-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FXsk+EFVKsZru0kb3LK2qle52b37dr57SjsdhG6nZMjnPuzJdU/PTBQEDnL5iEEL Rl2BR3cMq2S3Z1asiqVbDw== 0000093542-94-000016.txt : 19941216 0000093542-94-000016.hdr.sgml : 19941216 ACCESSION NUMBER: 0000093542-94-000016 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941003 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 19941215 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANHOME INC CENTRAL INDEX KEY: 0000093542 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 041864170 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09267 FILM NUMBER: 94564899 BUSINESS ADDRESS: STREET 1: 333 WESTERN AVE CITY: WESTFIELD STATE: MA ZIP: 01085 BUSINESS PHONE: 4135623631 FORMER COMPANY: FORMER CONFORMED NAME: STANLEY HOME PRODUCTS INC DATE OF NAME CHANGE: 19820513 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A FIRST AMENDMENT TO CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: October 14, 1994 Date of earliest event reported: October 3, 1994 STANHOME INC. _________________________________________________________________________ (Exact name of registrant as specified in its charter) MASSACHUSETTS 0-1349 04-1864170 _________________________________________________________________________ (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 333 WESTERN AVENUE, WESTFIELD, MASSACHUSETTS 01085 _________________________________________________________________________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (413) 562-3631 Total Number of Pages Contained Herein: 42 Index to Financial Statements and Pro Forma Financial Information to this Form 8-K/A is on Page: 3 AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K dated October 14, 1994 as set forth in the pages attached hereto: Item 7. Financial Statements and Exhibits. The financial statements of businesses acquired and pro forma financial information attached hereto and described on the following INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION are hereby filed as a part of the Current Report on Form 8-K dated October 14, 1994. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report amendment to be signed on its behalf by the undersigned hereunto duly authorized. STANHOME INC.____________________ (Registrant) Date: December 14, 1994 By/s/G. William Seawright________ G. William Seawright, President and Chief Executive Officer Item 7 Form 8-K/A Page No. - ------ ------------------- INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION Financial statements of businesses acquired Lilliput Group plc consolidated 4 Group Profit and Loss Account and Statement of Total Recognised Gains and Losses for the year ended December 31, 1993, December 31, 1993 Balance Sheet and Cash Flows for the year ended December 31, 1993 Report of Independent Auditors 26 Consent of Independent Auditors 27 Lilliput Group plc condensed consolidated 28 Group Profit and Loss Account and Total Recognised Gains and Losses for the nine months ended September 30, 1994, September 30, 1994 Balance Sheet and Cash Flows for the nine months ended September 30, 1994 Pro forma financial information Stanhome Inc. and Lilliput Group plc 35 September 30, 1994 Pro Forma Condensed Consolidated Balance Sheet Stanhome Inc. and Lilliput Group plc 38 for the year ended December 31, 1993 Pro Forma Condensed Consolidated Statement of Income Stanhome Inc. and Lilliput Group plc 40 for the nine months ended September 30, 1994 Pro Forma Condensed Consolidated Statement of Income Notes To Pro Forma Financial Information 42 LILLIPUT GROUP plc GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 1993 (1992 Unaudited)
Notes 1993 1992 (pound) (pound) (000) (000) Turnover 2 16,506 13,581 Cost of sales (8,117) (6,960) ------ ------ Gross profit 8,389 6,621 Distribution costs (2,940) (2,576) Administrative expenses (2,398) (1,916) ------ ------ (5,338) (4,492) ------ ------ Operating Profit 3 3,051 2,129 ------ ------ Interest receivable 95 24 Interest payable 6 (71) (145) ------ ------ 24 (121) ------ ------ Profit on ordinary activities before taxation 3,075 2,008 Tax on profit on ordinary activities 7 (1,094) (630) ------ ------ Profit on ordinary activities after taxation 8 1,981 1,378 Preference dividends 9 (156) (115) ------ ------ Profit attributable to equity shareholders 1,825 1,263 Ordinary dividends 9 (413) (203) ------ ------ Retained profit for the year 22 1,412 1,060 ====== ====== Earnings per ordinary share 10 9.5p 6.7p
-28- LILLIPUT GROUP plc GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 DECEMBER 1993 (1992 Unaudited)
1993 1992 (pound) (pound) (000) (000) Profit on ordinary activities after taxation 1,981 1,378 Exchange difference on retranslation of net assets of subsidiary undertaking 13 94 ------ ------ Total recognised gains and losses relating to the year 1,994 1,472 ====== ====== RECONCILIATION OF SHAREHOLDERS' FUNDS 1993 1992 (pound) (pound) (000) (000) Total recognised gains and losses 1,994 1,472 Dividends (569) (318) Other movements New shares issued 3,082 - Share issue costs (603) - Shares redeemed (1,519) - ------ ------ 2,385 1,154 Shareholders' funds at 4 January 2,339 1,185 ------ ------ Shareholders' funds at 31 December 4,724 2,339 ====== ======
-29- LILLIPUT GROUP plc BALANCE SHEET AT 31 DECEMBER 1993 (1992 and Company Unaudited)
Group Company Notes 1993 1992 1993 1992 (pound) (pound) (pound) (pound) (000) (000) (000) (000) Fixed assets Tangible assets 11 1,801 1,862 - - Investments 12 - - 1,425 1,843 ------ ------ ------ ------ 1,801 1,862 1,425 1,843 ------ ------ ------ ------ Current assets Stocks 13 858 416 - - Debtors 14 2,145 2,020 52 237 Cash at bank and in hand 15 4,021 1,244 3,058 - ------ ------ ------ ------ 7,024 3,680 3,110 237 Creditors: amounts falling due within one year 16 3,439 2,531 1,038 203 ------ ------ ------ ------ Net current assets 3,585 1,149 2,072 34 ------ ------ ------ ------ Total assets less current liabilities 5,386 3,011 3,497 1,877 Creditors: amounts falling due after more than one year 17 (641) (664) - - Provision for liabilities and charges 20 (21) (8) (4) - ------ ------ ------ ------ 4,724 2,339 3,493 1,877 ====== ====== ====== ====== Capital and reserves Called up share capital 21 1,163 1,700 1,163 1,700 Share premium account 22 2,286 140 2,286 140 Profit and loss account 22 1,275 499 44 37 ------ ------ ------ ------ 4,724 2,339 3,493 1,877 ====== ====== ====== ======
