1 EXHIBIT 99.3 ITEM 7(b)1. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 2001 (UNAUDITED) (IN THOUSANDS) PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 2/28/2001 12/31/2000 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- ASSETS Current assets: Cash and cash equivalents 168 630 (630)(a) 168 Trade accounts receivable, net of allowance 7,759 3,764 310(a) 11,833 Income tax receivable -- -- -- -- Investments in marketable securities 11 -- -- 11 Inventories 22,643 9,090 (592)(a) 31,141 Prepaid expenses and other 701 113 (59)(a) 755 Deferred income tax assets 63 -- -- 63 ------------- ------------- ------------- ------------- Total current assets 31,345 13,597 (971) 43,971 ------------- ------------- ------------- ------------- Property, plant and equipment, at cost 18,800 342 1,859(a) 21,001 Less accumulated depreciation and amortization (10,263) (19) 19(a) (10,263) ------------- ------------- ------------- ------------- Net property and equipment 8,537 323 1,878 10,738 ------------- ------------- ------------- ------------- Other assets 89 -- 85(c) 174 ------------- ------------- ------------- ------------- Total assets 39,971 13,920 992 54,883 ============= ============= ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 9,432 1,816 (409)(a) 10,839 Accrued liabilities 1,284 1,158 (578)(a) 1,864 Current maturities of long-term debt 319 -- 312(b) 631 Line of credit 10,667 -- -- 10,667 Current maturities of prepetition debt 7 -- -- 7 ------------- ------------- ------------- ------------- Total current liabilities 21,709 2,974 (675)(a) 24,008 Deferred income tax liability 788 -- -- 788 Intercompany -- -- -- -- Long-term debt, net of current maturities 3,469 -- 12,613(b) 16,082 Long-term portion of prepetition debt, net of current maturities 249 -- -- 249 ------------- ------------- ------------- ------------- Total liabilities 26,215 2,974 11,938 41,127 ------------- ------------- ------------- ------------- Stockholders' equity: Preferred stock -- -- -- -- Common stock 53 -- -- 53 Sky divisional capital -- 10,419 (10,419)(a) -- Treasury stock (39) -- -- (39) Additional paid-in capital 6,320 -- -- 6,320 Retained earnings 7,422 527 (527)(a) 7,422 ------------- ------------- ------------- ------------- Total stockholders' equity 13,756 10,946 (10,946) 13,756 ------------- ------------- ------------- ------------- Total liabilities and stockholders' equity 39,971 13,920 992 54,883 ============= ============= ============= ============= The accompanying notes are an integral part of these condensed financial statements. 2 EXHIBIT 99.3 ITEM 7(b)2. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED) (IN THOUSANDS) PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 2/28/2001 2/28/2001 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- Net sales 42,540 22,090 -- 64,630 Cost of sales 37,795 18,612 -- 56,407 ------------- ------------- ------------- ------------- Gross profit 4,745 3,478 -- 8,223 ------------- ------------- ------------- ------------- Other costs and expenses: Selling, general and administrative 3,638 3,442 (74)(e) 7,006 Interest expense 730 -- 502(b) 1,242 10(c) Other income, net (94) (198) -- (292) ------------- ------------- ------------- ------------- Total other costs and expenses 4,274 3,244 512 7,956 ------------- ------------- ------------- ------------- Income (loss) before income tax expense 471 234 (512) 267 ------------- ------------- ------------- ------------- Income tax expense (benefit): Current 162 82 (174)(d) 70 Deferred 19 -- -- 19 ------------- ------------- ------------- ------------- Total income tax expense (benefit) 181 82 (174) 89 ------------- ------------- ------------- ------------- Net income (loss) $ 290 152 (338) 178 ============= ============= ============= ============= Net income (loss) per share (basic and diluted) $ 0.05 $ 0.03 ============= ============= Weighted average shares outstanding 5,284 5,284 ============= ============= The accompanying notes are an integral part of these condensed financial statements. 3 EXHIBIT 99.3 ITEM 7(b)3. IMPRESO, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED AUGUST 31, 2000 (UNAUDITED) (IN THOUSANDS) PRO FORMA EFFECTS OF: IMPRESO, INC. SKY DIVISION HISTORICAL HISTORICAL PRO FORMA 8/31/2000 8/31/2000 ADJUSTMENTS PRO FORMA ------------- ------------- ------------- ------------- Net sales 74,118 40,852 -- 114,970 Cost of sales 64,625 34,695 -- 99,320 ------------- ------------- ------------- ------------- Gross profit 9,493 6,157 -- 15,650 ------------- ------------- ------------- ------------- Other costs and expenses: Selling, general and administrative 6,838 6,899 (70)(e) 13,667 Interest expense 1,304 -- 1,001(b) 2,325 20(c) Other income, net (138) (423) -- (561) ------------- ------------- ------------- ------------- Total other costs and expenses 8,004 6,476 951 15,431 ------------- ------------- ------------- ------------- Income (loss) before income tax expense 1,489 (319) (951) 219 ------------- ------------- ------------- ------------- Income tax expense (benefit): Current 534 (108) (323)(d) 103 Deferred 23 -- -- 23 ------------- ------------- ------------- ------------- Total income tax expense (benefit) 557 (108) (323) 126 ------------- ------------- ------------- ------------- Net income (loss) $ 932 (211) (628) 93 ============= ============= ============= ============= Net income (loss) per share (basic and diluted) $ 0.18 $ 0.02 Weighted average shares outstanding 5,293 5,293 ============= ============= The accompanying notes are an integral part of these condensed financial statements. 4 EXHIBIT 99.3 ITEM 7(b)4. IMPRESO, INC. NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) a) To record purchase adjustments necessary to reflect fair value of assets acquired and liabilities assumed and to eliminate equity of acquired entity. b) To record acquisition indebtedness and the related interest expense. c) To record deferred financing costs related to acquisition indebtedness and the related amortization expense. d) To adjust the provision for income taxes for the effect of the preceding pro forma adjustments. e) To eliminate intercompany expenses allocated to Sky Division by Durango Georgia Converting LLC