EXHIBIT 99.1
MONTHLY OPERATING REPORT DEBTOR: PSC INC.
----------------------
CASE #: 02-15876 (SMB)
JOINTLY ADMINISTERED
----------------------
REPORTING PERIOD: APRIL, 2003
----------------------
Monthly Operating Report Prepared By Debtor
-----------------
TABLE OF CONTENTS Form Number
-----------------
Statement of Operations MOR 1
Balance Sheet MOR 2
Cashflow Statement MOR 3
Schedule of Cash Receipts and Disbursements MOR 4
Schedule of Cash Receipts and Disbursements - Detailed Report MOR 4-A
Schedule of Accounts Payable MOR 5
Status of Post-Petition Taxes
Sales Tax MOR 6
Payroll Taxes MOR 7
Property Taxes MOR 8
Income Taxes MOR 9
Accounts Receivable MOR 10
Debtor Questionnaire And Insurance Certification MOR 11
Notes To Financials MOR 12
Debtor: PSC Inc. 02-15876 (SMB)
PSC Scanning, Inc. 02-15877 (SMB)
Address: 111 SW Fifth Avenue, Suite 4100
Portland, OR 97204
Debtors Attorneys: Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
CERTIFICATION:
The undersigned, having reviewed the attached report and being familiar
with the Debtors' financial affairs, verifies under the penalty of
perjury, that the information contained therein is complete, accurate and
truthful to the best of my knowledge.
/s/ PAUL M. BROWN 5-19-2003
------------------------------------- -------------------------------------
Signature of Authorized Individual Date
Vice President and Chief
Paul M. Brown Financial Officer
------------------------------------- -------------------------------------
Printed Name of Authorized Individual Title of Authorized Individual
Indicated if this is an amended statement -----------
by checking here: AMENDED STATEMENT:
-----------
PSC INC.
CASE #: 02-15876 (SMB)
REPORTING PERIOD: APRIL 2003
$ AMOUNTS IN THOUSANDS
---------------- --------------- ------------- ------------- -------------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
---------------- --------------- ------------- ------------- -------------
DECEMBER 31, JANUARY 24, FEBRUARY 21, MARCH 28, APRIL 25,
Consolidated Statement of Operations (MOR-1) (a),(b) 2002 2003 2003 2003 2003
---------------- --------------- ------------- ------------- -------------
Sales to third parties $ 15,529 $ 11,523 $ 13,587 $ 17,557 $ 13,013
Cost of Sales 11,261 7,172 8,376 11,303 8,167
---------------- --------------- ------------- ------------- -------------
GROSS PROFIT 4,268 4,351 5,211 6,254 4,846
---------------- --------------- ------------- ------------- -------------
Operating Expenses
Sales & Marketing 3,526 2,382 2,722 2,949 2,538
Engineering, R&D 1,089 1,058 753 1,093 929
General & Administrative 1,304 804 888 1,038 1,107
Severance & Other Costs (202) - - - -
MIP & Profit Sharing - - 172 346
Debt Restructuring Fees 450 503 499 291 1,367
Foreign Curr. (Gain) Loss (212) (114) 45 (9) (162)
Write-off of Debt Discount - 732 - -
Write-off of Goodwill - 633 - -
---------------- --------------- ------------- ------------- -------------
Total Operating Expenses 5,955 5,998 5,079 5,708 5,779
OPERATING PROFIT (LOSS) (1,687) (1,647) 132 546 (933)
---------------- --------------- ------------- ------------- -------------
Other (Income) Expense
Other (Income) Expense (1,788) (26) 51 58 (6)
Interest Expense 77 30 18 (13) (5)
---------------- --------------- ------------- ------------- -------------
Other (Income) Expense (1,711) 4 69 45 (11)
---------------- --------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE TAXES 24 (1,651) 63 501 (922)
Tax Provision (Benefit) 338 (2) 129 49 164
---------------- --------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (314) $ (1,649) $ (66) $ 452 $ (1,086)
================ =============== ============= ============= =============
Notes:
(a) This Statement of Operations is for the PSC Inc., on a consolidated
basis. All foreign subsidiaries included in this statement are excluded
from the Chapter 11 filing of the debtors.
(b) Reporting period for December, 2002 is actually from November 22, 2002
(the petition filing date) to December 31, 2002. The Reporting period for
January, 2003 is actually January 1 to January 24, 2003, and for
February, the reporting period is January 24, 2003 to February 21, 2003.
The reporting period for March is February 22, 2003 to March 28, 2003.
The April reporting period is March 29, 2003 to April 25, 2003.