-30- LILLIPUT GROUP plc GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 1993 (1992 Unaudited)
Notes 1993 1992 (pound) (pound) (000) (000) Net cash inflow from operating activities 3(b) 3,383 2,577 Returns on investment and servicing of finance Interest received 95 24 Interest paid (71) (145) Dividends paid (631) (188) ------ ------ Net cash outflow from returns on investments and servicing of finance (607) (309) ------ ------ Taxation Corporation tax paid (612) (358) Investing activities Payments to acquire tangible fixed assets (319) (274) Receipts from sales of tangible fixed assets 23 43 ------ ------ Net cash outflow from investing activities (296) (231) ------ ------ Net cash inflow before financing 1,868 1,679 ====== ====== Financing Issue of ordinary share capital 23 (3,082) - Redemption of share capital 23 1,519 - Share issue costs 23 603 - Repayment of long term loans 18 1 953 Repayments of capital element of finance lease rentals 19 51 168 ------ ------ Net cash (inflow)/outflow from financing (908) 1,121 Increase in cash and cash equivalents 15 2,776 558 ------ ------ 1,868 1,679 ====== ======
-31- LILLIPUT GROUP plc NOTES TO THE ACCOUNTS AT 31 DECEMBER 1993 (1992 AND COMPANY INFORMATION UNAUDITED) -------------------------------------- 1. ACCOUNTING POLICIES a) Basis of preparation The accounts are prepared under the historical cost convention and in accordance with applicable accounting standards. b) Basis of consolidation The group accounts consolidate the accounts of Lilliput Group plc and all its subsidiary undertakings drawn up to 31 December each year. The 1992 accounts were drawn up to 3 January 1993. c) Research and development Research and development expenditure is written off as it is incurred. d) Depreciation Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost or valuation, less residual value, of each asset on a straight line basis over its expected useful life. The expected useful lives are: Freehold buildings 50 years Leasehold land and buildings the term of the lease in equal annual instalments Plant, machinery and equipment 4 to 5 years Motor vehicles 4 years e) Leased assets Assets held under hire purchase contracts and finance leases, which are those where substantially all the risks and rewards of ownership of the asset have passed to the group, are capitalised in the balance sheet and are depreciated over their useful lives. The interest element of the rental obligations is charged to the profit and loss account over the period of the contract or lease and represents a constant proportion of the balance of capital repayments outstanding. Rentals paid under operating leases are charged to income on a straight line basis over the term of the lease. f) Stocks Stocks are stated at the lower of cost and net realisable value. Cost comprises amounts incurred in bringing each product to its present location and condition as follows: Raw materials - purchase cost on a first-in, first out basis Work in progress and finished goods - cost of direct materials and labour plus attributable overheads based on the normal level of activity. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal. g) Deferred taxation Deferred taxation is provided using the liability method on all timing differences to the extent that they are expected to reverse in the future without being replaced, calculated at the rate at which it is anticipated the timing differences will reverse. -32- h) Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the contracted rate if the transaction is covered by a forward exchange contract. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date or, if appropriate, at the forward contract rate. Investments in overseas subsidiary undertakings are translated at the rate of exchange ruling at the date of the investment. All differences are taken to the profit and loss account. On consolidation, the accounts of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. The exchange difference arising on the retranslation of opening net assets is taken directly to reserves. All other translation differences are taken to the profit and loss account. i) Pensions The group operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme. 2. TURNOVER AND SEGMENTAL ANALYSIS Turnover represents the amounts derived from the provision of goods and services which fall within the group's ordinary activities, stated net of value added tax. All of the turnover, operating profit and net operating assets (i.e., excluding those assets and liabilities on which interest is earned or paid respectively) relate to the manufacture and sale of miniature cottages as collectables and giftware, and are analysed as follows:
a) Turnover by geographical location 1993 1992 (pound) (pound) (000) (000) United Kingdom 12,074 9,538 United States of America 4,432 4,043 ------ ------ 16,506 13,581 ====== ====== b) Turnover by destination United Kingdom 10,131 8,132 United States of America 4,432 4,043 Continental Europe 1,313 906 Rest of World 630 500 ------ ------ 16,506 13,581 ====== ====== c) Profit United Kingdom 2,854 1,923 United States of America 197 206 ------ ------ Operating profit 3,051 2,129 Net interest 24 (121) ------ ------ Profit on ordinary activities before taxation 3,075 2,008 ====== ======
-33-
