1
EXHIBIT 99.2
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS
CASE NUMBER: 401-40788-BJH-11
JUDGE: BARBARA J. HOUSER
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
-------- -----
FORT WORTH DIVISION
----------
MONTHLY OPERATING REPORT
MONTH ENDING: MARCH 31, 2001
--------------
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT (ACCRUAL BASIS - 1 THROUGH ACCRUAL BASIS - 7) AND THE ACCOMPANYING
ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT
AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY): IS
BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ JOSEPH P. TOMCZAK TREASURER
- -------------------------------------------- ------------------------
Original Signature of Responsible Party Title
JOSEPH P. TOMCZAK MAY 2, 2001
- -------------------------------------------- ------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER ACCOUNTANT FOR DEBTOR
- -------------------------------------------- ------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER MAY 2, 2001
- -------------------------------------------- ------------------------
Printed Name of Preparer Date
2
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 1
CASE NUMBER: 401-40788-BJH-11
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT FEB-01 MAR-01 MONTH
- ------ ------------ ------------ ------------ -----------
1. Unrestricted Cash (FOOTNOTE) 6,557,974 17,746,282 26,213,696
2. Restricted Cash
3. Total Cash 6,557,974 17,746,282 26,213,696 0
4. Accounts Receivable (Net)
5. Inventory
6. Notes Receivable
7. Prepaid Expenses (FOOTNOTE) 3,450,681 2,824,027 1,920,893
8. Other (Attach List) 263,606 269,703 269,703
9. Total Current Assets 10,272,261 20,840,012 28,404,292 0
10. Property, Plant & Equipment 3,285,885 3,285,886 3,248,949
11. Less: Accumulated Depreciation/Depletion (1,753,163) (1,805,114) (1,836,750)
12. Net Property, Plant & Equipment 1,532,722 1,480,772 1,412,199 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 36,082 36,001 35,921
15. Other (Attach List) 153,399,371 119,191,133 119,290,012
16. Total Assets 165,240,436 141,547,918 149,142,424 0
POST PETITION LIABILITIES
17. Accounts Payable 301,078 355,015
18. Taxes Payable 6,359 7,414
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) (FOOTNOTE) 4,650,723 3,685,786
23. Total Post Petition Liabilities 4,958,159 4,048,215 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 63,113,388 63,113,388
25. Priority Debt (FOOTNOTE) 200,832 91,281 91,281
26. Unsecured Debt 1,779,701 2,486,489 1,421,970
27. Other (Attach List) 242,243,558 256,778,148 267,034,923
28. Total Pre Petition Liabilities 320,109,155 322,469,306 331,661,562 0
29. Total Liabilities 320,109,155 327,427,466 335,709,777 0
EQUITY
30. Pre Petition Owners' Equity (154,868,719) (154,868,719)
31. Post Petition Cumulative Profit Or (Loss) (367,705) (1,055,510)
32. Direct Charges To Equity (Attach Explanation FOOTNOTE) (30,643,124) (30,643,124)
33. Total Equity (185,879,548) (186,567,353) 0
34. Total Liabilities and Equity 141,547,918 149,142,424 0
This form x does does not have related footnotes on Footnotes Supplement.
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3
CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT FEB-01 MAR-01 MONTH
- ------ ----------- ----------- ----------- -----------
A. Security Deposit 8,794 8,794 8,794
B. Cash Surrender Value: Life Ins. 254,812 260,909 260,909
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 263,606 269,703 269,703 0
A. Organizational Costs 36,082 36,001 35,921
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 36,082 36,001 35,921 0
A. Intercompany Receivables (FOOTNOTE) 113,743,558 79,377,508 79,318,574
B. Intercompany Royalties 39,655,813 39,813,625 39,971,438
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 153,399,371 119,191,133 119,290,012 0
POST PETITION LIABILITIES
A. Accrued Liabilities Other 1,053,230 512,018
B. Deferred Compensation 960,371 960,371
C. 401K Contribution 32,932 31,321
D. Accrued Health Claims 1,300,036 991,237
E. Accrued Payroll 1,125,642 1,062,327
F. Acc. Professional Fees 178,512 128,512
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 4,650,723 3,685,786 0
PRE PETITION LIABILITIES
A. Intercompany Payables (FOOTNOTE) 113,743,558 128,278,148 138,534,923
B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000 105,000,000
C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000
D.
