-----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, WJq33e5uHEAY7IGEFwc+eRrfsnCsB9rSyXu1BpOQvLL0Zx4y43sxNoM94Y5MaqEe 6yP6s6/imMx5IHip2LCA8w== 0000897069-96-000225.txt : 19960806 0000897069-96-000225.hdr.sgml : 19960806 ACCESSION NUMBER: 0000897069-96-000225 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960531 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960805 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LACROSSE FOOTWEAR INC CENTRAL INDEX KEY: 0000919443 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 391446816 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23800 FILM NUMBER: 96603787 BUSINESS ADDRESS: STREET 1: 1319 ST ANDREW ST CITY: LACROSSE STATE: WI ZIP: 54603 BUSINESS PHONE: 6087823020 MAIL ADDRESS: STREET 1: 1319 ST ANDREW ST CITY: LA CROSSE STATE: WI ZIP: 54603 8-K/A 1 LACROSSE FOOTWEAR, INC. FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 8-K/A AMENDMENT NO. 1 TO CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 _______________________ Date of Report (Date of earliest event reported): May 31, 1996 LaCrosse Footwear, Inc. (Exact name of registrant as specified in its charter) Wisconsin 0-238001 39-1446816 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 1319 St. Andrew Street, LaCrosse, Wisconsin 54603 (Address of principal executive offices, including zip code) (608) 782-3020 (Registrant's telephone number) The undersigned registrant hereby amends Item 7 of its Current Report on Form 8-K dated June 14, 1996 to provide in its entirety as follows: Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. Independent Auditor's Report Financial Statements Balance Sheet Statement of Operations Statement of Stockholders' Equity Statement of Cash Flows Summary of Significant Accounting Policies Notes to Financial Statements Board of Directors Rainfair, Inc. Racine, Wisconsin Independent Auditor's Report We have audited the accompanying balance sheet of Rainfair, Inc. as of April 30, 1996, and the related statements of operations, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rainfair, Inc. as of April 30, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. As discussed in Note 11, the Company changed its method of accounting for post-retirement health care benefits. As discussed in Note 12 to the financial statements, subsequent to April 30, 1996, the Company has announced its intentions to sell all operating assets and liabilities of Rainfair, Inc. to a joint venture owned by its current owner and LaCrosse Footwear, Inc. This subsequent event is not reflected in the accompanying financial statements. /s/ CLIFTON, GUNDERSON & CO. Racine, Wisconsin May 24, 1996 RAINFAIR, INC. BALANCE SHEET April 30, 1996 ASSETS CURRENT ASSETS Cash $ 2,382 Accounts receivable, less allowance for doubtful accounts of $100,000 2,837,641 Inventories 5,994,010 Prepaid expenses 93,898 Current portion of deferred income taxes 82,000 --------- Total current assets 9,009,931 --------- PROPERTY AND EQUIPMENT Buildings and improvements 659,564 Machinery and equipment 727,457 Furniture and fixtures 492,519 ------- Total, at cost 1,879,540 Less accumulated depreciation 1,220,888 --------- Total property and equipment 658,652 --------- OTHER ASSETS Unamortized pension cost 78,517 Deferred income taxes, less current portion above 161,000 --------- Total other assets 239,517 --------- TOTAL ASSETS $ 9,908,100 ========= STATEMENT 1 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Note payable to bank $6,445,677 Note payable to stockholder 275,000 Current maturities of long-term debt 92,707 Accounts payable 983,470 Accrued liabilities Payroll and related taxes 145,271 Other 173,261 Income taxes 76,241 Deferred compensation 10,855 --------- Total current liabilities 8,202,482 --------- LONG-TERM LIABILITIES Long-term debt, less current maturities above 817,851 Unfunded pension liability 435,043 Other unfunded post-retirement benefits 19,982 Deferred compensation 41,166 --------- Total long-term liabilities 1,314,042 --------- Total liabilities 9,516,524 --------- STOCKHOLDERS' EQUITY Common stock, no par value; 2,800 shares authorized, 2,000 shares issued and outstanding 2,000 Retained earnings 572,778 --------- 574,778 Treasury stock, 1,256 shares at cost (160,000) Excess of additional pension liability over unrecognized prior service cost (23,202) --------- Total