PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
STANHOME INC.
MARCH 31, 1997
The following historical condensed consolidated balance sheet of Stanhome
Inc. as of March 31, 1997 was from the March 31, 1997 Form 10-Q. The pro
forma condensed consolidated balance sheet reflects the sale of Hamilton
Direct Response. The pro forma condensed consolidated balance sheet has
been prepared assuming the transaction was consummated at the balance
sheet date and includes adjustments which give effect to events that are
attributable to the transaction whether they have a continuing or non
recurring impact.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(In Thousands)
Pro Forma
Adjustments
Stanhome Inc. Increase
Historical (Decrease) Pro Forma
------------- ----------- ---------
ASSETS
CURRENT ASSETS:
Cash and certificates of deposit $ 13,439 $ 44,541 (a) $ 57,980
Notes and accounts receivable, net 110,405 - 110,405
Inventories 84,361 - 84,361
Prepaid expenses 4,862 - 4,862
-------- -------- --------
Total current assets 213,067 44,541 257,608
-------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost 79,367 - 79,367
Less - Accumulated depreciation and
amortization 43,242 - 43,242
-------- -------- --------
36,125 - 36,125
-------- -------- --------
OTHER ASSETS:
Goodwill and other intangibles, net 95,343 - 95,343
Other 13,091 3,800 (b) 16,891
-------- -------- --------
108,434 3,800 112,234
-------- -------- --------
NET RECEIVABLES FROM (PAYABLES TO)
DISCONTINUED OPERATIONS 31,175 ( 36,864)(c) ( 5,689)
-------- -------- --------
NET ASSETS OF DISCONTINUED OPERATIONS 38,127 ( 11,477)(d) 26,650
-------- -------- --------
$426,928 $ - $426,928
======== ======== ========
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(In Thousands)
Pro Forma
Adjustments
Stanhome Inc. Increase
Historical (Decrease) Pro Forma
------------- ----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $ 87,597 $ - $ 87,597
Accounts payable 26,701 - 26,701
Federal, state and foreign taxes
on income 18,393 - 18,393
Accrued expenses--
Royalties 6,915 - 6,915
Vacation, sick and
postretirement benefits 4,147 - 4,147
Pensions and profit sharing 3,957 - 3,957
Payroll and commissions 2,608 - 2,608
Other 25,292 - 25,292
-------- -------- --------
Total current liabilities 175,610 - 175,610
-------- -------- --------
LONG-TERM LIABILITIES:
Postretirement benefits 14,666 - 14,666
-------- -------- --------
Total long-term liabilities 14,666 - 14,666
-------- -------- --------
SHAREHOLDERS' EQUITY:
Common stock 3,154 - 3,154
Capital in excess of par value 45,007 - 45,007
Retained earnings 367,032 - 367,032
Cumulative translation adjustments ( 26,697) - ( 26,697)
-------- -------- --------
388,496 - 388,496
Less - Shares held in treasury, at cost 151,844 - 151,844
-------- -------- --------
Total shareholders' equity 236,652 - 236,652
-------- -------- --------
$426,928 $ - $426,928
======== ======== ========
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
STANHOME INC.
FOR THE THREE MONTHS ENDED MARCH 31, 1997
The following historical condensed consolidated statement of income of
Stanhome Inc. for the three months ended March 31, 1997 was from the
March 31, 1997 Form 10-Q. The pro forma condensed consolidated statement
of income reflects the removal of Hamilton Direct Response from the
income of discontinued operations, net of taxes. The pro forma
adjustments have been computed assuming the transaction was consummated
at the beginning of the three month period and include adjustments which
give effect to events that are attributable to the transaction and that
are expected to have a continuing impact.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(In thousands, except per share amounts)
Pro Forma
Adjustments
Stanhome Inc. Increase
Historical (Decrease) Pro Forma
------------- ----------- ---------
NET SALES $102,060 $ - $102,060
COST OF SALES 52,633 - 52,633
-------- -------- --------
GROSS PROFIT 49,427 - 49,427
SELLING, DISTRIBUTION, GENERAL
AND ADMINISTRATIVE EXPENSES 43,225 - 43,225
-------- -------- --------
OPERATING PROFIT 6,202 - 6,202
Interest expense ( 1,886) - ( 1,886)
Other expense, net ( 399) - ( 399)
-------- -------- --------
INCOME BEFORE INCOME TAXES
FROM CONTINUING OPERATIONS 3,917 - 3,917
Income taxes 1,724 - 1,724
-------- -------- --------
INCOME OF CONTINUING OPERATIONS,
NET OF TAXES 2,193 - 2,193
INCOME OF DISCONTINUED OPERATIONS,
NET OF TAXES 1,048 1,163(e) 2,211
NET LOSS ON SALE OF DIRECT RESPONSE ( 35,000) - ( 35,000)
-------- -------- --------
NET INCOME (LOSS) ($ 31,759) $ 1,163 ($ 30,596)
======== ======== ========
EARNINGS (LOSS) PER COMMON SHARE
(Primary and fully diluted):
CONTINUING OPERATIONS $ .12 $ .12
DISCONTINUED OPERATIONS .06 .12
SALE OF DIRECT RESPONSE ( 1.95) ( 1.95)
----- -----
TOTAL EARNINGS (LOSS) PER
COMMON SHARE ($1.77) ($1.71)
===== =====
AVERAGE SHARES FULLY DILUTED 17,926 17,926
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
STANHOME INC.
