-----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, A7zpvAxWSqnNyzSK/XUbHs8vsJFlxGRjLcH3GeLL1sXKBeMEuPfJD3TB7hQCOq0Z uzhGdxMguegVO1kQJdi/bg== 0000950130-97-002752.txt : 19970611 0000950130-97-002752.hdr.sgml : 19970611 ACCESSION NUMBER: 0000950130-97-002752 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970407 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970610 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CABLE DESIGN TECHNOLOGIES CORP CENTRAL INDEX KEY: 0000913142 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 363601505 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12561 FILM NUMBER: 97621730 BUSINESS ADDRESS: STREET 1: 661 ANDERSON DR STREET 2: FOSTER PLZ 7 CITY: PITTSBURGH STATE: PA ZIP: 15220 BUSINESS PHONE: 4129372300 MAIL ADDRESS: STREET 1: FOSTER PLAZA 7 STREET 2: 661 ANDERSEN DRIVE CITY: PITTSBURGH STATE: PA ZIP: 15220 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 7, 1997 Cable Design Technologies Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-22724 36-3601505 -------- (Commission (IRS Employer (State or other jurisdiction File Number) Identification No.) of incorporation) - -------------------------------------------------------------------------------- Foster Plaza 7 661 Andersen Drive Pittsburgh, PA 15220 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (412) 937-2300 -------------- Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) The undersigned Registrant hereby amends Item 7 of its current report on Form 8- K which was filed with the Securities and Exchange Commission on April 22, 1997, as follows: ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of business acquired. The following consolidated financial statements of Dearborn Wire and Cable L.P. and Subsidiaries ("Dearborn") are filed herewith as Item 7(a): i) See attached Report of Independent Public Accountants. ii) See attached Consolidated Balance Sheets of Dearborn as of December 31, 1996 and 1995. iii) See attached Consolidated Statements of Income of Dearborn for the years ended December 31, 1996 and 1995. iv) See attached Consolidated Statements of Cash Flows of Dearborn for the years ended December 31, 1996 and 1995. v) See attached notes to Dearborn Consolidated Financial Statements. (b) Pro forma financial information. i) Pro forma Condensed Consolidated Statement of Income of the Registrant for the six months ended January 31, 1997, giving effect on a pro forma basis to the acquisition of Dearborn. ii) Pro forma Condensed Consolidated Statement of Income of the Registrant for the year ended July 31, 1996, giving effect on a pro forma basis to the acquisition of Dearborn. iii) Pro forma Condensed Consolidated Balance Sheet of the Registrant as of January 31, 1997, giving effect on a pro forma basis to the acquisition of Dearborn. (c) Exhibits. *10.1 Asset Purchase Agreement, dated March 31, 1997, between Cable Design Technologies Inc., Dearborn/CDT, Inc., Dearborn West/CDT, Inc. and Thermax/CDT, Inc. and Dearborn Wire and Cable L.P., Dearborn West L.P. and Thermax Wire, L.P. ______________________________ *Previously filed. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Cable Design Technologies Corporation By: /s/ Kenneth O. Hale ----------------------------------------- Name: Kenneth O. Hale Title: Vice President, Chief Financial Officer and Secretary Dated: June 10, 1997 DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Dearborn Wire and Cable L.P.: We have audited the accompanying consolidated balance sheets of DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES as of December 31, 1996 and 1995, and the related consolidated statements of income and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Dearborn Wire and Cable L.P. and Subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Chicago, Illinois April 15, 1997 DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1996 AND 1995