stockholders' equity 391,576 --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,908,100 ========== These financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to financial statements. STATEMENT 2 RAINFAIR, INC. STATEMENT OF OPERATIONS Year Ended April 30, 1996 NET SALES $17,366,159 COST OF SALES 14,009,289 ---------- Gross profit 3,356,870 OPERATING EXPENSES Selling 1,039,278 General and administrative 1,377,950 --------- Total operating expenses 2,417,228 --------- Income from operations 939,642 OTHER INCOME (EXPENSE) Interest expense (780,918) Gain on disposal of assets 4,444 Miscellaneous 4,503 --------- Income before income taxes 167,671 PROVISION FOR INCOME TAXES 38,000 --------- NET INCOME $ 129,671 ========= These financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to financial statements. STATEMENT 3 RAINFAIR, INC. STATEMENT OF STOCKHOLDERS' EQUITY Year Ended April 30, 1996
Unrealized Common Retained Treasury Pension Stock Earnings Stock Loss Total BALANCE, BEGINNING OF YEAR 2,000 $443,107 $(160,000) $(65,018) $220,089 Change in excess of additional pension liability over unrecognized prior service cost, net of tax - - - 41,816 41,816 Net income 129,671 - - 129,671 ----- -------- ------- ------- ------- BALANCE, END OF YEAR 2,000 $572,778 $(160,000) $(23,202) $391,576 ===== ======== ======== ======= =======
These financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to financial statements. STATEMENT 4 RAINFAIR, INC. STATEMENT OF CASH FLOWS Year Ended April 30, 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 129,671 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 72,365 Deferred income taxes (28,000) Allowance for doubtful accounts 70,000 Unfunded pension liability 6,101 Other unfunded post-retirement benefits 19,982 Gain on disposal of assets (4,444) Changes in operating assets and liabilities: Increase in accounts receivable (641,808) Increase in inventories (782,032) Increase in prepaid expenses (11,805) Increase in accounts payable 155,966 Increase in accrued liabilities 24,392 Decrease in deferred compensation (8,630) -------- Net cash used in operating activities (998,242) -------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of equipment 11,429 Purchase of equipment (74,344) ------- Net cash used in investing activities (62,915) ------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 18,426,557 Principal payments on borrowings (17,208,265) Decrease in cash management draw (154,753) ---------- Net cash provided by financing activities 1,063,539 --------- NET INCREASE IN CASH 2,382 CASH, BEGINNING OF YEAR - -------- CASH, END OF YEAR $ 2,382 ======== These financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to financial statements. RAINFAIR, INC. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES April 30, 1996 Rainfair, Inc. was incorporated on March 27, 1984 in the State of Wisconsin. The Company manufactures protective clothing and imports boots and clothing for the industrial and consumer markets and grants credit to its customers, substantially all of whom are in the United States. The Company's fiscal year end is April 30. The significant accounting policies followed by the Company are presented below: USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES Inventories are stated at the lower of cost or market, with cost determined on a last-in, first-out (LIFO) basis. PROPERTY AND EQUIPMENT Property and equipment are carried at cost. Maintenance and repairs, including the replacement of minor items, are expensed as incurred, and major additions to property and equipment are capitalized. Depreciation is provided by the Company on both the straight-line and accelerated methods over the estimated useful lives of the related assets after allowing for estimated salvage value on selected assets. INCOME TAXES Current tax liabilities or assets are recognized for the estimated taxes payable or refundable on tax returns for the current year. Deferred income taxes are provided on temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years' tax returns. Deferred tax assets are recognized for temporary differences that will be deductible in future years' tax returns and for operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. PENSION EXPENSE The Company's funded pension plan expense includes the normal cost plus amortization of prior service costs