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
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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:
/s/ Wilford W. Simpson TREASURER
- --------------------------------------- ------------------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON AUGUST 24, 2001
- --------------------------------------- ------------------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner DEBTOR'S ACCOUNTANT
- --------------------------------------- ------------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER AUGUST 24, 2001
- --------------------------------------- ------------------------------------
Printed Name of Preparer Date
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 1
CASE NUMBER: 401-40784-BJH-11
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 MONTH
- ------ --------- ------ ------- -----
1. Unrestricted Cash (FOOTNOTE) 41,683 15,478 3,739
2. Restricted Cash
3. Total Cash 41,683 15,478 3,739 0
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 2,321,151 0
5. Inventory (FOOTNOTE) 14,793,828 1,890,477 0
6. Notes Receivable
7. Prepaid Expenses 196,584 129,240 29,975
8. Other (Attach List) 0 0 0 0
9. Total Current Assets 23,006,791 4,356,346 33,714 0
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 13,793,868 2,220,574
11. Less: Accumulated Depreciation (FOOTNOTE) (7,696,543) (2,766,863) (250,320)
12. Net Property, Plant & Equipment 24,385,644 11,027,005 1,970,254 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 45,924,996 0
16. Total Assets 69,303,474 47,901,387 47,928,964 0
POST PETITION LIABILITIES
17. Accounts Payable 127,980 77,023
18. Taxes Payable (FOOTNOTE) 143,932 26,492
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 634,232 151,317 0
23. Total Post Petition Liabilities 906,144 254,832 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 38,219,089 15,018,882
25. Priority Debt (FOOTNOTE) 1,383,756
26. Unsecured Debt (FOOTNOTE) 5,139,545 3,621,987 2,914,831
27. Other (Attach List) 197,008,999 197,951,008 197,951,008 0
28. Total Pre Petition Liabilities 279,417,364 239,792,084 215,884,721 0
29. Total Liabilities 279,417,364 240,698,228 216,139,553 0
EQUITY
30. Pre Petition Owners' Equity (210,107,292) (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (20,230,061) (18,844,017)
32. Direct Charges To Equity (Attach Explanation
FOOTNOTE) 37,540,512 60,740,720
33. Total Equity (192,796,841) (168,210,589) 0
34. Total Liabilities and Equity 47,901,387 47,928,964 0
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 - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 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 45,924,996
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 32,518,036 45,924,996 0
POST PETITION LIABILITIES
A. Accrued Payroll 409,289 44,013
B. Accrued Liabilities (FOOTNOTE) 224,943 107,304
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 634,232 151,317 0
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 69,451,008 69,451,008
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 27 197,008,999 197,951,008 197,951,008 0
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH MONTH QUARTER
REVENUES MAY-01 JUNE-01 MONTH TOTAL
- -------- ------ ------- ----- -------
1. Gross Revenues 2,829,039 5,906 2,834,945
2. Less: Returns & Discounts (101,473) (101,473)
3. Net Revenue 2,727,566 5,906 0 2,733,472
COST OF GOODS SOLD
4. Material 2,099,757 22 2,099,779
5. Direct Labor 129,867 129,867
6. Direct Overhead 121,057 1,636 122,693
7. Total Cost of Goods Sold 2,350,681 1,658 0 2,352,339
8. Gross Profit 376,885 4,248 0 381,133
OPERATING EXPENSES
9. Officer/Insider Compensation 17,790 24,009 41,799
10. Selling & Marketing 5,227 5,227
11. General & Administrative 36,358 18,213 54,571
12. Rent & Lease 15,490 1,423 16,913
13. Other (Attach List) 321,418 375,589 0 697,007
14. Total Operating Expenses 396,283 419,234 0 815,517
15. Income Before Non-Operating
Income & Expense (19,398) (414,986) 0 (434,384)
OTHER INCOME & EXPENSES
16. Non-Operating (Income) (Att List) (2,542) (2,260,416) 0 (2,262,958)
17. Non-Operating Expense (Att List) 245,551 157,988 0 403,539
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) 2,102,428 0 1,857,309
REORGANIZATION EXPENSES
23. Professional Fees 301,398 301,398
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 0 301,398 0 301,398
27. Income Tax 0
28. Net Profit (Loss) (264,517) 1,386,044 0 1,121,527
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 MONTH QUARTER
OPERATING EXPENSES MAY-01 JUNE-01 MONTH TOTAL
- ------------------ ------ ------- ----- -------
A. Payroll & Employee Benefits 207,732 382,932 590,664
B. Insurance Expense 60,379 60,379
C. Utilities and Telephone 6,582 (7,343) (761)
D. Taxes 46,725 46,725
E. 0
TOTAL OTHER OPERATING 321,418 375,589 0 697,007
EXPENSES - LINE 13
OTHER INCOME & EXPENSES
A. Miscellaneous Income (2,542) (3,332) (5,874)
B. Gain on sales of Better Bath and Duo-Form (FOOTNOTE) (2,257,084) (2,257,084)
C. 0
TOTAL NON-OPERATING INCOME (2,542) (2,260,416) 0 (2,262,958)
- LINE 16
A. Interco. working capital charge 20,900 20,900
B. Loss on sale of Design Comp. (FOOTNOTE) 224,651 224,651
C. Miscellaneous expenses 157,988 157,988
D.