ASSETS 1996 1995 - ------------------------------------------------------------------ ----------- ----------- CURRENT ASSETS: Cash and cash equivalents $ 5,301,290 $ 3,100,871 Receivables, less allowance for doubtful accounts of $294,000 and 11,168,533 10,105,284 $251,000 for 1996 and 1995, respectively Inventories (Note 1) 17,310,066 17,823,258 Prepaid expenses 481,327 297,846 ------------- ----------- Total current assets 34,261,216 31,327,259 ------------- ----------- PROPERTY, PLANT AND EQUIPMENT: Land 475,891 475,891 Buildings 2,735,970 2,735,970 Leasehold improvements 2,948,602 294,659 Machinery and equipment 8,335,014 7,606,089 Office furniture and equipment 1,927,583 1,510,718 Vehicles 98,528 84,326 Construction in progress 97,077 1,162,099 ------------ ---------- 16,618,665 13,869,752 Less - Accumulated depreciation 8,630,643 7,570,733 ------------- ----------- Property, plant and equipment, net 7,988,022 6,299,019 ------------- ----------- OTHER ASSETS: ------------- ----------- Intangible 2,793,207 2,793,207 Other 65,085 85,536 ------------- ----------- Total other assets 2,858,292 2,878,743 ------------- ----------- $45,107,530 $40,505,021 ============= =========== LIABILITIES AND PARTNERSHIP EQUITY - ------------------------------------------------------------------ CURRENT LIABILITIES: Current portion of long-term debt $ 275,000 $ 255,000 Accounts payable and accrued expenses 10,149,245 9,864,855 ------------ ---------- Total current liabilities 10,424,245 10,119,855 ------------- ----------- LONG-TERM DEBT, less current portion shown above 620,000 895,000 ------------- ----------- DEFERRED COMPENSATION 168,038 151,873 ------------- ----------- EXCESS OF ACQUIRED NET ASSETS OVER COST, net of accumulated amortization of $289,256 and $204,596 at December 31, 1996 and 1995, respectively 134,073 218,733 ------------- ----------- MINORITY INTEREST IN SUBSIDIARIES 732,203 561,386 ------------- ----------- PARTNERSHIP EQUITY 33,028,971 28,558,174 ------------- ----------- $45,107,530 $40,505,021 ============= ===========
The accompanying notes are an integral part of these balance sheets. DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 1995 ------------- ----------- NET SALES $87,910,760 $83,718,078 ------------- ---------- OPERATING EXPENSES: Cost of materials 46,625,453 43,977,254 Warehouse and manufacturing 16,705,103 15,335,239 Selling 5,465,456 5,027,163 General and administrative 7,375,819 6,854,058 ------------- ---------- Total operating expenses 76,171,831 71,193,714 ------------- ---------- Operating income 11,738,929 12,524,364 ------------- ---------- OTHER INCOME (EXPENSE): Interest income 167,392 168,778 Interest expense (68,186) (139,002) Minority interest in income of subsidiaries (314,825) (200,622) Professional fees relating to nonoperating activity (485,152) (496,096) Miscellaneous 104,615 (34,975) ------------- ---------- Other expense, net (596,156) (701,917) ------------- ---------- NET INCOME BEFORE TAXES 11,142,773 11,822,447 PROVISION FOR STATE INCOME TAXES 216,921 94,809 ------------- ---------- NET INCOME FOR THE YEAR 10,925,852 11,727,638 PARTNERSHIP EQUITY, beginning of year 28,558,174 22,069,153 DISTRIBUTIONS (Note 9) (6,455,055) (5,238,617) ------------- ----------- PARTNERSHIP EQUITY, end of year $33,028,971 $28,558,174 ============= ===========
The accompanying notes are an integral part of these statements. DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 1995 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income for the year $10,925,852 $11,727,638 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,027,426 685,058 Minority interest in income of subsidiaries 314,825 200,622 Change in operating assets and liabilities: Increase in receivables (1,063,246) (879,946) Decrease (increase) in inventories 513,193 (2,724,391) Increase in prepaid expenses (183,481) (48,035) Increase in accounts payable and accrued expenses 284,390 1,525,773 Increase in deferred compensation 16,165 20,235 ------------- ---------- Net cash provided by operating activities 11,835,124 10,506,954 ------------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (2,780,642) (2,919,091) Investment in joint venture - (51,725) ------------- ---------- Net cash used in investing activities (2,780,642) (2,970,816) ------------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on notes payable - (2,000,000) Payments on long-term debt (255,000) (235,000) Distributions to partners (6,455,055) (5,238,617) Distributions to minority interest in subsidiaries (144,008) (106,342) ------------- ---------- Net cash used in financing activities (6,854,063) (7,579,959) ------------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,200,419 (43,821) CASH AND CASH EQUIVALENTS, beginning of year 3,100,871 3,144,692 ------------- ----------- CASH AND CASH EQUIVALENTS, end of year $ 5,301,290 $ 3,100,871 ============= =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for interest $ 69,491 $ 140,196 Cash paid during the year for state income taxes 171,740 130,520 ============= ===========
