-----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, A3yFSOSw96o50dN6jlCxmktWUlEtPUuoUea9SiI3TX8s0O+72aAdDXoxkI1fp9iR fJcmT7jeDL6kiwBYuOofgA== 0000090045-05-000016.txt : 20050809 0000090045-05-000016.hdr.sgml : 20050809 20050809172017 ACCESSION NUMBER: 0000090045-05-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050805 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050809 DATE AS OF CHANGE: 20050809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARAGON TECHNOLOGIES INC CENTRAL INDEX KEY: 0000090045 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP [3530] IRS NUMBER: 221643428 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15729 FILM NUMBER: 051011023 BUSINESS ADDRESS: STREET 1: 600 KUEBLER ROAD CITY: EASTON STATE: PA ZIP: 18040 -929 BUSINESS PHONE: 6102523205 MAIL ADDRESS: STREET 1: 600 KUEBLER RD CITY: EASTON STATE: PA ZIP: 18040-9295 FORMER COMPANY: FORMER CONFORMED NAME: SI HANDLING SYSTEMS INC DATE OF NAME CHANGE: 19920703 8-K 1 f8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM 8-K ---------------------------- 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 5, 2005 ---------------------------- PARAGON TECHNOLOGIES, INC. (Exact Name of Issuer as Specified in Charter) ----------------------------
DELAWARE 1-15729 22-1643428 (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Incorporation or Organization) Identification Number)
600 KUEBLER ROAD, EASTON, PENNSYLVANIA 18040 (Address of Principal Executive Offices) (610) 252-3205 (Registrant's Telephone Number, Including Area Code) (Former name or former address, if changed since last report) ---------------------------- Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act This Current Report on Form 8-K is filed by Paragon Technologies, Inc., a Delaware corporation ("Paragon" or the "Company"), in connection with the matters described herein. Item 2.01. Completion of Acquisition or Disposition of Assets. On August 5, 2005, after receiving the approval of the Company's stockholders at a special meeting held on August 3, 2005, the Company has completed its previously announced sale of substantially all of the assets and liabilities of Ermanco Incorporated, a Michigan corporation ("Ermanco"), to TGW Transportgerate GmbH, an Austrian corporation ("Buyer Parent"), and Malibu Acquisition, Inc., a Michigan corporation and wholly owned subsidiary of Buyer Parent ("Buyer"). As a result of the completion of the sale, the Company received cash consideration of approximately $23,055,000 (subject to a working capital adjustment) in connection with the sale of substantially all of the assets and liabilities of Ermanco, Paragon's conveyor and sortation subsidiary located in Spring Lake, Michigan. The Company and Ermanco, entered into a previously disclosed Asset Purchase Agreement (the "Asset Purchase Agreement") with Buyer Parent, and Buyer, pursuant to which Ermanco and Paragon agreed to indemnify the Buyer and Buyer Parent for, among other things, a breach of any representation, warranty, covenant, or agreement set forth under the terms of the Asset Purchase Agreement. At the closing of the asset sale, Paragon delivered to the Buyer an irrevocable letter of credit issued by Wachovia Bank, National Association in the amount of $2 million as security for its indemnification obligations under the Asset Purchase Agreement. The letter of credit shall remain in place for a period of one year following the closing of the asset sale. However, should a dispute remain unresolved at the expiration of the one year period, the letter of credit shall be drawn upon, prior to its expiration, in an amount not less than an amount sufficient to resolve such dispute(s) and such amount shall be placed in escrow pending the final resolution of such dispute(s). A Current Report on Form 8-K relating to the Asset Purchase Agreement by and among Buyer, Buyer Parent, Ermanco, and the Company dated May 20, 2005 was filed by the Company on May 23, 2005. A copy of the Asset Purchase Agreement governing the terms of the sale was attached as Exhibit 10.1 to that Current Report on Form 8-K. The foregoing summary of the transaction is qualified in its entirety by reference to such Asset Purchase Agreement. A copy of the press release announcing the sale of Ermanco is attached hereto as Exhibit 99.1. Also in connection with the Asset Purchase Agreement and its requirement for stockholder approval, Paragon filed with the Securities and Exchange Commission a Proxy Statement on Schedule 14A on July 1, 2005 providing information related to a Special Meeting of Paragon's Stockholders which was held on August 3, 2005, in which the stockholders approved the transactions contemplated in the Asset Purchase Agreement. In connection with the completion of the sale of substantially all the assets and liabilities of Ermanco, the Company has attached hereto, as Exhibit 99.2, Pro Forma financial information as of March 31, 2005 for the Company, to reflect the disposition of substantially all of the assets and liabilities of Ermanco. Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers Effective August 5, 2005, as a result of the sale of substantially all of assets and liabilities of Ermanco, Leon C. Kirschner resigned as Chief Operating Officer of the Company and President of Ermanco and Gordon A. Hellberg resigned as Vice President of Sales of the Company and Vice President of Sales of Ermanco. Effective August 8, 2005, Steven Shulman resigned as a director of the Company. Mr. Shulman became a director of the Company as a result of the Company's purchase of Ermanco on September 30, 1999. Item 5.03 Amendment to the Articles of Incorporation or Bylaws; Change in Fiscal Year On August 5, 2005, in connection with the completion of the sale of substantially all of the assets and liabilities of Ermanco, Ermanco filed with the Michigan Secretary of State a Certificate of Amendment to Ermanco's Articles of Incorporation, changing Ermanco's name to "E Corporation" effective as of that date. The amendment to Ermanco's Articles of Incorporation was approved by the Company's sole stockholder on August 3, 2005. A copy of the certificate of amendment is filed with this Current Report as Exhibit 3.1 Item 9.01. Financial Statements and Exhibits The following exhibits are filed with this Form 8-K: (c) Exhibit No. Description 3.1 Certificate of Amendment to the Articles of Incorporation of Ermanco Incorporated as filed with the Michigan Secretary of State on August 5, 2005. 99.1 Press Release of Paragon Technologies, Inc. dated August 8, 2005. 99.2 Pro Forma Financial Statements as of March 31, 2005. 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. PARAGON TECHNOLOGIES, INC. Date: August 9, 2005 By: /s/ Leonard S. Yurkovic -------------------------- Leonard S. Yurkovic President and CEO Index of Exhibits (c) Exhibit No. Description 3.1* Certificate of Amendment to the Articles of Incorporation of Ermanco Incorporated as filed with the Michigan Secretary of State on August 5, 2005. 99.1* Press Release of Paragon Technologies, Inc. dated August 8, 2005. 99.2* Pro Forma Financial Statements as of March 31, 2005. - -------------- * Filed herewith EX-3.(I) 2 ex3-1.txt EXHIBIT 3.1 - ARTICLES OF INCORPORATION Exhibit 3.1 ----------- MICHIGAN DEPARTMENT OF LABOR & ECONOMIC GROWTH BUREAU OF COMMERCIAL SERVICES - -------------------------------------------------------------------------------- Data Received (FOR BUREAU USE ONLY) /s/ AUG 05 2005 /S/ FILED AUG 05 2005 Administrator BUREAU OF COMMERCIAL SERVICES EFFECTIVE DATE: This document is effective on the date filed, unless a subsequent effective date within 90 days after received data is dated in the document. - -------------------------------------------------------------------------------- Name CT Corporation Systems 6425442 SO Address 1515 Market Street Ste. 1210 City State Zip Code Philadelphia, PA 19102 Document will be returned to the name and address you enter above. If left blank document will be mailed to the registered office. - -------------------------------------------------------------------------------- CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION For use by Domestic Profit and Nonprofit Corporations (Please read information and instructions on the last page) Pursuant to the provisions of Act 284, Public Acts of 1972, (profit corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the undersigned corporation executes the following Certificate: 1. The present name of the corporations is: Ermanco Incorporated 2. The identification number assigned by the Bureau is: 110575 3. Article 1 of the Articles of Incorporation is hereby amended to read as --- follows: The name of the Corporation is E Incorporated. - -------------------------------------------------------------------------------- COMPLETE ONLY ONE OF THE FOLLOWING: 4. (For amendments adopted by unanimous consent of incorporators before the first meeting of the board of directors or trustees.) The foregoing amendment to the Articles of Incorporation was duly adopted on the ________ day of ________________________, ____________, in accordance with the provisions of the Act by the unanimous consent of the incorporator(s) before the first meeting of the Board of Directors or Trustees. Signed this ____________ day of __________________, _________________. - ------------------------------------- ------------------------------------- (Signature) (Signature) - ------------------------------------- ------------------------------------- (Type or Print Name) (Type or Print Name) - ------------------------------------- ------------------------------------- (Signature) (Signature) - ------------------------------------- ------------------------------------- (Type or Print Name) (Type or Print Name) - -------------------------------------------------------------------------------- 5. (For profit and nonprofit corporations whose Articles state the corporation is organized on a stock or on a membership basis.) The foregoing amendment to the Articles of Incorporation was duly adopted on the ___________ day of /s/ August 3, 2005 , by the shareholders ------------ -------------- if a profit corporation, or by the shareholders or members if a nonprofit corporation (check one of the following) / / at a meeting the necessary votes were cast in favor of the amendment. / / by written consent of the shareholders or members having not less than the minimum number of votes required by statute in accordance with Section 407(1) and (2) of the Act if a nonprofit corporation, or Section 407(1) of this Act if a profit corporation. Written notice to shareholders or members who have not consented in writing has been given. (Note: Written consent by less than all of the shareholders or members is permitted only if such provision appears in the Articles of Incorporation.) / x / by written consent of all the shareholders or members entitled to vote in accordance with Section 407(3) of the Act if a nonprofit corporation, or Section 407(2) of the Act if a profit corporation. / / by consents given by electronic transmission in accordance with Section 407(3) if a profit corporation. / / by the board of a profit corporation pursuant to section 611(2).