E.
TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 242,243,558 256,778,148 267,034,923 0
4
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40788-BJH-11
INCOME STATEMENT
MONTH MONTH QUARTER
REVENUES FEB-01 MAR-01 MONTH TOTAL
- -------- ---------- ---------- ---------- ----------
1. Gross Revenues 0
2. Less: Returns & Discounts 0
3. Net Revenue 0 0 0 0
COST OF GOODS SOLD
4. Material 0
5. Direct Labor 0
6. Direct Overhead 0
7. Total Cost Of Goods Sold 0 0 0 0
8. Gross Profit 0 0 0 0
OPERATING EXPENSES
9. Officer / Insider Compensation 45,063 45,028 90,091
10. Selling & Marketing 16,372 5,132 21,504
11. General & Administrative 120,177 190,404 310,581
12. Rent & Lease 38,622 50,028 88,650
13. Other (Attach List) 248,419 370,112 0 618,531
14. Total Operating Expenses 468,653 660,704 0 1,129,357
15. Income Before Non-Operating
Income & Expense (468,653) (660,704) 0 (1,129,357)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 789,394 682,857 0 1,472,251
17. Non-Operating Expense (Att List) 0 0 0 0
18. Interest Expense 0
19. Depreciation / Depletion 52,032 53,879 105,911
20. Amortization 0 0
21. Other (Attach List) 0 0
22. Net Other Income & Expenses 737,362 628,978 0 1,366,340
REORGANIZATION EXPENSES
23. Professional Fees (FOOTNOTE) 636,414 656,079 1,292,493
24. U.S. Trustee Fees 0
25. Other (Attach List) 0 0 0 0
26. Total Reorganization Expenses 636,414 656,079 0 1,292,493
27. Income Tax 0
28. Net Profit (Loss) (367,705) (687,805) 0 (1,055,510)
This form does x does not have related footnotes on Footnotes Supplement.
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5
CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
MONTH MONTH QUARTER
OPERATING EXPENSES FEB-01 MAR-01 MONTH TOTAL
- ------------------ --------- --------- --------- ---------
A. Payroll 187,266 248,360 435,626
B. Insurance 27,207 28,059 55,266
C. Utilities & Telephone 12,780 31,434 44,214
D. Taxes 21,166 62,259 83,425
E. 0
TOTAL OTHER OPERATING EXPENSES - LINE 13 248,419 370,112 0 618,531
OTHER INCOME & EXPENSES
A. Interest and Misc. Income 3,904 112,980 116,884
B. Intercompany Operating Fees 380,423 112,675 493,098
C. Interco. Management Fees 315,625 157,813 473,438
D. Intercompany Information Technology Fee 89,442 3,080 92,522
E. Write off uncleared AP checks 296,309 296,309
TOTAL NON-OPERATING INCOME - LINE 16 789,394 682,857 0 1,472,251
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL NON-OPERATING EXPENSE - LINE 17 0 0 0 0
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION EXPENSES - LINE 25 0 0 0 0
6
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40788-BJH-11
CASH RECEIPTS AND MONTH MONTH QUARTER
DISBURSEMENTS FEB-01 MAR-01 MONTH TOTAL
----------------- ------ ------ ----- -------
1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE
RECEIPTS FROM OPERATIONS
2. Cash Sales 0 0
COLLECTION OF ACCOUNTS RECEIVABLE
3. Pre Petition 0
4. Post Petition 0
5. Total Operating Receipts 0 0 0 0
NON-OPERATING RECEIPTS
6. Loans & Advances (Attach List) 0
7. Sale of Assets 0
8. Other (Attach List) 0
9. Total Non-Operating Receipts 0 0 0 0
10. Total Receipts 0 0 0 0
11. Total Cash Available 0 0 0 0
OPERATING DISBURSEMENTS
12. Net Payroll 0
13. Payroll Taxes Paid 0
14. Sales, Use & Other Taxes Paid 0
15. Secured / Rental / Leases 0
16. Utilities 0
17. Insurance 0
18. Inventory Purchases 0
19. Vehicle Expenses 0
20. Travel 0
21. Entertainment 0
22. Repairs & Maintenance 0
23. Supplies 0
24. Advertising 0
25. Other (Attach List) 0
26. Total Operating Disbursements 0 0 0 0
REORGANIZATION DISBURSEMENTS
27. Professional Fees 0
28. U.S. Trustee Fees 0
29. Other (Attach List) 0
30. Total Reorganization Expenses 0 0 0 0
31. Total Disbursements 0 0 0 0
32. Net Cash Flow 0 0 0 0
33. Cash - End of Month 0 0 0 0
This form x does does not have related footnotes on Footnotes Supplement.