Schedule: MOR-1
PSC INC.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
$ Amounts in thousands
---------- --------- --------- --------- --------- ---------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
---------- --------- --------- --------- --------- ---------
Consolidated Balance Sheet (MOR-2) 11/22/02
(a) (Petition Date) 12/31/02 01/24/03 02/21/03 03/28/03 04/25/03
---------- --------- --------- --------- --------- ---------
ASSETS
- ------------------------------------------
CURRENT ASSETS
Cash and cash equivalents 2,328 3,308 3,733 4,099 2,971 2,559
Accounts Receivable - net 29,643 29,012 30,182 30,625 30,656 32,390
Inventories - net 22,891 20,121 19,289 19,097 18,672 19,824
Prepaid Expenses and Other 2,832 3,960 4,738 4,643 4,576 4,183
---------- --------- --------- --------- --------- ---------
Total current assets 57,694 56,401 57,942 58,464 56,875 58,956
---------- --------- --------- --------- --------- ---------
PROPERTY, PLANT AND EQUIPMENT
Land - - - - - -
Buildings & Improvements 29 54 559 551 551 562
Office Furniture 13,966 14,117 14,153 14,245 14,559 15,073
Production Equipment 17,629 17,719 17,852 17,921 17,985 18,065
Leasehold Improvements 921 926 929 930 931 939
---------- --------- --------- --------- --------- ---------
Total property, plant and equipment 32,545 32,816 33,493 33,647 34,026 34,639
Less: Accumulated Depreciation (23,961) (24,337) (25,264) (25,523) (25,632) (25,900)
---------- --------- --------- --------- --------- ---------
NET PROPERTY, PLANT AND EQUIPMENT 8,584 8,479 8,229 8,124 8,394 8,739
---------- --------- --------- --------- --------- ---------
OTHER ASSETS
Intangibles from Acquisitions 102 50 - - - -
Other Intangibles 14,751 15,119 14,401 14,509 15,161 15,337
Other Assets (358) 86 227 178 178 177
Less: Accumulated amortization (5,593) (5,742) (5,909) (6,070) (6,232) (6,393)
---------- --------- --------- --------- --------- ---------
Total other assets 8,902 9,513 8,719 8,617 9,107 9,121
---------- --------- --------- --------- --------- ---------
TOTAL ASSETS 75,180 74,393 74,890 75,205 74,376 76,816
========== ========= ========= ========= ========= =========
Schedule: MOR-2
PSC INC.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
$ Amounts in thousands
---------- --------- --------- --------- --------- ---------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
---------- --------- --------- --------- --------- ---------
Consolidated Balance Sheet (MOR-2) 11/22/02
(a) (Petition Date) 12/31/02 01/24/03 02/21/03 03/28/03 04/25/03
---------- --------- --------- --------- --------- ---------
LIABILITIES & SHAREHOLDERS' EQUITY
- ------------------------------------------
LIABILITIES (POST-PETITION)
- ------------------------------------------
CURRENT LIABILITIES
DIP Financing Arrangement - 4,000 4,000 2,500 500 500
Accounts Payable - 4,945 6,004 10,661 12,446 14,647
Note Payable - - - - - -
Accrued Expenses - 151 2,144 2,641 3,111 3,069
Accrued Interest - 11 39 28 40 40
Deferred Revenue - 131 144 217 248 432
Accrued Warranty - 138 297 384 505 573
Accrued Taxes/VAT - 19 (172) (151) 345 564
Accrued Royalties - 535 855 1,268 1,385 1,866
Accrued Payroll and Commissions - 947 2,963 2,614 2,314 2,513
Accr. Acq. Related Restructuring Costs - 550 - - - -
Intercompany payable (receivable) - 170 (248) (177) (54) (3)
---------- --------- --------- --------- --------- ---------
TOTAL CURRENT LIABILITIES - 11,597 16,026 19,985 20,840 24,201
---------- --------- --------- --------- --------- ---------
LONG-TERM LIABILITIES
Deferred Revenue - - 29 34 42 44
LT Warranty Accrual - 110 172 261 372 443
Other LT Liabilities (includes warrants) - - 160 156 162 158
---------- --------- --------- --------- --------- ---------
TOTAL LONG-TERM LIABILITIES - 110 361 451 576 645
---------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES (POST-PETITION) - 11,707 16,387 20,436 21,416 24,846
---------- --------- --------- --------- --------- ---------
LIABILITIES (PRE-PETITION)
- ------------------------------------------
CURRENT LIABILITIES
Secured debt 93,462 93,462 93,462 93,462 93,462 93,462
Priority debt 29,268 29,268 30,000 30,000 30,000 30,000
Note Payable 1,651 1,651 1,651 1,651 1,651 1,651
Accounts Payable 17,226 8,463 6,675 3,539 2,411 2,672
Accrued Expenses 8,543 6,956 5,977 5,827 5,378 4,893
Accrued Interest 14,128 13,927 13,928 13,928 13,928 13,928
Deferred Revenue 884 560 615 561 515 496
Accrued Warranty 1,519 1,387 1,239 1,192 1,132 1,092
Accrued Taxes/VAT (457) - 12 6 6 6
Accrued Royalties 1,637 716 716 716 28 28
Accrued Payroll and Commissions 2,983 1,639 539 461 637 493
Accr. Acq. Related Restructuring Costs - - - - - -
Intercompany payable (receivable) - - - - - -
---------- --------- --------- --------- --------- ---------
TOTAL CURRENT LIABILITIES 170,844 158,029 154,814 151,343 149,148 148,721
---------- --------- --------- --------- --------- ---------
Schedule: MOR-2 (continued)
LONG-TERM LIABILITIES
Deferred Revenue 550 555 523 501 478 529
LT Warranty Accrual 1,557 1,497 1,441 1,383 1,326 1,270
Other LT Liabilities (includes warrants) 489 495 333 330 328 325
---------- --------- --------- --------- --------- ---------
TOTAL LONG-TERM LIABILITIES 2,596 2,547 2,297 2,214 2,132 2,124
---------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES (PRE-PETITION) 173,440 160,576 157,111 153,557 151,280 150,845
---------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES 173,440 172,283 173,498 173,993 172,696 175,691
---------- --------- --------- --------- --------- ---------
SHAREHOLDERS' EQUITY
Preferred Stock 1 1 1 1 1 1
Common Shares 129 129 129 129 129 129
Additional Paid-in Capital 73,078 73,078 73,078 73,078 73,078 73,078
Cumulative Translation Adjustment (3,277) (2,593) (1,662) (1,776) (1,760) (1,116)
Retained earnings - prepetition (166,834) (166,834) (166,834) (166,834) (166,834) (166,834)
Retained earnings - postpetition - (314) (1,963) (2,029) (1,577) (2,776)
Less: Treasury Shares (1,357) (1,357) (1,357) (1,357) (1,357) (1,357)
---------- --------- --------- --------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY (98,260) (97,890) (98,608) (98,788) (98,320) (98,875)
---------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS, EQUITY 75,180 74,393 74,890 75,205 74,376 76,816
========== ========= ========= ========= ========= =========
(a) The Consolidated Balance Sheet is for the PSC Inc., on a consolidated basis.
