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: MAY 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/ Wilford W. Simpson TREASURER
- --------------------------------------- ---------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON JULY 5, 2001
- --------------------------------------- ---------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner ACCOUNTANT FOR DEBTOR
- --------------------------------------- ---------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER JULY 5, 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
ASSETS AMOUNT MAY-01 MONTH MONTH
- ------ ------------ ------ ----- -----
1. Unrestricted Cash (FOOTNOTE) 6,557,974 16,261,944
2. Restricted Cash
3. Total Cash 6,557,974 16,261,944 0 0
4. Accounts Receivable (Net)
5. Inventory
6. Notes Receivable
7. Prepaid Expenses (FOOTNOTE) 3,450,681 2,101,323
8. Other (Attach List) 263,606 8,794 0 0
9. Total Current Assets 10,272,261 18,372,061 0 0
10. Property, Plant & Equipment 3,285,885 3,239,512
11. Less: Accumulated Depreciation/Depletion (1,753,163) (1,933,827)
12. Net Property, Plant & Equipment 1,532,722 1,305,685 0 0
13. Due From Insiders
14. Other Assets - Net of Amortization
(Attach List) 36,082 22,298 0 0
15. Other (Attach List) 153,399,371 145,695,477 0 0
16. Total Assets 165,240,436 165,395,521 0 0
POST PETITION LIABILITIES
17. Accounts Payable 96,453
18. Taxes Payable 9,523
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) (FOOTNOTE) 3,873,149 0 0
23. Total Post Petition Liabilities 3,979,125 0 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 38,219,089
25. Priority Debt (FOOTNOTE) 200,832 91,281
26. Unsecured Debt 1,779,701 1,400,736
27. Other (Attach List) 242,243,558 285,367,952 0 0
28. Total Pre Petition Liabilities 320,109,155 325,079,058 0 0
29. Total Liabilities 320,109,155 329,058,183 0 0
EQUITY
30. Pre Petition Owners' Equity (154,868,719)
31. Post Petition Cumulative Profit Or (Loss) (2,686,651)
32. Direct Charges To Equity (Attach
Explanation Footnote) (6,107,292)
33. Total Equity (163,662,662) 0 0
34. Total Liabilities and Equity 165,395,521 0 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
ASSETS AMOUNT MAY-01 MONTH MONTH
- ------ ----------- ------ ----- -----
A. Security Deposit 8,794 8,794
B. Cash Surrender Value: Life Ins 254,812
C
D
E
TOTAL OTHER ASSETS - LINE 8 263,606 8,794 0 0
A. Organizational Costs 36,082 22,298
B
C
D
E
TOTAL OTHER ASSETS NET OF
AMORTIZATION - LINE 14 36,082 22,298 0 0
A. Intercompany Receivables (FOOTNOTE) 113,743,558 105,724,039
B. Intercompany Royalties 39,655,813 39,971,438
C
D
E
TOTAL OTHER ASSETS - LINE 15 153,399,371 145,695,477 0 0
POST PETITION LIABILITIES
A. Accrued Liabilities Other 1,188,410
B. Deferred Compensation 960,371
C. 401K Contribution 13,519
D. Accrued Health Claims 722,049
E. Accrued Payroll 860,288
F. Acc. Professional Fees 128,512
G
TOTAL OTHER POST PETITION
LIABILITIES - LINE 22 3,873,149 0 0
PRE PETITION LIABILITIES
A. Intercompany Payables (FOOTNOTE) 113,743,558 156,867,952
B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000
C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000
D
E
TOTAL OTHER PRE PETITION
LIABILITIES - LINE 27 242,243,558 285,367,952 0 0
4
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40788-BJH-11
INCOME STATEMENT
MONTH QUARTER
REVENUES MAY-01 MONTH 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 57,754 57,754
10. Selling & Marketing (77) (77)
11. General & Administrative 67,488 67,488
12. Rent & Lease 39,050 39,050
13. Other (Attach List) 157,723 0 0 157,723
14. Total Operating Expenses 321,938 0 0 321,938
15. Income Before Non-Operating
Income & Expense (321,938) 0 0 (321,938)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 72,152 0 0 72,152
17. Non-Operating Expense (Att List) 581 0 0 581
18. Interest Expense 0
19. Depreciation / Depletion 51,670 51,670