over a 30-year period. The Company annually provides for its unfunded pension plan expense by calculating an estimated amount utilizing certain actuarial assumptions. This information is an integral part of the accompanying financial statements. RAINFAIR, INC. NOTES TO FINANCIAL STATEMENTS April 30, 1996 NOTE 1 - INVENTORIES Raw materials $ 830,111 Work in process 130,151 Finished goods 7,233,415 --------- 8,193,677 Less adjustment to LIFO basis 2,199,667 --------- Total $5,994,010 ========= NOTE 2 - DEBT Note payable to bank At April 30, 1996, the Company had a line-of-credit agreement with a bank which provides a commitment to borrow amounts based on inventory and accounts receivable percentages. $6,445,677 was outstanding at April 30, 1996. In addition, $288,606 in letters-of-credit were outstanding at April 30, 1996. Interest is computed daily at the bank's reference rate plus one and one-quarter percent on the commercial loan (9.5% at April 30, 1996) and is payable monthly. In addition, interest is computed daily on the balance of outstanding letters of credit at a fixed 3% annual rate. The outstanding borrowings are collateralized by accounts receivable, inventories and life insurance policies. This agreement is renewable on an annual basis. Note payable to stockholder The note payable to stockholder, due January, 1997, secured by assets of the Company, bears interest at 1% over prime (9.25% at April 30, 1996, with interest payable monthly. Long-term debt Promissory note due in semi-annual payments through January, 1999, with interest at 8%. Secured by inventories, accounts receivable, and life insurance policies. $ 38,572 Promissory note with interest payable annually at 4%. Principal payments which began December, 1995, with final payment due December, 2009, secured by a second mortgage on real estate and building. 840,000 Promissory note, unsecured, due in monthly installments through October, 1997, with interest at 8.7% 31,986 ------- Total 910,558 Less current portion 92,707 ------- Long-term portion $817,851 ======= Future maturities of long-term debt are as follows: Fiscal Year Ending Amount 1997 $ 92,707 1998 83,973 1999 73,878 2000 60,000 2001 60,000 Thereafter 540,000 ------- Total $ 910,558 ======= NOTE 3 - PENSION, PROFIT SHARING AND 401(k) SAVINGS PLANS The Company has a non-contributory defined benefit pension plan covering all eligible hourly employees. The Company's policy is to fund pension cost within the allowable range that is deductible for Federal income tax purposes. The plan's funded status projected to the latest actuarial valuation date is as follows: March 31, 1996 Vested benefit obligation $ 1,408,370 Nonvested benefit obligation 1,357 --------- Accumulated benefit obligation 1,409,727 Excess of projected benefit obligations over accumulated benefit obligation - --------- Projected benefit obligations 1,409,727 Plan assets at fair value 999,684 --------- Projected benefit obligations in excess of plan assets 410,043 Unrecognized net loss 38,202 Unrecognized net transition asset 78,517 Additional liability (116,719) -------- Unfunded accrued pension cost $410,043 ======== Net pension cost for the years ended April 30 included the following components: Service cost $ 9,154 Interest cost 108,637 Actual return on plan assets (152,680) Net amortization and deferral 94,965 ------- Periodic pension expense $60,076 ======= The expected long-term rate of return on assets was 8% and weighted- average discount rate was 7.56% for 1996. The Company also has a non-qualified and unfunded pension plan covering some retired salaried employees. The estimated present value of accumulated plan benefits was $25,000 as of April 30, 1996. Pension expense under both pension plans was $66,256 in 1996. Employees of the Company covered by a collective bargaining agreement may participate in a 401(k) savings plan, whereby the employees may elect to make contributions pursuant to a salary reduction agreement. The Company makes a matching contribution of $.40 for each dollar of electing employees' deferrals up to a maximum of 5%. Employees of the Company that are not covered by collective bargaining agreements may participate in a 401(k) savings plan, whereby the employees may elect to make contributions pursuant to a salary reduction agreement. The Company makes a matching contribution of $.50 for each