EXHIBIT 99.2
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
STANHOME INC.
SEPTEMBER 30, 1997
The following historical condensed consolidated balance sheet of Stanhome Inc.
as of September 30, 1997 was from the September 30, 1997 Form 10-Q. The pro
forma condensed consolidated balance sheet reflects the sale of Worldwide
Direct Selling. 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 and they have a continuing or non recurring impact.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(In Thousands)
Pro Forma
Adjustments
Stanhome Inc. Increase
Historical (Decrease) Pro Forma
------------- ----------- ---------
ASSETS
CURRENT ASSETS:
Cash and certificates of deposit $ 16,287 $ 66,144 (a) $ 82,431
Notes and accounts receivable, net 175,632 - 175,632
Inventories 104,619 - 104,619
Prepaid expenses 3,025 - 3,025
-------- -------- --------
Total current assets 299,563 66,144 365,707
-------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost 80,895 - 80,895
Less - Accumulated depreciation and
amortization 46,313 - 46,313
-------- -------- --------
34,582 - 34,582
-------- -------- --------
OTHER ASSETS:
Goodwill and other intangibles, net 90,503 - 90,503
Other 21,575 - 21,575
-------- -------- --------
112,078 - 112,078
-------- -------- --------
NET ASSETS OF DISCONTINUED OPERATIONS 21,994 ( 17,461)(b) 4,533
-------- -------- --------
$468,217 $ 48,683 $516,900
======== ======== ========
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(In Thousands)
Pro Forma
Adjustments
Stanhome Inc. Increase
Historical (Decrease) Pro Forma
------------- ----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $119,264 $ - $119,264
Accounts payable 30,595 2,332 (e) 32,927
Federal, state and foreign taxes
on income 23,889 17,291 (f) 41,180
Accrued expenses--
Royalties 8,981 - 8,981
Vacation, sick and
postretirement benefits 4,012 - 4,012
Pensions and profit sharing 2,713 - 2,713
Payroll and commissions 4,670 - 4,670
Other 44,383 4,578 (c) 48,961
-------- -------- --------
Total current liabilities 238,507 24,201 262,708
-------- -------- --------
LONG-TERM LIABILITIES:
Postretirement benefits 15,567 - 15,567
-------- -------- --------
Total long-term liabilities 15,567 - 15,567
-------- -------- --------
SHAREHOLDERS' EQUITY:
Common stock 3,154 - 3,154
Capital in excess of par value 46,729 - 46,729
Retained earnings 365,377 ( 6,000)(g) 359,377
Cumulative translation adjustments ( 32,243) 30,482 (d) ( 1,761)
-------- -------- --------
383,017 24,482 407,499
Less - Shares held in
treasury, at cost 168,874 - 168,874
-------- -------- --------
Total shareholders' equity 214,143 24,482 238,625
-------- -------- --------
$468,217 $ 48,683 $516,900
======== ======== ========
<FN>
See Notes to Pro Forma Condensed Consolidated Information.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
STANHOME INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
The following historical condensed consolidated statement of income of
Stanhome Inc. for the nine months ended September 30, 1997 was from the
September 30, 1997 Form 10-Q. The pro forma condensed consolidated statement
of income reflects the removal of Hamilton Direct Response and Direct Selling
from the income of discontinued operations, net of taxes. The pro forma
adjustments have been computed assuming the transactions were consummated at
the beginning of the nine month period and include adjustments which give
effect to events that are attributable to the transactions and that are
expected to have a continuing impact.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In thousands, except per share amounts)
Pro Forma
Adjust.
Increase Pro Forma
(Decrease) Adjust.