The accompanying notes are an integral part of these statements. DEARBORN WIRE AND CABLE L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 1. BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Dearborn Wire and Cable L.P. and Subsidiaries (the Partnership) consists of four divisions which are operated in the Chicago, Illinois, area as separate trades within the Partnership as follows: Dearborn Wire and Cable (DWC) is primarily engaged in the manufacture of wire and cable extrusions and the distribution of wire. American Electronic Wire is a distributor of primarily surplus wire and cable. Kerrigan Lewis Electronics is engaged in the manufacture of customer-specified assemblies used primarily in the electronics industry. Kerrigan Lewis Wire Products is engaged in the manufacture of litz wire and cable. Dearborn West L.P. (West) is a 81.5%-owned subsidiary of the Partnership. West is located in California and is engaged in the distribution of wire. Thermax Wire L.P. (Thermax) is a 99%-owned subsidiary of the Partnership. Thermax has three locations - Whitestone, New York; Northridge, California; and Nogales, Mexico; and is engaged in the manufacture and distribution of high temperature electronic specialty wire. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Partnership and its subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. CASH AND CASH EQUIVALENTS For purposes of reporting cash flows, cash and cash equivalents include cash on hand and funds held in short-term investments with a maturity of three months or less. INVENTORIES The DWC division, West and Thermax determine inventory costs utilizing the last- in, first-out ("LIFO") method of accounting for inventories. All other divisions determine inventory costs utilizing the first-in, first-out ("FIFO") method of accounting for inventories. The components of inventories as of December 31, 1996 and 1995, are as follows:
1996 1995 ----------- ----------- Inventories valued using FIFO $ 3,909,458 $ 5,378,406 ----------- ----------- Inventories valued using LIFO: At FIFO cost 14,304,574 14,278,965 Less-Reduction to LIFO cost (903,966) (1,834,113) ----------- ----------- LIFO inventories 13,400,608 12,444,852 ----------- ----------- Total inventories $17,310,066 $17,823,258 =========== =========== Inventory composition: Raw materials $ 5,118,695 $ 5,277,418 Work in process 1,672,585 1,890,651 Finished goods 10,518,786 10,655,189 ----------- ----------- $17,310,066 $17,823,258 =========== ===========
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the respective assets using a combination of accelerated and straight-line methods. The estimated useful lives are as follows:
ASSET DESCRIPTION ASSET LIFE ----------------- ---------- Buildings 10 to 35 years Leasehold improvements 5 to 31.5 years Machinery and equipment 5 to 8 years Office furniture and equipment 3 to 8 years Vehicles 3 to 5 years
Depreciation expense included in the consolidated statements of income was approximately $1,092,000 and $749,000 for the years ended December 31, 1996 and 1995, respectively. INTANGIBLE The intangible asset represents the excess of cost over the fair value of net assets of one of the divisions at the date that division was acquired (which was prior to November 1, 1970). the excess is not being amortized against operations. In management's opinion, this intangible asset is considered to have continuing value over an indefinite period of time. EXCESS OF ACQUIRED NET ASSETS OVER COST In 1993, the Partnership acquired assets and assumed liabilities related to Thermax. The excess of the fair market value of net assets purchased over acquisition cost of approximately $423,000 is being amortized as a credit to income on a straight-line basis over five years from the date of acquisition. LONG-LIVED ASSETS The Company continually evaluates whether circumstances have occurred that indicate the remaining useful life of its long-lived assets may warrant revision or that the remaining balance of such assets may not be recoverable. When factors indicate that such assets should be evaluated for possible impairment, the Company uses an estimate of the related business segment's undiscounted cash flows over the remaining life of the asset in measuring whether the asset is recoverable. MANAGEMENT'S USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. 