All foreign subsidiaries included in this statement are excluded from the
Chapter 11 filing of the debtors.
Schedule: MOR-2 (continued)
PSC INC.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
----------- ----------- ----------- ----------- -----------
$ Amounts in thousands UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
----------- ----------- ----------- ----------- -----------
CONSOLIDATED STATEMENT OF CASHFLOWS (MOR-3) (a),(b)12/31/02 01/24/02 02/21/03 03/28/03 04/25/03
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) (314) (1,649) (66) 452 (1,199)
Adjustments to reconcile net income to net cash:
Depreciation 348 472 493 470 424
Amortization 95 - - - -
Change in fair value of warrants - (10) - - -
(INCREASE) DECREASE IN ASSETS:
Accounts receivable 631 (1,170) (443) (31) (1,734)
Inventories 2,770 832 192 425 (1,152)
Prepaid expenses and other (1,124) (778) 91 63 389
INCREASE (DECREASE) IN LIABILITIES:
Accounts payable (6,450) (42) 1,769 2,704 2,066
Accrued expenses 1,771 (2,111) 630 (1,900) 1,006
Accrued payroll & commissions (351) 916 (427) (124) 55
Other Long-term liabilities (132) 79 26 28 (128)
----------- ----------- ----------- ----------- -----------
Net Cash Provided by/(Used in) Operating Activities (2,756) (3,461) 2,265 2,087 (273)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net (243) (61) (227) (580) (607)
Proceeds from sale of assets - - - - -
Write-off of goodwill - 633 - - -
Write-off of discount related to sub-debt - 2,383 - - -
Addition to intangible assets & other long-term assets, net (706) - (58) (651) (176)
----------- ----------- ----------- ----------- -----------
Net Cash Provided by/(Used in) Investing Activities (949) 2,955 (285) (1,231) (783)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to Debtor-In-Possession Financing Arrangement 4,000 - (1,500) (2,000) -
Additions (Payments) of long-term debt 1 - - - -
----------- ----------- ----------- ----------- -----------
Net Cash Provided by/(Used in) Financing Activities 4,001 - (1,500) (2,000) -
----------- ----------- ----------- ----------- -----------
Effect of Exchange Rate Changes on Cash & Cash Equivalents 684 931 (114) 16 644
----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Cash & Cash Equivalents 980 425 366 (1,128) (412)
CASH AND CASH EQUIVALENTS, beginning of period 2,328 3,308 3,733 4,099 2,971
----------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period 3,308 3,733 4,099 2,971 2,559
=========== =========== =========== =========== ===========
Notes:
(a) This Statement of Cashflows is for the PSC Inc., on a consolidated basis.
All foreign subsidiaries included in this statement are excluded from the
Chapter 11 filing of the debtors.
(b) Reporting period for December, 2002 is actually from November 22, 2002
(the petition filing date) to December 31, 2002. The Reporting period for
January, 2003 is actually January 1 to January 24, 2003, and for
February, the reporting period is January 24, 2003 to February 21, 2003.
The reporting period for March is February 22, 2003 to March 28, 2003.
The April reporting period is March 29, 2003 to April 25, 2003.
Schedule: MOR-3
PSC INC.
CASE #: 02-15876 (SMB)
REPORTING PERIOD: APRIL 2003
$ AMOUNTS IN THOUSANDS
-------------- -------------- -------------- -------------- --------------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
-------------- -------------- -------------- -------------- --------------
SCHEDULE OF CASH RECEIPTS & DISBURSEMENTS (MOR-4) (a),(b)12/31/02 01/24/03 02/21/03 03/28/03 04/25/03
-------------- -------------- -------------- -------------- --------------
Cash Receipts
- ----------------------------------------------------
Accounts Receivable Collections 10,394 7,780 7,263 10,057 7,043
Cash Repatriations From International Subsidiaries 3,681 3,176 4,350 6,144 2,730
Additions (Reductions) to Post-Petition Debt 4,000 - (1,500) (2,000) -
Other Cash Receipts -
-------------- -------------- -------------- -------------- --------------
Total Cash Receipts 18,075 10,956 10,113 14,201 9,773
-------------- -------------- -------------- -------------- --------------
OPERATING DISBURSEMENTS (c)
- ----------------------------------------------------
Payroll and Payroll Taxes 2,638 2,454 2,984 4,137 2,597
Accounts Payable And Accrued Liabilities 11,774 6,662 6,393 7,960 6,846
Consulting and Professionals In The Normal Course 201 125 8 670 317
Royalty Payments 921 30 20 1,198 -
Director & Officer Liability Insurance Payments 307 600 - - -
Rents 221 - - - -
Capital Expenditures 468 185 148 328 707
DIP Interest 11 30 24 -
-------------- -------------- -------------- -------------- --------------
TOTAL OPERATING DISBURSEMENTS 16,530 10,067 9,583 14,317 10,467
-------------- -------------- -------------- -------------- --------------
BANKRUPTCY-RELATED FEES AND EXPENSES
- ----------------------------------------------------
Payments To Professionals - - 189 484 320
US Trustee Fees - - 10 - 10
Court Costs - - - - -
Other Costs - - - - -
-------------- -------------- -------------- -------------- --------------
TOTAL BANKRUPTCY-RELATED FEES AND EXPENSES - - 199 484 330
-------------- -------------- -------------- -------------- --------------
TOTAL CASH DISBURSEMENTS 16,530 10,067 9,782 14,801 10,797
-------------- -------------- -------------- -------------- --------------
Net Change In Cash 1,545 889 331 (600) (1,024)
Beginning Cash Balance, US Bank Accounts (282) 1,263 2,152 2,483 1,883
-------------- -------------- -------------- -------------- --------------
ENDING CASH BALANCE, US BANK ACCOUNTS 1,263 2,152 2,483 1,883 859
============== ============== ============== ============== ==============
RECONCILIATION TO BALANCE SHEET:
Cash - US Bank Accounts 1,263 2,152 2,483 1,883 859
Cash - International Bank Accounts (Not In Chapter 11) 2,045 1,581 1,616 1,088 1,700
-------------- -------------- -------------- -------------- --------------
TOTAL CASH PER BALANCE SHEET 3,308 3,733 4,099 2,971 2,559
============== ============== ============== ============== ==============
(a) This schedule of Cash Receipts And Disbursements is related to US-only
disbursements that are treated in accordance with the Chapter 11 provisions.
