PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
(UNAUDITED)
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
(UNAUDITED)
(IN THOUSANDS)
CURRENT ASSETS | ||||
CASH & CASH EQUIVALENTS | $ | 2,436 | ||
ACCOUNTS RECEIVABLE, NET | 2,354 | |||
INVENTORIES, NET | 1,287 | |||
NOTE RECEIVABLE FROM STOCKHOLDER | 519 | |||
PREPAID EXPENSES | 53 | |||
TOTAL CURRENT ASSETS | 6,649 | |||
PROPERTY, PLANT AND EQUIPMENT, NET | 3,144 | |||
TOTAL ASSETS | $ | 9,793 | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
ACCOUNTS PAYABLE | $ | 848 | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3,776 | |||
TOTAL CURRENT LIABILITIES | 4,624 | |||
STOCKHOLDER’S EQUITY | ||||
COMMON STOCK | 300 | |||
ADDITIONAL PAID IN CAPITAL | 159 | |||
RETAINED EARNINGS | 4,710 | |||
TOTAL STOCKHOLDER’S EQUITY | 5,169 | |||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 9,793 | ||
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
(IN THOUSANDS)
2006 | 2005 | |||||||
REVENUES | $ | 16,380 | $ | 12,789 | ||||
COST OF REVENUES | 10,465 | 8,400 | ||||||
GROSS PROFIT | 5,915 | 4,389 | ||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 4,185 | 3,180 | ||||||
OPERATING INCOME | 1,730 | 1,209 | ||||||
INTEREST (INCOME) EXPENSE, NET | (49 | ) | 8 | |||||
NET INCOME | $ | 1,779 | $ | 1,201 | ||||
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
(IN THOUSANDS)
2006 | 2005 | |||||||
OPERATING ACTIVITIES: | ||||||||
NET INCOME | $ | 1,779 | $ | 1,201 | ||||
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN ) OPERATING ACTIVITIES: | ||||||||
DEPRECATION AND AMORTIZATION | 319 | 323 | ||||||
CHANGES IN ASSETS AND LIABILITIES: | ||||||||
ACCOUNTS RECEIVABLE, NET | 269 | (5 | ) | |||||
INVENTORIES, NET | (275 | ) | (726 | ) | ||||
PREPAID EXPENSES | (16 | ) | (9 | ) | ||||
ACCOUNTS PAYABLE | 81 | 291 | ||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 1,160 | 1,330 | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 3,317 | 2,405 | ||||||
INVESTING ACTIVITIES: | ||||||||
CAPITAL EXPENDITURES | (145 | ) | (132 | ) | ||||
COLLECTION OF NOTE RECEIVABLE FROM STOCKHOLDER | 272 | 250 | ||||||
NET CASH PROVIDED BY INVESTING ACTIVITIES | 127 | 118 | ||||||
FINANCING ACTIVITIES: | ||||||||
PRINCIPAL PAYMENTS ON LONG-TERM DEBT | (1,976 | ) | (110 | ) | ||||
DISTRIBUTIONS TO STOCKHOLDER | (1,220 | ) | (700 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (3,196 | ) | (810 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 248 | 1,713 | ||||||
CASH AND CASH EQUIVALENTS | ||||||||
BEGINNING OF PERIOD | 2,188 | 2,001 | ||||||
END OF PERIOD | $ | 2,436 | $ | 3,714 | ||||
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
PREMIER PNEUMATICS, INC. AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
September 30, 2006
(Unaudited)
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
NATURE OF BUSINESS
Premier Pneumatics, Inc. and subsidiary (“Premier”) manufacture pneumatic conveying components and design complete materials handling systems. Premier’s customers range in size from individually owned firms to manyFortune500 companies. These companies are involved in industries such as plastics, food, chemicals and mineral processing. Sales are generally concentrated in the United States of America, although the Company does have export sales throughout the world.
BASIS OF PRESENTATION
The unaudited consolidated financial statements include the financial statements of Premier Pneumatics, Inc. and its wholly-owned subsidiary, Mariposa Group, LLC. All intercompany transactions have been eliminated.
INTERIM FINANCIAL INFORMATION
The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and, in management’s opinion, include all adjustments necessary for a fair presentation of results for the periods presented.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
ACQUISITION OF PREMIER PNEUMATICS, INC. BY K-TRON INTERNATIONAL, INC.
On October 5, 2006, K-Tron International, Inc. (“K-Tron”), through its indirect, wholly-owned subsidiary Premier Pneumatics, Inc., a Delaware corporation (“Acquisition Co.”), acquired all of the outstanding capital stock (the “Premier Stock”) of Premier Pneumatics, Inc., a Kansas corporation (“Premier”), from the shareholder (“Shareholder”) of Premier. The acquisition of
the Premier Stock was made pursuant to a Stock Purchase Agreement (the “Premier Stock Purchase Agreement”) by and among Acquisition Co. and the Shareholder.
The purchase price paid to the Shareholder on October 5, 2006 for the acquisition of the Premier Stock was $27.565 million. The Shareholder expects to pay K-Tron an estimated post-closing adjustment of $111 thousand based on Premier’s net working capital on the closing date.