Exhibit 99.4
Crosstex International, Inc
Balance Sheet
July 31, 2005
Assets |
| 2005 |
| |
|
|
|
| |
Current Assets: |
|
|
| |
Cash and cash equivalents |
| $ | 3,114,532 |
|
Receivables: |
|
|
| |
Trade accounts receivable, net of allowance for doubtful accounts and sales rebates of $145,000 |
| 4,386,531 |
| |
Other |
| 11,929 |
| |
Inventories: |
|
|
| |
Raw materials |
| 1,983,671 |
| |
Work in process |
| 45,009 |
| |
Finished goods |
| 4,604,256 |
| |
Prepaid expenses |
| 102,584 |
| |
Prepaid income taxes |
| 134,603 |
| |
Deferred tax assets |
| 271,972 |
| |
|
|
|
| |
Total current assets |
| 14,655,087 |
| |
|
|
|
| |
Property, Plant and Equipment, net |
| 7,864,407 |
| |
|
|
|
| |
Intangible and Other Assets: |
|
|
| |
Customer lists, net |
| 20,833 |
| |
Noncompete agreements, net |
| 32,500 |
| |
Goodwill |
| 1,010,770 |
| |
Note receivable - other |
| 33,142 |
| |
Note receivable - officer |
| 324,577 |
| |
Other |
| 16,360 |
| |
|
|
|
| |
|
| 1,438,182 |
| |
|
|
|
| |
Total assets |
| $ | 23,957,676 |
|
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Liabilities and Shareholders’ Equity |
| 2005 |
| |
|
|
|
| |
Current Liabilities: |
|
|
| |
Current maturities of long-term debt |
| $ | 6,235,024 |
|
Current maturities of deferred compensation |
| 804,867 |
| |
Accounts payable |
| 1,929,238 |
| |
Accrued liabilities |
| 720,874 |
| |
Accrued compensation |
| 1,185,911 |
| |
Advances to officer’s and employees |
| 209,259 |
| |
|
|
|
| |
Total current liabilities |
| 11,085,173 |
| |
|
|
|
| |
Long-term debt, less current maturities |
| — |
| |
|
|
|
| |
Deferred compensation - long term |
| — |
| |
|
|
|
| |
Deferred taxes |
| 746,133 |
| |
|
|
|
| |
Total liabilities |
| 11,831,306 |
| |
|
|
|
| |
Shareholders’ Equity |
|
|
| |
Common stock, 500,000 shares authorized; 120,592 shares issued |
| 2,836 |
| |
Retained earnings |
| 18,223,484 |
| |
|
|
|
| |
|
| 18,226,320 |
| |
Less: treasury stock, 379,408 shares in 2005 |
| (6,099,950 | ) | |
|
| 12,126,370 |
| |
Total liabilities and shareholders’ equity |
| $ | 23,957,676 |
|
2
Crosstex International, Inc.
Statements of Income
Three Months Ended July 31, 2005 and 2004
|
| 2005 |
| 2004 |
| |||
|
|
|
|
|
| |||
Net sales |
| $ | 13,231,911 |
| $ | 11,906,370 |
| |
Cost of goods sold |
| 8,591,255 |
| 7,612,034 |
| |||
|
|
|
|
|
| |||
Gross profit |
| 4,640,656 |
| 4,294,336 |
| |||
|
|
|
|
|
| |||
Operating expenses: |
|
|
|
|
| |||
Selling, general and administrative |
| 3,742,015 |
| 2,566,529 |
| |||
Depreciation and amortization |
| 31,552 |
| 28,230 |
| |||
|
|
|
|
|
| |||
Operating income |
| 867,089 |
| 1,699,577 |
| |||
|
|
|
|
|
| |||
Other (income) expense: |
|
|
|
|
| |||
Other (income) expense, net |
| — |
| — |
| |||
Interest income |
| (827 | ) | (2,776 | ) | |||
Interest expense |
| 251,519 |
| 148,442 |
| |||
|
|
|
|
|
| |||
Income before income taxes |
| 616,397 |
| 1,553,911 |
| |||
|
|
|
|
|
| |||
Provision for income taxes |
| 282,000 |
| 583,000 |
| |||
|
|
|
|
|
| |||
Net income |
| $ | 334,397 |
| $ | 970,911 |
| |
3
Crosstex International, Inc.