- --------------------------------------------------------------------------------------------------------------------------- Profit Corporations and Professional Service Corporations Nonprofit Corporations Signed this /s/ 3rd day of /s/ August, 2005 Signed this day of , --------- ---------------- ------ ---------- ------------- By /s/ Leon C. Kirschner By ----------------------------------------------------- ----------------------------------------------- (Signature of an authorized officer or agent) (Signature President, Vice-President, Vice Chairperson or Chairperson) - -------------------------------------------------------- ---------------------------------------------------- (Type or Print Name) (Type or Print Name) - ---------------------------------------------------------------------------------------------------------------------------
EX-99 3 ex99-1.txt EXHIBIT 99.1 - NEWS RELEASE Exhibit 99.1 ------------ [PARAGON LETTERHEAD] News - -------------------------------------------------------------------------------- FOR: PARAGON TECHNOLOGIES, INC. CONTACTS: Len Yurkovic, President and CEO 610-252-3205 610-252-3102 (Fax) www.ptgamex.com PARAGON TECHNOLOGIES COMPLETES ASSET SALE OF ERMANCO - - - - - EASTON, PA -- August 8, 2005 -- Paragon Technologies, Inc. (AMEX:PTG), a leading supplier of "smart" material handling solutions, including systems, technologies, products and services, announced today that on August 5, 2005, after receiving the approval of the Company's stockholders at a Special Meeting of Stockholders held on August 3, 2005, the Company completed its previously announced sale of substantially all of the assets and liabilities of Ermanco Incorporated, Paragon's wholly-owned conveyor and sortation subsidiary located in Spring Lake, Michigan, to TGW Transportgerate GmbH and its wholly owned subsidiary, Malibu Acquisition, Inc. As a result of the completion of the sale, the Company received cash consideration of approximately $23 million (subject to a final working capital adjustment) in connection with the sale of substantially all of the assets and liabilities of Ermanco. As previously announced on May 23, 2005, the terms of the acquisition agreement provided that TGW pay cash in the amount of $23 million (subject to working capital adjustments) to the Company and assume certain liabilities of Ermanco. In connection with the asset sale, the Company's Board received an opinion from the Company's financial advisors, Boenning & Scattergood, Inc., that the consideration received by Paragon in the transaction was fair from a financial point of view to Paragon's stockholders. Commenting on the transaction, Len Yurkovic, President and Chief Executive Officer of Paragon Technologies said, "This transaction allows for a significant redeployment of assets to address the needs of our core markets and our investors. We are pleased with the support of our stockholders and wish to thank our strategic transaction advisors, Board of Directors, and employees for their dedication and effort to complete this transaction. We will continue to pursue strategies intended to maximize stockholder value." Ermanco, a manufacturer of Ermanco branded light to medium duty unit handling and conveyor and sortation products, serving the material handling industry through a network of approximately 100 experienced material handling equipment distributors, was originally acquired by the Company on September 30, 1999. The sale of Ermanco to TGW is the first major step in the Board of Paragon's review of strategic alternatives announced earlier this year. The sale allows the Company to focus its efforts and redirect its assets to potentially higher growth markets, including markets served by the Company's SI Systems branded Order Fulfillment technologies and SI Production & Assembly Systems branded technologies. Paragon's Board plans to continue to pursue strategies intended to maximize stockholder value. Also, the Company's Board of Directors recently amended its existing stock repurchase program by increasing the amount it has authorized management to repurchase from up to $1,000,000 of the Company's common stock to up to $5,000,000. The stock repurchases may, at the discretion of the Company's management, be made from time to time on the open market or in privately negotiated transactions. "The Board of Directors believes that the stock repurchase program will allow the Company to take advantage of opportunities to repurchase the Company's common stock at favorable prices in order to enhance stock value," says Len Yurkovic, President and CEO. [MORE] We Build