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & Expenses 19,901 0 0 19,901
REORGANIZATION EXPENSES
23. Professional Fees 271,153 271,153
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 271,153 0 0 271,153
27. Income Tax 0
28. Net Profit (Loss) (573,190) 0 0 (573,190)
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 QUARTER
OPERATING EXPENSES MAY-01 MONTH MONTH TOTAL
- ------------------ ------ ----- ----- -------
A. Payroll 115,459 115,459
B. Insurance 23,898 23,898
C. Utilities & Telephone 570 570
D. Taxes 17,796 17,796
E 0
TOTAL OTHER OPERATING
EXPENSES - LINE 13 157,723 0 0 157,723
OTHER INCOME & EXPENSES
A. Interest and Misc. Income 51,252 51,252
B. Intercompany Operating Fees 20,900 20,900
C 0
D 0
E 0
TOTAL NON-OPERATING
INCOME - LINE 16 72,152 0 0 72,152
A. Correction of Error on Books (FOOTNOTE) 581 581
B 0
C 0
D 0
E 0
TOTAL NON-OPERATING
EXPENSE - LINE 17 581 0 0 581
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 QUARTER
DISBURSEMENTS MAY-01 MONTH MONTH TOTAL
- ----------------- ------ ----- ----- -------
1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE
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 MANAGEMENT, INC. SUPPLEMENT TO ACCRUAL BASIS - 3
MAY, 2001
CASE NUMBER: 401-40788-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
------- --- ---- ------- ---- --------- -----
1 CASH-BEGINNING OF MONTH -- (66,617) 15,894,069 5,010 6,050 1,000 15,839,512
RECEIPTS FROM OPERATIONS
2 CASH SALES -- -- --
COLLECTION OF ACCOUNTS RECEIVABLE
3 PRE PETITION -- -- --
4 POST PETITION 1,632,245 3,693,478 5,325,723
5 TOTAL OPERATING RECEIPTS 1,632,245 3,693,478 -- -- -- -- 5,325,723
NON OPERATING RECEIPTS
6 LOANS & ADVANCES -- --
7 SALE OF ASSETS 4,482,109 484,077 4,966,186
8 OTHER 90,909 -- 157,652 -- -- 106,188 354,749
INTERCOMPANY TRANSFERS (478,997) (1,518,081) 2,103,266 -- -- (106,188) --
SALE EXPENSE REIMBURSEMENT
LIFE INSURANCE CASH VALUE 107,606
RENT 32,000
TAX REFUND 106,188
MISC 58,909 --
INTEREST INCOME 50,046
9 TOTAL NON OPERATING RECEIPTS 4,094,021 (1,034,004) 2,260,918 -- -- -- 5,320,935
10 TOTAL RECEIPTS 5,726,266 2,659,474 2,260,918 -- -- -- 10,646,658
11 CASH AVAILABLE 5,726,266 2,592,857 18,154,987 5,010 6,050 1,000 26,486,170
OPERATING DISBURSEMENTS
12 NET PAYROLL 700,664 526,941 203,943 1,431,548
13 PAYROLL TAXES PAID -- 647,797 647,797
14 SALES, USE & OTHER TAXES PAID 11,522 -- -- 11,522
15 SECURED/RENTAL/LEASES 177,239 36,916 37,642 251,797
16 UTILITIES 67,692 10,668 66,785 145,145
17 INSURANCE 14,687 -- 490,925 505,612
18 INVENTORY PURCHASES 10,627 1,173,682 -- 1,184,309
19 VEHICLE EXPENSE 17,018 16,375 -- 33,393
20 TRAVEL 9,370 25,190 864 35,424
21 ENTERTAINMENT 4,182 524 107 4,813
22 REPAIRS & MAINTENANCE 10,148 28,139 -- 38,287
23 SUPPLIES 1,839 16,336 12,624 30,799
24 ADVERTISING -- -- -- --
25 OTHER 4,701,250 742,608 235,456 -- -- -- 5,679,314
LOAN PAYMENTS 4,482,109 484,077 -- 4,966,186
FREIGHT 87,851 144,842 232,693
CONTRACT LABOR 1,183 346 59,580 61,109
401 K PAYMENTS -- 54,196 54,196
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC 130,107 113,343 121,680 365,130
26 TOTAL OPERATING DISBURSEMENTS 5,726,238 2,577,379 1,696,143 -- -- -- 9,999,760
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -- 196,900 196,900
28 US TRUSTEE FEES -- --
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- -- 196,900 -- -- -- 196,900
31 TOTAL DISBURSEMENTS 5,726,238 2,577,379 1,893,043 -- -- -- 10,196,660
32 NET CASH FLOW 28 82,095 367,875 -- -- -- 449,998
33 CASH-END OF MONTH 28 15,478 16,261,944 5,010 6,050 1,000 16,289,510
8
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40788-BJH-11
SCHEDULED MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT MAY-01 MONTH 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: MAY-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) 0