International revenues and expenses are excluded. Note that Cash Repatriations
From International Subsidiaries is the net cash swept from foreign cash
collections, after local disbursements.
(b) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
(c) Includes payment of Court-approved Pre-Petition items.
Schedule: MOR-4
PSC INC.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
$ Amounts in thousands
SCHEDULE OF CASH RECEIPTS & DISBURSEMENTS (MOR-4A)(a), (b)
PAGE 1 OF 2
-------- ------------ --------- -------- ------------ ---------
PSC Inc. PSC Scanning TOTAL PSC Inc. PSC Scanning TOTAL
Only Only UNAUDITED Only Only UNAUDITED
-------- ------------ --------- -------- ------------ ---------
01/24/03 01/24/03 01/24/03 02/21/03 02/21/03 02/21/03
-------- ------------ --------- -------- ------------ ---------
Cash Receipts
- -------------------------------------
Accounts Receivable Collections - 7,780 7,780 - 7,263 7,263
Cash Repatriations From
International Subsidiaries - 3,176 3,176 - 4,350 4,350
Additions (Reductions) to
Post-Petition Debt - - - - (1,500) (1,500)
Other Cash Receipts - - - - - -
-------- ------------ --------- -------- ------------ ---------
Total Cash Receipts - 10,956 10,956 - 10,113 10,113
-------- ------------ --------- -------- ------------ ---------
OPERATING DISBURSEMENTS (c)
- -------------------------------------
Payroll and Payroll Taxes 87 2,367 2,454 110 2,874 2,984
Accounts Payable And Accrued
Liabilities 46 6,599 6,662 515 5,861 6,393
Consulting and Professionals
In The Normal Course 25 100 125 8 - 8
Royalty Payments - 30 30 - 20 20
Director & Officer Liability
Insurance Payments 600 - 600 - - -
Rents 17 - - 17 - -
Capital Expenditures - 185 185 - 148 148
DIP Interest 11 11 30 30
-------- ------------ --------- -------- ------------ ---------
TOTAL OPERATING DISBURSEMENTS 775 9,281 10,067 650 8,903 9,583
-------- ------------ --------- -------- ------------ ---------
BANKRUPTCY-RELATED FEES AND EXPENSES
- -------------------------------------
Payments To Professionals - 189
US Trustee Fees - 10
Court Costs - -
Other Costs - -
--------- ---------
TOTAL BANKRUPTCY-RELATED FEES
AND EXPENSES - 199
--------- ---------
TOTAL CASH DISBURSEMENTS 10,067 9,782
--------- ---------
Net Change In Cash 889 331
Beginning Cash Balance,
US Bank Accounts 1,263 2,152
--------- ---------
ENDING CASH BALANCE, US BANK ACCOUNTS 2,152 2,483
========= =========
RECONCILIATION TO BALANCE SHEET:
Cash - US Bank Accounts 2,152 2,483
Cash - International Bank Accounts
(Not In Chapter 11) 1,581 1,616
--------- ---------
TOTAL CASH PER BALANCE SHEET 3,733 4,099
========= =========
Table continued on next page
Schedule: MOR-4A
PSC INC.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
$ Amounts in thousands
SCHEDULE OF CASH RECEIPTS & DISBURSEMENTS (MOR-4A)(a), (b)
PAGE 2 OF 2
-------- ------------ --------- -------- ------------ ---------
PSC Inc. PSC Scanning TOTAL PSC Inc. PSC Scanning TOTAL
Only Only UNAUDITED Only Only UNAUDITED
-------- ------------ --------- -------- ------------ ---------
03/28/03 03/28/03 03/28/03 04/25/03 04/25/03 04/25/03
-------- ------------ --------- -------- ------------ ---------
Cash Receipts
- -------------------------------------
Accounts Receivable Collections
Cash Repatriations From - 10,057 10,057 - 7,043 7,043
International Subsidiaries
Additions (Reductions) to - 6,144 6,144 - 2,730 2,730
Post-Petition Debt
Other Cash Receipts - (2,000) (2,000) - - -
- - - - - -
Total Cash Receipts -------- ------------ --------- -------- ------------ ---------
- 14,201 14,201 - 9,773 9,773
OPERATING DISBURSEMENTS (c) -------- ------------ --------- -------- ------------ ---------
- -------------------------------------
Payroll and Payroll Taxes
Accounts Payable And Accrued 151 3,986 4,137 123 2,474 2,597
Liabilities
Consulting and Professionals 291 7,669 7,960 301 6,545 6,846
