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: 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:
/s/ WILFORD W. SIMPSON TREASURER
- --------------------------------------- ----------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON JULY 18, 2002
- --------------------------------------- ----------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER DEBTOR'S ACCOUNTANT
- --------------------------------------- ----------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER JULY 18, 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 APR-02 MAY-02 JUN-02
- ------ ----------- ----------- ----------- -----------
1. Unrestricted Cash (FOOTNOTE) 41,683 0 0 0
2. Restricted Cash
3. Total Cash 41,683 0 0 0
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 0 0 0
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 1,771,093 0 0
11. Less: Accumulated Depreciation (7,696,543) (250,320) 0 0
12. Net Property, Plant & Equipment 24,385,644 1,520,773 0 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 45,421,985 45,421,985 45,421,985
16. Total Assets 69,303,474 46,942,758 45,421,985 45,421,985
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable 1,111 0 0
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 131,388 131,388 131,388
23. Total Post Petition Liabilities 132,499 131,388 131,388
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 13,768,129 13,858,277 13,945,516
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) 197,008,999 197,810,449 196,487,204 196,487,204
28. Total Pre Petition Liabilities 279,417,364 214,311,784 213,078,687 213,165,926
29. Total Liabilities 279,417,364 214,444,283 213,210,075 213,297,314
EQUITY
30. Pre Petition Owners' Equity (210,107,292) (210,107,292) (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (19,105,459) (19,301,875) (19,301,875)
32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 61,711,226 61,621,077 61,533,838
33. Total Equity (167,501,525) (167,788,090) (167,875,329)
34. Total Liabilities and Equity 46,942,758 45,421,985 45,421,985
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 APR-02 MAY-02 JUN-02
- ------ ----------- ----------- ----------- -----------
A.
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0 0 0
A. Goodwill: Consolidated Forest Products 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 45,421,985 45,421,985 45,421,985
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 45,421,985 45,421,985 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 69,310,449 67,987,204 67,987,204
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 27 197,008,999 197,810,449 196,487,204 196,487,204
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH MONTH MONTH QUARTER
REVENUES APR-02 MAY-02 JUN-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 9 0 0 9
12. Rent & Lease 0
13. Other (Attach List) 0
14. Total Operating Expenses 9 0 0 9
15. Income Before Non-Operating
Income & Expense (9) 0 0 (9)
OTHER INCOME & EXPENSES
16. Non-Operating (Income) (Att List) (19) 0 0 (19)
17. Non-Operating Expense (Att List) 0 196,416 0 196,416
18. Interest Expense 0
19. Depreciation / Depletion 0
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & (Expenses) 19 (196,416) 0 (196,397)
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) 10 (196,416) 0 (196,406)
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 APR-02 MAY-02 JUN-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 19 0 0 19
B. 0
C. 0
TOTAL NON-OPERATING INCOME - LINE 16 19 0 0 19
A. Net Loss on sale of Assets 20,772 0 20,772
B. Commissions paid at sale of Protecta Drive 90,000 0 90,000
C. Taxes paid at sale of Protecta Drive 85,234 0 85,234
D. Miscellaneous fees paid at sale of Protecta Drive 410 0 410
TOTAL NON-OPERATING EXPENSE - LINE 17 0 196,416 0 196,416
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
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 APR-02 MAY-02 JUN-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
JUNE, 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 -- -- 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 MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT APR-02 MAY-02 JUN-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: June-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) -- --
5. Total Taxes Payable -- 0 0 0 --
6. Accounts Payable 0 0
STATUS OF POST PETITION TAXES MONTH: June-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
9. Sales 0
10. Excise 0
11. Unemployment 0
12. Real Property 0
13. Personal Property 0
14. Other (Attach List) 0
15. Total State And Local 0
16. Total Taxes 0 0 0 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 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-02
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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
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 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 0 0
CASH
12. Currency On Hand 0
Reclass to Accounts Payable
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 MANUFACTURING, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40784-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 TOTAL PAID
NAME PAYMENT AMOUNT 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 TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- -----------
1. Bank of America N/A 13,945,516
2. Status of Leases Payable None
3.
4.
5. (Attach List)
6. TOTAL 0 0 13,945,516
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: 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
- -------------- ------- -------------- --------------------------
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
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS
MONTH: JUNE 30, 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 to
Kevco, Inc. and its subsidiaries is included in this
report as a Supplement to Accrual Basis -3.
1 4 The sale of Debtor's real property on Protecta Drive
1 5 in Elkhart, Indiana was finalized during May 2002.
1 10 Proceeds from the sale have been placed in a
segregated account (see the Supplement to Accrual
Basis-3). Pursuant to other Asset Purchase Agreements
approved by the Court (details are in prior Monthly
Operating Reports), Debtor has sold all of its assets
other than intercompany receivables.
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 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.