EXHIBIT 99.8
CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS
CASE NUMBER: 401-40789-BJH-11
JUDGE: BARBARA J. HOUSER
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
-------- -----
FORT WORTH DIVISION
----------
MONTHLY OPERATING REPORT
MONTH ENDING: JANUARY 31, 2002
----------------
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 MARCH 7, 2002
- ---------------------------------------- ----------------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER DEBTOR'S ACCOUNTANT
- ---------------------------------------- ----------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER MARCH 7, 2002
- ---------------------------------------- ----------------------------------
Printed Name of Preparer Date
CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 1
CASE NUMBER: 401-40789-BJH-11
COMPARATIVE BALANCE SHEET
<Table>
<Caption>
SCHEDULED MONTH
ASSETS AMOUNT JAN-02 MONTH MONTH
- ------ ---------- ------ ----- -----
1. Unrestricted Cash (FOOTNOTE) 41,421 0
2. Restricted Cash
3. Total Cash 41,421 0
4. Accounts Receivable-Net (FOOTNOTE) 17,545,859 314,759
5. Inventory (FOOTNOTE) 27,611,039
6. Notes Receivable
7. Prepaid Rent 236,697
8. Other (Attach List) 303,392
9. Total Current Assets 45,738,408 314,759
10. Property, Plant & Equipment 22,049,500 9,739,582
11. Less: Accumulated Depreciation/Depletion (6,151,901) (844,526)
12. Net Property, Plant & Equipment (FOOTNOTE) 15,897,599 8,895,056
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 5,741,869 481,876
15. Other (Attach List) 100,961,429 124,215,962
16. Total Assets 168,339,305 133,907,653
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable (FOOTNOTE) 413,580
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) (Footnote) 1,705,946
23. Total Post Petition Liabilities 2,119,526
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 13,509,318
25. Priority Debt (FOOTNOTE) 1,412,879
26. Unsecured Debt 19,966,456 18,555,081
27. Other (Attach List) 243,205,150 244,993,483
28. Total Pre Petition Liabilities 340,469,549 277,057,882
29. Total Liabilities 340,469,549 279,177,408
EQUITY
30. Pre Petition Owners' Equity (172,130,244)
31. Post Petition Cumulative Profit Or (Loss) (33,710,908)
32. Direct Charges To Equity (FOOTNOTE) 60,571,397
33. Total Equity (145,269,755)
34. Total Liabilities and Equity 133,907,653
</Table>
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO DISTRIBUTION, LP SUPPLEMENT TO
CASE NUMBER: 401-40789-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
<Table>
<Caption>
SCHEDULED MONTH
ASSETS AMOUNT JAN-02 MONTH MONTH
------ --------- ------ ----- -----
A. Inventory Vendor Deposit 130,000
B. Leased Facility Deposit 173,392
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 303,392 0
A. Goodwill: Shepherd Products 5,223,119
B. Goodwill: DARCO 518,750
C. Capitalized Lease 481,876
D.
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 5,741,869 481,876
A. Intercompany Receivables (FOOTNOTE) 100,961,429 124,215,962
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 100,961,429 124,215,962
POST PETITION LIABILITIES
A. Accrued Liabilities 588,787
B. Long Term Leases 1,107,492
C. Accrued Interest: Bank 9,667
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 1,705,946
PRE PETITION LIABILITIES
A. Interco.Payables (FOOTNOTE) 114,705,150 116,493,483
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 27 243,205,150 244,993,483
</Table>
CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40789-BJH-11
INCOME STATEMENT
<Table>
<Caption>
MONTH QUARTER
REVENUES JAN-02 MONTH 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 3,900 3,900
12. Rent & Lease
13. Other (Attach List) 3,635 3,635
14. Total Operating Expenses 7,535 7,535
15. Income Before Non-Operating
Income & Expense (7,535) (7,535)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 2,133 2,133
17. Non-Operating Expense (Att List)
18. Interest Expense
19. Depreciation / Depletion
20. Amortization
21. Other (Attach List)
22. Net Other Income & Expenses 2,133 2,133
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) (5,402) (5,402)
</Table>
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CASE NAME: KEVCO DISTRIBUTION, LP SUPPLEMENT TO
CASE NUMBER: 401-40789-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
<Table>
<Caption>
MONTH QUARTER
OPERATING EXPENSES JAN-02 MONTH MONTH TOTAL
------------------ ------ ----- ----- -------
A. Repairs & Maintenance 3,635 3,635
B.