In The Normal Course
Royalty Payments 37 633 670 17 300 317
Director & Officer Liability - 1,198 1,198 - - -
Insurance Payments
Rents - - - - - -
Capital Expenditures - - - - - -
DIP Interest - 328 328 - 707 707
24 24 - - -
TOTAL OPERATING DISBURSEMENTS -------- ------------ --------- -------- ------------ ---------
479 13,814 14,317 441 10,026 10,467
-------- ------------ --------- -------- ------------ ---------
BANKRUPTCY-RELATED FEES AND EXPENSES
- -------------------------------------
Payments To Professionals 484 320
US Trustee Fees - 10
Court Costs - -
Other Costs - -
--------- ---------
TOTAL BANKRUPTCY-RELATED FEES
AND EXPENSES 484 330
--------- ---------
TOTAL CASH DISBURSEMENTS 14,801 10,797
--------- ---------
Net Change In Cash (600) (1,024)
Beginning Cash Balance,
US Bank Accounts 2,483 1,883
--------- ---------
ENDING CASH BALANCE, US BANK ACCOUNTS 1,883 859
========= =========
RECONCILIATION TO BALANCE SHEET:
Cash - US Bank Accounts 1,883 859
Cash - International Bank Accounts
(Not In Chapter 11) 1,088 1,700
--------- ---------
TOTAL CASH PER BALANCE SHEET 2,971 2,559
========= =========
(a) This schedule of Cash Receipts And Disbursements is related to US-only
disbursements that are treated in accordance with the Chapter 11
provisions. International revenues and expenses are excluded. Note that
Cash Repatriations From International Subsidiaries is the net cash swept
from foreign cash collections, after local disbursements.
(b) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for
January, 2003 is actually January 1 to January 24, 2003, and for February,
the reporting period is January 24, 2003 to February 21, 2003. The
reporting period for March is February 22, 2003 to March 28, 2003.
(c) Includes payment of Court-approved Pre-Petition items.
Schedule: MOR-4A (continued)
PSC Inc.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
$ Amounts in thousands
-------------------------------------------------------------------------------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
-------------- -------------- -------------- ---------------- -----------------
SCHEDULE OF ACCOUNTS PAYABLE (MOR-5) 12/31/02 01/24/03 02/21/03 03/28/03 04/25/03
-------------- -------------- -------------- ---------------- -----------------
Trade Accounts Payable
US Pre-Petition Accounts Payable 7,870 6,675 3,539 2,411 2,672
US Post-Petition Accounts Payable 4,945 5,551 9,973 11,549 13,958
Foreign Subsidiary Accounts Payable 593 453 688 897 689
-------------- -------------- -------------- ---------------- -----------------
TOTAL CONSOLIDATED ACCOUNTS PAYABLE 13,408 12,679 14,200 14,857 17,319
============== ============== ============== ================ =================
-------------- -------------- -------------- ---------------- -----------------
Payable Payable Payable Payable Payable
INTERCOMPANY TRADE ACCOUNTS (a) (Receivable) (Receivable) (Receivable) (Receivable) (Receivable)
------------------------------------------------------------- -----------------
PSC Inc. (debtor) 9,715 14,012 15,554 16,719 16,338
PSC Scanning, Inc (debtor) (19,765) (21,708) (23,713) (24,221) (25,985)
PSC UK (233) (337) (150) 92 226
PSC France 686 623 843 489 1,175
PSC Italy 2,551 2,713 2,510 2,809 2,936
PSC Germany 3,559 3,594 4,157 4,257 4,744
PSC Australia 10 (138) (190) (473) (406)
PSC Japan 268 287 40 (165) 331
Consolidation Eliminations 3,209 954 949 493 641
-------------- -------------- -------------- ---------------- -----------------
TOTAL INTERCOMPANY TRADE ACCOUNTS - - - - -
============== ============== ============== ================ =================
Note:
(a) All cash flows within subsidiaries flow from the foreign subsidiaries to the
domestic debtors. There are no cash disbursements from the debtors to non-debtor
subsidiaries.
Schedule: MOR-5
PSC INC.