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7
CASE NAME: KEVCO MANAGEMENT CO. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 3
MARCH-01
-----------------
KEVCO KEVCO KEVCO KEVCO KEVCO KEVCO
DIST LP MFG.LP MGMT HOLDING COMPONENTS INC TOTAL
----------- ----------- ----------- ----------- ----------- ----------- -----------
1 CASH-BEGINNING OF MONTH 41,529 (55,996) 17,746,282 232 134 1,000 17,733,181
RECEIPTS FROM OPERATIONS
2 CASH SALES 274,302 -- 274,302
COLLECTION OF ACCOUNTS RECEIVABLE
3 PRE PETITION 1,120,290 367,383 1,487,673
4 POST PETITION 15,181,617 6,014,122 21,195,739
5 TOTAL OPERATING RECEIPTS 16,576,209 6,381,505 -- -- -- -- 22,957,714
NON OPERATING RECEIPTS
6 LOANS & ADVANCES -- --
7 SALE OF ASSETS 286 -- 286
8 OTHER -- -- -- -- 2,700 -- 2,700
SALE EXPENSE REIMBURSEMENT
ADP ADVANCE
MISC 2,700
INTEREST INCOME
9 TOTAL NON OPERATING RECEIPTS 286 -- -- -- 2,700 -- 2,986
10 TOTAL RECEIPTS 16,576,495 6,381,505 -- -- 2,700 -- 22,960,700
11 CASH AVAILABLE 16,618,024 6,325,509 17,746,282 232 2,834 1,000 40,693,881
OPERATING DISBURSEMENTS
12 NET PAYROLL 2,105,173 1,038,694 250,403 3,394,270
13 PAYROLL TAXES PAID -- 1,538,108 221 221 1,538,550
14 SALES, USE & OTHER TAXES PAID 235 1,675 50 1,960
15 SECURED/RENTAL/LEASES 327,171 99,127 97,670 500 500 524,968
16 UTILITIES 119,696 124,447 344,565 38 38 588,784
17 INSURANCE 5,770 1,447 1,241,403 1,248,620
18 INVENTORY PURCHASES 3,246,839 2,943,026 6,189,865
19 VEHICLE EXPENSE 55,871 32,906 88,777
20 TRAVEL 17,371 11,694 512 29,577
21 ENTERTAINMENT 7,156 1,384 8,540
22 REPAIRS & MAINTENANCE 9,451 32,333 470 42,254
23 SUPPLIES 10,799 58,576 69,375
24 ADVERTISING -- -- --
25 OTHER 394,411 226,566 214,929 179 259 -- 836,344
FREIGHT 357,913 143,548 501,461
CONTRACT LABOR 1,602 7,601 63,360 72,563
401 K PAYMENTS -- 151,450 151,450
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC 34,896 75,417 119 179 259 110,870
26 TOTAL OPERATING DISBURSEMENTS 6,299,943 4,571,875 3,688,060 988 1,018 -- 14,561,884
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -- --
28 US TRUSTEE FEES -- --
29 OTHER 10,316,598 1,848,876 (12,155,474) (5,766) (4,234) -- --
LOAN PAYMENTS -- --
INTERCOMPANY TRANSFERS 10,316,598 1,848,876 (12,155,474) (5,766) (4,234) --
--
--
30 TOTAL REORGANIZATION EXPENSE 10,316,598 1,848,876 (12,155,474) (5,766) (4,234) -- --
31 TOTAL DISBURSEMENTS 16,616,541 6,420,751 (8,467,414) (4,778) (3,216) -- 14,561,884
32 NET CASH FLOW (40,046) (39,246) 8,467,414 4,778 5,916 -- 8,398,816
----------- ----------- ----------- ----------- ----------- ----------- -----------
33 CASH- END OF MONTH 1,483 (95,242) 26,213,696 5,010 6,050 1,000 26,131,997
=========== =========== =========== =========== =========== =========== ===========
8
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40788-BJH-11
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT FEB-01 MAR-01 MONTH
------------------------- --------- ------ ------ -----
1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 0 0 0 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 0 0 0 0
AGING OF POST PETITION MONTH: MARCH-01
TAXES AND PAYABLES ---------------
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
------------- -------- --------- --------- ------- --------
1. Federal 0
2. State 0
3. Local 0
4. Other (See below) 1,055 6,359 7,414
5. Total Taxes Payable 1,055 6,359 0 0 7,414
6. Accounts Payable 114,475 240,540 355,015
MONTH: MARCH-01
---------------
STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