C.
D.
E.
TOTAL OTHER OPERATING EXPENSES - LINE 13 3,635 3,635
OTHER INCOME & EXPENSES
A. Collection of Bad Debt 2,133 2,133
B.
C.
D.
E.
TOTAL NON-OPERATING INCOME - LINE 16 2,133 2,133
A.
B.
C.
D.
E.
TOTAL NON-OPERATING EXPENSE - LINE 17
A.
B.
C.
D.
E.
TOTAL OTHER EXPENSE - LINE 21
REORGANIZATION EXPENSES
A.
B.
C.
D.
E.
TOTAL OTHER REORGANIZATION EXPENSES - LINE 25
</Table>
CASE NAME: KEVCO DISTRIBUTION, L ACCRUAL BASIS - 3
CASE NUMBER: 401-40789-BJH-11
<Table>
<Caption>
CASH RECEIPTS AND MONTH QUARTER
DISBURSEMENTS JAN-02 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
</Table>
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CASE NAME: KEVCO DISTRIBUTION LP SUPPLEMENT TO ACCRUAL BASIS -3
JANUARY, 2002
CASE NUMBER: 401-40789-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
<Table>
<Caption>
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
---------- ---------- ---------- ---------- ------ ---------- ----------
1 CASH-BEGINNING OF MONTH -- 151,232 3,175,268 -- -- 1,000 3,327,500
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 -- --
7 SALE OF ASSETS 29,212 29,212
8 OTHER 4,448 35,062 4,736 -- -- -- 44,246
INTERCOMPANY TRANSFERS 6,003 (34,871) 28,868 -- --
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND
RENT
PAYROLL TAX ADVANCE RETURNED
MISC 4,448 --
INTEREST INCOME 4,736
9 TOTAL NON OPERATING RECEIPTS 10,451 29,403 33,604 -- -- -- 73,458
10 TOTAL RECEIPTS 10,451 29,403 33,604 -- -- -- 73,458
11 CASH AVAILABLE 10,451 180,635 3,208,872 -- -- 1,000 3,400,958
OPERATING DISBURSEMENTS
12 NET PAYROLL 17,178 17,178
13 PAYROLL TAXES PAID -- 33,873 33,873
14 SALES, USE & OTHER TAXES PAID -- --
15 SECURED/RENTAL/LEASES -- 5,078 5,078
16 UTILITIES -- 192 192
17 INSURANCE -- 37,859 37,859
18 INVENTORY PURCHASES -- --
19 VEHICLE EXPENSE -- --
20 TRAVEL -- --
21 ENTERTAINMENT -- --
22 REPAIRS & MAINTENANCE 3,260 -- 3,260
23 SUPPLIES -- --
24 ADVERTISING --
25 OTHER 7,191 29,220 4,617 -- -- -- 41,028
LOAN PAYMENTS 29,212 29,212
FREIGHT -- --
CONTRACT LABOR -- --
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC 7,191 8 4,617 11,816
26 TOTAL OPERATING DISBURSEMENTS 10,451 29,220 98,797 -- -- -- 138,468
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -- 92,450 92,450
28 US TRUSTEE FEES -- 11,500 11,500
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- -- 103,950 -- -- -- 103,950
31 TOTAL DISBURSEMENTS 10,451 29,220 202,747 -- -- -- 242,418
32 NET CASH FLOW -- 183 (169,143) -- -- -- (168,960)
33 CASH- END OF MONTH -- 151,415 3,006,125 -- -- 1,000 3,158,540
</Table>
CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40789-BJH-11
<Table>
<Caption>
SCHEDULED MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT JAN-02 MONTH MONTH
- ------------------------- --------- ------ ----- -----
1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 + 314,759
5. Total Accounts Receivable 17,545,859 314,759
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) (Footnote) 17,545,859 314,759
</Table>
AGING OF POST PETITION MONTH: January-02
TAXES AND PAYABLES ----------
<Table>
<Caption>
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
- ------------- ------ -------- ------- ----- -----
1. Federal
2. State
3. Local
4. Other (See Below) 413,580 413,580
5. Total Taxes Payable 413,580 413,580
6. Accounts Payable 0
</Table>
MONTH: January-02
----------
STATUS OF POST PETITION TAXES
<Table>
<Caption>
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 (Footnote) 413,580 413,580
13.Personal Property
14.Other (Attach List)
15.Total State And Local 413,580 413,580
16.Total Taxes 413,580 413,580
</Table>
* 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.