Stanhome Inc. Disc. Increase
Historical Operations (Decrease) Pro Forma
------------- ---------- -------- ---------
NET SALES $367,323 $ - $ - $367,323
COST OF SALES 198,406 - - 198,406
-------- ------ ------ --------
GROSS PROFIT 168,917 - - 168,917
SELLING, DISTRIBUTION,
GENERAL AND
ADMINISTRATIVE EXPENSES 143,077 - - 143,077
-------- ------ ------ --------
OPERATING PROFIT 25,840 - - 25,840
Interest expense ( 5,368) - 1,950 (j) ( 3,418)
Other expense, net ( 2,044) - - ( 2,044)
-------- ------ ------ --------
INCOME BEFORE INCOME
TAXES FROM
CONTINUING OPERATIONS 18,428 - 1,950 20,378
Income taxes 9,228 - 780 (k) 10,008
-------- ------ ------ --------
INCOME OF CONTINUING
OPERATIONS,
NET OF TAXES 9,200 - 1,170 10,370
INCOME OF DISCONTINUED
OPERATIONS,
NET OF TAXES 2,158 ( 2,158)(h) - -
NET LOSS ON SALE
OF DIRECT RESPONSE ( 35,000) - - ( 35,000)
NET LOSS ON SALE
OF DIRECT SELLING - ( 6,000)(g) - ( 6,000)
-------- ------ ------ --------
NET INCOME (LOSS) ($ 23,642) ($8,158) $1,170 ($ 30,630)
======== ====== ====== ========
EARNINGS (LOSS)
PER COMMON SHARE
(Primary and
fully diluted):
CONTINUING OPERATIONS $ .51 $ .58
DISCONTINUED OPERATIONS .12 -
SALE OF DIRECT RESPONSE ( 1.96) ( 1.96)
SALE OF DIRECT SELLING - ( .34)
----- -----
TOTAL EARNINGS (LOSS)
PER COMMON SHARE ($1.33) ($1.72)
===== =====
AVERAGE SHARES
FULLY DILUTED 17,824 17,824
<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 and Direct Selling from the income of discontinued operations,
net of taxes. The pro forma adjustments have been computed assuming the
transactions were consummated at the beginning of the year and include
adjustments which give effect to events that are attributable to the
transactions 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, the
historical condensed consolidated financial statements of Stanhome Inc.
included in its September 30, 1997 Form 10-Q and pro forma financial
information on Stanhome Inc. included in its May 22, 1997 Form 8-K.
STANHOME INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share amounts)
Pro Forma
Adjust.
Increase Pro Forma
Stanhome Inc. (Decrease) Adjust.
Stanhome Inc. Reclassi- Historical Disc. Increase
Historical fications Reclassified Operations (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) - 2,600 (j) ( 5,596)
Other expense, net ( 3,502) 228 ( 3,274) - - ( 3,274)
-------- -------- -------- ------- ------- --------
INCOME BEFORE INCOME
TAXES FROM
CONTINUING OPERATIONS 69,279 ( 11,037) 58,242 - 2,600 60,842
Income taxes 30,842 ( 5,216) 25,626 - 1,040 (k) 26,666
-------- -------- -------- ------- ------- --------
INCOME OF CONTINUING
OPERATIONS,
NET OF TAXES 38,437 ( 5,821) 32,616 - 1,560 34,176
INCOME OF DISCONTINUED
OPERATIONS,
NET OF TAXES - 5,821 5,821 ( 5,821)(i) - -
NET LOSS ON SALE OF
DIRECT RESPONSE - ( 35,000) ( 35,000) - - ( 35,000)
NET LOSS ON SALE OF
DIRECT SELLING - - - ( 6,000)(g) - ( 6,000)
-------- -------- -------- ------- ------- --------
NET INCOME (LOSS) $ 38,437 ($ 35,000) $ 3,437 ($11,821) $ 1,560 ($ 6,824)
======== ======== ======== ====== ======= ========
EARNINGS (LOSS)
PER COMMON SHARE
(Primary and
fully diluted):
CONTINUING OPERATIONS $2.12 $1.80 $1.89
DISCONTINUED OPERATIONS - .32 -
SALE OF DIRECT RESPONSE - ( 1.93) ( 1.93)
SALE OF DIRECT SELLING - - ( .33)
----- ----- -----
TOTAL EARNINGS (LOSS)
PER COMMON SHARE $2.12 $ .19 ($ .37)
===== ===== =====
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 Direct Selling
inclusive of escrow amount less taxes due at closing.
(b) Reflects the elimination of the net assets sold from Direct Selling.
(c) Reflects accrued transaction fees.
(d) Reflects the cumulative translation adjustment associated with
Worldwide Direct Selling.
(e) Reflects the net payable owed to Direct Selling.
(f) Reflects income taxes payable due to tax gain on sale of Direct
Selling.
(g) Reflects loss associated with sale of Direct Selling.
(h) Reflects the elimination of $1,163,000 Direct Response net loss and
$3,321,000 Direct Selling net income.
(i) Reflects the elimination of $6,171,000 Direct Response net loss and
$11,992,000 Direct Selling net income.
(j) Reflects the reduction of interest expense associated with use of
proceeds received from the sale of Direct Selling.
(k) Reflects income taxes related to the pro forma adjustment (j).