Productivity [LOGO] - -------------------------------------------------------------------------------- PARAGON TECHNOLOGIES, INC. o 600 Kuebler Road o Easton, PA 18040-9295 o 610.252.3205 o Fax 610.252.3102 www.ptgamex.com [LOGO] Page 2 - -------------------------------------------------------------------------------- Under the stock repurchase program, the Company may repurchase shares of its common stock from time to time in compliance with SEC regulations and subject to market conditions. The stock repurchase program does not require the Company to acquire any specific number of shares, and the Company may terminate the program at any time. Subject to the $5,000,000 limitation, of which approximately $4,675,000 remains available for repurchases under the stock repurchase program, the timing and quantity of any stock repurchases will be at the sole discretion of the Company. Paragon will continue to offer and sell products under its SI Systems Order Fulfillment and SI Production & Assembly Systems brands, including material handling solutions that address order fulfillment and unit assembly handling applications. The Company's SI Systems Order Fulfillment Systems capabilities have been enhanced by providing sophisticated turnkey software and hardware products, and fulfilling orders in distribution centers, ranging from health and beauty aids to entertainment products in the music and computer fields. The Company has a well established clientele in mail order operations, wholesale drug and chain store drug distribution centers, and numerous other sophisticated warehouse management operations. The newly developed SINTHESIS(TM) Software Suite, offering 26 modules of integrating software, enables expansion and growth potential in warehouse and distribution management centers, beyond its current customer base. SINTHESIS(TM) supports order fulfillment needs, from small manual systems to large sophisticated systems, integrating proprietary as well as nonproprietary products. The Company's SI Production & Assembly Systems capabilities have enabled it to become a market leader in serving customers in selected niches seeking horizontal transport of unit load products. Its LO-TOW(R) Ergonomic Towline Vehicle(TM) employs RFID (Radio Frequency Identification) technology to impart ergonomic capability to the production of vehicles, ranging from golf carts, motorcycles, and snowmobiles to the assembly of lawn mowers, motor assemblies, and farming vehicles. This product line is installed in numerous government facilities, ranging from the Defense Logistics Agency to the U.S. Postal Service. Paragon's high precision CARTRAC(R) product line has a well established customer base in the appliance and automotive industry, with new applications possible in the radiation technology field, where the need for precision guidance is paramount. Paragon's SI Systems Order Fulfillment and SI Production & Assembly Systems branded technologies drive productivity for Fortune 1000 companies and the United States government. As a result of the completion of the sale of substantially all of the assets and liabilities of Ermanco, Paragon will file a report on Form 8-K describing the transaction. Once filed, this document will be available free of charge at the SEC's website at http:/www.sec.gov/ and from Paragon. In other news, Steven Shulman resigned as a director of the Company. Mr. Shulman became a director of the Company as a result of the Company's purchase of Ermanco on September 30, 1999. Len Yurkovic expressed the Company's appreciation for his contributions and years of service to the Company. * * * - ----------------------------- Cautionary Statement. Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities and Exchange Commission rules, regulations and releases. Paragon intends that such forward-looking statements be subject to the safe harbors created hereby. Among other things, the forward-looking statements regard Paragon's earnings, liquidity, financial condition, review of strategic alternatives, and other matters. Words or phrases denoting the anticipated results of future events, such as "anticipate," "does not anticipate," "should help to," "believe," "estimate," "is positioned," "expects," "may," "will," "is expected," "should," "continue," and similar expressions that denote uncertainty, are intended to identify such forward-looking statements. Paragon's actual results, performance, or achievements could differ materially from the results expressed in, or implied by, such "forward-looking statements:" (1) as a result of factors over which Paragon has no control, including the strength of domestic and foreign economies, sales growth, competition, and certain cost increases; and (2) if the factors on which Paragon's conclusions are based do not conform to its expectations. Furthermore, achievement of the objectives of the Company following the sale of Ermanco is subject to risks associated with business disruption resulting from the announcement of the sale and other risks outlined in Paragon's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2004 and the most recent quarterly report on Form 10-Q for the first fiscal quarter ended March 31, 2005. This press release and prior releases are available at www.ptgamex.com.
