-----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, INg5UOY7lFQVShVZob70uwoUWi+Khf0WvjM4chb0QMmqpiCLSj88xYr4P2woyzlt pxoLjww3sMJyBbTwGYcoZA== 0000950148-96-001765.txt : 19960919 0000950148-96-001765.hdr.sgml : 19960919 ACCESSION NUMBER: 0000950148-96-001765 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960814 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960815 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUILDERS WAREHOUSE ASSOCIATION INC CENTRAL INDEX KEY: 0000840249 STANDARD INDUSTRIAL CLASSIFICATION: 3577 IRS NUMBER: 841090968 STATE OF INCORPORATION: CO FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21082 FILM NUMBER: 96616444 BUSINESS ADDRESS: STREET 1: 2800 28TH ST. STREET 2: SUITE 100 CITY: SANTA MONCIA STATE: CA ZIP: 90405 BUSINESS PHONE: 3104534371 FORMER COMPANY: FORMER CONFORMED NAME: OMNI CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CEETAC CORP DATE OF NAME CHANGE: 19910815 8-K/A 1 FORM 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 14, 1996 (May 31, 1996) ------------------------------ BUILDERS WAREHOUSE ASSOCIATION, INC. ------------------------------------ (Exact name of Registrant as specified in charter) Colorado 0-2108-2 84-1090968 -------- -------- ---------- (State or other juris- (Commission (IRS Employer) diction of incorporation) File Number) Identification No.) 2800 28th Street, Suite 100, Santa Monica, CA 90405 - - --------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (310) 453-4371 -------------- 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) The following financial statements are filed herewith: Balance Sheets as of December 31, 1995 and May 31, 1996. Statements of Operations and Accumulated Deficit for the Year Ended December 31, 1995 and the Five Months Ended May 31, 1996. Statements of Cash Flows for the Year Ended December 31, 1995 and the Five Months Ended May 31, 1996. Notes to Financial Statements. (b) Pro Forma Information The pro forma financial information is incorporated by reference to Form 10-KSB for the year ended May 31, 1996. (c) Exhibits - Previously filed under Form 8-K, June 14, 1996. 2 3 SCITEQ ELECTRONICS, INC. FINANCIAL STATEMENTS DECEMBER 31, 1995 AND MAY 31, 1996 TABLE OF CONTENTS Pages Independent Accountants' Report 4 Balance Sheets as of December 31, 1995 and May 31, 1996 5-6 Statements of Operations and Accumulated Deficit Year Ended December 31, 1995 and Five Months Ended May 31, 1996 7 Statements of Cash Flows Year Ended December 31, 1995 and Five Months Ended May 31, 1996 8 Notes to Financial Statements 9-14 3 4 Independent Accountants' Report The Stockholder Sciteq Electronics, Inc. We audited the accompanying balance sheets of Sciteq Electronics, Inc. (Sciteq) as of December 31, 1995 and May 31, 1996 and the related statements of operations and accumulated deficit and cash flows for the year ended December 31, 1995 and the five months ended May 31, 1996. These financial statements are the responsibility of Sciteq's management. Our responsibility is to express an opinion on these financial statements based on our audits. 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 also 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 our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, Sciteq's financial position as of December 31, 1995 and May 31, 1996 and the results of its operations and cash flows for the year ended December 31, 1995 and five months ended May 31, 1996 in conformity with generally accepted accounting principles. Weinbaum & Yalamanchi /s/ Weinbaum & Yalamanchi Canoga Park, California August 13, 1996 4 5 Sciteq Electronics, Inc. Balance Sheets December 31, 1995 and May 31, 1996 ASSETS
December May ---------- ---------- Current Assets Cash $ 220,000 $ 398,000 Accounts receivable (less $190,000 and $22,000 allowances for doubtful accounts) 732,000 412,000 Note receivable - net (Note 11) 105,000 Inventories (Note 3) 399,000 555,000 Other current assets 23,000 59,000 ---------- ---------- Total current assets 1,374,000 1,529,000 ---------- ---------- Property and Equipment Furniture and fixtures 72,000 72,000 Office equipment and computers 973,000 988,000 ---------- ---------- 1,045,000 1,060,000 Accumulated depreciation 904,000 931,000 ---------- ---------- 141,000 129,000 ---------- ---------- $1,515,000 $1,658,000 ========== ==========
The accompanying notes are an integral part of these financial statements. 5 6 Sciteq Electronics, Inc. Balance Sheets December 31, 1995 and May 31, 1996 LIABILITIES AND STOCKHOLDERS' EQUITY
December May ----------- ----------- Current Liabilities Accounts payable $ 461,000 $ 294,000 Accrued expenses (Notes 4, 13 and 14) 548,000 507,000 ----------- ----------- Total current liabilities 1,009,000 801,000 ----------- ----------- Commitments and contingencies (Notes 7, 13 and 14) Stockholders' Equity (Note 10) Common stock, no par value 1,000,000 shares authorized 504,343 shares outstanding 362,000 362,000 Convertible preferred stock at liquidation preference 1,000,000 shares authorized 132,241 shares outstanding 1,388,000 1,388,000 ----------- ------------ Accumulated deficit (1,244,000) (893,000) ----------- ----------- Total stockholders' equity 506,000 857,000 $ 1,515,000 $ 1,658,000 =========== ===========
