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: 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 DEBTOR'S ACCOUNTANT
- --------------------------------------- -------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER JULY 5, 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
ASSETS AMOUNT MAY-01 MONTH MONTH
- ------ --------- ------ ----- -----
1. Unrestricted Cash (FOOTNOTE) 41,683 15,478
2. Restricted Cash
3. Total Cash 41,683 15,478 0 0
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 2,321,151
5. Inventory (FOOTNOTE) 14,793,828 1,890,477
6. Notes Receivable
7. Prepaid Expenses 196,584 129,240
8. Other (Attach List) 0 0 0 0
9. Total Current Assets 23,006,791 4,356,346 0 0
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 13,793,868
11. Less: Accumulated Depreciation (FOOTNOTE) (7,696,543) (2,766,863)
12. Net Property, Plant & Equipment 24,385,644 11,027,005 0 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 8,369,096 0 0 0
15. Other (Attach List) 13,541,943 32,518,036 0 0
16. Total Assets 69,303,474 47,901,387 0 0
POST PETITION LIABILITIES
17. Accounts Payable 127,980
18. Taxes Payable (FOOTNOTE) 143,932
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 634,232 0 0
23. Total Post Petition Liabilities 906,144 0 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 38,219,089
25. Priority Debt (FOOTNOTE) 1,383,756
26. Unsecured Debt (FOOTNOTE) 5,139,545 3,621,987
27. Other (Attach List) 197,008,999 197,951,008 0 0
28. Total Pre Petition Liabilities 279,417,364 239,792,084 0 0
29. Total Liabilities 279,417,364 240,698,228 0 0
EQUITY
30. Pre Petition Owners' Equity (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (20,230,061)
32. Direct Charges To Equity (Attach Explanation Footnote) 37,540,512
33. Total Equity (192,796,841) 0 0
34. Total Liabilities and Equity 47,901,387 0 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
ASSETS AMOUNT MAY-01 MONTH MONTH
- ------ --------- ------ ----- -----
A. 0 0
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0 0 0
A. Goodwill: Consolidated Forest Products (FOOTNOTE) 8,369,096
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF
AMORTIZATION - LINE 14 8,369,096 0 0 0
A. Intercompany Receivables (FOOTNOTE) 13,541,943 32,518,036
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 32,518,036 0 0
POST PETITION LIABILITIES
A. Accrued Payroll 409,289
B. Accrued Liabilities (FOOTNOTE) 224,943
C.
D.
E.
TOTAL OTHER POST PETITION
LIABILITIES - LINE 22 634,232 0 0
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 69,451,008
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 27 197,008,999 197,951,008 0 0
4
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH QUARTER
REVENUES MAY-01 MONTH MONTH TOTAL
- -------- ------ ----- ----- -------
1. Gross Revenues 2,829,039 2,829,039
2. Less: Returns & Discounts (101,473) (101,473)
3. Net Revenue 2,727,566 0 0 2,727,566
COST OF GOODS SOLD
4. Material 2,099,757 2,099,757
5. Direct Labor 129,867 129,867
6. Direct Overhead 121,057 121,057
7. Total Cost of Goods Sold 2,350,681 0 0 2,350,681
8. Gross Profit 376,885 0 0 376,885
OPERATING EXPENSES
9. Officer / Insider Compensation 17,790 17,790
10. Selling & Marketing 5,227 5,227
11. General & Administrative 36,358 36,358
12. Rent & Lease 15,490 15,490
13. Other (Attach List) 321,418 0 0 321,418
14. Total Operating Expenses 396,283 0 0 396,283
15. Income Before Non-Operating
Income & Expense (19,398) 0 0 (19,398)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) (2,542) 0 0 (2,542)
17. Non-Operating Expense (Att List) 245,551 0 0 245,551
18. Interest Expense 0
19. Depreciation / Depletion 2,110 2,110
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & Expenses (245,119) 0 0 (245,119)
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) (264,517) 0 0 (264,517)
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
MONTH QUARTER
OPERATING EXPENSES MAY-01 MONTH MONTH TOTAL
- ------------------ ------ ----- ----- -------
A. Payroll & Employee Benefits 207,732 207,732
B. Insurance Expense 60,379 60,379
C. Utilities and Telephone 6,582 6,582
D. Taxes 46,725 46,725
E. 0
TOTAL OTHER OPERATING EXPENSES - LINE 13 321,418 0 0 321,418
OTHER INCOME & EXPENSES
A. Miscellaneous Income (2,542) (2,542)
B. 0
C. 0
TOTAL NON-OPERATING INCOME - LINE 16 (2,542) 0 0 (2,542)
A. Interco. working capital charge 20,900 20,900
B. Loss on sale of Design Comp. (FOOTNOTE) 224,651 224,651
C. 0
D.