CASE #: 02-15876 (SMB)
REPORTING PERIOD: APRIL 2003 ----------------
UNAUDITED
----------------
SCHEDULE OF SALES AND USE TAXES (MOR-6) (A)
-------------- -------------------------------------------------------------------------------
GROSS TAXABLE SALES & USE TAX LIABILITY
SALES
-------------- -------------------------------------------------------------------------------
Jurisdiction 04/25/03 03/28/03 TOTAL PAYMENTS PAYMENT 04/25/03
BALANCE COLLECTIONS MADE DATE BALANCE
- ----------------------------------- -------------- -------------------------------------------------------------------------------
Canada - 4,038 (6,663) (1,411) 4/25/03 (4,036)
Arkansas (7,029) 311 768 (311) 4/10/03 767
Arizona (10,787) (6,505) 5,176 (1,624) 4/10/03 (2,953)
California (50,101) 1,550 5,426 (1,550) 4/18/03 5,426
Colorado (697) 197 220 (197) 4/17/03 220
Florida (23,419) 1,671 3,260 (1,671) 4/18/03 3,260
Georgia (2,628) 4,272 6,900 (4,272) 4/17/03 6,900
Hawaii/adj to be made - (22) (22) (44)
Illinois (5,167) 704 1,023 (704) 4/17/03 1,023
Indiana (280) (8,246) (8,230) (222) 4/17/03 (16,699)
Louisiana/adj to be made - (6) (6) (12)
Massachusetts (3,437) (446) (276) (97) 4/17/03 (819)
Maryland (1,494) 2,301 2,376 (2,301) 4/17/03 2,376
Michigan (11,318) 170 801 (170) 4/10/03 801
Minnesota (2,681) 457 689 1,146
Minnesota/adj to be made - 1,305 1,305 2,610
North Carolina (23,688) 225 1,962 (225) 4/10/03 1,963
New Jersey (10,537) (5,129) (4,499) (9,628)
New York (26,130) 795 2,787 (795) 4/17/03 2,788
Ohio (30,588) 3,003 4,977 (3,003) 4/17/03 4,976
Oklahoma 21,374 754 378 (393) 4/10/03 739
Pennsylvania (14,590) 291 1,166 (291) 4/17/03 1,166
Tennessee (34,351) (1,125) 2,044 919
Texas (28,321) 1,444 3,737 (1,444) 4/17/03 3,736
Virginia (681) 291 322 (291) 4/17/03 321
Washington (1,310) 218 319 (218) 4/17/03 319
Misc Adjustments 52 60 112
-------------- -------------------------------------------------------------------------------
Total (267,861) 2,569 25,998 (21,191) 7,376
============== =============================================== ================
(a) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
Schedule: MOR-6
PSC INC.
CASE #: 02-15876 (SMB) ---------
REPORTING PERIOD: APRIL 2003 UNAUDITED
---------
SCHEDULE OF PAYROLL & PAYROLL TAXES (MOR-7) (A)
PAGE 1 OF 2
------------------------------ --------------------------------
GROSS SALARY/WAGES PAID EMPLOYEE PAYROLL TAXES WITHHELD
------------------------------ --------------------------------
Jurisdiction 4/11/03 4/25/03 Total 4/11/03 4/25/03 Total
- ---------------- --------- --------- ---------- ---------- ---------- ----------
1,168,788 1,246,797 2,415,585
Federal - - - 133,624 152,316 285,939
EIC - - - (3) (52) (54)
Social Security - - - 69,449 73,501 142,951
Medicare - - - 16,493 17,624 34,117
FUTA - - - - - -
California - - - 1,348 1,744 3,093
Colorado - - - 127 227 354
Florida - - - - - -
Georgia - - - 1,816 2,352 4,167
Indiana - - - 89 333 422
Massachusetts - - - 124 242 366
Maryland - - - - - -
North Carolina - - - 121 224 345
New Jersey - - - 121 240 361
Nevada - - - - - -
New York - - - 307 307 614
Ohio - - - 2,613 3,121 5,734
Oregon - - - 58,294 58,027 116,321
Pennslyvania - - - 448 759 1,207
Texas - - - - - -
Utah - - - 159 406 565
Washington - - - - - -
Canada 6,053 10,577 16,629 1,848 1,875 3,723
------------------------------ --------------------------------
Total 1,174,840 1,257,374 2,432,214 286,979 313,246 600,225
============================== ================================
(a) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
Schedule: MOR-7
PSC INC.
CASE #: 02-15876 (SMB) ---------
REPORTING PERIOD: MARCH 2003 UNAUDITED
---------
SCHEDULE OF PAYROLL & PAYROLL TAXES (MOR-7) (A)
PAGE 2 OF 2
----------------------------------------- --------------------
EMPLOYER PAYROLL TAXES CONTRIBUTIONS DATE TAXES REMITTED
----------------------------------------- --------------------
JURISDICTION 4/11/03 4/25/03 Total 4/11/03 4/25/03
- ------------- ----------------------------------------- --------------------
- - - 4/11/2003 4/25/2003
Federal - - - 4/11/2003 4/25/2003
EIC 69,449 73,501 142,951 4/11/2003 4/25/2003
Social Security 16,493 17,624 34,117 4/11/2003 4/25/2003
Medicare 1,267 858 2,124 4/11/2003 4/25/2003
FUTA - - - 4/11/2003 4/25/2003
California - - - 4/11/2003 4/25/2003
Colorado 1 - 1 4/11/2003 4/25/2003
Florida - - - 4/11/2003 4/25/2003
Georgia - - - 4/11/2003 4/25/2003
Indiana - - - 4/11/2003 4/25/2003
Massachusetts - - - 4/11/2003 4/25/2003
Maryland - - - 4/11/2003 4/25/2003
North Carolina - - - 4/11/2003 4/25/2003
New Jersey - - - 4/11/2003 4/25/2003
Nevada - - - 4/11/2003 4/25/2003
New York - 30 30 4/11/2003 4/25/2003
Ohio 21,245 19,617 40,861 4/11/2003 4/25/2003
Oregon - - - 4/11/2003 4/25/2003
Pennslyvania - - - 4/11/2003 4/25/2003
Texas - 3 3 4/11/2003 4/25/2003
Utah - - - 4/11/2003 4/25/2003
Washington 220 223 444 4/9/2003 4/23/2003
Canada
-----------------------------------------
Total 108,675 111,856 220,531
=========================================
(a) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
Schedule: MOR-7 (continued)
PSC INC. -----------
CASE #: 02-15876 (SMB) UNAUDITED
Reporting Period: April 2003 -----------
SCHEDULE OF PROPERTY TAXES (MOR-8) (A)
--------------------------------------------------------------
PROPERTY TAXES
--------------------------------------------------------------
- -------------------------------------------------------------------- 3/29 - 4/25 ACCRUED
Jurisdication Location Asset Description EXPENSED LIABILITY TOTAL PAID DATE PAID
- -------------------------------------------------------------------- -------------- -------------- ----------- --------- ----------
Boulder County Boulder, CO Tooling (scrapped in 2001) -
Orange County Santa Ana, CA Tooling -
Miami Dade County Miami, CA office furniture/equip -
Citicorp Vendor Finance Philadelphia, PA 2 photo copiers -
GE Capital Pasadena, CA 14 Sharp photo copiers -
Siemens Financial Chicago, IL Manufacturing Equip. -
Siemens Financial Chicago, IL Manufacturing Equip. -
Siemens Financial Chicago, IL Manufacturing Equip. -
Clark County Vancouver, WA Tooling 7,766 7,766
Vancouver, WA Refund of Prior Payments -
Nielsen Family PartnershipEugene, OR Building Rent -
Sonoma County Sonoma, CA -
Lane County Eugene, OR various asset classes 27,102 (27,102) (0)
Multnomah County Portland, OR office furniture/equip -
----------------------------------------------------
TOTAL 27,102 (19,336) 7,766 0
====================================================
(a) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
Schedule: MOR-8
PSC INC.
