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
----------
MONTHLY OPERATING REPORT
MONTH ENDING: JULY 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 AUGUST 23, 2002
- --------------------------------------- ----------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner DEBTOR'S ACCOUNTANT
- --------------------------------------- ----------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER AUGUST 23, 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 JUL-02 ----- -----
- ------ ------ ------
1. Unrestricted Cash (FOOTNOTE) 41,683 0
2. Restricted Cash
3. Total Cash 41,683 0
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 0
5. Inventory (Footnote) 14,793,828 0
6. Notes Receivable
7. Prepaid Expenses 196,584 0
8. Other (Attach List) 0 0
9. Total Current Assets 23,006,791 0
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187
11. Less: Accumulated Depreciation (7,696,543)
12. Net Property, Plant & Equipment 24,385,644 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 8,369,096 0
15. Other (Attach List) 13,541,943 45,421,985
16. Total Assets 69,303,474 45,421,985
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable 0
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 131,388
23. Total Post Petition Liabilities 131,388
PRE PETITION LIABILITIES
24. Secured Debt (Footnote) 75,885,064 13,945,516
25. Priority Debt (Footnote) 1,383,756
26. Unsecured Debt 5,139,545 2,733,206
27. Other (Attach List) 197,008,999 196,487,204
28. Total Pre Petition Liabilities 279,417,364 213,165,926
29. Total Liabilities 279,417,364 213,297,314
EQUITY
30. Pre Petition Owners' Equity (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (19,301,875)
32. Direct Charges To Equity (Attach Explanation Footnote) 61,533,838
33. Total Equity (167,875,329)
34. Total Liabilities and Equity 45,421,985
This form x does does not have related footnotes on Footnotes Supplement.
--- ---
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 JUL-02 ----- -----
- ------ ------ ------
A.
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0
A. Goodwill: Consolidated Forest Products 8,369,096 0
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 8,369,096 0
A. Intercompany Receivables (FOOTNOTE) 13,541,943 45,421,985
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 45,421,985
POST PETITION LIABILITIES
A. Accrued Liabilities 131,388
B.
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 131,388
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 67,987,204
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 27 197,008,999 196,487,204
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
MONTH MONTH MONTH QUARTER
REVENUES JUL-02 ----- ----- TOTAL
- -------- ------ -----
1. Gross Revenues 0 0
2. Less: Returns & Discounts 0
3. Net Revenue 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
8. Gross Profit 0 0
OPERATING EXPENSES
9. Officer / Insider Compensation 0
10. Selling & Marketing 0
11. General & Administrative 0 0
12. Rent & Lease 0
13. Other (Attach List) 0
14. Total Operating Expenses 0 0
15. Income Before Non-Operating
Income & Expense 0 0
OTHER INCOME & EXPENSES
16. Non-Operating (Income) (Att List) 0 0
17. Non-Operating Expense (Att List) 0 0
18. Interest Expense 0
19. Depreciation / Depletion 0
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & (Expenses) 0 0
REORGANIZATION EXPENSES
23. Professional Fees 0
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 0 0
27. Income Tax 0
28. Net Profit (Loss) 0 0
This form does x does not have related footnotes on Footnotes Supplement.
--- ---
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 3
CASE NUMBER: 401-40784-BJH-11
CASH RECEIPTS AND MONTH MONTH MONTH QUARTER
DISBURSEMENTS JUL-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.