EX-99 4 ex99-2.txt EXHIBIT 99.2 - UNAUDITED PRO FORMA STATEMENTS EXHIBIT 99.2 ------------ ----------------------------------------------------- PARAGON TECHNOLOGIES, INC. ----------------------------------------------------- UNAUDITED PRO FORMA FINANCIAL STATEMENTS AS OF MARCH 31, 2005 PARAGON TECHNOLOGIES, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (IN THOUSANDS)
Historical Consolidated Pro Forma Pro Forma 3/31/2005 Adjustments Consolidated ------------ ----------- ------------ Assets - ------ Current assets: Cash and cash equivalents $ 4,118 19,515 (A) 23,633 Receivables 5,862 (4,330) (B) 1,532 Costs and estimated earnings in excess of billings 1,040 (583) (B) 457 Inventories 1,627 (1,207) (B) 420 Deferred income tax benefits 897 (291) (B) 606 Prepaid expenses and other current assets 589 (346) (B) 243 ------------------------------------ -------------------- Total current assets 14,133 12,758 26,891 ------------------------------------ -------------------- Property, plant and equipment, at cost 3,949 (2,906) (B) 1,043 Less: accumulated depreciation 2,677 (1,834) (B) 843 ------------------------------------ -------------------- Net property, plant and equipment 1,272 (1,072) (B) 200 ------------------------------------ -------------------- Deferred income tax benefits - 258 (C) 258 Goodwill 17,657 (17,657) (B) - Other assets 10 10 ------------------------------------ -------------------- Total assets $33,072 (5,713) 27,359 ==================================== ====================
PARAGON TECHNOLOGIES, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (IN THOUSANDS)
Historical Consolidated Pro Forma Pro Forma 3/31/2005 Adjustments Consolidated ------------ ----------- ------------ Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Accounts payable $ 2,535 (1,331) (B) 1,204 Customers' deposits and billings in excess of costs and estimated earnings 2,256 (1,141) (B) 1,115 Accrued salaries, wages, and commissions 411 (262) (B) 149 Income taxes payable 44 44 Accrued product warranty 595 (187) (B) 408 Deferred gain on sale-leaseback 165 165 Accrued other liabilities 981 (1) (B) 980 ------------------------------------ -------------------- Total current liabilities 6,987 (2,922) 4,065 ------------------------------------ -------------------- Long-term liabilities: Deferred gain on sale-leaseback 316 316 Deferred income taxes payable 2,253 (2,253) (B)(C) - ------------------------------------ -------------------- Total long-term liabilities 2,569 (2,253) 316 ------------------------------------ -------------------- Stockholders' equity: Common stock 4,267 4,267 Additional paid-in capital 8,008 8,008 Retained earnings 11,241 (538) (D) 10,703 ------------------------------------ -------------------- Total stockholders' equity 23,516 (538) 22,978 ------------------------------------ -------------------- Total liabilities and stockholders' equity $33,072 (5,713) 27,359 ==================================== ==================== NOTES: (A) To reflect the estimated net cash proceeds of approximately $23,055,000 (subject to working capital adjustments) less approximately $900,000 in professional fees and transaction expenses and $2,000,000 in estimated income taxes associated with the sale of certain assets and liabilities of Ermanco. (B) To reflect the sale of certain assets and liabilities of Ermanco. (C) To reclass long-term deferred income tax benefits of $258,000 from long-term deferred income taxes payable. (D) To reflect the estimated after-tax loss for financial statement purposes on the sale of certain assets and liabilities of Ermanco. Due to the fact that there is a final working capital adjustment, the final gain or loss on the transaction has not yet been determined.