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CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 5
CASE NUMBER: 401-40789-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: January-02
-----------
<Table>
<Caption>
BANK RECONCILIATIONS Account # 1 Account # 2
-------------------- ----------- -----------
A. BANK: Other Accounts
B. ACCOUNT NUMBER: (Attach List) TOTAL
C. PURPOSE (TYPE):
1. Balance Per Bank Statement
2. Add: Total Deposits Not Credited
3. Subtract: Outstanding Checks
4. Other Reconciling Items
5. Month End Balance Per Books 0
6. Number of Last Check Written
</Table>
INVESTMENT ACCOUNTS
<Table>
<Caption>
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE
--------------------------- ---------------- ------------------ -------------- -------------
7.
8.
9.
10. (Attach List)
11. Total Investments 0
CASH
12. Currency On Hand 0
13. Total Cash - End of Month 0
</Table>
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CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40789-BJH-11 MONTH: January-02
-------------
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
<Table>
<Caption>
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
---- ------- ------ ----------
1. Martin, Steve Payroll 99,229
2. Martin, Steve Exp. Reimb. 1,390
3.
4.
5. (Attach List)
6. Total Payments To Insiders 100,619
</Table>
PROFESSIONALS
<Table>
<Caption>
DATE OF
COURT ORDER
AUTHORIZING AMOUNT AMOUNT TOTAL PAID TOTAL INCURRED
NAME PAYMENTS APPROVED PAID TO DATE UNPAID *
---- ----------- -------- ------ ---------- --------------
1.
2.
3.
4.
5. (Attach List)
6. Total Payments To Professionals
</Table>
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
<Table>
<Caption>
SCHEDULED AMOUNTS TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- ----------
1. Bank of America 13,509,318
2. Leases Payable None
3.
4.
5. (Attach List)
6. TOTAL 13,509,318
</Table>
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CASE NAME: KEVCO DISTRIBUTION, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40789-BJH-11
MONTH: January-02
-------------
QUESTIONNAIRE
<Table>
<Caption>
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
</Table>
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
<Table>
<Caption>
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.
</Table>
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
<Table>
<Caption>
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY
- -------------- ------- -------------- --------------------------
Property Lexington, Allianz 5/29/00-3/1/02 Semi-Annual $26,485
Auto Liberty Mutual 9/1/00-3/1/02 Semi-Annual $3,333
General Liability Liberty Mutual 9/1/00-3/1/02 Semi-Annual $64,657
</Table>
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CASE NAME: KEVCO DISTRIBUTION, LP FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40789-BJH-11 ACCRUAL BASIS
MONTH: January 31, 2002
-----------------
<Table>
<Caption>
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------ ----------- ----------------------
1 1 Pursuant to the February 12, 2001 Order (1)
3 1 Authorizing 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.
1 4 As of July 2001, the remaining accounts receivable
4 7 are for commissions earned for the sale of consigned
inventory. Although collection is uncertain, Debtor
will maintain these receivables on the balance sheet
until such time as the likelihood of collection can
be more accurately determined.
1 5, 12 Pursuant to Asset Purchase Agreements approved by
the Court (see prior Monthly Operating Reports for
details), Debtor has sold most of its assets.
1 22 The Debtor records on its books accruals for certain
liabilities based on historical estimates. While
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 15A Intercompany receivables/payables are from/to
1 27A co-debtors Kevco Management Co. (Case No.
7 3 401-40788-BJH-11), Kevco Manufacturing, LP (Case No.
401-40784-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 Property tax owing is an accrual only and not yet
4 12 due.
1 24 The direct charges to equity are due to secured debt
1 32 reductions pursuant to sales of Kevco Manufacturing,
LP's operating divisions, the asset sale of the
South Region of Kevco Distribution, as well as
direct cash payments. The secured debt owed to Bank
of America by Kevco, Inc. (Case No. 401-40783-BJH)
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 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.
</Table>