1
EXHIBIT 99.7
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS
CASE NUMBER: 401-40784-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 DEBTOR'S ACCOUNTANT
- --------------------------------------- ----------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER MAY 2, 2001
- --------------------------------------- ----------------------
Printed Name of Preparer Date
2
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 1
CASE NUMBER: 401-40784-BJH-11
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT FEB-01 MAR-01 MONTH
- ------ ------------ ------------ ------------ ------------
1. Unrestricted Cash (FOOTNOTE) 41,683 0 0
2. Restricted Cash
3. Total Cash 41,683 0 0 0
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 4,933,430 5,874,185
5. Inventory (FOOTNOTE) 14,793,828 7,980,684 4,859,572
6. Notes Receivable
7. Prepaid Expenses 196,584 172,282 123,925
8. Other (Attach List) 6,598 98 0
9. Total Current Assets 23,013,389 13,086,495 10,857,682 0
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 28,603,697 28,652,257
11. Less: Accumulated Depreciation (FOOTNOTE) (7,696,543) (6,643,000) (6,807,128)
12. Net Property, Plant & Equipment 24,385,644 21,960,698 21,845,129 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 8,369,096 8,347,100 8,325,105
15. Other (Attach List) 13,541,943 20,020,858 21,711,278
16. Total Assets 69,310,072 63,415,150 62,739,194 0
POST PETITION LIABILITIES
17. Accounts Payable (FOOTNOTE) 15,192 110,434
18. Taxes Payable (FOOTNOTE) 105,632 151,685
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 1,366,523 1,264,568
23. Total Post Petition Liabilities 1,487,347 1,526,687 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 63,113,388 63,113,388
25. Priority Debt (FOOTNOTE) 1,383,756 0 0
26. Unsecured Debt (FOOTNOTE) 5,139,545 3,842,137 3,621,510
27. Other (Attach List) 197,008,999 197,509,594 197,948,008
28. Total Pre Petition Liabilities 279,417,364 264,465,120 264,682,906 0
29. Total Liabilities 279,417,364 265,952,467 266,209,593 0
EQUITY
30. Pre Petition Owners' Equity (210,107,292) (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (5,079,239) (6,012,322)
32. Direct Charges To Equity (Attach Explanation
FOOTNOTE) 12,649,215 12,649,215
33. Total Equity (202,537,316) (203,470,399) 0
34. Total Liabilities and Equity 63,415,150 62,739,194 0
This form x does does not have related footnotes on Footnotes Supplement.
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3
CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT FEB-01 MAR-01 MONTH
- ------ ------------ ------------ ------------ ------------
A. Security Deposits 6,598 98
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 6,598 98 0 0
A. Goodwill: Consolidated Forest Products 8,369,096 8,347,100 8,325,105
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF
AMORTIZATION - LINE 14 8,369,096 8,347,100 8,325,105 0
A. Intercompany Receivables (Footnote) 13,541,943 20,020,858 21,711,278
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 20,020,858 21,711,278 0
POST PETITION LIABILITIES
A. Accrued Payroll 847,056 629,663
B. Accrued Liabilities (FOOTNOTE) 519,467 634,905
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 1,366,523 1,264,568 0
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 69,009,594 69,448,008
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 27 197,008,999 197,509,594 197,948,008 0
4
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH MONTH QUARTER
REVENUES FEB-01 MAR-01 MONTH TOTAL
- -------- ------------ ------------ ------------ ------------
1. Gross Revenues 9,497,654 8,276,526 0 17,774,180
2. Less: Returns & Discounts (236,301) (221,852) (458,153)
3. Net Revenue 9,261,353 8,054,674 0 17,316,027
COST OF GOODS SOLD
4. Material 8,167,587 7,327,837 15,495,424
5. Direct Labor 307,854 257,318 565,172
6. Direct Overhead 307,731 257,213 564,944
7. Total Cost of Goods Sold 8,783,172 7,842,368 0 16,625,540
8. Gross Profit 478,181 212,306 0 690,487
OPERATING EXPENSES
9. Officer / Insider Compensation 46,386 43,957 90,343
10. Selling & Marketing 2,786 819 3,605
11. General & Administrative 50,247 45,115 95,362
12. Rent & Lease 97,786 79,464 177,250
13. Other (Attach List) 659,068 380,608 1,039,676
14. Total Operating Expenses 856,273 549,963 0 1,406,236
15. Income Before Non-Operating
Income & Expense (378,092) (337,657) 0 (715,749)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) (2,423) (1,168) (3,591)
17. Non-Operating Expense (Att List) 4,661,402 554,036 5,215,438
18. Interest Expense 1,266 1,266
19. Depreciation / Depletion 40,902 42,558 83,460
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & Expenses (4,701,147) (595,426) 0 (5,296,573)
REORGANIZATION EXPENSES
23. Professional Fees 0
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 0 0 0 0
27. Income Tax 0
28. Net Profit (Loss) (5,079,239) (933,083) 0 (6,012,322)
This form x does does not have related footnotes on Footnotes Supplement.