------- ------------- --------------- ------------- ----------
1. Withholding ** 58,651 (58,651) 0
2. FICA - Employee ** 26,487 (26,487) 0
3. FICA - Employer ** 26,487 (26,487) 0
4. Unemployment 363 (363) 0
5. Income 0 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 111,988 (111,988) 0
STATE AND LOCAL
8. Withholding 1,279 (1,279) 0
9. Sales (FOOTNOTE) 6,359 53 0 6,412
10. Excise 0 0
11. Unemployment 1,553 (1,553) 0
12. Real Property (FOOTNOTE) 1,002 0 1,002
13. Personal Property 0 0
14. Other (Attach List) 0 0
15. Total State And Local 6,359 3,887 (2,832) 7,414
16. Total Taxes 6,359 115,875 (114,820) 7,414
* The beginning tax liability should represent the liability from the prior
month or, if this is the first operating report, the amount should be zero.
** Attach photocopies of IRS Form 6123 or your FTD coupon and payment receipt to
verify payment of deposit.
This form x does does not have related footnotes on Footnotes Supplement.
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9
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 5
CASE NUMBER: 401-40788-BJH-11
The debtor in possession must complete the reconciliation below for each
bank account, including all general, payroll and tax accounts, as well as all
savings and investment accounts, money market accounts, certificates of deposit,
government obligations, etc. Accounts with restricted funds should be identified
by placing an asterisk next to the account number. Attach additional sheets if
necessary.
MONTH: MARCH-01
------------
BANK RECONCILIATIONS Account # 1 Account # 2
-------------------- ----------------- -----------------
A. BANK: Bank of America Bank of America Other Accounts
B. ACCOUNT NUMBER: 1295026976 3751629012 (Attach List) TOTAL
DIP Disbursement
C. PURPOSE (TYPE): Operating Account Account
1. Balance Per Bank Statement 3,492,779 387,968 23,105,363 26,986,110
2. Add: Total Deposits Not Credited 286,109 0 286,109
3. Subtract: Outstanding Checks (512,034) (504,108) (1,016,142)
4. Other Reconciling Items 16,017 (59,398) (43,381)
5. Month End Balance Per Books 3,282,871 387,968 22,541,857 26,212,696
6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE
--------------------------- ---------------- ------------------ -------------- -------------
7.
8.
9.
10. (Attach List)
11. Total Investments 0 0
CASH
----
12. Currency On Hand 1,000
13. Total Cash - End of Month (Footnote) 26,213,696
This form x does does not have related footnotes on Footnotes Supplement.
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10
CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 5
MONTH: MARCH-01
----------------
BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5
-------------------- --------------- ----------- ---------------
Bank of America/ Bank of Bank of
A. BANK: Nations Funds America America TOTAL
OTHER BANK
B. ACCOUNT NUMBER: 846713 3751775241 1295027040 ACCOUNTS
Kevco, Inc. S-T
C. PURPOSE (TYPE): Investment Stay Pay Payroll - Dist.
1. Balance Per Bank Statement 21,604,979 984,081 282,757 22,871,817
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks (504,108) (504,108)
4. Other Reconciling Items (59,343) (59,343)
5. Month End Balance Per Books 21,604,979 984,081 (280,694) 22,308,366
6. Number of Last Check Written N/A N/A N/A
INVESTMENT ACCOUNTS
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE
--------------------------- ---------------- ------------------ -------------- -------------
A.
B.
C.
D.
