-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WEnoxO7Xn+lUy2c/rIpbiDRS1aVLTNpPNpCmirZYsxdX98ZpDU/mS1LBhzbjWB/F WGXC+6eI0Bk/3fkJaUjbKg== 0000950152-03-005979.txt : 20030606 0000950152-03-005979.hdr.sgml : 20030606 20030606111848 ACCESSION NUMBER: 0000950152-03-005979 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030414 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESCALADE INC CENTRAL INDEX KEY: 0000033488 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 132739290 STATE OF INCORPORATION: IN FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-06966 FILM NUMBER: 03735247 BUSINESS ADDRESS: STREET 1: 817 MAXWELL AVE STREET 2: P O BOX 899 CITY: EVANSVILLE STATE: IN ZIP: 47717 BUSINESS PHONE: 8124671200 MAIL ADDRESS: STREET 1: PO BOX 889 CITY: EVANSVILLE STATE: IN ZIP: 47706 FORMER COMPANY: FORMER CONFORMED NAME: MARTIN YALE BUSINESS MACHINES CORP DATE OF NAME CHANGE: 19820310 FORMER COMPANY: FORMER CONFORMED NAME: MARTIN YALE INDUSTRIES INC DATE OF NAME CHANGE: 19720306 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAMS MANUFACTURING CO DATE OF NAME CHANGE: 19710504 8-K/A 1 l01312ae8vkza.txt ESCALADE, INCORPORATED | FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K /A CURRENT REPORT Pursuant to Section 13 or 15 (D) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest event reported): April 14, 2003 ESCALADE, INCORPORATED ----------------------- (Exact name of Registrant as specified in its charter) Indiana 0-6966 13-2739290 ------- ------ ---------- (State or Other Jurisdiction of (Commission File Number) (IRS Employer I.D. Incorporation) No.) 817 Maxwell Avenue, Evansville, Indiana 47711 --------------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code: (812) 467-1200 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On April 14, 2003 Escalade, Inc.'s ("Escalade") wholly owned subsidiary Martin Yale Industries, Inc. ("Martin Yale") successfully completed a tender offer for Schleicher & Co., International AG ("Schleicher"). After the tender offer, Martin Yale owns 97.2% or 2,784,603 shares of Schleicher. The acquisition of shares was for cash and the cost of the acquisition was $12,486,092. Schleicher, a Germany company, has office and manufacturing facilities in Germany and sales/distribution facilities in France, England and the United States. The assets of Schleicher include accounts receivable; inventory; and property, plant and equipment used in the manufacture and distribution of data shredders. Escalade intends to maintain Schleicher's current locations and will use the property, plant and equipment to manufacture Schleicher's current product line. Escalade believes the business combination of Martin Yale and Schleicher has significant synergies that have immediate benefits to both companies. Schleicher shares were acquired through direct purchases on the German stock market, privately negotiated transactions and the tender offer. Cash for the acquisition was obtained from the Company's long-term financing agreement with Bank One Indiana, N.A. This amendment to Escalade's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 29, 2003, is submitted to include the financial statements and pro forma financial information required by Item 7, which were impracticable to provide at the time the Form 8-K was initially filed. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of the business acquired. Schleicher and Co. International Aktiengesellschaft audited financial statements for the nine months ended December 31, 2002 (including report of independent auditors) Schleicher and Co. International Aktiengesellschaft unaudited financial statements for the three months ended March 22, 2003 The historical financial information required in this Form 8-K/A is based on prior Escalade filings with the Securities and Exchange Commission and on prior Schleicher filings with German Securities Regulatory Agencies. The Schleicher audited historical financial statements were audited by Bodensee Treuhand GmbH and are included as an exhibit to this Form 8-K/A. The Escalade audited historical financial statements were audited by BKD LLP, which are included in Escalade's Form 10-K filed with the Securities Exchange Commission on March 14, 2003. The following unaudited financial information for the first quarter of 2003 should be read in connection with the historical financial statements of both companies. The accompanying unaudited interim financial information for Escalade and Schleicher for the three months ended March 22, 2003 was prepared in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the information does not include all of the information and disclosures required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals necessary for a fair presentation are included. The results of operations for the three months ended March 22, 2003 for Escalade and Schleicher may not indicate the results for the full fiscal year. All amounts are stated in U.S. Dollars. SCHLEICHER & CO., INTERNATIONAL AG CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands)