dollar of electing employees' deferrals up to a maximum of 5%. The Company may also make discretionary contributions to the savings and retirement plans. Matching contributions were $27,000 in 1996. NOTE 4 - DEFERRED COMPENSATION PLAN The Company had an unfunded deferred compensation plan covering certain specified corporate staff and officers. Participant accounts are maintained and credited with accrued interest at the prime rate. Participants may elect to receive payments over no more than ten years. The plan has been discontinued and there will be no additional participants. Deferred compensation expense amounted to $4,913 in 1996. NOTE 5 - CASH FLOW DISCLOSURES Cash paid for interest and income taxes was as follows: Interest $ 767,520 Income taxes 59,909 NOTE 6 - ADVERTISING Advertising costs are expensed as incurred. Advertising expense totaled $49,947 in 1996. NOTE 7 - OPERATING LEASE The Company leases its corporate headquarters and principal manufacturing facility from the Company's sole shareholder. The lease term is from April 1, 1989 to November 30, 2004, with an annual rental of approximately $300,000, which will be adjusted at the beginning of the eleventh year to current appraisal value. Rent expense paid under all operating leases totaled $316,405, which includes $300,000 building rent. Based on an independent appraisal it received, the Company believes that the annual rent under this lease is no more or less than if it had been with a third party. The minimum future lease payments are as follows: Fiscal Year Ending Amount 1997 $300,000 1998 300,000 1999 300,000 2000 300,000 2001 300,000 Thereafter 1,075,000 --------- Total $2,575,000 ========= NOTE 8 - PROVISION FOR INCOME TAXES The sources of deferred tax assets and liabilities and the tax effects of each are as follows: Deferred tax assets: Allowance for doubtful accounts $ 40,000 Deferred compensation 20,000 Accrued pension costs 126,000 Other accrued post-retirement benefits 8,000 Unrealized pension loss 15,000 Accrued vacation pay 2,000 Capitalized inventory costs 34,000 Manufacturers' sales tax credit carryforwards 7,000 ------- Total deferred tax assets 252,000 Deferred tax liability: Tax over financial statement depreciation 9,000 ------- Net deferred tax asset $243,000 ======= The net deferred tax asset is presented in the accompanying balance sheet as follows: Current deferred tax asset $ 82,000 Long-term deferred tax asset 161,000 ------- $243,000 ======= The provision for income taxes consists of the following components: Current $ 66,000 Deferred (28,000) ------- Total provision for income taxes $ 38,000 ======= The Company has Wisconsin manufacturers' sales tax credits available for carrying forward to offset future income tax of approximately $7,000, expiring in varying amounts through April 30, 2011. The Company's provision for income taxes differed from the tax that would result from applying statutory Federal tax rates to income before income taxes, primarily because of State income taxes, State tax credits utilized and nondeductible expenses. NOTE 9 - SIGNIFICANT CONCENTRATIONS Generally accepted accounting principles require disclosure of information about certain significant estimates and current vulnerabilities due to certain concentrations. These matters include the following: Collective Bargaining Arrangements Substantially all of the Company's production employees are covered by a collective bargaining agreement which is scheduled to expire July, 1997. Major Customers The Company derived approximately 21% of net sales in 1996 from one major customer. As of April 30, 1996, the balance due from this customer was approximately 17% of the company's accounts receivable. NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments consist principally of cash and cash equivalents, trade receivables and payables and notes payable. There are no significant differences between the carrying value and fair value of any of these financial instruments except for the note which bears interest at 4%. The book value of this note is $840,000 and the fair value is estimated at $616,706 at April 30, 1996, based on an interest rate of 9.5%. NOTE 11 - POSTRETIREMENT HEALTH BENEFITS The Company provides health insurance benefits to certain retirees under an agreement with those individuals when they retired. The Company has recorded the cost