Statements of Cash Flows
Three Months Ended July 31, 2005 and 2004
|
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
Cash Flows from Operating Activities: |
|
|
|
|
| ||
Net income |
| $ | 334,397 |
| $ | 970,911 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation |
| 286,309 |
| 277,752 |
| ||
Intangibles amortization |
| 6,666 |
| 6,666 |
| ||
Deferred income taxes |
| 32,500 |
| — |
| ||
Deferred financing costs amortization |
| 40,013 |
| 2,305 |
| ||
Deferred compensation |
| (5,300 | ) | 9,900 |
| ||
Change in working capital components, net of effects of business combinations: |
|
|
|
|
| ||
Trade accounts receivable |
| (61,677 | ) | 375,965 |
| ||
Inventories |
| (116,912 | ) | (1,172,935 | ) | ||
Prepaid expenses and other current assets |
| 179,717 |
| 561,393 |
| ||
Accounts payable and accrued liabilities |
| 1,964,983 |
| (237,894 | ) | ||
|
|
|
|
|
| ||
Net cash provided by operating activities |
| 2,660,696 |
| 794,063 |
| ||
|
|
|
|
|
| ||
Cash Flows from Investing Activities: |
|
|
|
|
| ||
Purchase of leasehold improvements and equipment |
| (52,616 | ) | (183,631 | ) | ||
Payment for acquisition of businesses |
| (647,000 | ) | — |
| ||
Payments received on note receivable |
| 2,873 |
| 1,813 |
| ||
Purchase of intangibles |
| (60,769 | ) | — |
| ||
|
|
|
|
|
| ||
Net cash (used in) investing activities |
| (757,512 | ) | (181,818 | ) | ||
|
|
|
|
|
| ||
Cash Flows from Financing Activities: |
|
|
|
|
| ||
Payments on long-term debt |
| (1,224,309 | ) | (338,613 | ) | ||
Cash dividends |
| (150,740 | ) | — |
| ||
|
|
|
|
|
| ||
Net cash (used in) financing activities |
| (1,375,049 | ) | (338,613 | ) | ||
|
|
|
|
|
| ||
Net increase in cash and cash equivalents |
| 528,135 |
| 273,632 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents: |
|
|
|
|
| ||
Beginning |
| 2,586,397 |
| 1,106,342 |
| ||
|
|
|
|
|
| ||
Ending |
| $ | 3,114,532 |
| $ | 1,379,974 |
|
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|
| 2005 |
| 2004 |
| ||
|
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Supplemental Disclosures of Cash Flow Information |
|
|
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Cash payments (receipts) for: |
|
|
|
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| ||
Interest |
| $ | 183,206 |
| $ | 147,807 |
|
|
|
|
|
|
| ||
Income taxes |
| $ | 99,374 |
| $ | 15,798 |
|
|
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Supplemental Schedule of Noncash Investing and Financing Activities |
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Acquisition of businesses: |
|
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|
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Fair value of net assets acquired: |
|
|
|
|
| ||
Working capital assets |
| $ | 97,000 |
| $ | — |
|
Machinery and equipment |
| 100,000 |
| — |
| ||
Goodwill |
| 450,000 |
| — |
| ||
|
|
|
|
|
| ||
Net cash purchase price |
| $ | 647,000 |
| $ | — |
|
5
Crosstex International, Inc.
Notes to financial statements
Note 1. Basis of Presentation
The financial information as of July 31, 2005 and for the three month periods ended July 31, 2005 and 2004 is unaudited; however, such financial information includes all adjustments (consisting solely of normal recurring adjustments), which, in the opinion of management, are necessary for the fair presentation of the financial information in conformity with accounting principles generally accepted in the United States of America.
The results of operations for the three month periods ended July 31, 2005 and 2004 are not necessarily indicative of the operating results for the full year or any other interim period.
In connection with the terms of the stock purchase agreements among Cantel Medical Corp., the Company and the shareholders of the Company, and as a condition of the closing, the Company was required to repay the outstanding bank debt and the deferred compensation obligations to officers. As a result, at July 31, 2005, the Company has classified its bank debt and deferred compensation obligations as current liabilities. In addition, the portion of the deferred tax asset related to deferred compensation obligations was also classified as a current deferred tax asset.
Note 2. Acquisitions
In May 2005, the Company purchased certain assets, including intangibles, of a manufacturer and distributor of rubber tips that attach to dental suction tubes. The purchase price was approximately $647,000. The fair value of the assets acquired consisted of $97,000 in inventory and $100,000 in machinery and equipment. The excess purchase price of $450,000 was assigned to goodwill.
In addition, the Company paid approximately $60,000 in connection with a prior acquisition and the amount was assigned to goodwill.
Note 3. Notes Payable
During the quarter ended July 31, 2005, the Company repaid one of the notes payable-treasury stock which amounted to approximately $900,000. The other note payable-treasury stock was repaid in connection with the acquisition described in Note 1 above.
Note 4. Income Tax Matters
Included in the provision for income taxes is an estimated provision of approximately $60,000 relating to a tax assessment resulting from an IRS examination for the years ended April 30, 2004 and 2003.
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