2. RELATED-PARTY TRANSACTIONS AFFILIATED COMPANIES During 1996 and 1995, the Partnership transacted business with Cable Technology, Inc. (Cable Technology). Certain partners of the Partnership are among the owners of Cable Technology. Purchases from this related party were approximately $874,000 and $955,000 for the years ended December 31, 1996 and 1995, respectively. The Partnership was the guarantor of two obligations incurred by affiliated companies totaling approximately $2,107,000 and $2,223,000 at December 31, 1996 and 1995, respectively. In June of 1992, the Partnership entered into a lease agreement with an affiliated company that expires on May 31, 1997. Rent payments to the affiliated company for the years ended December 31, 1996 and 1995, were approximately $243,000 per year. 3. DEBT Long-term debt consists of a note payable to the Village of Wheeling, Illinois, under an industrial revenue bond arrangement and bears interest at approximately 5.94% at December 31, 1996 and 1995. The note was paid in full on April 7, 1997, the date of acquisition (see Note 13). A guaranty agreement relating to these notes contains restrictive covenants regarding minimum Partnership equity and working capital requirements and limitations on payments of distributions to partners, among other things. At December 31, 1996, the Partnership was in compliance with or had received waivers for all covenants. 4. INCOME TAXES The income of the Partnership will be included with that of each partner for income tax purposes. The Partnership is responsible only for certain state income taxes. 5. 401(K) PLAN The Partnership sponsors a 401(k) defined contribution plan covering substantially all employees. A portion of compensation deferred by nonunion employees is matched by the Partnership, subject to certain vesting provisions. Partnership contributions to the plan totaled approximately $166,000 and $167,000 for the years ended December 31, 1996, and 1995, respectively. 6. EMPLOYMENT AGREEMENTS Under agreements dated June 1, 1992, between the Partnership and two of its partners, the Partnership agreed to compensate these partners, who are active participants in the operation of the business, at a fixed annual salary plus a bonus equal to a percentage of the Partnership's net income as defined in the agreements. This compensation is included in general and administrative expenses in the determination of net income. The Partnership also has deferred compensation arrangements with certain employees. Amounts earned each year vest ratably over periods ranging from three to five years. Such amounts are paid out over periods ranging from three to six years. Amounts are fully expensed in the year earned. Included in accounts payable and accrued expenses is the portion of deferred compensation to be paid in the next year. 7. MINORITY INTEREST IN SUBSIDIARY As of December 31, 1996 and 1995, the minority interest in subsidiary is offset by a long-term note receivable of approximately $128,500 due from one of the West limited partners and demand notes of approximately $23,500 due from the West general partners. 8. SIGNIFICANT CUSTOMER The Partnership had one nonaffiliated customer who provided approximately 13% and 16% of net sales for the year ended December 31, 1996 and 1995, respectively. 9. PARTNERSHIP DISTRIBUTIONS Partnership distributions include preferential payments to a partner which are not guaranteed by the Partnership, as defined in the Partnership agreement. Preferential distributions paid for the years ended December 31, 1996 and 1995, were $200,000 and $150,000, respectively. Subsequent to year-end, preferential payments of $100,000 were made to the above partner and additional payments of approximately $3,532,000 were distributed to all partners. 10. LEASE COMMITMENTS The Partnership leases certain property and equipment from unaffiliated companies under various operating leases. The leases expire at various dates through September 1999. Rent expense charged to operations relating to all unaffiliated operating leases for the year ended December 31, 1996, was approximately $675,000. The future minimum lease payments are as follows:
1997 $290,070 1998 220,869 1999 65,652 2000 9,972 2001 5,140 -------- $591,703 ========
11. RECLASSIFICATION Certain 1995 balances have been reclassed to conform with 1996 presentation. 12. CONTINGENCIES From time to time, the Company is subject to litigation proceedings resulting from the conduct of its business. In the opinion of management, the ultimate disposition of such matters discussed above will not have a materially adverse effect on the financial position of the Company. 13. SUBSEQUENT EVENT Effective at the opening of business on April 7, 1997, Cable Design Technologies, Inc. (CDT) acquired substantially all of the net assets of Dearborn Wire and Cable L.P. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The following Pro Forma Condensed Consolidated Financial Statements are based on the historical financial statements of Cable Design Technologies Corporation (the "Company") and of Dearborn Wire and Cable L.P. and Subsidiaries ("Dearborn"), adjusted to give effect to the acquisition of Dearborn by the Company. The unaudited pro forma condensed consolidated statements of income for the year ended July 31, 1996, and the six months ended January 31, 1997, assume that such event had occurred on August 1, 1995. The unaudited pro forma condensed balance sheet gives effect to the acquisition of Dearborn by the Company as if the event had occurred on January 31, 1997. The pro forma financial information reflects the purchase method of accounting for the acquisition of Dearborn and, accordingly, is based on estimated purchase accounting adjustments that are subject to further revision upon completion of any appraisals or other studies of the fair value of Dearborn's assets and liabilities. Final purchase accounting adjustments will differ from the pro forma adjustments presented herein and described in the accompanying notes due to the results of operation of Dearborn from December 31, 1996, to the date of the closing, April 7, 1997. The pro forma financial information does not purport to present what the Company's results of operations would actually have been if the acquisition of Dearborn had occurred on the assumed dates, as specified above, or to project the Company's financial condition or results of operations for any future period. The Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes thereto which are included in the Company's Annual Report on Form 10-K for its fiscal year ended July 31, 1996, the Company's Current Report on Form 8-K dated April 22, 1997, (each as filed with the Securities and Exchange Commission) and the audited financial statements of Dearborn that are filed herewith as item 7(a). CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME SIX MONTHS ENDED JANUARY 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ACQUISITION PRO FORMA HISTORICAL HISTORICAL PRO FORMA RESULTS CDT DEARBORN ADJUSTMENTS CONSOLIDATED (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (a) (b) Net Sales $ 229,928 $43,600 $ 273,528 Cost of Sales 159,961 31,414 (291)(c) 191,649 465 (d) 100 (e) ----------------- -------------- ----------- ----------- Gross Profit 69,967 12,186 (274) 81,879 Selling, general and administrative expenses 42,181 6,769 (122)(f) 49,633 805 (g) ----------------- -------------- ----------- ----------- Income from operations 27,786 5,417 (957) 32,246 Interest (income) expense, net 2,143 (66) 2,473 (h) 4,550 Minority interest 145 (145)(i) --- Other (income) expense, net 140 (3) 137 ----------------- -------------- ----------- ----------- Income before income taxes 25,503 5,341 (3,285) 27,559 Income tax provision 9,425 104 760 (j) 10,289 ----------------- -------------- ----------- ----------- Net income $ 16,078 $ 5,237 $(4,045) $ 17,270 ================= ============== =========== =========== Net income per share of common stock $0.78 $0.84 ================= ============== =========== =========== Weighted average number of common shares and equivalents 20,533,427 50,218 (k) 20,583,645 ================= ============== =========== ===========