d) Operating assets 1993 1992 (pound) (pound) (000) (000) United Kingdom 2,061 2,109 United States of America 511 438 ------ ------ 2,572 2,547 Unallocated net assets/(liabilities) 2,152 (208) ------ ------ Total net assets 4,724 2,339 ====== ====== Unallocated net assets/(liabilities) comprise:- Cash at bank and in hand 4,021 1,244 Loans (672) (673) Corporation tax liabilities (1,036) (568) Proposed dividend (140) (203) Provision for deferred tax (21) (8) ------ ------ 2,152 (208) ====== ====== 3. OPERATING PROFIT 1993 1992 (pound) (pound) (000) (000) a) This is stated after charging/(crediting): Auditors' remuneration - audit services 36 25 - non-audit services 12 7 Depreciation of tangible fixed assets - owned 303 193 - leased 65 42 Operating lease rentals - plant and machinery 12 8 - land and buildings 172 169 - other 119 132 Profit on disposal of tangible fixed assets (11) (9) ====== ====== b) Reconciliation of operating profit to net cash inflow from operating activities Operating profit 3,051 2,129 Depreciation charges 368 235 Profit on sale of tangible fixed assets (11) (9) ------ ------ 3,408 2,355 (Increase)/decrease in stocks (441) 375 Increase in debtors (108) (177) Increase in creditors 524 24 ------ ------ Net cash inflow from operating activities 3,383 2,577 ====== ======
-34-
4. DIRECTORS' REMUNERATION 1993 1992 (pound) (pound) (000) (000) Fees 6 - Other emoluments (including pension contributions) Basic salaries 365 289 Benefits 52 21 Performance related bonuses 6 121 Pension contributions 40 36 ------ ------ 469 467 ====== ======
Benefits in kind comprise fully expensed cars which are stated at the Inland Revenue scale charge and medical cover stated at cost. For the year ended 31 December 1992, performance related bonuses were payable to executive directors based on the achievement of targets set for return on operating assets. Five of the UK based directors waived their entitlement to performance related bonuses for the year ended 31 December 1993. Had they not done so, they would have received bonuses totalling (pounds)50,000. The bonus payable for that year relates to the achievement of targets set for profit before taxation at the company's US subsidiary undertaking. On 26 August 1993, J A Russell, A R Dunning, R E Freestone, D J Tate and P G Thomas were each granted options over 10,000 "B" ordinary shares at an exercise price of 50p per share. These options were exercised on 11 November 1993. The emoluments of the chairman, who is also the highest paid UK director, are as follows:-
Salary 83 58 Benefits 13 5 ------ ------ 96 63 Performance related bonus - 29 ------ ------ 96 92 Pension contributions 15 15 ------ ------ 111 107 ====== ======
The emoluments (excluding pension contributions) of the directors, fell within the following ranges:
No No Nil - (pounds)5,000 2 1 (pounds)20,001 - (pounds)25,000 1 - (pounds)45,001 - (pounds)50,000 3 - (pounds)55,001 - (pounds)60,000 - 3 (pounds)60,001 - (pounds)65,000 1 - (pounds)70,001 - (pounds)75,000 - 1 (pounds)90,001 - (pounds)95,000 - 1 (pounds)95,001 - (pounds)100,000 2 - (pounds)100,001 - (pounds)105,000 - 1
-35-
5. EMPLOYEE INFORMATION 1993 1992 (pound) (pound) (000) (000) Wages and salaries 5,571 4,880 Social security costs 436 402 Other pension costs 112 90 ------ ------ 6,119 5,372 ====== ======
The average weekly number of employees during the year was made up as follows:
No No Manufacturing 491 434 Office and management 74 61 ------ ------ 565 495 ====== ======
6. INTEREST PAYABLE
1993 1992 (pound) (pound) (000) (000) Bank loans, overdrafts and other loans wholly repayable within five years 6 36 Bank loans not wholly repayable within five years 60 87 Finance charges payable under finance leases and hire purchase contracts 5 22 ------ ------ 71 145 ====== ======
7. TAX ON PROFIT ON ORDINARY ACTIVITIES
1993 1992 (pound) (pound) (000) (000) Based on the profit for the year: Corporation tax at 33% 1,041 545 Overseas taxation 62 94 Deferred taxation (7) 10 ------ ------ 1,096 649 Adjustments in respect of previous years (2) (19) ------ ------ 1,094 630 ====== ======
8. PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY The profit dealt with in the accounts of the parent company was (pounds)1,224,000 (1992: (pounds)354,000). -36- 9. DIVIDENDS
1993 1992 (pound) (pound) (000) (000) Preference - paid 156 115 ====== ====== Preferred ordinary - paid 273 - - proposed - 203 Ordinary - final proposed 0.6p 140 - ------ ------ 413 203 ====== ======
10. EARNINGS PER ORDINARY SHARE Earnings per ordinary share are based on the profit for the year after deducting preference dividends and on 19,286,503 (1992: 18,867,970) ordinary shares, being the weighted average number of ordinary shares in issue, as adjusted, during the year. 11. TANGIBLE FIXED ASSETS
Plant, Land and buildings machinery Short and Motor Freehold leasehold equipment vehicles Total (pound) (pound) (pound) (pound) (pound) (000) (000) (000) (000) (000) Cost: At 4 January 1993 1,133 103 1,501 154 2,891 Exchange adjustment - - 4 - 4 Additions 1 29 148 141 319 Disposals - - (15) (37) (52) ----- ----- ----- ----- ----- At 31 December 1993 1,134 132 1,638 258 3,162 ----- ----- ----- ----- ----- Depreciation: At 4 January 1993 88 30 814 97 1,029 Exchange adjustment - - 4 - 4 Provided during the year 23 15 292 38 368 Disposals - - (10) (30) (40) ----- ----- ----- ----- ----- At 31 December 1993 111 45 1,100 105 1,361 ----- ----- ----- ----- ----- Net book value: At 31 December 1993 1,023 87 538 153 1,801 ===== ===== ===== ===== ===== At 4 January 1993 1,045 73 687 57 1,862 ===== ===== ===== ===== =====
Included in fixed assets above are the following amounts relating to assets acquired under finance leases and hire purchase contracts:-
(pound) (000) Net book value: At 31 December 1993 14 ==== At 4 January 1993 96 ====
-37- 12. INVESTMENT IN SUBSIDIARY UNDERTAKINGS 1993 1992 (pound) (pound) (000) (000) At 4 January 1,843 1,914 Amount received from subsidiary undertakings (418) (71) ----- ----- At 31 December 1,425 1,843 ===== ===== Details of the investments in which the company holds more than 10% of the nominal value of any class of share capital are as follows: Country of registration Proportion (or of voting Subsidiary incorporation) rights and Nature of undertaking and operation Holding shares held business Lilliput Lane England and Ordinary 100% Manufacture Ltd Wales shares of miniature cottages for sale as collectables and giftware Lilliput Inc USA Common 100% Distribution of stock Lilliput Lane and other collectable/ giftware products Lilliput England and Ordinary 100% Dormant Creations Ltd Wales shares 13. STOCKS
1993 1992 (pound) (pound) (000) (000) Raw materials and consumables 101 114 Work in progress 79 73 Finished goods 678 229 ------ ------ 858 416 ====== ====== The difference between purchase price or production cost of stocks and their replacement cost is not material. 14. DEBTORS
