EXHIBIT 99.1
CASE NAME: KEVCO, INC. ACCRUAL BASIS
CASE NUMBER: 401-40783-BJH-11
JUDGE: BARBARA J. HOUSER
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
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FORT WORTH DIVISION
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MONTHLY OPERATING REPORT
MONTH ENDING: JUNE 30, 2001
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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:
EXECUTIVE VICE PRESIDENT AND
/s/ Wilford W. Simpson CHIEF FINANCIAL OFFICER
- --------------------------------------- ------------------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON AUGUST 24, 2001
- --------------------------------------- ------------------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner ACCOUNTANT FOR DEBTOR
- --------------------------------------- ------------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER AUGUST 24, 2001
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Printed Name of Preparer Date
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 1
CASE NUMBER: 401-40783-BJH-11
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 MONTH
- ------ --------- ------ ------- -----
1. Unrestricted Cash (FOOTNOTE) 1,000 1,000 1,000
2. Restricted Cash
3. Total Cash 1,000 1,000 1,000
4. Accounts Receivable (Net)
5. Inventory
6. Notes Receivable
7. Prepaid Expenses
8. Other (Attach List) 459,000 2,453,000 3,154,750
9. Total Current Assets 460,000 2,454,000 3,155,750
10. Property, Plant & Equipment
11. Less: Accumulated Depreciation/Depletion
12. Net Property, Plant & Equipment
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 4,790,071 6,974,466 6,894,693
15. Other (Attach List) 613,299,110 310,687,331 310,687,331
16. Total Assets 618,549,181 320,115,797 320,737,774
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 44,666,278 69,906,981
23. Total Post Petition Liabilities 44,666,278 69,906,981
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 38,219,089 15,018,882
25. Priority Debt
26. Unsecured Debt
27. Other (Attach List) 136,505,780 141,833,049 141,833,049
28. Total Pre Petition Liabilities 212,390,844 180,052,138 156,851,931
29. Total Liabilities 212,390,844 224,718,416 226,758,912
EQUITY
30. Pre Petition Owners' Equity 406,158,337 406,158,337
31. Post Petition Cumulative Profit Or (Loss) (1,264,822) (2,679,467)
32. Direct Charges To Equity (Attach Explanation) (FOOTNOTE) (309,496,134) (309,500,008)
33. Total Equity 95,397,381 93,978,862
34. Total Liabilities and Equity 320,115,797 320,737,774
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. SUPPLEMENT TO
CASE NUMBER: 401-40783-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 MONTH
- ------ --------- ------ ------- -----
A. Prepaid Escrowed Retention Pmts. 459,000 253,000 253,000
B. Receivable from Adorn (FOOTNOTE) 2,200,000 2,901,750
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 459,000 2,453,000 3,154,750
A. Capitalized loan costs 4,790,071 4,470,981 4,391,208
B. Investment in Subsidiaries 2,503,485 2,503,485
C.
D.
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 4,790,071 6,974,466 6,894,693
A. Intercompany Receivables (FOOTNOTE) 306,649,555
B. Interco. Promissory Note (FOOTNOTE) 235,981,314 235,981,314 235,981,314
C. Interco. Royalties (FOOTNOTE) 70,668,241 74,706,017 74,706,017
D.
E.
TOTAL OTHER ASSETS - LINE 15 613,299,110 310,687,331 310,687,331
POST PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 40,103,938 63,989,465
B. Accrued Interest on Notes/Bonds 4,562,340 5,917,516
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 44,666,278 69,906,981
PRE PETITION LIABILITIES
A. Interco. Liabilities (FOOTNOTE) 8,005,780 8,005,780 8,005,780
B. 10 3/8% Sr. Sub. Notes 105,000,000 105,000,000 105,000,000
C. Senior Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000
D. Accrued Interest on Notes/Bonds 5,327,269 5,327,269
E.
TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 136,505,780 141,833,049 141,833,049
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40783-BJH-11
INCOME STATEMENT
MONTH MONTH QUARTER
REVENUES MAY-01 JUNE-01 MONTH TOTAL
- -------- ------ ------- ------- -------
1. Gross Revenues
2. Less: Returns & Discounts
3. Net Revenue
COST OF GOODS SOLD
4. Material
5. Direct Labor
6. Direct Overhead
7. Total Cost Of Goods Sold
8. Gross Profit
OPERATING EXPENSES
9. Officer/Insider Compensation
10. Selling & Marketing
11. General & Administrative
12. Rent & Lease
13. Other (Attach List)
14. Total Operating Expenses
15. Income Before Non-Operating Income & Expense
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 23,197 23,197
17. Non-Operating Expense (Att List)
18. Interest Expense 1,640,768 1,414,645 3,055,413
19. Depreciation/Depletion
20. Amortization
21. Other (Attach List)
22. Net Other Income & Expenses (1,617,571) (1,414,645) (3,032,216)
REORGANIZATION EXPENSES
23. Professional Fees
24. U.S. Trustee Fees
25. Other (Attach List)
26. Total Reorganization Expenses
27. Income Tax
28. Net Profit (Loss) (1,617,571) (1,414,645) (3,032,216)
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. SUPPLEMENT TO
CASE NUMBER: 401-40783-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
MONTH MONTH QUARTER
OPERATING EXPENSES MAY-01 JUNE-01 MONTH TOTAL
- ------------------ ------ ------- ------- -------
A.
B.
C.
D.
E.
TOTAL OTHER OPERATING EXPENSES - LINE 13
OTHER INCOME & EXPENSES
A. Interco. Interest Income (FOOTNOTE) 23,197 23,197
B.
C.
D.
E.
TOTAL NON-OPERATING INCOME - LINE 16 23,197 23,197
A.
B.
C.
D.
E.
TOTAL NON-OPERATING EXPENSE - LINE 17
REORGANIZATION EXPENSES
A.
B.
C.
D.
E.
TOTAL OTHER REORGANIZATION EXPENSES - LINE 25
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40783-BJH-11
CASH RECEIPTS AND MONTH MONTH QUARTER
DISBURSEMENTS MAY-01 JUNE-01 MONTH TOTAL
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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, INC. SUPPLEMENT TO ACCRUAL BASIS - 3
JUNE, 2001
CASE NUMBER: 401-40783-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
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1 CASH-BEGINNING OF MONTH 28 15,478 16,261,944 5,010 6,050 1,000 16,289,510
RECEIPTS FROM OPERATIONS
2 CASH SALES -- -- --
COLLECTION OF ACCOUNTS RECEIVABLE
3 PRE PETITION -- -- --
4 POST PETITION 155,454 408,048 563,502
5 TOTAL OPERATING RECEIPTS 155,454 408,048 -- -- -- -- 563,502
NON OPERATING RECEIPTS
6 LOANS & ADVANCES -- --
7 SALE OF ASSETS 300,000 13,335,176 365,203 14,000,379
8 OTHER 49,423 1,171 50,046 -- -- -- 100,640
INTERCOMPANY TRANSFERS 466,052 (275,474) (190,578) -- -- --
SALE EXPENSE REIMBURSEMENT
LIFE INSURANCE CASH VALUE
RENT
TAX REFUND
MISC. 49,423 --
INTEREST INCOME 50,046
9 TOTAL NON OPERATING RECEIPTS 815,475 13,060,873 224,671 -- -- -- 14,101,019
10 TOTAL RECEIPTS 970,929 13,468,921 224,671 -- -- -- 14,664,521
11 CASH AVAILABLE 970,957 13,484,399 16,486,615 5,010 6,050 1,000 30,954,031
OPERATING DISBURSEMENTS
12 NET PAYROLL 166,627 66,305 169,505 402,437
13 PAYROLL TAXES PAID -- 167,389 167,389
14 SALES, USE & OTHER TAXES PAID 281 -- 281
15 SECURED/RENTAL/LEASES 215,126 6,622 38,617 260,365
16 UTILITIES 76,221 48,459 3,480 128,160
17 INSURANCE 31,699 -- 166,527 198,226
18 INVENTORY PURCHASES 3,055 28,101 -- 31,156
19 VEHICLE EXPENSE 906 -- -- 906
20 TRAVEL 10,030 8,043 143 18,216
21 ENTERTAINMENT -- -- -- --
22 REPAIRS & MAINTENANCE 6,736 2,505 2,703 11,944
23 SUPPLIES 1,157 8,190 30,130 39,477
24 ADVERTISING --
25 OTHER 459,119 13,011,037 10,134,199 379 382 -- 23,605,116
LOAN PAYMENTS 300,000 12,883,776 10,000,000 23,183,776
FREIGHT 15,800 112,046 4,535 132,381
CONTRACT LABOR 1,917 -- 23,505 25,422
401 K PAYMENTS -- 40,675 40,675
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS 3,746 3,746
MISC. 141,402 15,215 61,738 379 382 219,116
26 TOTAL OPERATING DISBURSEMENTS 970,957 13,179,262 10,712,693 379 382 -- 24,863,673
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES 301,398 347,517 648,915
28 US TRUSTEE FEES -- 31,250 31,250
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- 301,398 378,767 -- -- -- 680,165
31 TOTAL DISBURSEMENTS 970,957 13,480,660 11,091,460 379 382 -- 25,543,838
32 NET CASH FLOW (28) (11,739) 10,866,789 (379) (382) -- (10,879,317)
33 CASH - END OF MONTH -- 3,739 5,395,155 4,631 5,668 1,000 5,410,193
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40783-BJH-11
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT MAY-01 JUNE-01 MONTH