FOR THE YEAR ENDED DECEMBER 31, 1996
The Company's historical statement of income for the year ended December
31, 1996 has been reclassified to present two business segments (Hamilton
Direct Response and Direct Selling) as discontinued operations. The pro
forma condensed consolidated statement of income reflects the removal of
Hamilton Direct Response from the income of discontinued operations, net
of taxes. The pro forma adjustments have been computed assuming the
transaction was consummated at the beginning of the year and include
adjustments which give effect to events that are attributable to the
transaction and that are expected to have a continuing impact. This
statement should be read in conjunction with the historical consolidated
financial statements of Stanhome Inc. included in its December 31, 1996
Form 10-K and the historical condensed consolidated financial statements
of Stanhome Inc. included in its March 31, 1997 Form 10-Q.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share amounts)
Pro Forma
Stanhome Inc. Adjustments
Stanhome Inc. Reclassi- Historical Increase
Historical fications Reclassified (Decrease) Pro Forma
------------- --------- ------------- ----------- ---------
NET SALES $844,992 ($329,544) $515,448 $ - $515,448
COST OF SALES 370,178 ( 97,998) 272,180 - 272,180
-------- -------- -------- -------- --------
GROSS PROFIT 474,814 ( 231,546) 243,268 - 243,268
SELLING, DISTRIBUTION, GENERAL AND
ADMINISTRATIVE EXPENSES 393,349 ( 219,793) 173,556 - 173,556
-------- -------- -------- -------- --------
OPERATING PROFIT 81,465 ( 11,753) 69,712 - 69,712
Interest expense ( 8,684) 488 ( 8,196) - ( 8,196)
Other expense, net ( 3,502) 228 ( 3,274) - ( 3,274)
-------- -------- -------- -------- --------
INCOME BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS 69,279 ( 11,037) 58,242 - 58,242
Income taxes 30,842 ( 5,216) 25,626 - 25,626
-------- -------- -------- -------- --------
INCOME OF CONTINUING OPERATIONS,
NET OF TAXES 38,437 ( 5,821) 32,616 - 32,616
INCOME OF DISCONTINUED OPERATIONS,
NET OF TAXES - 5,821 5,821 6,171(e) 11,992
NET LOSS ON SALE OF DIRECT RESPONSE - ( 35,000) ( 35,000) - ( 35,000)
-------- -------- -------- -------- --------
NET INCOME $ 38,437 ($ 35,000) $ 3,437 $ 6,171 $ 9,608
======== ======== ======== ======== ========
EARNINGS PER COMMON SHARE
(Primary and fully diluted):
CONTINUING OPERATIONS $2.12 $1.80 $1.80
DISCONTINUED OPERATIONS - .32 .66
SALE OF DIRECT RESPONSE - ( 1.93) ( 1.93)
----- ----- -----
TOTAL EARNINGS PER COMMON SHARE $2.12 $ .19 $ .53
===== ===== =====
AVERAGE SHARES FULLY DILUTED 18,120 18,120 18,120
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The Pro Forma Financial Information has been prepared by Stanhome Inc.
and is based upon assumptions deemed proper by it. The Pro Forma
Financial Information presented herein is shown for illustrative purposes
only and is not necessarily indicative of the future financial position
or future results of operations of Stanhome Inc., or of the financial
position or results of operations of Stanhome Inc. that would have
actually occurred had the transaction been in effect as of the date or
for the periods presented.
(a) Reflects the cash received related to the sale of Hamilton Direct
Response.
(b) Reflects the addition of a long-term escrow deposit related to the
sale of Hamilton Direct Response.
(c) Reflects the repayment of the indebtedness of Hamilton Direct Response
to Stanhome Inc.
(d) Reflects the elimination of the net assets of Hamilton Direct
Response.
(e) Reflects the elimination of the Hamilton Direct Response loss of
discontinued operations, net of taxes.