Group Company 1993 1992 1993 1992 (pound) (pound) (pound) (pound) (000) (000) (000) (000) Trade debtors 1,868 1,789 - - Other debtors 76 97 52 34 Prepayments and accrued income 201 134 - - Amount owed by subsidiary undertaking - - - 203 ------ ------ ------ ------ 2,145 2,020 52 237 ====== ====== ====== ======
-38- 15. CASH AND CASH EQUIVALENTS Analysis of balances as shown in the group balance sheet and changes during the current and previous year:
Change 1993 1992 in year (pound) (pound) (pound) (000) (000) (000) Cash at bank and in hand 4,021 1,244 2,777 ===== ===== ===== Change 1992 1991 in year (pound) (pound) (pound) (000) (000) (000) Cash at bank and in hand 1,244 803 441 Bank overdraft - (68) 68 ----- ----- ----- 1,244 735 509 ===== ===== ===== 1993 1992 (pound) (pound) (000) (000) Balance at 4 January 1,244 735 Net cash inflow before adjustments for the effect of foreign exchange rates 2,776 558 Effect of foreign exchange rate changes 1 (49) ----- ----- 4,021 1,244 ===== =====
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company Notes 1993 1992 1993 1992 (pound) (pound) (pound) (pound) (000) (000) (000) (000) Current instalments due on loans 18 33 42 - - Obligations under finance leases and hire purchase contracts 19 31 51 - - Trade creditors 414 445 - - Amount owed to subsidiary undertaking - - 898 - Corporation tax 1,036 568 - - Other taxes and social security 598 489 - - Accruals 825 602 - - Deferred income 362 131 - - Dividends 140 203 140 203 ------ ------ ------ ------ 3,439 2,531 1,038 203 ====== ====== ====== ======
Included within accruals is (pounds)19,000 (1992: (pounds)12,000) relating to outstanding contributions payable to the pension scheme. -39- 17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Notes 1993 1992 (pound) (pound) (000) (000) Bank loans 18 639 631 Obligations under finance leases and hire purchase contracts 19 2 33 ------ ------ 641 664 ====== ======
18. BANK LOANS
1993 1992 (pound) (pound) (000) (000) Not wholly repayable within five years 672 673 Amounts due within one year (33) (42) ------ ------ 639 631 ====== ====== Instalments not due within five years 502 449 ====== ======
Details of loans not wholly repayable within 5 years are as follows:
Bank loan repayable over 15 years from 30 September 1990 in monthly instalments of (pounds)2,730 at an interest rate of 2% above base rate 256 263 Bank loan repayable over 20 years from 30 September 1990 in monthly instalments of (pounds)3,852 at an interest rate of 7.81% 416 410 ------ ------ 672 673 ====== ======
Amounts due at 31 December 1993 are repayable as follows:
After five years 502 449 Between two and five years 107 140 Between one and two years 30 42 ------ ------ 639 631 Within one year 33 42 ------ ------ 672 673 ====== ======
The bank loans are secured by a fixed charge over freehold properties and book debts and a floating charge over all other assets. Analysis of changes in group loan financing during the year:
At 4 January 673 1,626 Net cash outflow from financing (1) (953) ------ ------ At 31 December 672 673 ====== ======
-40- 19. OBLIGATIONS UNDER LEASES AND HIRE PURCHASE CONTRACTS
1993 1992 (pound) (pound) (000) (000) Amounts payable: (000) (000) Within one year 31 58 Between one and two years 3 31 Between two and five years - 4 ------ ------ 34 93 Less: finance charges allocated to future periods (1) (9) ------ ------ 33 84 ====== ======
Finance leases and hire purchase contracts are analysed as follows:
Current obligations 31 51 Non-current obligations 2 33 ------ ------ 33 84 ====== ======
Analysis of changes in finance leasing during the year:
>C> At 4 January 84 248 Capital element of finance lease rental payments (51) (168) Effect of foreign exchange rate changes - 4 ------ ------ At 31 December 33 84 ====== ======
Annual commitments of the group under non-cancellable operating leases are as follows:
Land and Buildings Other 1993 1992 1993 1992 (pound) (pound) (pound) (pound) (000) (000) (000) (000) Operating leases which expire: Within one year - - 18 37 Between two and five years 112 85 78 92 Over five years 74 82 - - ----- ----- ----- ----- 186 167 96 129 ===== ===== ===== =====
The company had no commitments under operating leases at 31 December 1993 (1992: nil). -41- 20. PROVISIONS FOR LIABILITIES AND CHARGES Deferred taxation provided in the accounts and the amounts not provided are as follows:-
Provided Not provided 1993 1992 1993 1992 (pound) (pound) (pound) (pound) (000) (000) (000) (000) Group Capital allowances in advance of depreciation 25 42 241 241 Short term timing differences (4) (34) - - ----- ----- ----- ----- 21 8 241 241 ===== ===== ===== =====
Company Short term timing differences 4 - - - ===== ===== ===== ===== 21. SHARE CAPITAL
1993 1992 (pound) (pound) (000) (000) Authorised Ordinary shares of 5p each 3,000 - 'A' ordinary shares of 5p each - 209 'B' ordinary shares of 5p each - 77 Deferred shares of 5p each - 319 Preferred ordinary shares of 0.05p each - 2 Redeemable preference shares of (pound)1 each - 1,150 ----- ----- 3,000 1,757 ===== =====
Allotted, called up and fully paid
1993 1992 1993 1992 No No (pound) (pound) (000) (000) (000) (000) Ordinary shares of 5p each 23,269 - 1,163 - 'A' ordinary shares of 5p each - 4,104 - 205 'B' ordinary shares of 5p each - 476 - 24 Deferred shares of 5p each - 6,375 - 319 Preferred ordinary shares of 0.05p each - 4,854 - 2 Redeemable preference shares of (pound)1 each - 1,150 - 1,150 ------ ------ ----- ----- 23,269 16,959 1,163 1,700 ====== ====== ===== =====