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME SIX MONTHS ENDED JANUARY 31, 1997 (a) The historical financial results of CDT represent the six month period ending January 31, 1997. (b) The financial results of Dearborn represent the six month period ending December 31, 1996. (c) This pro forma adjustment represents a reduction to annual depreciation expense based on the estimated fair values and remaining lives of the fixed assets. (d) This pro forma adjustment represents the increase to cost of sales for the period assuming the FIFO valuation of inventory methodology was adopted upon the assumed effective date of the transaction. The Company intends to adopt the Fifo method of inventory valuation as of the acquisition date. (e) This pro forma adjustment represents the estimated cost of maintaining quality assurance under ISO 9002 programs. (f) This pro forma adjustment represents reversal of non-recurring legal expenses. (g) This pro forma adjustment represents the net adjustment to amortization expense based on the estimated value of goodwill and other intangibles, amortized over a period of 35 years and 7 years, respectively. (h) This pro forma adjustment represents additional interest related to acquisition debt. (i) This pro forma adjustment represents the reversal of minority interest in the income of subsidiaries. (j) This pro forma adjustment represents tax on historical Dearborn results and the net impact on tax expense as a result of the above pro forma adjustments. (k) This pro forma adjustment represents CDT shares purchased by certain of the selling parties under the provisions of the asset purchase agreement. CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME YEAR ENDED JULY 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ACQUISITION PRO FORMA HISTORICAL HISTORICAL PRO FORMA RESULTS CDT DEARBORN ADJUSTMENTS CONSOLIDATED (UNAUDITED) (UNAUDITED) (UNAUDITED) (a) (a) (k) Net Sales $ 357,352 $87,417 $ 444,769 Cost of Sales 245,533 62,564 (373)(b) 308,411 487 (c) 200 (d) -------------- ------------ ------------- ----------- Gross Profit 111,819 24,853 (314) 136,358 Selling, general and administrative expenses 63,562 13,144 (733)(e) 77,583 1,610 (f) Non-recurring charges 16,730 16,730 -------------- ------------ ------------- ----------- Income from operations 31,527 11,709 (1,191) 42,045 Interest (income) expense, net 5,362 (76) 5,379 (g) 10,665 Minority interest 248 (248)(h) --- Other expense, net 271 108 379 -------------- ------------ ------------- ----------- Income before income taxes and extraordinary items 25,894 11,429 (6,322) 31,001 Income tax provision 10,013 158 1,987 (i) 12,158 -------------- ------------ ------------- ----------- Income before extraordinary items 15,881 11,271 (8,309) 18,843 Extraordinary loss on early extinguishment of debt 596 596 -------------- ------------ ------------- ----------- Net income $ 15,285 $11,271 $(8,309) $ 18,247 ============== ============ ============= =========== Income per share of common stock: Income before extraordinary items $0.85 $1.01 Extraordinary loss (0.03) (0.03) -------------- ------------ ------------ ---------- Net income $0.82 $0.98 ============== ============ ============ ========== Weighted average number of common shares and equivalents 18,626,792 50,218 (j) 18,677,010 ============== ============ ============= ==========
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME YEAR ENDED JULY 31, 1996 (a) The historical financial results represent the twelve month periods ending July 31, 1996, for CDT and ending June 30, 1996, for Dearborn. (b) This pro forma adjustment represents a reduction to annual depreciation expense based on the estimated fair values and remaining estimated lives of the fixed assets. (c) This pro forma adjustment represents the increase to cost of sales for the period assuming the FIFO valuation of inventory methodology was adopted upon the assumed effective date of the transaction. The Company intends to adopt the Fifo method of inventory valuation as of the acquisition date. (d) This pro forma adjustment represents the estimated cost of maintaining quality assurance under ISO 9002 programs. (e) This pro forma adjustment represents the reversal of non-recurring legal expenses. (f) This pro forma adjustment represents the net adjustment to amortization expense based on the estimated value of goodwill and other intangibles, amortized over a period of 35 years and 7 years, respectively. (g) This pro forma adjustment represents additional interest related to acquisition debt. (h) This pro forma adjustment represents the reversal of minority