March 22, 2003 December 31, 2002 -------------- ----------------- ASSETS Current Assets: Cash and equivalents $ 993 $ 1,023 Receivables 9,104 8,658 Inventories 10,660 10,261 Prepaid expenses and other 946 900 Deferred tax assets 637 616 ---------- ---------- Total current assets 22,340 21,458 Property, plant and equipment 16,185 15,542 Accumulated depreciation and amortization (11,884) (11,374) ---------- ---------- Net property, plant and equipment 4,301 4,168 Other assets 289 275 ---------- ---------- $ 26,930 $ 25,901 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable - banks $ 11,092 $ 10,687 Trade accounts payable 5,151 5,058 Accrued liabilities 4,194 3,908 Accrued taxes payable 454 440 ---------- ---------- Total current liabilities 20,891 20,093 Long-term debt 422 408 Stockholders' equity: Common Stock; Authorized 4,200,000 shares; no par value, issued and outstanding 2,866,000 shares 7,459 7,459 Retained earnings (1,960) (2,049) Accumulated other comprehensive income (loss) 118 (10) ---------- ---------- Total stockholders' equity 5,617 5,400 ---------- ---------- $ 26,930 $ 25,901 ========== ==========
SCHLEICHER & CO., INTERNATIONAL AG CONSOLIDATED CONDENSED INCOME STATEMENTS (In thousands, except share information)
3 Months ended 9 Months ended March 22, 2003 December 31, 2002 -------------- ----------------- Net sales $ 11,400 $ 30,519 Cost of goods sold 6,101 16,711 ---------- ---------- Gross profit 5,299 13,808 Selling, general and administrative 4,936 14,363 Interest expense 281 765 Other income 58 481 ---------- ---------- Income (loss) before income taxes 140 (839) Provision for income taxes 51 43 ---------- ---------- Net income (loss) $ 89 $ (882) ========== ========== Per Share Data: Basic and diluted earnings per share $ 0.03 $ (0.31) Weighted average shares 2,866,000 2,866,000 Comprehensive other income (loss) Foreign exchange translation adjustment $ 118 $ (10)
SCHLEICHER & CO., INTERNATIONAL AG CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (In thousands)
3 Months ended 9 Months ended March 22, 2003 December 31, 2002 -------------- ----------------- Operating Activities: Net income (loss) $ 89 $ (882) Depreciation and amortization 126 2,110 Adjustments necessary to reconcile net income (loss) to net cash provided by operating activities (244) 465 ---------- ---------- Net cash provided by operating activities (29) 1,693 Investing Activities: Purchase of property, plant and equipment (113) (271) Investments in affiliates (193) Other - 11 ---------- ---------- Net cash used by investing activities (113) (453) Financing Activities: Net increase in notes payable - banks 56 160 ---------- ---------- Net cash generated (used) (86) 1,400 Currency related value adjustments 56 (687) Cash and equivalents at beginning of period 1,023 310 ---------- ---------- Cash and equivalents at end of period $ 993 $ 1,023 ========== ==========
SCHLEICHER & CO., INTERNATIONAL AG NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business Schleicher, a German company, manufactures and distributes data shredders. Schleicher has subsidiaries in Austria, Czech Republic, England, France, India and the USA. The financial statements reflect the consolidation of these subsidiaries. Basis of Presentation The significant accounting policies followed by Schleicher and it's subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The condensed consolidated balance sheet of Schleicher as of December 31, 2002 has been derived from the audited consolidated financial statements included as an exhibit to this Form 8-K/A. Certain historical data has been reclassified to conform to financial statement presentation in the United States of America. Certain note disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included as an exhibit to this Form 8-K/A. NOTE B - INVENTORIES (In thousands)
March 22, 2003 December 31, 2002 -------------- ----------------- Raw materials $ 2,770 $ 3,405 Work in progress 634 533 Finished goods 7,256 6,323 ---------- ---------- $ 10,660 $ 10,261 ========== ==========
NOTE C - PROVISION FOR INCOME TAXES The provision for income taxes was computed based on financial statement income. (b) Pro forma financial information. Unaudited Pro Forma Condensed Combined Balance Sheets (in thousands) Unaudited Pro Forma Condensed Combined Income Statements (in thousands, except per share information) The following unaudited pro forma condensed financial statements combine Escalade's historical results for the three months ended March 22, 2003 and the year ended December 28, 2002 with Schleicher's historical results for the three months ended March 22, 2003 and the year ended December 31, 2002, giving effect to the merger as if it had occurred as of January 1, 2002 for income statement purposes and on December 28, 2002 for balance sheet purposes. The following unaudited pro forma condensed financial statements have been derived from, and should be read in conjunction with, the audited and unaudited financial information referenced in Item 7(a) of this Form 8-K/A and the related notes thereto. Reliance should not be placed on these unaudited pro forma condensed financial statements as being indicative of the historical results that would have occurred had Escalade and Schleicher been combined during these time periods or the future results that may be achieved as a result of this merger. All amounts are stated in U.S. Dollars. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS AS OF MARCH 22, 2003 (In thousands)