-42- On 8 April 1993, the company purchased 100,000 of the 'A' ordinary shares in issue at a price of 50p per share. On 26 August 1993 the authorised share capital was increased from (pounds)1,757,245 to (pounds)1,759,745 by the creation of 50,000 new 'B' ordinary shares. On 11 November 1993: - - 1,057,000 'B' ordinary shares were issued at par; - - 50,000 'B' ordinary shares were issued at 50p per share; - - 82,618 'A' ordinary shares were issued at par; - - the authorised share capital of the company was increased from (pounds)1,759,745 to (pounds)2,030,762 by the creation of 542,033,625 new preferred ordinary shares; - - (pounds)240,267 of the amount standing to the credit of the share premium account and reserves was capitalised by the issue of 480,533,625 preferred ordinary shares credited as fully paid at par, on the basis of 99 new preferred ordinary shares for every one such share held; - - every 100 preferred ordinary shares were consolidated into one preferred ordinary share of 5p; - - all of the preferred ordinary shares, 'A' ordinary shares and 'B' ordinary shares were converted into and redesignated as ordinary shares; - - the authorised share capital of the company was increased from (pounds)2,030,762 to (pounds)4,468,767 by the creation of 48,760,109 new ordinary shares; and - - 2,222,214 ordinary shares were issued at a price of 135p per share. (pounds)526,180 of the amount standing to the credit of reserves was capitalised and applied in paying up in full at par 10,523,603 ordinary shares. All of the redeemable preference shares and deferred shares were redeemed at par and the authorised share capital was reduced by (pounds)1,468,767. On 25 November 1993, all of the ordinary shares were listed on the London Stock Exchange, issued as fully paid at a price of 135p per share. Analysis of changes in share capital during the year:
1993 1992 (pound) (pound) (000) (000) At 4 January 1,700 1,700 Net cash outflow from financing (1,304) - Capitalisation of reserves 767 - ----- ----- 1,163 1,700 ===== =====
-43- 22. RESERVES
Share Capital Profit premium redemption and loss account reserve account (pound) (pound) (pound) (000) (000) (000) Group At 4 January 1993 140 - 499 Exchange difference on retranslation of net assets of subsidiary undertaking - - 13 Shares redeemed - 5 (50) Arising on share issues 2,912 - - Share issue costs (603) - - Capitalisation of reserves (163) (5) (599) Retained profit for the year - - 1,412 ----- ----- ----- At 31 December 1993 2,286 - 1,275 ===== ===== ===== Company At 4 January 1993 140 - 37 Shares redeemed - 5 (50) Arising on share issues 2,912 - - Share issue costs (603) - - Capitalisation of reserves (163) (5) (599) Retained profit for the year - - 656 ----- ----- ----- At 31 December 1993 2,286 - 44 ===== ===== =====
23. NET CASH INFLOW FROM SHARE MOVEMENTS
1993 1992 (pound) (pound) (000) (000) Nominal value of shares issued 170 - Share premium 2,912 - ----- ----- 3,082 - Share issue costs (603) - Shares redeemed (1,519) - ----- ----- 960 - ===== =====
-44- 24. CAPITAL COMMITMENTS
1993 1992 (pound) (pound) (000) (000) Group Contracted for but not provided in the accounts 3 - ===== ===== Authorised by the directors but not contracted for 349 310 ===== =====
Company The company had no capital commitments at the period end (1992: Nil). 25. PENSION COMMITMENTS The group operates a defined contribution scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. -45- 26. DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The Group's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United Kingdom ("UK GAAP") which differ from United States generally accepted accounting principles ("US GAAP"). The principal differences as they apply to the Group are summarised below: However, these differences do not have any significant impact on profit for the year ended December 31, 1993, or on shareholders equity at that date. Deferred taxation The Group provides for deferred taxation using the liability method only where, in the opinion of the Directors, it is probable that the taxation liability will crystallise within the foreseeable future. Under US Statement of Financial Accounting Standards ("FAS") 109, deferred taxation is computed using the liability method under which deferred taxation liabilities on temporary differences are fully provided and future taxation benefits are recognised as deferred taxation assets to the extent that their realisation is more likely than not. Ordinary dividends In the consolidated financial statements, final Ordinary dividends are provided for in the year in respect of which they are recommended by the Board of Directors for approval by the shareholders. Under US GAAP, dividends are not provided for until declared. Consolidated statement of cash flows The consolidated statements of cash flows prepared under UK GAAP, present substantially the same information as that required under US GAAP by FAS 95, "Statement of Cash Flows". These Standards differ, however, with regard to classification of items within the statements and as regards the definition of cash and cash equivalents. Under US GAAP,cash and cash equivalents would not include bank overdrafts and borrowings with initial maturities of less than three months. Under UK GAAP, cash flows are presented separately for operating activities, returns on investments and servicing of finance, taxation investing activities and financing activities. US GAAP, however, requires only three categories of cash flow activity to be reported, operating, investing and financing. Cash flows from taxation and returns on investments and servicing of finance shown under UK GAAP would, with the exception of dividends paid, be included as operating activities under US GAAP. The payment of dividends would be included as a financing activity under US GAAP. Under US GAAP, capitalised interest is treated as part of the cost of the asset to which it relates and thus included as part of investing cash flows, under UK GAAP all interest is treated as part of returns on investments and servicing of finance. Concentrations of credit risk Potential concentrations of credit risk to the Group consist principally of short term cash investments, trade loans and trade receivables. The Group only deposits short term cash surpluses with high credit quality banks and institutions and, by policy, limits the amount of credit exposure to any one bank or institution. Trade receivables comprise a large, widespread customer base. At December 31, 1993, the Group did not consider there to be any significant concentration of credit risk. Segmental information The total assets of the Group split by geographical location are as follows:
1993 (pound) (000) United Kingdom 7,913 United States 912 ----- 8,825 =====
[LOGO] REPORT OF THE INDEPENDENT AUDITORS to the Board of Directors Lilliput Group plc We have audited the accompanying consolidated balance sheet of Lilliput Group plc as of December 31, 1993 and the related consolidated statements of income, total recognised gains and losses 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 audits. We conducted our audit in accordance with United Kingdom auditing standards which do not differ in any significant respect from United States generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurances 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 the 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 consolidated financial statements referred to above present fairly, in all material respect, the consolidated financial position of Lilliput Group plc at December 31, 1993, and the consolidated results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United Kingdom which differ in certain respects from those followed in the United States (see Note 26 of Notes to the Accounts). /s/Ernst & Young Ernst & Young Chartered Accountants Manchester, England April 13, 1994 except for Note 26-Differences between UK and United States Generally Accepted Accounting Principles, as to which the date is December 9, 1994 [LOGO] CONSENT OF INDEPENDENT AUDITORS to the Board of Directors and Shareholders of Stanhome Inc.: We consent to the incorporation by reference in the Registration Statements (Form S-8 No 2-97934, No 33-11415, No 33-42974 and No 33-50723) of Stanhome Inc. of our report dated 13 April 1994 except for Note 26 - Differences between UK and US Generally Accepted Accounting Principles, as to which the date is 9 December 1994, with respect to the consolidated financial statements of Lilliput Group plc as at 31 December 1993 and for the year then ended, included in Amendment No 1 to the Current Report (Form 8-K/A) dated 14 December 1994 of Stanhome Inc. filed with the Securities and Exchange Commission in relation to the Form 8-K filed by Stanhome Inc. dated 14 October 1994. /s/Ernst & Young Ernst & Young Chartered Accountants Manchester 9 December 1994 LILLIPUT GROUP plc INTERIM RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 1994 LILLIPUT GROUP plc GROUP PROFIT AND LOSS ACCOUNT (Unaudited)
Nine Months Ended Year Ended ----------------- ---------- 30 September 30 September 31 December 1994 1993 1993 (pound) (pound) (pound) (000) (000) (000) Turnover 11,772 11,600 16,506 Cost of sales (6,000) (5,781) (8,117) ------- ------- ------- Gross profit 5,772 5,819 8,389 Distribution costs (2,188) (2,037) (2,940) Administrative expenses (2,277) (1,765) (2,398) ------- ------- ------- (4,466) (3,802) (5,338) ------- ------- ------- Operating profit 1,307 2,017 3,051 ------- ------- ------- Interest receivable 144 57 95 Interest payable (40) (54) (71) ------- ------- ------- 104 3 24 ------- ------- ------- Profit on ordinary activities before taxation 1,411 2,020 3,075 Tax on profit on ordinary activities (601) (761) (1,094) ------- ------- ------- Profit on ordinary activities after taxation 810 1,259 1,981 Preference dividends - (86) (156) ------- ------- ------- Profit attributable to equity shareholders 810 1,173 1,825 Ordinary dividends (384) - (413) ------- ------- ------- Retained profit for the period 426 1,173 1,412 ======= ======= ======= Earnings per ordinary share (note 3) 3.5p 6.3p 9.5p
LILLIPUT GROUP plc GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Unaudited)
Nine Months Ended Year Ended ----------------- ---------- 30 September 30 September 31 December 1994 1993 1993 (pound) (pound) (pound) (000) (000) (000) Profit on ordinary activities after taxation 810 1,259 1,981 Exchange differences on retranslation of net assets of subsidiary undertaking (26) - 13 ----- ----- ----- Total recognised gains and losses relating to the period 784 1,259 1,994 ===== ===== ===== Reconciliation of shareholders' funds Total recognised gains and losses 784 1,259 1,994 Dividends (384) (86) (569) Other movements New shares issued - - 3,082 Share issue costs - - (603) Shares redeemed - (50) (1,519) ----- ----- ----- 400 1,123 2,385 Shareholders' funds at beginning of period 4,724 2,339 2,339 ----- ----- ----- Shareholders' funds at end of period 5,124 3,462 4,724 ===== ===== =====
LILLIPUT GROUP plc GROUP BALANCE SHEET (Unaudited)
30 September 30 September 31 December 1994 1993 1993 (pound) (pound) (pound) (000) (000) (000) Fixed assets Tangible assets 1,750 1,881 1,801 Current assets Stocks 1,108 798 858 Debtors 2,800 2,908 2,145 Cash at bank and in hand 3,674 1,824 4,021 ------ ------ ------ 7,582 5,530 7,024 Creditors: amounts falling due within one year 3,569 3,277 3,439 ------ ------ ------ Net current assets 4,013 2,253 3,585 ------ ------ ------ Total assets less current liabilities 5,763 4,134 5,386 Creditors: amounts falling due after more than one year (618) (670) (641) Provision for liabilities and charges (21) (2) (21) ------ ------ ------ 5,124 3,462 4,724 ====== ====== ====== Capital and reserves Called up share capital 1,163 1,700 1,163 Share premium account 2,286 140 2,286 Profit and loss account 1,675 1,622 1,275 ------ ------ ------ 5,124 3,462 4,724 ====== ====== ======
LILLIPUT GROUP plc GROUP STATEMENT OF CASH FLOWS (Unaudited)
Nine Months Ended Year Ended ----------------- ---------- 30 September 30 September 31 December 1994 1993 1993 (pound) (pound) (pound) (000) (000) (000) Net cash inflow from operating activities (note 2) 1,045 1,269 3,383 Returns on investment and servicing of finance Interest received 144 57 95 Interest paid (40) (54) (71) Dividends paid (140) (288) (631) ------ ------ ------ Net cash outflow from returns on investments and servicing of finance (36) (285) (607) ------ ------ ------ Taxation Corporation tax paid (981) (90) (612) Investing activities Payments to acquire tangible fixed assets (347) (241) (319) Receipts from sales of tangible fixed assets 25 - 23 ------ ------ ------ Net cash outflow from investing activities (322) (241) (296) ------ ------ ------ Net cash (outflow)/inflow before financing (294) 653 1,868 ====== ====== ====== Financing Issue of ordinary share capital - - (3,082) Redemption of share capital - 50 1,519 Share issue costs - - 603 Repayment of long term loans 22 (8) 1 Repayments of capital element of finance lease rentals 31 30 51 ------ ------ ------ Net cash outflow/(inflow) from financing 53 72 (908) (Decrease)/increase in cash and cash equivalents (347) 581 2,776 ------ ------ ------ (294) 653 1,868 ====== ====== ======