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1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net)
AGING OF POST PETITION MONTH: JUNE-01
TAXES AND PAYABLES ---------------
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
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1. Federal
2. State
3. Local
4. Other (Attach List)
5. Total Taxes Payable
6. Accounts Payable
MONTH: JUNE-01
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STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding **
2. FICA - Employee **
3. FICA - Employer **
4. Unemployment
5. Income
6. Other (Attach List)
7. Total Federal Taxes
STATE AND LOCAL
8. Withholding
9. Sales
10. Excise
11. Unemployment
12. Real Property
13. Personal Property
14. Other (Attach List)
15. Total State And Local
16. Total Taxes
* 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 does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. ACCRUAL BASIS - 5
CASE NUMBER: 401-40783-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: JUNE-01
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BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- -------------- -----------
A. BANK: Bank of America Other Accounts TOTAL
B. ACCOUNT NUMBER: 3750768521 (Attach List)
C. PURPOSE (TYPE): DIP Account
1. Balance Per Bank Statement 1,000 1,000
2. Add: Total Deposits Not Credited
3. Subtract: Outstanding Checks
4. Other Reconciling Items
5. Month End Balance Per Books 1,000 1,000
6. Number of Last Check Written 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
13. Total Cash - End of Month 1,000
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40783-BJH-11
MONTH: JUNE-01
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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.
2.
3.
4.
5. (Attach List)
6. Total Payments To Insiders
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) 23,200,207 15,018,882
2.
3.
4.
5. (Attach List)
6. TOTAL 23,200,207 15,018,882
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. ACCRUAL BASIS - 7
CASE NUMBER: 401-40783-BJH-11
MONTH: JUNE-01
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QUESTIONNAIRE
YES NO
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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
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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
-------------- ------- -------------- --------------------------
General Liability Liberty Mutual 9/1/00-9/1/01 Annual $313,520
Umbrella National Union 6/1/00-9/1/01 Annual $103,349
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40783-BJH-11 ACCRUAL BASIS
MONTH: JUNE-01
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ACCRUAL
BASIS
FORM
NUMBER LINE 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. 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 8B (A) Pursuant to an Asset Purchase Agreement approved by the Court
1 22A on February 23, 2001 and effective as of the same date among
1 24 Kevco, Inc., Kevco Manufacturing, LP, Wingate Management Co. II,
6 1 LP and Adorn LLC, certain assets and liabilities of Design
7 4 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. The
escrow account established in conjunction with the sale will be
adjusted from time to time until all issues have been settled
between the Buyer and Seller.
(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 and
$10 million during June to Bank of America to reduce
pre-petition secured debt.
(D) The increase in intercompany payables in May is due to the sale
of the South Region of Kevco Distribution, LP. Although Kevco, Inc.
carries the secured debt on its books, Kevco Management maintains
the DIP cash account which results in an intercompany transaction.
(E) 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.
(F) Pursuant to an Asset Purchase Agreement approved by the
Court on May 21, 2001 and effective June 1, 2001, Drew
Industries Incorporated purchased substantially all of the
assets used by the Better Bath Division of Kevco Manufacturing,
LP. Approximately $8 million of the sales proceeds were paid
directly to Bank of America thereby reducing pre-petition
secured debt.
(G) Pursuant to an Asset Purchase Agreement approved by the
Court on May 21, 2001 and effective June 1, 2001, Duo-Form
Acquisition Corporation purchased substantially all of the
assets used by the Duo-Form Division of Kevco Manufacturing, LP.
Approximately $5 million of the sales proceeds were paid
directly to Bank of America thereby reducing pre-petition
secured debt