TOTAL OTHER INVESTMENT ACCOUNTS - LINE 10 0 0
11
CASE NAME: KEVCO MANAGEMENT, INC. 2ND SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 5
MONTH: MARCH-01
-------------------
BANK RECONCILIATIONS Account # 6 Account # 7 Account # 8
-------------------- --------------- --------------- -------------
A. BANK: Bank of America Bank of America TOTAL
B. ACCOUNT NUMBER: 3750768628 3750801912 OTHER BANK
C. PURPOSE (TYPE): Payroll Payroll ACCOUNTS
1. Balance Per Bank Statement 173,287 60,259 233,546
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items (417) 362 (55)
5. Month End Balance Per Books 172,870 60,621 0 233,491
6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE
--------------------------- ---------------- ------------------ -------------- -------------
A.
B.
C.
D.
TOTAL OTHER INVESTMENT ACCOUNTS - LINE 10 0 0
12
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40788-BJH-11
MONTH: MARCH-01
PAYMENTS TO INSIDERS AND PROFESSIONALS --------------------
Of the Total Disbursements shown for the month, list the amount paid to Insiders
(as defined in Section 101 (31) (A) - (F) of the U.S. Bankruptcy Code) and to
Professionals. Also, for payments to Insiders, identify the type of compensation
paid (e.g. salary, bonus, commissions, insurance, housing allowance, travel, car
allowance, etc.). Attach additional sheets if necessary.
INSIDERS
NAME TYPE OF PAYMENT AMOUNT PAID TOTAL PAID TO DATE
---- --------------------- ----------- ------------------
1. Sharon Romere Expense Reimb. 240 240
2. Joe Tomczak Expense Reimb. 198 261
3. John Wittig Expense Reimb. 263 263
4. Sharon Romere Payroll 6,923 13,846
5. Joe Tomczak Payroll 17,308 34,616
6. John Wittig Payroll 11,442 23,557
7. Will Simpson Payroll 8,654 17,308
8. Total Payments To
Insiders 45,028 90,091
PROFESSIONALS
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID *
---- ----------- -------- ------ ---------- ----------
1.
2.
3.
4.
5. (Attach List)
6. Total Payments To Professionals 0 0 0 0
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
SCHEDULED AMOUNTS TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- --------
1. Bank of America (FOOTNOTE) 63,113,388
2. Leases Payable (FOOTNOTE) (Not Available)
3.
4.
5. (Attach List)
6. TOTAL 0 0 63,113,388
This form x does does not have related footnotes on Footnotes Supplement.
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13
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 7
CASE NUMBER: 401-40788-BJH-11
MONTH: MARCH-01
QUESTIONNAIRE ---------------
YES NO
--- --
1. Have any Assets been sold or transferred outside the normal course of business this
reporting period? X
2. Have any funds been disbursed from any account other than a debtor in possession
account? X
3. Are any Post Petition Receivables (accounts, notes, or loans) due from related parties? X
4. Have any payments been made on Pre Petition Liabilities this reporting period? X
5. Have any Post Petition Loans been received by the debtor from any party? X
6. Are any Post Petition Payroll Taxes past due? X
7. Are any Post Petition State or Federal Income Taxes past due? X
8. Are any Post Petition Real Estate Taxes past due? X
9. Are any other Post Petition Taxes past due? X
10. Are any amounts owed to Post Petition creditors delinquent? X
11. Have any Pre Petition Taxes been paid during the reporting period? X
12. Are any wage payments past due? X
If the answer to any of the above questions is "Yes", provide a
detailed explanation of each item. Attach additional sheets if
necessary.
SEE FOOTNOTE
INSURANCE
YES NO
--- --
1. Are Worker's Compensation, General Liability and other necessary insurance coverages
in effect? X
2. Are all premium payments paid current? X
3. Please itemize policies below.
If the answer to any of the above questions is "No", or if any policies
have been canceled or not renewed during this reporting period, provide
an explanation below. Attach additional sheets if necessary.
INSTALLMENT PAYMENTS
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY
------------------- ------------------------ ---------------------------- --------------------------
Property Lexington, Allianz 5/29/00-5/29/01 Annual $3,632
Group Health Blue Cross Blue Shield Self Insured - Renews Annual Annual $141,036
Auto Liberty Mutual 9/1/00-9/1/01 Annual $6,030
Fiduciary Federal Insurance 7/15/00-9/1/01 Annual $10,800
Employee Practices Federal Insurance 6/30/99-6/30/01 Annual $72,800
Crimeguard National Union 6/30/00-9/1/01 Annual $10,873
D&O Liability Great American Insurance 10/31/98-10/31/01 Annual $71,250
This form x does does not have related footnotes on Footnotes Supplement.