5. Total Taxes Payable 0 0 0 0 0
6. Accounts Payable 52,165 41,850 2,438 96,453
MONTH: MAY-01
------------
STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT ENDING TAX
FEDERAL LIABILITY * WITHHELD AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- ----------------------- ------------- ---------
1. Withholding ** 48,980 (48,980) 0
2. FICA - Employee ** 19,738 (19,738) 0
3. FICA - Employer ** 19,739 (19,739) 0
4. Unemployment 1 (1) 0
5. Income 0
6. Other (Attach List)
7. Total Federal Taxes 0 88,458 (88,458) 0
STATE AND LOCAL
8. Withholding 311 (311) 0
9. Sales (FOOTNOTE) 6,412 6,412
10. Excise 0
11. Unemployment 104 (104) 0
12. Real Property (FOOTNOTE) 0
13. Personal Property 2,057 1,054 3,111
14. Other (Attach List) 0
15. Total State And Local 8,469 1,469 (415) 9,523
16. Total Taxes 8,469 89,927 (88,873) 9,523
* 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: MAY-01
-----------------
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: Bank of America Bank of America Other Accounts TOTAL
B. ACCOUNT NUMBER: 1295026976 3751629012 (Attach List)
C. PURPOSE (TYPE): Operating Account DIP Disbursement Account
1. Balance Per Bank Statement 1,234,337 319,981 14,901,412 16,455,730
2. Add: Total Deposits Not Credited 0 0
3. Subtract: Outstanding Checks (44,159) (24,177) (68,336)
4. Other Reconciling Items 70,180 (196,630) (126,450)
5. Month End Balance Per Books 1,260,358 319,981 14,680,605 16,260,944
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 0 0
CASH
12. Currency On Hand 1,000
13. Total Cash - End of Month (Footnote) 16,261,944
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: MAY-01
--------------
BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5
-------------------- ----------- ----------- -----------
Bank of America/ Bank of Bank of
A. BANK: Nations Funds America America TOTAL
B. ACCOUNT NUMBER: 846713 3751775241 3750801912 OTHER BANK
Kevco, Inc. S-T ACCOUNTS
C. PURPOSE (TYPE): Investment Stay Pay Payroll-Mgmt
1. Balance Per Bank Statement 13,742,731 984,081 15,526 14,742,338
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items 0
5. Month End Balance Per Books 13,742,731 984,081 15,526 14,742,338
6. Number of Last Check Written N/A N/A N/A
INVESTMENT ACCOUNTS
DATE OF TYPE OF
BANK, ACCOUNT NAME & NUMBER PURCHASE 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: APRIL-01
------------------
BANK RECONCILIATIONS Account # 6 Account # 7 Account # 8
- -------------------- ----------- ----------- -----------
A. BANK: Bank of America Bank of America TOTAL
B. ACCOUNT NUMBER: 1295027040 3750768628 OTHER BANK
C. PURPOSE (TYPE): Payroll-Dist Payroll-MFG ACCOUNTS
1. Balance Per Bank Statement 20,171 138,903 159,074
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks (24,177) (24,177)
4. Other Reconciling Items (196,630) (196,630)
5. Month End Balance Per Books (200,636) 138,903 (61,733)
6. Number of Last Check Written N/A N/A 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 0 0
12
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40788-BJH-11
MONTH: MAY-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
TOTAL
TYPE OF AMOUNT PAID TO
NAME PAYMENT PAID DATE
---- ------- ------ --------
1. Sharon Romere Expense Reimb. 0 240
2. Joe Tomczak Expense Reimb. 255 626
3. John Wittig Expense Reimb. 0 263
4. Sharon Romere Payroll 8,846 30,769
5. Joe Tomczak Payroll 22,115 76,923
6. John Wittig Payroll 15,481 53,173
7. Will Simpson Payroll 11,057 38,251
Other (see attached) 0 19,000
8. Total Payments To Insiders 57,754 200,245
PROFESSIONALS
DATE OF
COURT ORDER TOTAL TOTAL
AUTHORIZING AMOUNT AMOUNT PAID TO INCURRED
NAME PAYMENT APPROVED PAID DATE & UNPAID *
---- ------------ -------- ------- ------ ----------
1. Haynes and Boone 3/20/01 492,647 492,647 492,647 531,164
2. Lain, Faulkner & Co., P.C. 3/20/01 93,558 93,558 93,558 194,623
3.
