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, 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:
EXECUTIVE VICE PRESIDENT AND
/s/ WILFORD W. SIMPSON CHIEF FINANCIAL OFFICER
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Original Signature of Responsible Party Title
WILFORD W. SIMPSON JULY 18, 2002
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Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER ACCOUNTANT FOR DEBTOR
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Original Signature of Preparer Title
DENNIS S. FAULKNER JULY 18, 2002
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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 MONTH
ASSETS AMOUNT APR-02 MAY-02 JUN-02
- ------ ----------- ----------- ----------- -----------
1. Unrestricted Cash (FOOTNOTE) 1,000
2. Restricted Cash
3. Total Cash 1,000
4. Accounts Receivable (Net)
5. Inventory
6. Notes Receivable
7. Prepaid Expenses
8. Other (Attach List) 459,000 0 0 0
9. Total Current Assets 460,000
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 6,801,458 6,801,458 6,801,458
15. Other (Attach List) 613,299,110 310,687,331 310,687,331 310,687,331
16. Total Assets 618,549,181 317,488,789 317,488,789 317,488,789
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 82,049,689 83,291,436 84,493,128
23. Total Post Petition Liabilities 82,049,689 83,291,436 84,493,128
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 13,768,129 13,858,277 13,945,516
25. Priority Debt
26. Unsecured Debt
27. Other (Attach List) 136,505,780 141,833,049 141,833,049 141,833,049
28. Total Pre Petition Liabilities 212,390,844 155,601,178 155,691,326 155,778,565
29. Total Liabilities 212,390,844 237,650,867 238,982,762 240,271,693
EQUITY
30. Pre Petition Owners' Equity 406,158,337 406,158,337 406,158,337
31. Post Petition Cumulative Profit Or (Loss) (14,188,752) (15,520,647) (16,809,578)
32. Direct Charges To Equity (Attach Explanation)
(FOOTNOTE) (312,131,663) (312,131,663) (312,131,663)
33. Total Equity 79,837,922 78,506,027 77,217,096
34. Total Liabilities and Equity 317,488,789 317,488,789 317,488,789
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 MONTH
ASSETS AMOUNT APR-02 MAY-02 JUN-02
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A. Prepaid Escrowed Retention Pmts. 459,000
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 459,000
A. Capitalized loan costs 4,790,071 4,297,973 4,297,973 4,297,973
B. Investment in Subsidiaries 2,503,485 2,503,485 2,503,485
C.
D.
E.
TOTAL OTHER ASSETS NET OF
AMORTIZATION - LINE 14 4,790,071 6,801,458 6,801,458 6,801,458
A. Intercompany Receivables (FOOTNOTE) 306,649,555
B. Interco. Promissory Note (FOOTNOTE) 235,981,314 235,981,314 235,981,314 235,981,314
C. Interco. Royalties (FOOTNOTE) 70,668,241 74,706,017 74,706,017 74,706,017
D.
E.
TOTAL OTHER ASSETS - LINE 15 613,299,110 310,687,331 310,687,331 310,687,331
POST PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 62,979,907 62,979,907 62,979,907
B. Accrued Interest on Notes/Bonds 19,069,782 20,311,529 21,513,221
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 82,049,689 83,291,436 84,493,128
PRE PETITION LIABILITIES
A. Interco. Liabilities (FOOTNOTE) 8,005,780 8,005,780 8,005,780 8,005,780
B. 10 3/8% Sr. Sub. Notes 105,000,000 105,000,000 105,000,000 105,000,000
C. Senior Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000 23,500,000
D. Accrued Interest on Notes/Bonds 5,327,269 5,327,269 5,327,269
E.
TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 136,505,780 141,833,049 141,833,049 141,833,049
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40783-BJH-11
INCOME STATEMENT
MONTH MONTH MONTH QUARTER
REVENUES APR-02 MAY-02 JUN-02 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)
17. Non-Operating Expense (Att List)
18. Interest Expense 1,288,931 1,331,895 1,288,931 3,909,757
19. Depreciation / Depletion
20. Amortization
21. Other (Attach List)
22. Net Other Income & Expenses (1,288,931) (1,331,895) (1,288,931) (3,909,757)
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) (1,288,931) (1,331,895) (1,288,931) (3,909,757)
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40783-BJH-11
CASH RECEIPTS AND MONTH MONTH MONTH QUARTER
DISBURSEMENTS APR-02 MAY-02 JUN-02 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., ET AL SUPPLEMENT TO ACCRUAL BASIS - 3
JUNE, 2002
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 -- -- 4,866,245 -- -- -- 4,866,245
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 88,235 -- 1,085,606 -- -- -- 1,173,841
INTERCOMPANY TRANSFERS (87,675) 87,675 -- --
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND 1,955
REBATE 88,235
WORKERS COMP REFUND 1,077,239
MISC. 210 --
INTEREST INCOME -- 6,202
9. TOTAL NON OPERATING RECEIPTS 560 -- 1,173,281 -- -- -- 1,173,841
10. TOTAL RECEIPTS 560 -- 1,173,281 -- -- -- 1,173,841
11. CASH AVAILABLE 560 -- 6,039,526 -- -- -- 6,040,086
OPERATING DISBURSEMENTS
12. NET PAYROLL 12,771 12,771
13. PAYROLL TAXES PAID -- 4,788 4,788
14. SALES, USE & OTHER TAXES PAID -- --
15. SECURED/RENTAL/LEASES -- 4,820 4,820
16. UTILITIES -- 324 324
17. INSURANCE -- 844 844
18. INVENTORY PURCHASES -- --
19. VEHICLE EXPENSE -- --
20. TRAVEL -- --
21. ENTERTAINMENT -- --
22. REPAIRS & MAINTENANCE 560 -- 560
23. SUPPLIES -- --
24. ADVERTISING --
25. OTHER -- -- 463 -- -- -- 463
LOAN PAYMENTS -- --
FREIGHT -- --
CONTRACT LABOR -- --
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC. -- 463 463
26. TOTAL OPERATING DISBURSEMENTS 560 -- 24,010 -- -- -- 24,570
REORGANIZATION DISBURSEMENTS
27. PROFESSIONAL FEES 926,143 926,143
28. US TRUSTEE FEES -- --
29. OTHER 41,804 41,804
30. TOTAL REORGANIZATION EXPENSE -- -- 967,947 -- -- -- 967,947
31. TOTAL DISBURSEMENTS 560 -- 991,957 -- -- -- 992,517
32. NET CASH FLOW -- -- 181,324 -- -- -- 181,324
33. CASH- END OF MONTH -- -- 5,047,569 -- -- -- 5,047,569
CASE NAME: KEVCO, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40783-BJH-11
SCHEDULED MONTH MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT APR-02 MAY-02 JUN-02
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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) 0
AGING OF POST PETITION MONTH: June-02
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 0
6. Accounts Payable 0
MONTH: June-02
STATUS OF POST PETITION TAXES ----------
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
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1. Withholding **
2. FICA - Employee **
3. FICA - Employer **
4. Unemployment
5. Income
6. Other (Attach List)
7. Total Federal Taxes 0
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 0
16. Total Taxes 0
* 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-02
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BANK RECONCILIATIONS Account # 1 Account # 2
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A. BANK: Bank of America Other Accounts TOTAL
B. ACCOUNT NUMBER: 3750768521 (Attach List)
C. PURPOSE (TYPE): DIP Account
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
6. Number of Last Check Written 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
CASH
12. Currency On Hand 0
13. Total Cash - End of Month 0
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-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
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
AMOUNTS TOTAL
SCHEDULED PAID UNPAID
MONTHLY DURING POST
NAME OF CREDITOR PAYMENTS DUE MONTH PETITION
---------------- ------------ ------- ----------
1. Bank of America 13,945,516
2.
3.
4.
5. (Attach List)
6. TOTAL 13,945,516
This form does x 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-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
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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, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40783-BJH-11 ACCRUAL BASIS
MONTH: June-02
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ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
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1 1 Pursuant to the February 12, 2001 Order (1) Authorizing Continued Use of Existing Forms and Records; (2)
3 1 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 15A,B,C Intercompany assets were inadvertently doubled on Debtor's Schedules. The adjustment to equity corrects
1 32 the error.
1 15B,C Intercompany receivables/payables are from/to co-debtors Kevco Management Co. (Case No.
1 22A 401-40788-BJH), Kevco Distribution, LP (Case No. 401-40789-BJH)'
1 27A Kevco Holding, Inc. (Case No. 401-40785-BJH), DCM Delaware, Inc.
7 3 (Case No. 401-40787-BJH), Kevco GP, Inc. (Case No. 401-40786-BJH), Kevco
Components, Inc. (Case No. 401-40790-BJH), and Kevco Manufacturing, LP. (Case No.
401-40784-BJH).
1 24 Secured debt reductions are from the sales of Kevco Manufacturing, LP's operating divisions, the
asset sale of the South Region of Kevco Distribution, real property sales and direct cash payments.