CASE #: 02-15876 (SMB) -----------
REPORTING PERIOD: APRIL 2003 UNAUDITED
-----------
SCHEDULE OF INCOME TAXES (MOR-9) (A)
------------------------------------------------------------------------------------
TAX TAX TAX TAX 4/25/2003
REFUNDS DUE WITHHELD PAYMENTS TAX LIABILITY
----------------- --------------- ---------------- ---------------- ----------------
Federal Income Tax - - - - -
State Income Tax - - - - -
Pennsalvania Refund - - - - -
NY State Refund - - - - -
Michigan State Tax Refund - - - - -
Portland License Fee - - - - -
Accrued State Income Tax 50,000 - - 425,000
Foreign Income Tax - - - - -
------------------------------------------------------------------------------------
TOTAL - 50,000 - - 425,000
====================================================================================
(a) Reporting period for December, 2002 is actually from November 22, 2002 (the
petition filing date) to December 31, 2002. The Reporting period for January,
2003 is actually January 1 to January 24, 2003, and for February, the reporting
period is January 24, 2003 to February 21, 2003. The reporting period for March
is February 22, 2003 to March 28, 2003. The April reporting period is March 29,
2003 to April 25, 2003.
Schedule: MOR-9
PSC INC.
CASE #: 02-15876 (SMB)
REPORTING PERIOD: APRIL 2003
$ AMOUNTS IN THOUSANDS
SCHEDULE OF ACCOUNTS RECEIVABLE (MOR-10)
---------------- ---------------- ---------------- ----------------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
---------------- ---------------- ---------------- ----------------
January 2003 February 2003 March 2003 April 2003
---------------- ---------------- ---------------- ----------------
US 15,668 15,369 14,454 14,320
Europe 13,253 14,347 15,571 16,938
Asia 1,908 1,585 1,336 1,651
---------------- ---------------- ---------------- ----------------
Total Accounts Receivable 30,829 31,301 31,361 32,909
Allowance For Doubtful Accounts (647) (676) (705) (519)
---------------- ---------------- ---------------- ----------------
Net Accounts Receivable 30,182 30,625 30,656 32,390
================ ================ ================ ================
Schedule: MOR-10
PSC Inc.
Case #: 02-15876 (SMB)
Reporting Period: April 2003
Debtor Questionnaire (MOR-11)
April 2003
- ---------------------------------------------------------------- ---------------
Must be completed each month Yes No
- ---------------------------------------------------------------- ---------------
1. Have any assets been sold or transferred outside the X
normal course of business this period? If yes, provide
an explantion below.
2. Have any funds been disbursed for any account other X
than a debtor in possession account this reporting
period? If yes, provide an explanation below.
3. Have all postpetition tax returns been timely filed? X
If no, provide an explanation below.
4. Are workers compensation and general liability and other X
necessary insurance coverages in effect? If no,
provide an explanation below.
5) All insurance policies are fully paid for the current period. X
6) All amounts relating to workers compensation and X
disability insurance have been paid for the current period.
Schedule: MOR-11
Schedule: MOR-12
PSC INC.
CASE #: 02-15876 (SMB)
REPORTING PERIOD: APRIL, 2003
NOTES TO FINANCIALS
1. THE COMPANY
The accompanying financial statements are comprised of the accounts of PSC Inc.
(a New York corporation) (the Company) and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain schedules have been provided to provide direct cash
receipts and disbursement information that relates solely to the debtors.
On November 22, 2002, PSC Inc. and PSC Scanning, Inc. (both US corporations)
(the debtors) filed for protection from creditors under Chapter 11, of the US
Bankruptcy Code. The Company filed a Plan of Reorganization outlining its
anticipated treatment of various creditor classes on the same date. At the time
of the filing, the debtors had negotiated a Debtor-In-Possession financing
arrangement (DIP financing) to provide up to $20 million in working capital for
the period of reorganization, subject to certain performance covenants. This DIP
financing was subsequently approved by the Bankruptcy Court. As of April, 2003,
the Company was in compliance with all performance covenants.
2. SUMMARY OF SIGNIFIGANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, including those
related to revenue recognition, bad debts, inventories, warranty obligations,
and income taxes. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions. We believe the following critical accounting policies
and the related judgments and estimates affect the preparation of our
consolidated financial statements.
