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
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FORT WORTH DIVISION
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MONTHLY OPERATING REPORT
MONTH ENDING: MARCH 31, 2002
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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 APRIL 22, 2002
- ----------------------------------------------- --------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER DEBTOR'S ACCOUNTANT
- ----------------------------------------------- --------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER APRIL 22, 2002
- ----------------------------------------------- --------------------------
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 MONTH
ASSETS AMOUNT JAN-02 FEB-02 MAR-02
- ------- ----------- ----------- ----------- -----------
1. Unrestricted Cash (FOOTNOTE) 41,683 151,415 120,993 110,582
2. Restricted Cash
3. Total Cash 41,683 151,415 120,993 110,582
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 0 0 0
5. Inventory (FOOTNOTE) 14,793,828 0 0 0
6. Notes Receivable
7. Prepaid Expenses 196,584 0 0 0
8. Other (Attach List) 0 0 0 0
9. Total Current Assets 23,006,791 151,415 120,993 110,582
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 1,771,093 1,771,093 1,771,093
11. Less: Accumulated Depreciation (7,696,543) (250,320) (250,320) (250,320)
12. Net Property, Plant & Equipment 24,385,644 1,520,773 1,520,773 1,520,773
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 45,411,431 45,411,431 45,421,985
16. Total Assets 69,303,474 47,083,619 47,053,197 47,053,340
POST PETITION LIABILITIES
17. Accounts Payable 34,503 0 0
18. Taxes Payable (FOOTNOTE) 1,111 1,111 1,111
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 131,388 131,388 131,388
23. Total Post Petition Liabilities 167,002 132,499 132,499
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 13,509,318 13,590,741 13,680,889
25. Priority Debt (FOOTNOTE) 1,383,756
26. Unsecured Debt 5,139,545 2,733,206 2,733,206 2,733,206
27. Other (Attach List) 197,008,999 197,917,106 197,921,042 197,921,042
28. Total Pre Petition Liabilities 279,417,364 214,159,630 214,244,989 214,335,137
29. Total Liabilities 279,417,364 214,326,632 214,377,488 214,467,636
EQUITY
30. Pre Petition Owners' Equity (210,107,292) (210,107,292) (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (19,105,757) (19,105,612) (19,105,469)
32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 61,970,036 61,888,613 61,798,465
33. Total Equity (167,243,013) (167,324,291) (167,414,296)
34. Total Liabilities and Equity 47,083,619 47,053,197 47,053,340
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 MONTH
ASSETS AMOUNT JAN-02 FEB-02 MAR-02
- -------- ----------- ----------- ----------- -----------
A.
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0 0 0
A. Goodwill: Consolidated Forest Products (FOOTNOTE) 8,369,096 0 0 0
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 45,411,431 45,411,431 45,421,985
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 45,411,431 45,411,431 45,421,985
POST PETITION LIABILITIES
A. Accrued Liabilities 131,388 131,388 131,388
B.
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 131,388 131,388 131,388
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 69,417,106 69,421,042 69,421,042
B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000 105,000,000 105,000,000
C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000 23,500,000
D.
E.
TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 197,008,999 197,917,106 197,921,042 197,921,042
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH MONTH MONTH QUARTER
REVENUES JAN-02 FEB-02 MAR-02 TOTAL
- --------- -------- --------- --------- ----------
1. Gross Revenues 0 0 0 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 0
10. Selling & Marketing 0
11. General & Administrative 609 9 9 627
12. Rent & Lease 0
13. Other (Attach List) 0
14. Total Operating Expenses 609 9 9 627
15. Income Before Non-Operating
Income & Expense (609) (9) (9) (627)
OTHER INCOME & EXPENSES
16. Non-Operating (Income) (Att List) (191) (154) (151) (496)
17. Non-Operating Expense (Att List) 420,269 0 0 420,269
18. Interest Expense 0
19. Depreciation / Depletion 0
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & (Expenses) (420,078) 154 151 (419,773)
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) (420,687) 145 142 (420,400)
This form does x 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 MONTH QUARTER
OPERATING EXPENSES JAN-02 FEB-02 MAR-02 TOTAL
- ------------------ --------- ---------- --------- --------
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER OPERATING EXPENSES - LINE 13 0 0 0 0
OTHER INCOME & EXPENSES
A. Interest Income 191 154 151 496
B. Balance Sheet Adjustments 0
0
TOTAL NON-OPERATING INCOME - LINE 16 191 154 151 496
A. Loss on sale of assets (FOOTNOTE) 420,269 420,269
B. 0
C. 0
D.