--- ---
CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO ACCRUAL BASIS - 3
JULY, 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 - - 5,047,569 - - - 5,047,569
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 - - 10,670 - - - 10,670
INTERCOMPANY TRANSFERS 235 (235) - -
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND 4,991
REBATE
WORKERS COMP REFUND
MISC. -
INTEREST INCOME - 5,679
9 TOTAL NON OPERATING RECEIPTS 235 - 10,435 - - - 10,670
10 TOTAL RECEIPTS 235 - 10,435 - - - 10,670
11 CASH AVAILABLE 235 - 5,058,004 - - - 5,058,239
OPERATING DISBURSEMENTS
12 NET PAYROLL 12,770 12,770
13 PAYROLL TAXES PAID - 4,788 4,788
14 SALES, USE & OTHER TAXES PAID - -
15 SECURED/RENTAL/LEASES - 5,020 5,020
16 UTILITIES - 428 428
17 INSURANCE - 844 844
18 INVENTORY PURCHASES - -
19 VEHICLE EXPENSE - -
20 TRAVEL - -
21 ENTERTAINMENT - -
22 REPAIRS & MAINTENANCE 235 - 235
23 SUPPLIES - -
24 ADVERTISING -
25 OTHER - - 4,455 - - - 4,455
LOAN PAYMENTS - - -
FREIGHT - -
CONTRACT LABOR - -
401 K PAYMENTS - -
PAYROLL TAX ADVANCE ADP -
WAGE GARNISHMENTS -
MISC. - 4,455 4,455
26 TOTAL OPERATING DISBURSEMENTS 235 - 28,305 - - - 28,540
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -
28 US TRUSTEE FEES - 7,250 7,250
29 OTHER -
30 TOTAL REORGANIZATION EXPENSE - - 7,250 - - - 7,250
31 TOTAL DISBURSEMENTS 235 - 35,555 - - - 35,790
32 NET CASH FLOW - - (25,120) - - - (25,120)
33 CASH- END OF MONTH - - 5,022,449 - - - 5,022,449
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT JUL-02 ----- -----
- ------------------------- ------ ------
1. 0 - 30 0
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 7,974,696 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 7,974,696 0
AGING OF POST PETITION MONTH: JULY-02
TAXES AND PAYABLES -----------
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
- ------------- ---- ---- ---- ---- -----
1. Federal 0
2. State 0
3. Local 0
4. Other (See Below) 0
5. Total Taxes Payable 0 0 0 0 0
6. Accounts Payable 0 0
STATUS OF POST PETITION TAXES MONTH: JULY-02
-----------
AMOUNT
BEGINNING TAX WITHHELD AND/OR ENDING TAX
FEDERAL LIABILITY* 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.
--- ---
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: JULY-02
-----------
BANK RECONCILIATIONS Other Accounts
- -------------------- --------------
A. BANK: Summit Bank Summit Bank (Attach List)
B. ACCOUNT NUMBER: 1-0138099 1-0137836 TOTAL
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 0
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
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.
--- ---
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40784-BJH-11
MONTH: JULY-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
AMOUNT TOTAL PAID
NAME TYPE OF PAYMENT PAID TO DATE
---- --------------- ------ ----------
1.
2.
3.
4.
5. (Attach List)
6. Total Payments To
Insiders 0
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 0
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
AMOUNTS
SCHEDULED PAID TOTAL
MONTHLY DURING UNPAID POST
NAME OF CREDITOR PAYMENTS 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 13,945,516
This form does x does not have related footnotes on Footnotes Supplement.
--- ---
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40784-BJH-11
MONTH: JULY-02
-----------
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 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
--- --
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.
--- ---
CASE NAME: KEVCO MANUFACTURING, LP
CASE NUMBER: 401-40784-BJH-11
MONTH: JULY 31, 2002
-----------------
FOOTNOTES SUPPLEMENT ACCRUAL BASIS
DUAL
BASIS
FORM LINE
NUMBER NUMBER FOOTNOTE / EXPLANATION
- ------ ------ ----------------------
1 1 Pursuant to the February 12, 2001 Order (1) Authorizing Continued Use of Existing Forms and
3 1 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 in Elkhart, Indiana was finalized during
1 5 May 2002. Proceeds from the sale have been placed in a segregated account (see the Supplement
1 10 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 co-debtors Kevco Management Co. (Case No.
1 27A 401-40788-BJH-11), Kevco Distribution, LP (Case No. 401-40789-BJH-11), Kevco Holding, Inc. (Case No.
7 3 401-40785-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 reductions pursuant to asset sales by Debtor
1 32 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.