of such benefits on a "pay-as-you-go" (cash) basis. Financial Accounting Standard No. 106, Employees' Accounting for Postretirement Benefits Other Than Pension, became effective for the Company for the year ended April 30, 1996. This standard requires accrual, during the years that the employee renders the necessary service, of the expected cost of providing those benefits. The Company's unfunded liability for future health benefits as of April 1, 1995 was $265,243. As permitted under the standard, the Company has elected a delayed recognition of the unfunded obligation, whereby the transition obligation is amortized on a straight-line basis over the average life expectancy period of the plan participants. Disclosures required under FAS No. 106 as of March 31, 1996 are as follows: Delayed Recognition Discount rate 8% Health Care Cost trend rates 10%, 9.5% 6% 10%, 9.5%...6% Accumulated postretirement benefit obligation as of March 31, 1996 $(258,701) Fair value of plan assets - -------- Funded status (258,701) Unrecognized obligation at transition 238,719 Unrecognized prior service cost - Unrealized gains and losses - Accrued postretirement benefit cost 19,982 Net Periodic Postretirement Benefit Cost for 1996 Service cost - Interest cost 20,152 Amortization of unrecognized obligation at transition 26,524 ------- Net Periodic Postretirement Benefit Cost $ 46,676 ======= NOTE 12 - SUBSEQUENT EVENT Subsequent to year-end, the Company reached an agreement to sell the operating assets of Rainfair, Inc., subject to its operating liabilities, to a joint venture owned by the Company's majority stockholder and LaCrosse Footwear, Inc. The sales price exceeds the book value of the Company's net assets. The joint venture will continue the business operations of Rainfair, Inc. The sale is expected to be completed May 31, 1996. This information is an integral part of the accompanying financial statements. (b) Pro Forma Financial Information. LACROSSE FOOTWEAR, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The following unaudited pro forma financial information relates to the May 31, 1996 acquisition by a 50% owned subsidiary (the "Subsidiary") of LaCrosse Footwear, Inc. ("LaCrosse") of substantially all of the assets of Rainfair, Inc. ("Rainfair") and the assumption of certain specified liabilities (the "Acquisition"). The Acquisition was accounted for as a purchase. The pro forma amounts have been prepared based on certain purchase accounting and other pro forma adjustments (as described in the accompanying notes) to the December 31, 1995 and March 30, 1996 historical financial statements of both companies. In June, 1996, Rainfair's name was changed and the Subsidiary's name was subsequently changed to Rainfair, Inc. The unaudited pro forma condensed consolidated statements of income for the year ended December 31, 1995 and the quarter ended March 30, 1996 reflect the historical results of operations of both companies for the year ended December 31, 1995 and quarter ended March 30, 1996 with pro forma acquisition adjustments as if the Acquisition had occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated balance sheet at March 30, 1996 reflects the historical financial position of both companies at March 30, 1996, with pro forma acquisition adjustments as if the Acquisition had occurred on March 30, 1996. The pro forma adjustments are described in the accompanying notes and give effect to events that are (a) directly attributable to the Acquisition, (b) factually supportable, and (c) in the case of certain income statement adjustments, expected to have a continuing impact. The unaudited pro forma condensed consolidated financial statements should be read in connection with LaCrosse's Annual Report on Form 10-K for the year ended December 31, 1995, along with the April 30, 1996 financial statements of Rainfair and related notes appearing elsewhere in this Current Report on Form 8-K. The unaudited pro forma financial information presented is for information purposes only and does not purport to represent what LaCrosse's and Rainfair's financial position or results of operations as of the dates presented would have been had the Acquisition in fact occurred on such dates or at the beginning of the periods indicated or to project LaCrosse's consolidated financial position or results of operations for any future date or period. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (In thousands) (Unaudited) March 30, 1996 LaCrosse Pro Forma Pro ASSETS Footwear Rainfair Adjustments Forma Current assets: (Note 1) Cash and cash equivalents $223 $0 $0 $223 Accounts receivable 14,080 2,675 (57) 16,698 Inventories 28,044 6,592 1,858 36,494 Prepaid expenses 1,860 38 0 1,898 Deferred tax assets 1,719 0 0 1,719 ------ ----- ----- ------ Total current assets 45,926 9,305 1,801 57,032 Net Property and equipment 11,878 665 0 12,543 Intangibles 13,636 0 518 14,154 Other assets 1,277 200 49 1,428 ------ ------ ----- ------ Total assets $72,717 $10,170 $2,270 $85,157 ====== ====== ===== ====== LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term obligations $1,760 $277 $(277) $1,760 Borrowings under credit agreement 0 6,939 2,835 9,774 Accounts payable 3,983 951 (325) 4,609 Accrued expenses 5,505 371 (11) 5,865 Dividends payable 29 0 0 29 Income taxes payable 162 35 (35) 162 ------ ------ ------ ------ Total current liabilities 11,439 8,573 2,187 22,199 Accrued postretirement benefit cost 1,359 0 0 1,359 Accrued pension 0 312 118 430 Long-term obligations 4,892 911 (911) 4,892 Deferred compensation 1,481 53 (53) 1,481 ------ ------ ------ ------ Total liabilities 19,171 9,849 1,341 30,361 ====== ====== ====== ====== Minority interest 0 0 1,250 1,250 Redeemable preferred stock 1,957 0 1,957 Total shareholders' equity 51,589 321 (321) 51,589 ------ ------ ------- ------- Total liabilities and shareholders' equity $72,717 $10,170 $2,270 $85,157 ======= ======= ====== ======= See accompanying notes to unaudited pro forma condensed consolidated financial statements. PRO FORMA CONDENSED STATEMENT OF INCOME (In thousands, except per share data) (Unaudited) Year Ended December 31, 1995 LaCrosse Pro Forma Pro Footwear Rainfair Adjustments Forma (Note 2) Net sales $98,571 $16,846 $(470) $114,947 Cost of goods sold 72,011 13,459 (1,197) 84,273 ------ ------ ------ ------- Gross profit 26,560 3,387 727 30,674 Selling and administrative expenses 19,898 2,282 1,058 23,238 ------ ------ ------ ------ Operating Income 6,662 1,105 (331) 7,436 Interest expense (1,457) (716) 175 (1,998) Miscellaneous income (expense) 266 (78) 5 193 ------ ----- ------- ------- Income before income taxes 5,471 311 (151) 5,631 Provision for income taxes 2,143 99 (37) 2,205 ------ ------- ------- ------ Net income before minority interest 3,328 212 (114) 3,426 Minority interest in net income of subsidiary 0 0 29 29 ------ ------ ------ ------- Net income $3,328 $212 ($143 $3,397 ====== ====== ====== ======= Net income available to common shareholders $3,211 $3,280 ====== ====== Earnings per common and common equivalent share $0.48 $0.49 ===== ===== Weighted average common and common equivalent shares outstanding 6,680 6,680 ===== ===== See accompanying notes to unaudited pro forma condensed consolidated financial statements. PRO FORMA CONDENSED STATEMENT OF INCOME (In thousands, except per share data) (Unaudited) Quarter ended March 30, 1996 LaCrosse Pro Forma Pro Footwear Rainfair Adjustments Forma (Note 2) Net sales $22,131 $4,648 $(206) $26,573 Cost of goods sold 16,324 3,849 (467) 19,706 ------ ----- ------ ------ Gross profit 5,807 799 261 6,867 Selling and administrative expenses 5,253 600 278 6,131 ----- ----- ------ ------ Operating income 554 199 (17) 736 Interest expense (180) (191) 44 (327) Miscellaneous income 113 1 1 115 ----- ------ ------ ------ Income before income taxes 487 9 28 524 Provision for income taxes 190 1 13 204 ----- ------ ------ ------- Net income before minority interest 297 8 15 320 Minority interest in net income of subsidiary 0 0 7 7 Net income $297 $8 $8 $313 ===== ===== ===== ====== Net income available to common shareholders $268 $284 ===== ====== Earnings per common and common equivalent share $0.04 $0.04 ===== ===== Weighted average common and common equivalent shares outstanding 6,677 6,677 ===== ===== See accompanying notes to unaudited pro forma condensed consolidated financial statements. NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except share data) NOTE 1 The pro forma condensed consolidated balance sheet has been prepared to reflect the purchase by a 50% owned subsidiary of LaCrosse of substantially all of the assets and the assumption of certain specified liabilities of Rainfair, Inc. (the "Acquisition"). The