PARAGON TECHNOLOGIES, INC. SELECTED UNAUDITED PRO FORMA FINANCIAL DATA The following selected unaudited pro forma consolidated statements of operations data gives effect to the sale of certain assets and liabilities of Ermanco as if the transaction occurred at the beginning of the 2004 fiscal year and at the beginning of the 2005 fiscal year. The pro forma data presented below should be read in conjunction with the Company's financial statements previously filed with the U.S. Securities and Exchange Commission and pro forma consolidated financial information and accompanying assumptions previously included elsewhere herein. Such data is not necessarily indicative of the results of operations that would have been achieved had the transaction described above occurred on the date indicated or that may be expected to occur in the future as a result of such transaction.
Paragon Technologies, Inc. Paragon Technologies, Inc. Unaudited Pro Forma Consolidated Unaudited Pro Forma Consolidated Statement Of Operations Statement Of Operations For The Year Ended December 31, 2004 For The Three Months Ended March 31, 2005 (In Thousands, Except Share And Per Share Data) (In Thousands, Except Share And Per Share Data) ----------------------------------------------- ----------------------------------------------- Historical (1) Pro Forma Historical (1) Pro Forma Consolidated Pro Forma Consolidated Consolidated Pro Forma Consolidated 12/31/2004 Adjustments Results 3/31/2005 Adjustments Results ---------- ----------- ------- --------- ----------- ------- Net sales $ 42,255 (30,553) (E) 11,702 $ 10,308 (6,442) (E) 3,866 Cost of sales 31,277 (23,462) (E) 7,815 7,696 (4,923) (E) 2,773 ------------------------ ----------- -------------------------- ---------- Gross profit on sales 10,978 (7,091) (E) 3,887 2,612 (1,519) (E) 1,093 ------------------------ ----------- -------------------------- ---------- Selling, general and administrative expenses 8,703 (4,546) (E) 4,157 2,329 (1,292) (E) 1,037 Product development costs 314 (138) (E) 176 43 (39) (E) 4 Interest expense 4 4 1 1 Interest income (76) (390) (F) (466) (13) (98) (F) (111) Other income, net (183) 80 (E) (103) (55) 15 (E) (40) ------------------------ ----------- -------------------------- ---------- 8,762 (4,994) 3,768 2,305 (1,414) 891 ------------------------ ----------- -------------------------- ---------- Earnings before income taxes 2,216 (2,097) 119 307 (105) 202 Income tax expense 743 (697) (G) 46 113 (35) (G) 78 ------------------------ ----------- -------------------------- ---------- Net earnings $ 1,473 (1,400) 73 $ 194 (70) 124 ======================== =========== ========================== ========== Basic earnings per share $ .34 .02 $ .05 .03 ============= =========== ============== ========== Diluted earnings per share $ .34 .02 $ .04 .03 ============= =========== ============== ========== Weighted average shares outstanding 4,278,065 4,278,065 4,266,323 4,266,323 Dilutive effect of stock options 72,232 72,232 47,425 47,425 ------------------------ ----------- -------------------------- ---------- Weighted average shares outstanding assuming dilution 4,350,297 4,350,297 4,313,748 4,313,748 ======================== =========== ========================== ========== NOTES: (1) The following sale of certain assets and liabilities of Ermanco adjustments reflect results of operations as if the sale of certain assets and liabilities of Ermanco, which was completed on August 5, 2005, had occurred on January 1, 2004 and January 1, 2005. The results of operations are derived from the Company's historical statement of operations for the year ended December 31, 2004 and the Company's historical statement of operations for the three months ended March 31, 2005. (E) To reflect the elimination of Ermanco's statement of operations activities. (F) To reflect an increase in interest income due to the availability of additional cash of approximately $19,500,000 from the sale of certain assets and liabilities of Ermanco. (G) To reflect the adjustment to record income tax expense at an effective rate of 38.62%.
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