The Company reports its results from operations on a fiscal month reporting
basis. As such, the first and second month of each quarter is a 4-week month and
the third month of each quarter is a 5-week month. At yearend, the last month of
the year is extended or reduced so that the year end falls on the last day of
the calendar year. Management believes that this reporting policy facilitates
effective management of the business. However, for monthly reporting purposes,
comparability of monthly results can be affected by the differences in the
length of the reporting period.
REVENUE RECOGNITION. Our policy is to recognize revenue upon delivery of our
products to our customers and the fulfillment of all contractual terms and
conditions, pursuant to the guidance provided by Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements (SAB 101), issued by the
Securities and Exchange Commission.
Revenue related to the sales of the Company's scanning products is generally
recognized when products are shipped or services are rendered, the risk of loss
has passed to the customer, the sales price is fixed or determinable, and
Schedule: MOR-12
collectibility is reasonably assured. Some distributors and dealer agreements
allow for return of product and/or price protection under certain conditions
within limited time periods. The Company maintains a reserve for sales returns
and price adjustments based on historical experience and other qualitative
factors. Estimated sales returns and price protection amounts are reserved for
against revenue in the month in which it is recognized. These estimates have not
differed materially from actual results. Service and maintenance sales are
recognized over the contract term.
ALLOWANCE FOR DOUBTFUL ACCOUNTS. Our policy is to maintain allowances for
estimated losses resulting from the inability of our customers to make required
payments. Credit limits are established through a process of reviewing the
financial history and stability of each customer. Where appropriate, we obtain
credit rating reports and financial statements of the customer when determining
or modifying their credit limits. We regularly evaluate the collectibility of
our trade receivable balances based on a combination of factors. When a
customer's account balance becomes past due, we initiate dialogue with the
customer to determine the cause. If it is determined that the customer will be
unable to meet its financial obligation to us, such as in the case of a
bankruptcy filing, deterioration in the customer's operating results or
financial position or other material events impacting their business, we record
a specific allowance to reduce the related receivable to the amount we expect to
recover given all information presently available.
We also record an allowance for all other customers based on certain other
factors including the length of time the receivables are past due and historical
collection experience with individual customers. If the financial conditions of
those customers were to deteriorate, however, resulting in their inability to
make payments, we may need to record additional allowances, which would result
in additional selling, general and administrative expenses being recorded for
the period in which such determination was made.
INVENTORY RESERVES. As a designer and manufacturer of bar code verification
products, we are exposed to a number of economic and industry factors that could
result in portions of our inventory becoming either obsolete or in excess of
anticipated usage. These factors include, but are not limited to, technological
changes in our markets, our ability to meet changing customer requirements,
competitive pressures in products and prices, and the availability of key
components from our suppliers. Our policy is to establish inventory reserves
when conditions exist that suggest that our inventory may be in excess of
anticipated demand, or is obsolete based upon our assumptions about future
demand for our products and market conditions. We regularly evaluate the ability
to realize the value of our inventory based on a combination of factors
including the following: historical usage rates, forecasted sales or usage,
product end of life dates, estimated current and future market values and new
product introductions. Purchasing requirements and alternative usage avenues are
explored within these processes to mitigate inventory exposure. When recorded,
our reserves are intended to reduce the carrying value of our inventory to its
net realizable value.
PRODUCT WARRANTIES. Our products are sold with warranty provisions that require
us to remedy deficiencies in quality or performance of our products over a
specified period of time at no cost to our customers. Our policy is to establish
warranty reserves at levels that represent our estimate of the costs that will
be incurred to fulfill those warranty requirements at the time that revenue is
recognized. We believe that our recorded liability at April 25, 2003, is
adequate to cover our future cost of materials, labor and overhead for the
Schedule: MOR-12 (continued)
servicing of our products sold through that date. If actual product failures, or
material or service delivery costs differ from our estimates, our warranty
liability would need to be revised accordingly.
INCOME TAXES. The Company has recorded a valuation allowance to reduce our
deferred tax assets to the amount that is more likely than not to be realized.
The Company has assessed the valuation allowance based upon our estimate of
future taxable income covering a relatively short time horizon given the
volatility in the markets we serve and our historic operating results. External
market data is considered in this evaluation. The availability of tax planning
strategies to utilize our recorded deferred tax assets is also considered.
DEBT. Prepetition senior secured and subordinated unsecured debt was acquired
from the Company's prior lenders by affiliates of Littlejohn & Co., LLC
(Littlejohn), a private investment firm based in Greenwich, Connecticut.
Littlejohn makes control equity investments in mid-sized companies that can
benefit from operational or financial restructuring. Immediately following the
debt purchase, and agreement with the terms of an arrangement between Littlejohn
and the Company, the debtors filed a petition from protection from creditors
under Chapter 11 of the US Bankruptcy Code. Simultaneously with the filing of
the bankruptcy petition, the debtors also filed a Plan of Reorganization (the
Plan) which, among other provisions, contemplates that most pre-petition debt
will be converted to equity upon confirmation of the Plan.
As an integral part of the arrangement between Littlejohn and the Company, a DIP
financing arrangement was agreed upon, to provide working capital financing
during the period of reorganization, for amounts up to $20 million. The DIP
financing arrangement provides that the Company maintain certain financial and
non-financial performance covenants, including minimum revenue, cash receipts
and cash disbursements results and well as cash flow and EBITDA performance
measurements. In addition, there are certain non-financial performance measures
related to progressing efficiently through the reorganization process. The DIP
financing arrangement expires on June 30, 2003.
GOODWILL. In November 2002, in conjunction with the filing of the Chapter 11
reorganization, all goodwill was determined to be impaired. The write-off
resulted in a charge of $63 million recorded in November 2002.
Schedule: MOR-12 (continued)