4.
5. (Attach List)
6. Total Payments To Professionals 586,205 586,205 586,205 725,787
* 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) N/A 3,680,978 38,219
2. Leases Payable (FOOTNOTE) (Not Available)
3.
4.
5. (Attach List)
6. TOTAL 0 3,680,978 38,219
This form X does does not have related footnotes on Footnotes Supplement.
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13
CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 6
PAYMENTS TO INSIDERS AND PROFESSIONALS MONTH: MAY-01
------------------
INSIDERS
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
---- ------- ------ ----------
A. Bill Estes Director's Fees 6,500
B. Peter McKee Director's Fees 6,000
C. Richard Nevins Director's Fees 6,500
D.
E.
F.
G.
H.
TOTAL OTHER PAYMENTS
TO INSIDERS - LINE 5 19,000
PROFESSIONALS
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED &
NAME PAYMENT APPROVED PAID TO DATE UNPAID *
---- ----------- -------- ----- ---------- -----------
A.
B.
C.
D.
E.
F.
G.
H.
TOTAL OTHER PAYMENTS
TO PROFESSIONALS-LINE 5
* 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 AMOUNTS MONTH PETITION
---------------- -------- ----- --------
A.
B.
C.
D.
E.
STATUS OF OTHER CREDITORS - LINE 5
14
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 7
CASE NUMBER: 401-40788-BJH-11
MONTH: MAY-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 X
in effect?
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 Lexingon, Allianz 5/29/00-9/1/01 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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15
CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS
MONTH: MAY-01
-------------------
ACCRUAL BASIS LINE
FORM NUMBER NUMBER FOOTNOTE/EXPLANATION
----------- ------ ----------------------
1 1 Pursuant to the February 12, 2001 Order (1) Authorizing Continued Use of
3 1 Existing Forms and Records; (2) Authorizing Maintenance of Existing
5 13 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. 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. Prepaid 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
1 27A Manufacturing, LP (Case No. 401-40784-BJH-11), Kevco Distribution, LP (Case
7 3 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). Although intercompany balances
increased post-petition, the increase has not been reflected as
post-petition assets and liabilities.
1 15A Intercompany assets were inadvertently misstated on Debtor's Schedules. The
1 32 February adjustment to equity corrected the error. The April adjustment to
equity is due to a secured debt reduction pursuant to the sale of Kevco
Manufacturing, LP's operating division (Sunbelt Wood) and the asset sale of
the South Region of Kevco Distribution, as well as a direct cash payment of
$15 million (see footnote 1,24). 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 1,27A); 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.
1 22 The Debtor records on its books accruals for certain liabilities based on
2 17A 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." During an internal audit of the accrued liabilities account
during April, an error was discovered and corrected.
16
ACCRUAL BASIS LINE
FORM NUMBER NUMBER FOOTNOTE/EXPLANATION
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1 1 (A) Pursuant to an Asset Purchase Agreement approved by the Court on
1 24 February 23, 2001 and effective as of the same date among Kevco, Inc., Kevco
6 1 Manufacturing, LP, Wingate Management Co. II, LP and Adorn LLC, certain
7 4 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.
(B) Pursuant to an Asset Purchase Agreement approved by the Court on April
3, 2001 and effective as of the same date, Universal Forest Products Eastern
Division, Inc. purchased the assets (inventory, equipment, machinery and
five of the seven facilities at which Sunbelt Wood Components Division
operates) of the Sunbelt division of Kevco Manufacturing, LP. Approximately
$7 million in sales proceeds were paid directly to Bank of America thereby
reducing pre-petition secured debt.
(C) Debtor paid $15 million from available cash during April to Bank of
America to reduce pre-petition secured debt.
(D) Pursuant to an Asset Purchase Agreement approved by the Court on April
25, 2001 and effective as of April 30, 2001, Alliance Investment and
Management Company, Inc. purchased most of the assets (inventory, equipment,
machinery and two of seven facilities) of the South Region of Kevco
Distribution, LP. Approximately $4 million in sales proceeds were paid
directly to Bank of America 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.
4 9,12 Sales/property tax liabilities represent accruals of tax and are not yet
due.
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.