The accompanying notes are an integral part of these financial statements. 6 7 Sciteq Electronics, Inc. Statements of Operations and Accumulated Deficit Year Ended December 31, 1995 and Five Months Ended May 31, 1996
December May ----------- ----------- Net sales (Note 6) $ 3,797,000 $ 1,770,000 ----------- ----------- Cost of sales 2,177,000 790,000 Inventory writedowns 115,000 18,000 ----------- ----------- 2,292,000 808,000 ----------- ----------- Gross margin 1,505,000 962,000 ----------- ----------- Selling, general and administrative expenses (Notes 11 and 14) 1,345,000 449,000 Research and development 455,000 162,000 ----------- ----------- 1,800,000 611,000 ----------- ----------- Operating income (loss) (295,000) 351,000 Royalty income (Note 12) 143,000 ----------- ----------- Net (loss) income (152,000) 351,000 Accumulated deficit-beginning of period 1,092,000 1,244,000 ----------- ----------- Accumulated deficit-end of period $ 1,244,000 $ 893,000 =========== ===========
The accompanying notes are an integral part of these financial statements. 7 8 Sciteq Electronics, Inc. Statements of Cash Flows Year Ended December 31, 1995 and Five Months Ended May 31, 1996
December May --------- --------- Operating cash flows: Net (loss) income $(152,000) $ 351,000 Adjustments to reconcile net (loss) income to cash provided by operations Depreciation and amortization 80,000 27,000 Changes in operating assets Accounts receivable (68,000) 215,000 Inventories 232,000 (156,000) Other current assets 18,000 (36,000) Accounts payable (144,000) (167,000) Accrued expenses 238,000 (41,000) --------- --------- Cash provided by operations (Note 11) 204,000 193,000 --------- --------- Investing cash flows: Property acquisitions 11,000 15,000 --------- --------- Cash used by investing activities (Note 11) 11,000 15,000 --------- --------- Financing cash flows: Reduction in capitalized lease obligations 48,000 --------- Cash used by financing activities 48,000 --------- Increase in cash (Note 5) 145,000 178,000 Cash - beginning of period 75,000 220,000 --------- --------- Cash - end of period $ 220,000 $ 398,000 ========= =========
The accompanying notes are an integral part of these financial statements. 8 9 Sciteq Electronics, Inc. Notes To Financial Statements December 31, 1995 and May 31, 1996 Note 1. Accounting Policies and Operations Basis of Presentation - The financial statements include the assets and liabilities of Sciteq Electronics, Inc. (Sciteq) a California Corporation. Business Description - Sciteq manufactures frequency synthesizers for the electronics industry. Inventories - Inventories are valued at the lower of cost, first - in, first- out method, or market. Property and Equipment - Property and equipment are stated at cost. Depreciation is recorded by the straight-line method over the related assets estimated useful lives. Advertising - Sciteq expenses advertising as incurred. Accounts Receivable - Sciteq provides an allowance for doubtful accounts to reduce receivables to net realizable value. Sciteq does not require collateral from its customers. Sciteq's three largest May 31, 1996 receivables were $60,000; $58,000 and $50,000. Revenue Recognition - Revenue is recognized when products are shipped except for long-term contracts which are recorded by the percentage of completion method. Losses on long-term contracts are recorded as they become known. Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make 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 the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates. Fair Value of Financial Instruments - Accounts receivable, cash, accounts payable and accrued expenses carrying value approximates fair value because of the short-term maturity of those instruments. The note receivable (Note 11) has been reduced to estimated fair value. 9 10 Sciteq Electronics, Inc. Notes To Financial Statements (continued) December 31, 1995 and May 31, 1996 Note 2. Sale of Sciteq On May 31, 1996 Sciteq's stockholders sold 100% of Sciteq's stock to Builders' Warehouse Association, Inc. (BWI). BWI agreed to pay Sciteq's former stockholders additional consideration based on Sciteq's income for the year ending December 31, 1996. On June 5, 1996 BWI contributed $200,000 to Sciteq's capital. Note 3. Inventories Inventories were:
December May -------- -------- Raw materials $307,000 $413,000 Work in process 153,000 198,000 -------- -------- 460,000 611,000 Obsolescence reserve 61,000 56,000 -------- -------- $399,000 $555,000 ======== ======== Note 4. Accrued Expenses Accrued expenses include: Vacations $ 26,000 $ 26,000 Compensation 232,000 287,000 Sales commissions 175,000 79,000 Warranty 20,000 20,000 Other 95,000 95,000 -------- -------- $548,000 $507,000 ======== ========
Note 5. Supplemental Cash Flow Disclosures Interest income and expense were not material for the periods. Taxes paid were not material. 10 11 Sciteq Electronics, Inc. Notes To Financial Statements (continued) December 31, 1995 and May 31, 1996 Note 6. Sales and Expense Information Sales and expenses included these amounts by period:
December May -------- --- FEL (Note 11) $386,000 Export sales 566,000 $365,000 Sales to customer A 338,000 326,000 Repair and maintenance expense 3,000 7,000 Advertising expense 35,000 1,000
Note 7. Operating Leases Rent expense was $106,000 and $42,000 for the periods. Sciteq's operating lease commitments at May 31, 1996 were as follows, by years: $92,000 through May 31, 1997 and $24,000 through May 31, 1998. Sciteq's building lease has two renewal options totaling 84 months. Note 8. Retirement Plan Sciteq has a 401K plan for certain employees which permits Sciteq to contribute to the plan. Sciteq contributed $28,000 and $11,000 for the periods. Note 9. Income Taxes At May 31, 1996 the estimated differences between the book and tax bases of Sciteq's assets and liabilities were: Allowance for doubtful accounts and notes $ 182,000 Obsolescence reserve 56,000 Various accruals 96,000 -------------- $ 334,000 ==============
11 12 Sciteq Electronics, Inc. Notes To Financial Statements (continued) December 31, 1995 and May 31, 1996 At May 31, 1996 Sciteq had $406,000 of NOL carryforwards available to reduce Sciteq's taxable income usable at the rate of $215,000 per year until 2010. Future tax benefits attributable to the differences between the book and tax basis of Sciteq's assets and liabilities and the NOL's realization are not assured and therefore have not been recognized in these financial statements. There was no tax benefit recorded in 1995 as there is no assurance of its realization. No tax provision was recorded in 1996 as it was eliminated through the use of NOL carryforwards. Note 10. Stockholders' Equity Convertible Preferred Stock - Each share of preferred stock was voting and convertible at the holder's option, into one share of common stock. Upon Sciteq's liquidation, holders of preferred stock were entitled to a distribution equal to the original issuance price of their preferred shares in preference to any distributions to common shareholders; all excess distributions were to be made to the common shareholders. Preferred Stock Warrants - At May 31, 1996 warrants to purchase 2,000 shares of Sciteq's preferred stock at $16 per share were outstanding. The warrants expire in May 1997. Stock Option Plan - Sciteq's 1990 stock option plan provides for the issuance of incentive options to certain key employees and non-qualified options to consultants and others performing services for Sciteq, to purchase common stock. All outstanding common stock options were exercisable at $2 per share. The following summarizes transactions in this plan for the periods:
December May -------- -------- Outstanding - beginning of period $155,251 $131,250 Granted 18,000 20,000 Canceled 42,001 -------- -------- Outstanding - end of period $131,250 $151,250 ======== ========
On May 31, 1996 27,241 shares of convertible preferred stock and 398,093 shares of common stock were converted into 169,306 shares of BWI and 105,000 shares of convertible preferred stock and 106,250 shares of common stock were sold to BWI for $600,000. 12 13 Sciteq Electronics, Inc. Notes To Financial Statements (continued) December 31, 1995 and May 31, 1996 The 169,306 shares of BWI stock issued to Sciteq's former shareholders are "puttable" to BWI at $11.77 per share on May 31, 1997, for an aggregate purchase price of $1,994,000. The 151,250 options were converted to options to purchase 60,250 shares of BWI common stock at $5.02 per share. Note 11. Note Receivable On March 30, 1996 Frequency Engineering Laboratories (FEL) gave Sciteq a $296,728 note receivable due in nine monthly installments of $34,675 including 12.25% interest. As of August 13, 1996, FEL had made three monthly installments. Converting FEL's accounts receivable into a note neither provided nor used cash. During 1995, Sciteq recorded a $160,000 impairment allowance to reduce this receivable to estimated net realizable value. Note 12. Royalty Income In 1995 Sciteq received $143,000 as a non - refundable royalty allowing Westinghouse to use certain of its technology in mobile terminals. Should Westinghouse continue to use the technology Sciteq will receive royalties based on units sold. Note 13. Employment Agreements In May 1996, Sciteq entered into employment agreements with two executives providing for minimum annual payments as follows, by year: 1997 $220,000 1998 220,000 1999 220,000 -------- $660,000 ======== 13 14 Sciteq Electronics, Inc. Notes To Financial Statements (continued) December 31, 1995 and May 31, 1996 Note 14. Comsat Dispute During 1995, Comsat RSI, Inc. (Comsat), a Sciteq customer, claimed Sciteq failed to meet its obligations under a purchase order and caused Comsat to incur $104,000 of related costs. Comsat and Sciteq are currently negotiating a settlement of this dispute. Sciteq recorded a $50,000 liability for the estimated costs of settling this matter. 14 15 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. Builders Warehouse Association, Inc. ------------------------------------ (Registrant) Dated: August 14, 1996 By: /s/ Barry Witz ------------------------------- Barry Witz Chief Executive Officer 15 -----END PRIVACY-ENHANCED MESSAGE-----