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14
CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS
MONTH: MARCH-01
------------
ACCRUAL BASIS
FORM NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------------- ----------- ----------------------
1 1 Pursuant to the February 12, 2001 Order (1) Authorizing Continued Use of Existing Forms and Records;
3 1 (2) Authorizing Maintenance of Existing Corporate Bank Accounts and Cash Management System; and (3)
5 13 Extending Time to Comply with 11 U.S.C. Section 345 Investment Guidelines, funds in the Bank of
America and Key Bank deposit accounts are swept daily into Kevco's lead account number 1295026976. The
Bank of America lead account is administered by, and held in the name of Kevco Management Co.
Accordingly, all cash receipts and disbursements flow through Kevco Management's Bank of America DIP
account. A schedule allocating receipts and disbursements among Kevco, Inc. and its subsidiaries is
included in this report as a Supplement to Accrual Basis -3.
1 7 Prepaid Expenses consist of payroll, rent, insurance and other miscellaneous items. The largest
prepaid item, payroll, is due to the timing difference between transfers to ADP payroll service and
distribution of payroll checks.
1 15A Intercompany receivables/payables are from/to co-debtors Kevco Manufacturing, LP (Case No.
1 27A 401-40784-BJH-11), Kevco Distribution, LP (Case No. 401-40789-BJH-11), Kevco Holding, Inc. (Case No.
7 3 401-40785-BJH-11), DCM Delaware, Inc. (Case No. 401-40787-BJH-11), Kevco GP, Inc. (Case No.
401-40786-BJH-11), Kevco Components, Inc. (Case No. 401-40790-BJH-11), and Kevco, Inc. (Case No.
401-40783-BJH-11). Although intercompany payables increased post-petition, the increase has not been
reflected as a post-petition liability.
1 15A Intercompany assets were inadvertently misstated on Debtor's Schedules. The adjustment to equity
1 32 corrects the error.
1 22 The Debtor records on its books accruals for certain liabilities based on historical estimates. While
the known creditors were listed on the Debtor's Schedules, the estimated amounts were not.
Accordingly, for purposes of this report, the accrued liabilities are reflected as post-petition
"Accrued Liabilities."
15
CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS
MONTH: MARCH-01
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ACCRUAL BASIS
FORM NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
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1 24 Pursuant to an Asset Purchase Agreement approved by the Court on February 23, 2001 and effective as of
6 1 the same date among Kevco, Inc., Kevco Manufacturing, LP, Wingate Management Co. II, LP and Adorn LLC,
certain assets and liabilities of Design Components, a division of Kevco Manufacturing, LP (Case No.
401-40784-BJH-11), were transferred to Adorn, LLC. At the effective date of purchase, Buyer assumed
certain executory contracts, approximately $1.6 million of Kevco Manufacturing, LP's unsecured
pre-petition liabilities, $3.5 million of accounts receivable, $5 million of inventory and $2.2
million (book value) of property and equipment. Payment was made directly to Bank of America, the
secured lender, thereby reducing pre-petition secured debt.
1 25 Pursuant to Order dated February 12, 2001 and Supplemental Order dated March 14, 2001, debtors were
authorized to pay pre-petition salaries and wages up to a maximum of $4,300 per employee. Debtors were
also (a) allowed to pay accrued vacation to terminated employees and (b) permitted to continue
allowing employees to use vacation time as scheduled.
2 23 The consulting and professional fee expenses are primarily for: (a) pre-petition payments to
bankruptcy professionals ($409,555.47), (b) legal and accounting fees with regard to negotiations with
the Bank Group ($214,806.64) and (c) other payments for professionals handling asset sales and other
miscellaneous activities ($51,443.13).
4 9 Sales and property tax liabilities represent accruals of tax and are not yet due.
4 12
6 2 The Debtor is the lessee on hundreds of real and personal property leases, the vast majority of which
have been or will soon be rejected. The Debtor does not isolate monthly payments due or paid on
account of such leases. Instead, all lease payments are reflected in the Debtor's accounts payable
system. To separately identify monthly accruals and payments on leases would require an enormous
outlay of the Debtor's accounting personnel and professionals. The Debtor simply does not have
available to it the resources that would be required to provide the detail requested. If any
party-in-interest desires specific information about any specific lease, the Debtor will provide such
information upon request.