Selling, General and Administrative 1,863,114 402,475 9,788 (a) 2,275,377 Interest Expense 124,882 -- -- 124,882 ---------- ---------- ---------- ---------- Total Costs and Expenses 4,338,771 723,158 9,788 5,071,717 ---------- ---------- ---------- ---------- Income Before Taxes 320,532 122,003 (9,788) 432,747 Income Tax Expense 131,418 -- 43,827 (a) 175,245 ---------- ---------- ---------- ---------- Net Income $ 189,114 $ 122,003 $ (53,615) $ 257,502 ========== ========== ========== ========== Net Income per Common Share $ 0.11 $ 0.13 ========== ========== Weighted Average Number of Common Shares and Common Share Equivalents Outstanding 1,794,649 200,000 (b) 1,994,649 ========== ========== ==========
23 SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (a) The following proforma adjustments are incorporated in the pro forma condensed combined statements of income: Year ended Six Months Ended October 31, 1995 April 30, 1996 ---------------- ---------------- 1. Increase in amortization expense resulting from goodwill. $ (17,241) $ (8,621) 2. Increase in amortization expense resulting from adjustment to carrying amount of trademarks. (2,333) (1,167) 3. Decrease in income tax expense associated with 1 and 2 above. 7,751 3,876 4. Increase in income tax expense resulting from the change of Surface Doctor from an S-Corporation to a C-Corporation status. (89,273) (47,703) ---------- --------- $ (101,096) $ (53,615) ========== ========= (b) Represents the issuance of 200,000 shares of Swisher International, Inc. stock in exchange for the assets of Surface Doctor. (c) Combined statements for different periods due to the different fiscal year-end of the registrant and acquired companies.
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