TOTAL NON-OPERATING EXPENSE - LINE 17 420,269 0 0 420,269
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 MONTH QUARTER
DISBURSEMENTS JAN-02 FEB-02 MAR-02 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
MARCH, 2002
CASE NUMBER: 401-40784-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
------- ------- --------- ------- ---- --------- ---------
1 CASH-BEGINNING OF MONTH -- 120,993 2,958,782 -- -- 1,000 3,080,775
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 -- --
8 OTHER -- 151 12,020 -- -- -- 12,171
INTERCOMPANY TRANSFERS 11,541 (10,553) 12 -- (1,000) --
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND
RENT
PAYROLL TAX ADVANCE RETURNED
MISC. 8,036 --
INTEREST INCOME 151 3,984
9 TOTAL NON OPERATING RECEIPTS 11,541 (10,402) 12,032 -- -- (1,000) 12,171
10 TOTAL RECEIPTS 11,541 (10,402) 12,032 -- -- (1,000) 12,171
11 CASH AVAILABLE 11,541 110,591 2,970,814 -- -- -- 3,092,946
OPERATING DISBURSEMENTS
12 NET PAYROLL 17,547 17,547
13 PAYROLL TAXES PAID -- 7,695 7,695
14 SALES, USE & OTHER TAXES PAID 11,541 -- 11,541
15 SECURED/RENTAL/LEASES -- 3,214 3,214
16 UTILITIES -- 188 188
17 INSURANCE -- 98,810 98,810
18 INVENTORY PURCHASES -- --
19 VEHICLE EXPENSE -- --
20 TRAVEL -- --
21 ENTERTAINMENT -- --
22 REPAIRS & MAINTENANCE -- --
23 SUPPLIES -- --
24 ADVERTISING --
25 OTHER -- 9 796 -- -- -- 805
LOAN PAYMENTS -- -- --
FREIGHT -- --
CONTRACT LABOR -- 493 493
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC. 9 303 312
26 TOTAL OPERATING DISBURSEMENTS 11,541 9 128,250 -- -- -- 139,800
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -- 10,553 10,553
28 US TRUSTEE FEES -- --
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- -- 10,553 -- -- -- 10,553
31 TOTAL DISBURSEMENTS 11,541 9 138,803 -- -- -- 150,353
32 NET CASH FLOW -- (10,411) (126,771) -- -- (1,000) (138,182)
33 CASH-END OF MONTH -- 110,582 2,832,011 -- -- -- 2,942,593
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT JAN-02 FEB-02 MAR-02
- ------------------------- --------- ------ ------ ------
1. 0 - 30 0 0 0
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 7,974,696 0 0 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 7,974,696 0 0 0
AGING OF POST PETITION MONTH: MARCH-02
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) 1,111 1,111
5. Total Taxes Payable 1,111 0 0 0 1,111
6. Accounts Payable 0 0
STATUS OF POST PETITION TAXES MONTH: MARCH-02
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BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY * AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding ** 0
2. FICA - Employee ** 0
3. FICA - Employer ** 0
4. Unemployment 0
5. Income 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 0 0 0
STATE AND LOCAL
8. Withholding 0 0
9. Sales (FOOTNOTE) 0 0
10. Excise 0
11. Unemployment 0 0
12. Real Property (FOOTNOTE) 1,111 1,111
13. Personal Property 0 0
14. Other (Attach List) 0
15. Total State And Local 1,111 0 0 1,111
16. Total Taxes 1,111 0 0 1,111
* 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: MARCH-02
---------------------
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: Summit Bank Summit Bank Other Accounts TOTAL
B. ACCOUNT NUMBER: 1-0138099 1-0137836 (Attach List)
C. PURPOSE (TYPE): Depository Depository
1. Balance Per Bank Statement 4,955 105,627 -- 110,582
2. Add: Total Deposits Not Credited
3. Subtract: Outstanding Checks --
4. Other Reconciling Items --
5. Month End Balance Per Books 4,955 105,627 -- 110,582
6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
DATE TYPE OF
BANK, ACCOUNT NAME & NUMBER OF PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE
- --------------------------- ----------- ---------- -------------- -------------
7.
8.
9.
10. (Attach List)
11. Total Investments 0 0
CASH
12. Currency On Hand 0
Reclass to Accounts Payable
13. Total Cash - End of Month 110,582
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: MARCH-02
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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
AMOUNT TOTAL PAID
NAME TYPE OF PAYMENT PAID TO DATE
---- --------------- ------ ----------
1. Lee Denham Payroll/severance 134,620
2. Lee Denham Expense Reimb. 254
3. Jim Connors Consulting fees and expenses 114,975
4. Jim Connors Division Sale Bonuses 112,500
5. (Attach List)
6. Total Payments To Insiders 0 362,349
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 0 301,398 0
2.
3.
4.
5. (Attach List)
6. Total Payments To Professionals 301,398 0 301,398 0
* 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 N/A 13,680,889
2. Status of Leases Payable None
3.
4.
5. (Attach List)
6. TOTAL 0 0 13,680,889
This form does x 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: MARCH-02
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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
-------------- ------- -------------------- ----------------------------
Property, Auto, General Liability Aon Risk Services 3/1/02-9/1/02 Semi-Annual $ 98,598
D&O Liability Great American Insurance 11/1/2001-10/31/2004 Annual $ 64,657
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP FOOTNOTES SUPPLEMENT
ACCRUAL BASIS
CASE NUMBER: 401-40784-BJH-11
MONTH: MARCH 31, 2002
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DUAL
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 4,5 Pursuant to Asset Purchase Agreements approved by the
1 10,14A Court (see prior Monthly Operating Reports for
details), Debtor has sold most of its assets.
1 15A Intercompany receivables/payables are from/to
1 27A co-debtors Kevco Management Co. (Case No.
7 3 401-40788-BJH-11), Kevco Distribution, 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 Property tax owing is an accrual only and not yet due.
4 9, 13
1 24 The direct charges to equity are due to secured debt
1 32 reductions pursuant to asset sales by Debtor and its
co-debtors as well as direct cash payments. 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 1,15A);
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 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.
2 17A During January 2002, property located in Waco, Texas
was sold. Proceeds of the sale were applied to
Debtor's long-term debt with its secured lender, Bank
of America.