RADIAN INTERNATIONAL LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
(UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS, JUNE 30, 1998 AND DECEMBER 31, 1997
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JUNE 30, DEC 31,
ASSETS 1998 1997
CURRENT ASSETS:
Cash and cash equivalents $ 1,793,282 $ 2,319,038
Trade accounts receivable, net 78,324,280 75,969,419
Inventories 5,685,342 4,602,934
Other current assets 4,756,489 7,902,832
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Total current assets 90,559,393 90,794,223
PROPERTY AND EQUIPMENT, Net 30,615,927 32,583,658
GOODWILL, Net 16,885,310 17,032,010
RETAINAGE RECEIVABLE 6,389,870 6,242,905
OTHER ASSETS 12,770,455 13,058,922
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TOTAL ASSETS $157,220,955 $159,711,718
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LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 44,215,334 $ 37,882,381
Current portion of long-term debt - 20,462
Trade accounts payable 5,024,389 11,250,385
Accrued payroll and related items 12,656,220 12,154,016
Accrued income taxes 335,775 511,361
Restructuring and termination liabilities 3,048,958 5,155,748
Other current liabilities 9,470,414 13,645,636
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Total current liabilities 74,751,090 80,619,989
EMPLOYEE BENEFIT PLANS 6,916,749 6,529,643
LONG-TERM DEBT - 204,620
OTHER LONG-TERM LIABILITIES 512,814 606,590
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Total liabilities 82,180,653 87,960,842
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN SUBSIDIARIES 385,145 427,806
MEMBERS' EQUITY 74,655,157 71,323,070
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TOTAL LIABILITIES AND MEMBERS' EQUITY $157,220,955 $159,711,718
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RADIAN INTERNATIONAL LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
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SIX MONTHS ENDED JUNE 30,
1998 1997
REVENUE:
Commercial contracts $ 80,517,485 $ 93,018,550
United States government contracts 56,773,815 63,366,374
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Total revenue 137,291,300 156,384,924
COST OF SERVICES AND SALES 78,859,082 96,505,041
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GROSS PROFIT 58,432,218 59,879,883
OVERHEAD AND GENERAL AND ADMINISTRATIVE
EXPENSES 54,528,498 58,832,720
INTEREST EXPENSE 1,118,750 1,224,083
GAIN ON SALE OF BUSINESS UNITS (965,873) -
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INCOME (LOSS) BEFORE INCOME TAXES 3,750,843 (176,920)
PROVISION FOR INCOME TAXES 248,780 1,260,146
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NET INCOME (LOSS) $ 3,502,063 $ (1,437,066)
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See notes to condensed consolidated financial statements.
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RADIAN INTERNATIONAL LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
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SIX MONTHS ENDED JUNE 30,
1998 1997
OPERATING ACTIVITIES:
Net income (loss) $ 3,502,063 $ (1,437,066)
Depreciation and amortization 5,797,402 4,160,328
Gain on sale of business units (965,873) -
Deferred taxes (38,504) (1,248,510)
Unrealized gain on investments 418,422 -
Currency translation adjustment (236,920) (74,934)
Changes in assets and liabilities:
Trade accounts and retainage receivable (2,501,825) (11,949,221)
Other receivables 3,463,889 (5,045,387)
Inventories (1,082,409) 217,409
Other assets 214,947 (882,546)
Trade accounts payable (6,225,996) (6,714,266)
Accrued payroll and related items 502,204 (146,222)
Restructuring and termination (2,106,790) (3,443,000)
Employee benefit plans 119,904 2,909,884
Other current liabilities (4,425,461) 9,049,089
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Cash used in operating activities (3,564,947) (14,604,442)
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INVESTING ACTIVITIES:
Purchases of property, equipment and leasehold improvements - net (3,541,111) (2,264,350)
Proceeds from sale of business units 1,102,413 -
Investments and other assests (545,702) 1,021,857
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Cash used in investing activities (2,984,400) (1,242,493)
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FINANCING ACTIVITIES:
Proceeds from short-term borrowings 13,784,795 48,205,000
Repayments of short-term borrowings (7,472,304) (32,216,727)
Repayments of long-term debt (204,620) (43,275)
Tax distributions to members (84,280) -
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Cash provided by financing activities 6,023,591 15,944,998
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CHANGE IN CASH AND CASH EQUIVALENTS (525,756) 98,063
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,319,038 1,847,715
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,793,282 $ 1,945,778
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SUPPLEMENTAL DISCLOSURE - Cash paid for interest $ 450,801 $ 1,026,746
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See notes to condensed consolidated financial statements.
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RADIAN INTERNATIONAL LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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NOTE 1 - BASIS OF PRESENTATION:
The accompanying condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and
disclosures included in the Company's 1997 consolidated financial
statements for the years ended December 31, 1997 and 1996. The condensed
consolidated financial statements include all adjustments (consisting only
of normal recurring items) which management considers necessary to present
fairly the financial position of the Company as of June 30, 1998 and
December 31, 1997 and the results of operations for the six-month periods
ended June 30, 1998 and June 30, 1997. Certain items in the prior year's
financial statements have been reclassified to be consistent with the 1998
presentation.
The results of operations for the interim periods are not necessarily
indicative of operating results to be expected for the full year.
NOTE 2 - RESTRUCTURING AND TERMINATION ACCRUALS:
During 1997, the Company reorganized its operations, resulting in the
termination of approximately 50 employees, and accrued termination
payments of $3,149,000, which will be substantially paid out within 1998.
At June 30, 1998 approximately $2,055,000 remains to be expended to
complete the restructuring. Additionally, at December 31, 1997, the
Company accrued $2,001,000 related to amounts to be paid to three former
executives under consulting agreements, at June 30, 1998; approximately
$993,000 remains to be paid.
NOTE 3 - INVENTORIES:
Inventories at June 30, 1998 consisted of the following:
Raw materials and supplies $2,369,810
Work-in-progress 2,163,149
Finished goods 1,152,383
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Total $5,685,342
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RADIAN INTERNATIONAL LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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NOTE 4 - COMPREHENSIVE INCOME:
The Company adopted Statement of Financial Accounting Standard (SFAS) No.
130 "Reporting of Comprehensive Income", effective in 1998. SFAS No. 130
established standards for the reporting and display of comprehensive
income and its components. Other comprehensive income of the Company
consists of unrealized gains or losses on marketable securities, foreign
currency translation adjustments, and minimum pension liability
adjustments. SFAS No. 130 does not affect the measurement of the items
included in other comprehensive income; it affects only where those items
are displayed and how they are described.
Comprehensive income is as follows:
SIX MONTHS ENDED JUNE 30,
1998 1997
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Net income (loss) $ 3,502,063 $ (1,437,066)
Other comprehensive income, net of tax:
Unrealized gain on marketable securities 418,422 -
Realized loss on marketable securities - 17,429
Foreign currency translation adjustments (236,920) (74,934)
Minimum pension liability adjustment (267,202) (36,908)
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(85,700) (94,413)
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Comprehensive income $ 3,416,363 $ (1,531,479)
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NOTE 5 - SALE OF BUSINESS UNITS
In February 1998, the Company sold its Materials & Mechanical Engineering
business unit to Hartford Steam Boiler Inspection and Insurance Company
for $1,102,413. A gain of $965,873 was recognized.
NOTE 6 - SUBSEQUENT EVENT
On July 31, 1998, the members sold 100% of their interest in Radian
International LLC to Dames & Moore Group. In connection with the sale, the
sellers or their affiliates forgave the Company's outstanding borrowings
of $40,780,843 under the revolving credit agreement.
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