LILLIPUT GROUP plc NOTES TO THE INTERIM ACCOUNTS AT 30 SEPTEMBER 1994 (Unaudited) 1. BASIS OF PREPARATION The interim accounts have been prepared on the basis of the accounting policies set out in the Group's 1993 Annual Report. Fixed annual charges are apportioned to the interim period on the basis of time elapsed. Other expenses are accrued in accordance with the same principles used in the preparation of the annual accounts. The taxation charge is calculated by applying the directors' best estimate of the annual effective tax rate to the profit for the period. 2. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Nine Months Ended Year Ended ----------------- ---------- 30 September 30 September 31 December 1994 1993 1993 (pound) (pound) (pound) (000) (000) (000) Operating profit 1,307 2,017 3,051 Depreciation charges 371 223 368 Profit on sale of tangible fixed assets - - (11) ------ ------ ------ 1,678 2,240 3,408 Increase in stocks (250) (381) (441) Increase in debtors (655) (889) (108) Increase in creditors 272 299 524 ------ ------ ------ 1,045 1,269 3,383 ====== ====== ======
3. EARNINGS PER ORDINARY SHARE Earnings per ordinary share are based on the profit attributable to equity shareholders for the period and on 23,269,420 (1993: 18,716,189) ordinary shares, being the weighted average number of ordinary shares in use, as adjusted, during the period. 4. PAYMENT OF DIVIDEND The interim dividend of 1.65p per share will be paid on 14 October 1994 to holders of ordinary shares on the register at the close of business on 29 September 1994 (23,269,420 shares or (pounds)384,000). 5. DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The Group's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United Kingdom which differ from United States generally accepted accounting principles. The principal accounting and financial reporting differences as they apply to the Group consist of the following: Accounting for deferred taxation Accounting for Ordinary dividends Classification and definition of items included in the consolidated statement of cash flows Disclosure of concentration of credit risks Disclosure of business segmental information The above differences do not have a significant impact on profit for the nine months ended 30 September 1994, or on shareholders equity at that date. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET STANHOME INC. AND LILLIPUT GROUP plc SEPTEMBER 30, 1994 The historical condensed consolidated balance sheets of Stanhome Inc. and Lilliput Group plc ("Lilliput") have been consolidated into a pro forma condensed consolidated balance sheet using the consolidated balance sheet at the end of the third quarter of the fiscal year for each entity (September 30, 1994 for both). The Lilliput balance sheet has been translated to U.S. dollars, using FASB 52 guidelines, and reclassified to the Stanhome Inc. reporting format. An exchange rate of 1.5795 dollars per pound was used. The pro forma condensed consolidated balance sheet has been prepared assuming the transaction was consummated at the balance sheet date and includes adjustments which give effect to events that are attributable to the transaction whether they have a continuing or non recurring impact. The excess of the purchase price over the net book value acquired was recorded as goodwill, in other assets. The adjustment of the allocation of the purchase price may change as a result of future determinations as to the fair value of the net assets acquired, but the Company believes that there is not a substantial difference between fair value and net book value of the net assets acquired. This statement should be read in conjunction with the historical consolidated financial statements of Stanhome Inc. included in its latest Form 10-Q and Lilliput included in this Form 8-K/A. STANHOME INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1994 (In Thousands)
Lilliput Adjustments Stanhome Inc. Group plc Increase (Historical) (Historical) (Decrease) Pro Forma ------------- ------------ ----------- --------- ASSETS CURRENT ASSETS: Cash and certificates of deposit $ 11,138 $ 5,803 $ - $ 16,941 Marketable securities, at cost (which approximates market value) 20,523 - ( 16,800)(g) 3,723 Notes and accounts receivable, net 160,538 4,055 - 164,593 Inventories 107,848 1,750 - 109,598 Prepaid advertising 47,308 - - 47,308 Other prepaid expenses 7,048 368 - 7,416 -------- -------- -------- -------- Total current assets 354,403 11,976 ( 16,800) 349,579 -------- -------- -------- -------- PROPERTY, PLANT AND EQUIPMENT, at cost 108,717 5,261 ( 2,497)(f) 111,481 Less - Accumulated depreciation and amortization 64,675 2,497 ( 2,497)(f) 64,675 -------- -------- -------- -------- 44,042 2,764 - 46,806 -------- -------- -------- -------- OTHER ASSETS: Intangibles Goodwill, net 42,017 - 53,907 (f) 95,924 Product lines and other, net 17,737 - - 17,737 Other 11,003 - - 11,003 -------- -------- -------- -------- Total other assets 70,757 - 53,907 124,664 -------- -------- -------- -------- $469,202 $ 14,740 $ 37,107 $521,049 ======== ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes and loans payable $ 19,364 $ 1,027 $ 60,000 (f) $ 63,591 ( 16,800)(g) Accounts payable 51,882 1,596 - 53,478 Federal, state and foreign taxes 32,749 960 - 33,709 Other accrued expenses 74,777 3,064 2,000 (f) 79,841 -------- -------- -------- -------- Total current liabilities 178,772 6,647 45,200 230,619 -------- -------- -------- -------- LONG-TERM LIABILITIES: Foreign employee severance obligations 13,602 - - 13,602 Pensions 8,099 - - 8,099 -------- -------- -------- -------- Total long-term liabilities 21,701 - - 21,701 -------- -------- -------- -------- SHAREHOLDERS' EQUITY Common stock 3,154 1,837 ( 1,837)(f) 3,154 Capital in excess of par value 37,071 3,611 ( 3,611)(f) 37,071 Retained earnings 356,815 2,645 ( 2,645)(f) 356,815 Cumulative translation adjustments ( 25,167) - - ( 25,167) -------- -------- -------- -------- 371,873 8,093 ( 8,093) 371,873 Less: Shares held in treasury, at cost 103,144 - - 103,144 -------- -------- -------- -------- Total shareholders' equity 268,729 8,093 ( 8,093) 268,729 -------- -------- -------- -------- $469,202 $ 14,740 $ 37,107 $521,049 ======== ======== ======== ======== See Notes to Pro Forma Financial Information.