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5
CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
MONTH MONTH QUARTER
OPERATING EXPENSES FEB-01 MAR-01 MONTH TOTAL
- ------------------ ------------ ------------ ------------ ------------
A. Payroll & Employee Benefits 473,634 197,958 671,592
B. Insurance Expense 98,171 86,110 184,281
C. Utilities and Telephone 30,707 39,973 70,680
D. Taxes 56,556 56,567 113,123
E. 0
TOTAL OTHER OPERATING EXPENSES - LINE 13 659,068 380,608 0 1,039,676
OTHER INCOME & EXPENSES
A. Miscellaneous Income (2,423) (1,168) (3,591)
B. 0
C. 0
TOTAL NON-OPERATING INCOME - LINE 16 (2,423) (1,168) 0 (3,591)
A. Interco. working capital charge 163,912 112,675 276,587
B. Intercompany management fee 103,823 38,809 142,632
C. Intercompany royalty fee 277,234 92,459 369,693
D. Intercompany interest charges 620,186 310,093 930,279
E. Loss on sale of Design Comp. (Footnote) 3,496,247 3,496,247
F. 0
G.
TOTAL NON-OPERATING EXPENSE - LINE 17 4,661,402 554,036 0 5,215,438
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 MANUFACTURING, LP ACCRUAL BASIS - 3
CASE NUMBER: 401-40784-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 0
RECEIPTS FROM OPERATIONS
2. Cash Sales 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 MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-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 MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT FEB-01 MAR-01 MONTH
- ------------------------- ---------- ---------- ---------- ----------
1. 0 - 30 4,468,648 5,833,124
2. 31 - 60 464,782 41,061
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 7,974,696 4,933,430 5,874,185 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 7,974,696 4,933,430 5,874,185 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 --
2. State --
3. Local --
4. Other (See Below) 46,053 105,632 151,685
5. Total Taxes Payable 46,053 105,632 -- -- 151,685
6. Accounts Payable 95,242 15,192 110,434
MONTH: MARCH-01
STATUS OF POST PETITION TAXES -------------------
BEGINNING TAX AMOUNT ENDING TAX
FEDERAL LIABILITY WITHHELD AND/OR (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ------------
1. Withholding ** 142,097 (142,097) 0
2. FICA - Employee ** 105,626 (105,626) 0
3. FICA - Employer ** 105,627 (105,627) 0
4. Unemployment 7,355 (7,355) 0
5. Income 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 360,705 (360,705) 0
STATE AND LOCAL
8. Withholding 32,909 (32,909) 0
9. Sales (FOOTNOTE) 15,389 427 15,816
10. Excise 0
11. Unemployment 13,693 (13,693) 0
12. Real Property 0
13. Personal Property (FOOTNOTE) 90,243 45,626 135,869
14. Other (Attach List) 0
15. Total State And Local 105,632 92,655 (46,602) 151,685
16. Total Taxes 105,632 453,360 (407,307) 151,685
* 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 MANUFACTURING, LP ACCRUAL BASIS - 5
CASE NUMBER: 401-40784-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,
MONTH: MAR-01
-------------------
BANK RECONCILIATIONS Account # 1 Account # 2 Other Accounts
- -------------------- ----------- ----------- (Attach List)
A. BANK: Bank of America KeyBank
B. ACCOUNT NUMBER: 3751764595 149651002847 TOTAL
C. PURPOSE (TYPE): DIP Disbursement-BB DIP Disbursement-Design
1. Balance Per Bank Statement 39,600 14,904 31,203 85,707
2. Add: Total Deposits Not Credited -- --
3. Subtract: Outstanding Checks (156,479) (40,197) (196,676)
4. Other Reconciling Items (1,776) 82 (1,694)
5. Month End Balance Per Books (118,655) 14,904 (8,912) (112,663)
6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
DATE OF TYPE OF
BANK, ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE
- --------------------------- -------- ---------- -------------- -------------
7.
8.
9.
10. (Attach List)
11. Total Investments
CASH
12. Currency On Hand 17,421
Reclass to Accounts Payable 95,242
13. Total Cash - End of Month (FOOTNOTE) (0)
This form x does does not have related footnotes on Footnotes Supplement.
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10
CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 5
MONTH: MAR-01
----------
BANK RECONCILIATIONS Account #3 Account #4 Account #5
- -------------------- ----------- ---------- ----------
A. BANK: GWJones Exch Bank TOTAL
B. ACCOUNT NUMBER: 0005006226 OTHER BANK
C. PURPOSE (TYPE): DIP Disbursement-DF ACCOUNTS
1. Balance Per Bank Statement 31,203 31,203
2. Add: Total Deposits Not Credited --
3. Subtract: Outstanding Checks (40,197) (40,197)
4. Other Reconciling Items 82 82
5. Month End Balance Per Books (8,912) (8,912)
6. Number of Last Check Written N/A
INVESTMENT ACCOUNTS
DATE OF TYPE OF PURCHASE CURRENT
BANK, ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PRICE VALUE
- --------------------------- -------- ---------- -------- -------
A.
B.
C.
D.
