Exhibit 99.2
TIBBETTS INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
ASSETS
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| March 31, |
| September 30, |
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Current assets: |
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Cash |
| $ | 17,916 |
| $ | 33,507 |
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Accounts receivable |
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| 1,332,118 |
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| 1,287,496 |
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Inventories |
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| 785,683 |
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| 932,069 |
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Deferred income taxes |
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| 106,900 |
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| 94,300 |
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Other current assets |
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| 16,300 |
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| 38,954 |
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Total current assets |
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| 2,258,917 |
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| 2,386,326 |
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Property, plant and equipment, at cost: |
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| 2,790,087 |
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| 2,698,906 |
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Less: accumulated depreciation and amortization |
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| 1,412,910 |
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| 1,303,592 |
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Net property, plant and equipment |
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| 1,377,178 |
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| 1,395,314 |
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Patents, net of accumulated amortization |
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| 266,023 |
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| 264,891 |
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| $ | 3,902,117 |
| $ | 4,046,531 |
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TIBBETTS INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
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| March 31, |
| September 30, |
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Current liabilities: |
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Note payable to bank |
| $ | 444,000 |
| $ | 400,000 |
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Current portion of long-term debt |
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| 374,944 |
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| 405,915 |
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Accounts payable |
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| 221,234 |
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| 188,267 |
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Accrued liabilities |
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| 500,812 |
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| 303,248 |
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Total current liabilities |
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| 1,540,990 |
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| 1,297,430 |
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Deferred income taxes |
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| 148,700 |
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| 136,100 |
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Long-term debt, net of current portion |
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| 652,305 |
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| 697,788 |
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Total liabilities |
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| 2,341,995 |
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| 2,131,318 |
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Stockholders’ equity: |
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Common stock, $1 stated value; authorized 250,000 shares; issued and outstanding 179,309 shares |
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| 179,309 |
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| 179,309 |
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Additional paid-in capital |
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| 575,016 |
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| 575,016 |
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Retained earnings |
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| 805,798 |
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| 1,160,888 |
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Total stockholders’ equity |
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| 1,560,123 |
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| 1,915,213 |
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| $ | 3,902,117 |
| $ | 4,046,531 |
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2
TIBBETTS INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
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| Six Months Ended |
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| March 31, |
| March 31, |
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Net sales |
| $ | 3,312,890 |
| $ | 3,273,585 |
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Cost of goods sold |
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| 2,744,459 |
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| 2,524,265 |
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Gross profit |
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| 568,431 |
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| 749,320 |
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Selling, general, administrative and research and development expenses |
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| 848,537 |
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| 736,867 |
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Income (loss) from operations |
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| (280,106 | ) |
| 12,453 |
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Other income (expense): |
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Interest expense |
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| 61,075 |
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| 41,592 |
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Other income, net |
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| (1,088 | ) |
| (20,411 | ) |
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| 59,987 |
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| 21,181 |
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Loss before income taxes |
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| (340,093 | ) |
| (8,728 | ) |
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Income tax expense |
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| (14,082 | ) |
| (12,613 | ) |
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Net loss |
| $ | (354,175 | ) | $ | (21,341 | ) |
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3
TIBBETTS INDUSTRIES, INC.
Notes to Condensed Financial Statements (Unaudited)
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1. | General |
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| In the opinion of management, the accompanying condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly Tibbetts Industries, Inc.’s (the Company) financial position as of March 31, 2007 and September 30, 2006, and the results of its operations for the six months ended March 31, 2007 and 2006. Results of operations for the interim periods are not necessarily indicators of the results of the operations expected for the full year. |
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2. | New Accounting Pronouncements |
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| Financial Accounting Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”), was issued in January 2003 and amended in December 2003. FIN 46 requires that if an entity is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity should be included in the consolidated financial statements of the entity. The provisions of FIN 46 are effective immediately for all arrangements entered into after December 31, 2003. For those arrangements entered into prior to December 31, 2003, the provisions of FIN 46 were required to be adopted by the Company at the beginning of fiscal 2006. Management has concluded that the Company is not required to consolidate an affiliated joint venture whose activities are described in note 6. |
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3. | Inventories |
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| A summary of inventories at March 31, 2007 and September 30, 2006 is set forth below: |
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| March 31, |
| September |
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Raw materials |
| $ | 253,943 |
| $ | 465,937 |
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Supplies |
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| 70,416 |
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| 27,661 |
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Work-in-process |
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| 430,848 |
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| 341,124 |
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Finished units |
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| 30,476 |
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| 97,347 |
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| $ | 785,683 |
| $ | 932,069 |
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4. | Note Payable to Bank and Long-Term Debt |
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| Note payable to bank consists of borrowings outstanding under a working capital line of credit. Borrowings of up to $650,000 are available, subject to levels of accounts receivable and inventories. At March 31, 2007 and September 30, 2006, $444,000 and $400,000 was outstanding and $206,000 and $250,000 was available to be borrowed under the line, respectively. |
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| At March 31, 2007 and September 30, 2006, long-term debt consisted of the following: |
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| March 31, |
| September |
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Mortgage notes payable |
| $ | 741,175 |
| $ | 790,995 |
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Borrowings under $350,000 equipment line of credit payable |
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| 286,074 |
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| 312,708 |
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| 1,027,249 |
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| 1,103,703 |
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Less current portion |
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| 374,944 |
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| 405,915 |
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| $ | 652,305 |
| $ | 697,788 |
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| All of the borrowings are secured by substantially all Company assets and are subject to the Company maintaining certain financial covenants. |
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5. | Income Taxes |
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| Income tax expense was $14,082 and $12,613 for the six months ended March 31, 2007 and 2006, respectively. |
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6. | Joint Venture |
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| In 2003, the Company entered into a joint venture with a Swiss company to market, design, manufacture, and sell audio coils to the hearing health industry. The Company paid $7,590 for its 50% interest in the venture. The Company recorded sales of approximately $680,089 and $1,296,339 through the joint venture for the six months ended March 31, 2007 and 2006, respectively. Related accounts receivable due from the joint venture were $253,882 and $413,599 at March 31, 2007 and September 30, 2006, respectively. |
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