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME STANHOME INC. AND LILLIPUT GROUP plc FOR THE YEAR ENDED DECEMBER 31, 1993 The historical condensed consolidated statements of income of Stanhome Inc. and Lilliput Group plc ("Lilliput") for the year ended December 31, 1993 have been consolidated into a pro forma condensed consolidated statement of income. The Lilliput income statement has been converted to U.S. dollars, using FASB 52 guidelines, and reclassified to the Stanhome Inc. reporting format. An exchange rate of 1.5100 dollars per pound was used. The pro forma adjustments have been computed assuming the transaction was consummated at the beginning of the year and include adjustments which give effect to events that are attributable to the transaction and that are expected to have a continuing impact. This statement should be read in conjunction with the historical consolidated financial statements of Stanhome Inc. included in its latest Form 10-K and Lilliput included in this Form 8-K/A. STANHOME INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 (In thousands, except per share amounts)
Lilliput Adjustments Stanhome Inc. Group plc Increase (Historical) (Historical) (Decrease) Pro Forma ------------- ------------ ----------- --------- NET SALES $750,663 $ 23,056 $ - $773,719 COST OF SALES 304,660 11,349 - 316,009 -------- -------- -------- -------- GROSS PROFIT 446,003 11,707 - 457,710 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 363,451 7,100 100 (a) 370,651 RESTRUCTURING CHARGE 17,000 - - 17,000 -------- -------- -------- -------- OPERATING PROFIT 65,552 4,607 ( 100) 70,059 Interest expense ( 2,011) ( 107) ( 3,483)(b) ( 5,601) Other income, net 2,599 143 ( 1,372)(c) 1,370 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 66,140 4,643 ( 4,955) 65,828 Income taxes 33,007 1,652 ( 1,207)(e) 33,452 -------- -------- -------- -------- NET INCOME 33,133 2,991 ( 3,748) 32,376 Preference dividends - ( 235) 235 (d) - -------- -------- -------- -------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 33,133 $ 2,756 ($ 3,513) $ 32,376 ======== ======== ======== ======== EARNINGS PER COMMON SHARE: Primary $1.68 $1.64 Fully diluted $1.67 $1.64 AVERAGE SHARES: Primary 19,749 19,749 Fully diluted 19,791 19,791 See Notes to Pro Forma Financial Information.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME STANHOME INC. AND LILLIPUT GROUP plc FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 The historical condensed consolidated statements of income of Stanhome Inc. and Lilliput Group plc ("Lilliput") for the nine months ended September 30, 1994 have been consolidated into a pro forma condensed consolidated statement of income. The Lilliput income statement has been converted to U.S. dollars, using FASB 52 guidelines, and reclassified to the Stanhome Inc. reporting format. An exchange rate of 1.5305 dollars per pound was used. The pro forma adjustments have been computed assuming the transaction was consummated at the beginning of the nine month period and include adjustments which give effect to events that are attributable to the transaction and that are expected to have a continuing impact. This statement should be read in conjunction with the historical consolidated financial statements of Stanhome Inc. included in its latest Form 10-Q and Lilliput included in this Form 8-K/A. STANHOME INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (In thousands, except per share amounts)
Lilliput Adjustments Stanhome Inc. Group plc Increase (Historical) (Historical) (Decrease) Pro Forma ------------- ------------ ----------- --------- NET SALES $553,616 $ 16,067 $ - $569,683 COST OF SALES 229,324 8,493 - 237,817 -------- -------- -------- -------- GROSS PROFIT 324,292 7,574 - 331,866 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 266,500 5,574 75 (a) 272,149 -------- -------- -------- -------- OPERATING PROFIT 57,792 2,000 ( 75) 59,717 Interest expense ( 514) ( 61) ( 2,642)(b) ( 3,217) Other income, net 2,124 221 ( 974)(c) 1,371 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 59,402 2,160 ( 3,691) 57,871 Income taxes 26,544 920 ( 915)(e) 26,549 -------- -------- -------- -------- NET INCOME $ 32,858 $ 1,240 ($ 2,776) $ 31,322 ======== ======== ======== ======== EARNINGS PER COMMON SHARE: Primary and fully diluted $1.67 $1.60 ===== ===== AVERAGE SHARES: Fully diluted 19,619 19,619 See Notes to Pro Forma Financial Information.
NOTES TO PRO FORMA FINANCIAL INFORMATION (a) Reflects additional corporate general and administrative expense as a result of the acquisition. (b) Reflects additional interest expense on borrowings incurred to finance the acquisition. (c) Reflects amortization over a forty year period of goodwill which resulted from the excess of acquisition costs over the net book value acquired. (d) The year 1993 Lilliput preferred dividends were eliminated as intercompany dividends after the acquisition. (e) Reflects the tax effects of above entries (a) and (b). (f) Reflects the total purchase price of $62,000,000, including transaction fees, for all of the Lilliput Group plc common stock, comprised from short-term bank loans. The transaction fees were accrued as at the acquisition date. The excess of acquisition costs over the net book value acquired was recorded as goodwill, in other assets. The property, plant and equipment acquired is presented on a net basis. (g) Reflects the elimination of Lilliput stock purchased by Stanhome Inc. in September, in conjunction with Stanhome's cash offer for all the shares of Lilliput, and the related short-term borrowing. -----END PRIVACY-ENHANCED MESSAGE-----