TOTAL OTHER INVESTMENT
ACCOUNTS - LINE 10
11
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40784-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
AMOUNT TOTAL PAID
NAME TYPE OF PAYMENT PAID TO DATE
---- --------------- ------ ----------
1. Lee Denham Payroll 10,386 20,772
2. Lee Denham Expense Reimb. 254
3. Jim Connors Consulting fees and expenses 33,571 33,571
4.
5. (Attach List)
6. Total Payments To Insiders 43,957 54,597
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 -- -- -- --
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- ------------
1. Bank of America (Footnote) N/A $ 63,113,388
2. Status of Leases Payable (Footnote)
3.
4.
5. (Attach List)
6. TOTAL $ -- $ -- $ 63,113,388
This form x does does not have related footnotes on Footnotes Supplement.
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12
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40784-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
PAYMENT AMOUNT
TYPE OF POLICY CARRIER PERIOD COVERED & FREQUENCY
-------------- ------- -------------- --------------
Property Lexington, Allianz 5/29/00-5/29/01 Annual $ 171,771
Group Health Blue Cross/Blue Shield Debtor is self-insured Annual 1,709,506
Auto Liberty Mutual 9/1/00-9/1/01 Annual 101,505
General Liability Liberty Mutual 9/1/00-9/1/01 Annual 141,519
Umbrella National Union 6/1/00-9/1/01 Annual 46,651
Workers Compensation Liberty Mutual 9/1/00-9/1/01 Annual 644,601
This form x does does not have related footnotes on Footnotes Supplement.
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13
CASE NAME: KEVCO MANUFACTURING, LP
CASE NUMBER: 401-40784-BJH-11
MONTH: MARCH 31, 2001
--------------
FOOTNOTES SUPPLEMENT ACCRUAL BASIS
ACCRUAL
BASIS
FORM LINE
NUMBER NUMBER FOOTNOTE / EXPLANATION
- ------- ------ ----------------------
1 1 Pursuant to the February 12, 2001 Order (1) Authorizing Continued
3 1 Use of Existing Forms and Records; (2) Authorizing Maintenance of
Existing Corporate Bank Accounts and Cash Management System; and (3)
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. (co-debtor, Case No.
401-40788-BJH-11). 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. Debtor maintains several small petty cash accounts
for use by its operating divisions that are included in the cash
supplement schedule.
1 1 Kevco Manufacturing, LP maintains several small petty cash accounts
3 1 for use by its various operating divisions. These amounts are
5 13 intended to be maintained on an imprest basis by way of intercompany
transfers from Kevco Management which maintains the lead account
(see footnote for MOR 1, Line 1). The negative cash balance shown on
the Supplement to Accrual Basis -3 and the bank reconciliations
presented in MOR -5 is due to checks that were issued on March 31
but not funded from Kevco's lead account until April 1. Accrual
Basis -1 (Debtor's balance sheet) reflects cash as $0 and the issued
and unfunded checks as post-petition accounts payable.
1 4 Pursuant to an Asset Purchase Agreement approved by the Court on
1 5 February 23, 2001 and effective as of the same date among Kevco,
1 10 Inc., Kevco Manufacturing, LP, Wingate Management Co. II, LP and
1 11 Adorn, LLC, certain assets and liabilities of Design Components, a
1 24 division of Kevco Manufacturing, were transferred to Adorn, LLC. At
1 26 the effective date of purchase, Buyer assumed certain executory
2 17E contracts, approximately $1.6 million of debtor's unsecured
6 1 pre-petition liabilities. $3.5 million of accounts receivable, $5
7 4 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. Kevco, Inc.'s
report reflects the transaction detail (see Footnote 1,32).
KEVCO MANUFACTURING INC. 2-1-01 MOR's Pg 1 of 2
14
ACCRUAL
BASIS
FORM LINE
NUMBER NUMBER FOOTNOTE / EXPLANATION
- ------- ------ ----------------------
1 15A Intercompany receivables/payables are from/to co-debtors Kevco
1 27A Management Co. (Case No. 401-40788-BJH-11), Kevco Distribution, LP
7 3 (Case No. 401-40789-BJH-11), Kevco Holding, Inc. (Case No.
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).
1 18 Sales tax owing is an accrual only and not yet due. Some of the
4 9 property taxes payable may be pre-petition. Once they are
4 13 identified, the monthly operating report will be adjusted.
1 22B 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."
1 25 Pursuant to Order dated February 12, 2001 and Supplemental Order
dated March 14, 2001, debtors were authorized to pay pre-petition
taxes, 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.
1 32 The direct charge to equity is due to the secured debt reduction
pursuant to the sale of Design Components (see Footnote 1,4). The
secured debt owed to Bank of America by Kevco, Inc. (Case No.
401-40783-BJH-11) has been guaranteed by all of its co-debtors (see
Footnote 1,15A); therefore, the secured debt is reflected as a
liability on all of the Kevco entities. The charge to equity is
simply an adjustment to the balance sheet. See Kevco, Inc.'s Monthly
Operating Report for details of the transaction.
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.
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