interest in the income of subsidiaries. (i) This pro forma adjustment represents tax on historical Dearborn results and the net impact on tax expense as a result of the above pro forma adjustments. (j) This pro forma adjustment represents CDT shares purchased by certain of the selling parties under the provisions of the asset purchase agreement. (k) Pro forma results consolidated presented below represent the effect of certain transactions that occurred during Fiscal 1996: the Offering and the acquisitions of NORDX/CDT and Raydex/CDT, excluding the effect of nonrecurring and extraordinary charges, as previously described and disclosed in the Company's July 31, 1996 Annual Report and Form 10-K. These adjustments are being made to reflect these transactions as if they had occurred as of August 1, 1995 to include the effect of such transactions on a full twelve month's basis. (Pro forma unaudited) Year ended July 31, 1996 ---------------------- (Dollars in thousands) Net Sales $550,332 Income before extraordinary items 32,173 Net income 32,173 Net income per common share $ 1.58 CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JANUARY 31, 1997 (DOLLARS IN THOUSANDS)
ACQUISITION PRO FORMA HISTORICAL HISTORICAL PRO FORMA RESULTS CDT DEARBORN ADJUSTMENTS CONSOLIDATED (UNAUDITED) (UNAUDITED) (UNAUDITED) (a) (b) ASSETS Current Assets: Cash and cash equivalents $ 14,268 $ 5,301 $ (8,000)(c) $ 11,569 Accounts receivable, net of allowance 92,611 11,169 103,780 Inventories 104,334 17,310 904 (d) 122,548 Other current assets 7,333 481 7,814 ------------- ---------- ------------ -------- Total current assets 218,546 34,261 (7,096) 245,711 Property, plant and equipment, net 94,357 7,988 1,942 (e) 104,287 Intangible assets 4,274 3,000 (f) 7,274 Goodwill, net of amortization 16,126 2,793 (2,793)(g) 51,591 35,465 (f) Other assets 1,211 65 1,276 ------------- ---------- ------------ -------- Total assets $334,514 $45,107 $ 30,518 $410,139 LIABILITIES Current maturities of long-term debt $ 8,403 $ 275 $ (275)(h) $ 8,403 Accounts payable 34,000 6,251 40,251 Other accrued liabilities 22,758 3,898 (1,350)(h) 25,869 563 (i) ------------- ---------- ------------ -------- Total current liabilities 65,161 10,424 (1,062) 74,523 Long-term debt 75,405 620 (620)(h) 75,405 66,095 (c) 66,095 Other 5,653 302 (134)(j) 5,821 Deferred income taxes 5,643 5,643 ------------- ----------- ------------ -------- Total liabilities 151,862 11,346 64,279 227,487 MINORITY INTEREST IN SUBSIDIARIES 732 (732)(h) --- STOCKHOLDERS' EQUITY Preferred stock --- --- Common stock 184 184 Paid in capital 154,683 154,683 Deferred compensation (174) (174) Retained earnings 28,262 28,262 Partnership equity 33,029 (33,029)(k) --- Currency translation adjustment (303) (303) -------------- ---------- ------------ -------- Total stockholders' equity 182,652 33,029 (33,029) 182,652 Total liabilities and stockholders' equity $334,514 $45,107 $ 30,518 $410,139 ============== ========== ============ ========
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JANUARY 31, 1997 (a) The historical balance sheet of CDT is as of January 31, 1997. (b) The historical balance sheet of Dearborn is as of December 31, 1996 (c) This pro forma adjustment records the cash payment and acquisition debt to finance the purchase of Dearborn. (d) This pro forma adjustment reflects a change in accounting principle from the LIFO to the FIFO method of inventory valuation, which the Company intends to adopt as of the acquisition date. (e) This pro forma adjustment represents the adjustment of property, plant and equipment to their estimated fair values. (f) This pro forma adjustment represents the recording of estimated goodwill and intangibles based on the net assets acquired and the consideration paid. (g) This pro forma adjustment represents the elimination of historical Dearborn goodwill. (h) This pro forma adjustment reflects the elimination of Dearborn liabilities not assumed in the transaction; in accordance with the purchase agreement. (i) This pro forma adjustment reflects the estimated acquisition costs incurred to consummate the transaction. (j) This pro forma adjustment represents the elimination of historical Dearborn negative goodwill. (k) This pro forma adjustment reflects the elimination of the acquired net equity of Dearborn. -----END PRIVACY-ENHANCED MESSAGE-----