TOTAL NON-OPERATING 245,551 157,988 0 403,539
EXPENSE - LINE 17
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION
EXPENSES - LINE 25 0 0 0 0
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 3
CASE NUMBER: 401-40784-BJH-11
CASH RECEIPTS AND MONTH MONTH QUARTER
DISBURSEMENTS MAY-01 JUNE-01 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
JUNE, 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 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 MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT MAY-01 JUNE-01 MONTH
- ------------------------- --------- ------ ------- -----
1. 0 - 30 1,898,279 0
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: JUNE-01
TAXES AND PAYABLES ---------------
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
- ------------- ------ ------- ------- ---- -----
1. Federal --
2. State 5,000 5,000
3. Local --
4. Other (See Below) 21,492 21,492
5. Total Taxes Payable 26,492 -- -- -- 26,492
6. Accounts Payable 77,023 -- 77,023
STATUS OF POST PETITION TAXES MONTH: JUNE-01
---------------
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding ** 7,604 (7,604) 0
2. FICA - Employee ** 6,310 (6,310) 0
3. FICA - Employer ** 6,310 (6,310) 0
4. Unemployment 123 (123) 0
5. Income 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 20,347 (20,347) 0
STATE AND LOCAL
8. Withholding 863 (863) 0
9. Sales (FOOTNOTE) 10,984 (5,984) 5,000
10. Excise 0
11. Unemployment 746 (746) 0
12. Real Property 0
13. Personal Property (FOOTNOTE) 132,948 (111,456) 21,492
14. Other (Attach List) 0
15. Total State And Local 143,932 1,609 (119,049) 26,492
16. Total Taxes 143,932 21,956 (139,396) 26,492
* 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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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: JUNE-01
--------------
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: Bank of America GWJones Exch Bank Other Accounts
B. ACCOUNT NUMBER: 3751764595 0005006226 (Attach List) TOTAL
C. PURPOSE (TYPE): DIP Disbursement-BB DIP Disbursement-DF
1. Balance Per Bank Statement 25,984 3,673 -- 29,657
2. Add: Total Deposits Not Credited -- -- --
3. Subtract: Outstanding Checks (20,624) (244) -- (20,868)
4. Other Reconciling Items (5,057) 7 -- (5,050)
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 --
Reclass to Accounts Payable
13. Total Cash - End of Month 3,739
This form does x 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: 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. Lee Denham Payroll/severance 134,620
2. Lee Denham Expense Reimb. 254
3. Jim Connors Consulting fees and expenses 24,009 93,897
4.
5. (Attach List)
6. Total Payments To Insiders 24,009 228,771
PROFESSIONALS
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID*
---- ----------- -------- ------- ---------- ---------
1. Gordion Group 03/20/01 301,398 301,398 301,398 --
2.
3.
4.
5. (Attach List)
6. Total Payments To Professionals 301,398 301,398 301,398 --
* 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 $23,200,207 $15,018,882
2. Status of Leases Payable (FOOTNOTE) Unknown
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 MANUFACTURING, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40784-BJH-11
MONTH: JUNE-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 X
reporting period?
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
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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CASE NAME: KEVCO MANUFACTURING, LP FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS
MONTH: JUNE 30, 2001
-----------------
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE/EXPLANATION
- ------ ----------- ----------------------
Pursuant to the February 12, 2001 Order (1) Authorizing Continued Use of
1 1 Existing Forms and Records; (2) Authorizing Maintenance of Existing Corporate
3 1 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 two small petty cash accounts
that are included in the cash supplement schedule.
1 4,5 (A) Pursuant to an Asset Purchase Agreement approved by the Court on
1 10,11 February 23, 2001 and effective as of the same date among Kevco, Inc., Kevco
1 14A Manufacturing, LP, Wingate Management Co. II, LP and Adorn, LLC, certain
1 24 assets and liabilities of Design Components, a division of Kevco
1 26 Manufacturing, were transferred to Adorn, LLC. At the effective date of
2 16B,17B purchase, Buyer assumed certain executory contracts, approximately $1.6
6 1 million of debtor's unsecured pre-petition liabilities, $3.5 million of
7 1,4 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 and $10 million
during June 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.
(E) 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. In
addition, certain executory contracts, unexpired leases and vendor
agreements were assumed thereby reducing unsecured non-priority debt.
(F) 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. In
addition, certain executory contracts and unexpired leases were assumed
thereby reducing unsecured non-priority debt.
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
asset sales by Debtor and its co-debtors as well as direct cash payments of $25
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.
1 15A Intercompany receivables/payables are from/to co-debtors Kevco Management Co.
1 27A (Case No. 401-40788-BJH-11), Kevco Distribution, LP (Case No. 401-40789-BJH-11),
7 3 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 and property tax owing are accruals only and not yet due.
4 9, 13