assets have been adjusted to their estimated fair value at March 30, 1996. The pro forma adjustments as of March 30, 1996 reflect the following: a) The allocation of excess of cost over the fair value of net assets acquired to goodwill. b) The restatement of the value of certain assets and liabilities to their estimated fair market value. c) The elimination of assets not acquired and liabilities not assumed as part of the acquisition and the elimination of the LIFO reserve. d) The financing for the acquisition. NOTE 2 The pro forma condensed consolidated statements of operations for the year ended December 31, 1995 and the three months ended March 30, 1996 are based on the financial statements of LaCrosse and Rainfair for the twelve months ended December 31, 1995 and the three months ended March 30, 1996, respectively, after giving effect to the following pro forma adjustments: a) Reduction of net sales and cost of sales resulting from the elimination of sales from LaCrosse to Rainfair. b) Reclassification of Rainfair's costs to conform with classifications used by LaCrosse Footwear. c) Change in operating expenses reflecting reduced depreciation expense, amortization of goodwill based on a useful life of 15 years and increased facility costs reflecting the terms of a new lease agreement for the Subsidiary's facility in Racine, Wisconsin. d) Reduced interest expense, primarily due to lower borrowing costs for LaCrosse and the improved capital structure of the Subsidiary. e) Provision for income taxes resulting from incremental income using LaCrosse's effective tax rate. NOTE 3 The financial information of the Subsidiary utilized in the pro forma condensed consolidated financial statements has been extracted from the full financial statements of Rainfair. Certain expenses, such as deferred compensation, were not acquired by the Subsidiary and therefore have not been allocated to the Acquisition. Certain expenses, such as interest, have been estimated. Income tax expense has been calculated using LaCrosse's effective tax rate. Similarly, certain assets of Rainfair, such as cash and deferred taxes, and certain liabilities, such as loans, were not acquired by the Subsidiary and are therefore eliminated in the pro forma adjustments. NOTE 4 The purchase price for Rainfair has been allocated to the underlying acquired assets and liabilities based on estimated fair values at the date of the Acquisition. Such estimates may be revised at a later date. A summary of the purchase price allocation is as follows. Allocated to: (In Thousands) Working capital other than cash $ 9,670 Property and equipment 659 Cost in excess of net assets of business acquired 518 ------- Purchase price $10,847 (c) Exhibits. The exhibits listed in the accompanying Exhibit Index are filed as part of this Current Report on Form 8-K. 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. LACROSSE FOOTWEAR, INC. Date: August 5, 1996 By: /s/ Robert J. Sullivan Robert J. Sullivan Vice President - Finance and Administration LACROSSE FOOTWEAR, INC. EXHIBIT INDEX TO FORM 8-K/A REPORT Dated June 14, 1996 Exhibit (2.1) Asset Purchase Agreement dated May 16, 1996, by and among Rainco, Inc., LaCrosse Footwear, Inc., Rainfair, Inc. and Craig L. Leipold* [Previously filed with this Current Report on Form 8-K] (2.2) Shareholders' Agreement dated as of May 31, 1996 by and between Craig L. Leipold, LaCrosse Footwear, Inc. and Rainco, Inc. [Previously filed with this Current Report on Form 8-K] (23) Consent of Clifton Gunderson L.L.C. _____________ * The schedules and exhibits to this document are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such schedule or exhibit to the Securities and Exchange Commission upon request. EX-23 2 CONSENT Exhibit (23) CONSENT OF INDEPENDENT AUDITORS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-77516, 33-77518 and 333-2702) pertaining to the LaCrosse Footwear, Inc. Employees' Retirement Savings Plan, the LaCrosse Footwear, Inc. Union Employees' Retirement Savings Plan and the LaCrosse Footwear, Inc. 1993 Employee Stock Incentive Plan of our report dated May 24, 1996 and the related financial statements of Rainfair, Inc. for the year ended April 30, 1996 included in this Current Report on Form 8-K of LaCrosse Footwear, Inc. CLIFTON, GUNDERSON L.L.C. Racine, Wisconsin August 2, 1996 -----END PRIVACY-ENHANCED MESSAGE-----