TOTAL NON-OPERATING EXPENSE - LINE 17 245,551 0 0 245,551
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 QUARTER
DISBURSEMENTS MAY-01 MONTH MONTH TOTAL
- ----------------- ------ ----- ----- -------
1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE
RECEIPTS FROM OPERATIONS
2. Cash Sales
COLLECTION OF ACCOUNTS RECEIVABLE
3. Pre Petition
4. Post Petition
5. Total Operating Receipts
NON-OPERATING RECEIPTS
6. Loans & Advances (Attach List)
7. Sale of Assets
8. Other (Attach List)
9. Total Non-Operating Receipts
10. Total Receipts
11. Total Cash Available
OPERATING DISBURSEMENTS
12. Net Payroll
13. Payroll Taxes Paid
14. Sales, Use & Other Taxes Paid
15. Secured / Rental / Leases
16. Utilities
17. Insurance
18. Inventory Purchases
19. Vehicle Expenses
20. Travel
21. Entertainment
22. Repairs & Maintenance
23. Supplies
24. Advertising
25. Other (Attach List)
26. Total Operating Disbursements
REORGANIZATION DISBURSEMENTS
27. Professional Fees
28. U.S. Trustee Fees
29. Other (Attach List)
30. Total Reorganization Expenses
31. Total Disbursements
32. Net Cash Flow
33. Cash - End of Month
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO ACCRUAL BASIS - 3
MAY, 2001
CASE NUMBER: 401-40784-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 MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT MAY-01 MONTH MONTH
- ------------------------- --------- ------ ----- -----
1. 0 - 30 1,898,279
2. 31 - 60 388,094
3. 61 - 90 34,778
4. 91 +
5. Total Accounts Receivable 7,974,696 2,321,151 0 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 7,974,696 2,321,151 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 --
2. State --
3. Local --
4. Other (See Below) --
5. Total Taxes Payable -- -- -- -- --
6. Accounts Payable 98,172 29,808 127,980
MONTH: MAY-01
---------------
STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding ** 61,534 (61,534) 0
2. FICA - Employee ** 39,597 (39,597) 0
3. FICA - Employer ** 39,597 (39,597) 0
4. Unemployment 1,244 (1,244) 0
5. Income 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 141,972 (141,972) 0
STATE AND LOCAL
8. Withholding 8,686 (8,686) 0
9. Sales (FOOTNOTE) 10,984 10,984
10. Excise 0
11. Unemployment 5,191 (5,191) 0
12. Real Property 0
13. Personal Property (FOOTNOTE) 16,621 116,327 132,948
14. Other (Attach List) 0
15. Total State And Local 27,605 130,204 (13,877) 143,932
16. Total Taxes 27,605 272,176 (155,849) 143,932
* 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: MAY-01
---------------
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: Bank of America GWJones Exch Bank Other Accounts TOTAL
B. ACCOUNT NUMBER: 3751764595 0005006226 (Attach List)
C. PURPOSE (TYPE): DIP Disbursement-BB DIP Disbursement-DF
1. Balance Per Bank Statement 44,105 43,659 -- 87,764
2. Add: Total Deposits Not Credited 17,733 -- 17,733
3. Subtract: Outstanding Checks (43,802) (57,956) -- (101,758)
4. Other Reconciling Items -- --
5. Month End Balance Per Books 303 3,436 -- 3,739
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 11,739
Reclass to Accounts Payable
13. Total Cash - End of Month (FOOTNOTE) 15,478
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40784-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
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
---- ------- ------ ----------
1. Lee Denham Payroll/severance 134,620
2. Lee Denham Expense Reimb. 254
3. Jim Connors Consulting fees and expenses 17,790 69,888
4.
5. (Attach List)
6. Total Payments To Insiders 17,790 204,762
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 TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- --------
1. Bank of America (FOOTNOTE) N/A $ 3,680,978 $ 38,219,089
2. Status of Leases Payable (FOOTNOTE) Unknown
3.
4.
5. (Attach List)
6. TOTAL $ -- $ 3,680,978 $ 38,219,089
This form x does does not have related footnotes on Footnotes Supplement.
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11
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40784-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 X
insurance coverages 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 Lexington, Allianz 5/29/00-9/1/01 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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12
CASE NAME: KEVCO MANUFACTURING, LP
CASE NUMBER: 401-40784-BJH-11
MONTH: MAY 31, 2001
-------------------
FOOTNOTES SUPPLEMENT ACCRUAL BASIS
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------ ----------- ----------------------
1 1 Pursuant to the February 12, 2001 Order (1) Authorizing
3 1 Continued 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 4,5 (A) Pursuant to an Asset Purchase Agreement approved by the
1 10,11 Court on February 23, 2001 and effective as of the same date
1 14A among Kevco, Inc., Kevco Manufacturing, LP, Wingate Management
1 24 Co. II, LP and Adorn, LLC, certain assets and liabilities of
1 26 Design Components, a division of Kevco Manufacturing, were
2 17B transferred to Adorn, LLC. At the effective date of purchase,
6 1 Buyer assumed certain executory contracts, approximately $1.6
7 4 million of debtor'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. Kevco, Inc.'s report
reflects the transaction detail (see Footnote 1,32).
(B) Pursuant to an Asset Purchase Agreement approved by the
Court on April 3, 2001 and effective as of the same date among
Universal Forest Products Eastern Division, Inc. and Kevco
Manufacturing, LP, Universal 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. In the course of recording
this transaction, the goodwill associated with the purchase of
Consolidated Forest Products was eliminated.
(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 15A Intercompany receivables/payables are from/to co-debtors Kevco
1 27A Management Co. (Case No. 401-40788-BJH-11), Kevco Distribution,
7 3 LP (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, 13 property taxes payable may be pre-petition. Once they are
identified, the monthly operating report will be adjusted.
KEVCO MANUFACTURING INC. MOR's Pg. 1 of 2
13
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------ ----------- ----------------------
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 charges to equity are due to secured debt reductions
pursuant to sales of two of Kevco Manufacturing, LP's operating
divisions (Design Components and 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.
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.
KEVCO MANUFACTURING INC. MOR's Pg. 2 of 2