Escalade Schleicher Adjustments Combined ---------- ---------- ----------- ---------- ASSETS Current Assets: Cash and equivalents $ 4,400 $ 993 $ 5,393 Receivables 13,952 9,104 23,056 Inventories 22,084 10,660 32,744 Prepaid expenses and other 438 946 1,384 Deferred tax assets 814 637 1,451 ---------- ---------- ---------- Total current assets 41,688 22,340 64,028 Property, plant and equipment 35,563 16,185 (4,376) 47,372 Accumulated depreciation and amortization (26,900) (11,884) 11,577 (27,207) ---------- ---------- ---------- 8,663 4,301 20,165 Intangible assets 6,268 6,268 Goodwill 13,351 13,351 Other assets 12,640 289 (6,729) 6,200 ---------- ---------- ---------- $ 82,610 $ 26,930 $ 110,012 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable - banks $ 5,327 $ 11,092 $ 16,419 Current portion long-term debt 167 167 Trade accounts payable 2,347 5,151 7,498 Accrued liabilities 9,468 4,194 5,748 19,410 Accrued taxes payable 1,101 454 1,555 ---------- ---------- ---------- Total current liabilities 18,410 20,891 45,049 Long-term debt 16,933 422 17,355 Deferred Compensation 1,343 1,343 Minority Interest 366 366 Stockholders' equity: Common Stock 6,533 7,459 (7,459) 6,533 Additional paid-in capital 756 756 Retained earnings 38,712 (1,960) 1,934 38,686 Accumulated other comprehensive income (loss) (77) 118 (117) (76) ---------- ---------- ---------- Total stockholders' equity 45,924 5,617 45,899 ---------- ---------- ---------- $ 82,610 $ 26,930 $ 110,012 ========== ========== ==========
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS AS OF DECEMBER 28, 2002 (In thousands)
Escalade Schleicher Adjustments Combined ---------- ---------- ----------- ---------- ASSETS Current Assets: Cash and equivalents $ 3,370 $ 1,023 $ 4,393 Receivables 34,141 8,658 42,799 Inventories 20,550 10,261 30,811 Prepaid expenses and other 542 900 1,442 Deferred tax assets 814 616 1,430 ---------- ---------- ---------- Total current assets 59,417 21,458 80,875 Property, plant and equipment 35,258 15,542 (4,232) 46,568 Accumulated depreciation and amortization (26,199) (11,374) 11,374 (26,199) ---------- ---------- ---------- 9,059 4,168 20,369 Intangible assets 6,492 6,492 Goodwill 13,351 13,351 Other assets 8,469 275 (2,657) 6,087 ---------- ---------- ---------- $ 96,788 $ 25,901 $ 127,174 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable - banks $ 11,223 $ 10,687 $ 21,910 Current portion long-term debt 167 167 Trade accounts payable 2,793 5,058 7,851 Accrued liabilities 17,004 3,908 9,519 30,431 Accrued taxes payable 1,189 440 1,629 ---------- ---------- ---------- Total current liabilities 32,376 20,093 61,988 Long-term debt 17,200 408 17,608 Deferred Compensation 1,337 1,337 Minority Interest 366 366 Stockholders' equity: Common Stock 6,509 7,459 (7,459) 6,509 Additional paid-in capital 682 682 Retained earnings 38,709 (2,049) 2,049 38,709 Accumulated other comprehensive income (loss) (25) (10) 10 (25) ---------- ---------- ---------- Total stockholders' equity 45,875 5,400 45,875 ---------- ---------- ---------- $ 96,788 $ 25,901 $ 127,174 ========== ========== ==========
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS FOR THE THREE MONTHS ENDED MARCH 22, 2003 (In thousands, except per share information)
Escalade Schleicher Adjustments Combined -------- ---------- ----------- -------- Net sales $ 17,703 $ 11,400 $ 29,103 Cost of goods sold 12,558 6,101 18,659 ---------- ---------- ----------- Gross profit 5,145 5,299 10,444 Selling, general and administrative 4,865 4,936 188 9,989 Interest expense 167 281 448 Other (income) expense 109 (58) 51 ---------- ---------- ----------- Income (loss) before income taxes 4 140 (44) Provision for income taxes 1 51 (73) (21) ---------- ---------- ----------- Net income (loss) $ 3 $ 89 $ (23) Per Share Data: Basic earnings per share $ 0.00 $ 0.03 $ 0.00 Diluted earnings per share 0.00 $ 0.03 $ 0.00 Weighted average shares outstanding Basic 6,511,124 2,866,000 6,511,124 Diluted 6,632,243 2,866,000 6,632,243
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2002 (In thousands, except per share information)
Escalade Schleicher Adjustments Combined -------- ---------- ----------- -------- Net sales $ 155,455 $ 41,439 $ 196,894 Cost of goods sold 111,164 22,850 134,014 ---------- ---------- ----------- Gross profit 44,291 18,589 62,880 Selling, general and administrative 26,328 18,954 702 45,984 Interest expense 951 992 1,943 Other (income) expense 70 (570) (500) ---------- ---------- ----------- Income (loss) before income taxes 16,942 (787) 15,453 Provision for income taxes 5,804 105 (253) 5,656 ---------- ---------- ----------- Net income (loss) $ 11,138 $ (892) $ 9797 Per Share Data: Basic earnings per share $ 1.72 $ (0.31) $ 1.51 Diluted earnings per share 1.66 $ (0.31) $ 1.46 Weighted average shares outstanding: Basic 6,486,081 2,866,000 6,486,081 Diluted 6,717,152 2,866,000 6,717,152
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION Certain historical data of Schleicher has been reclassified to conform to Escalade's presentation. 2. ALLOCATION OF PURCHASE PRICE The purchase price of $12,486 thousand has been allocated to property and equipment. 3. PRO FORMA ADJUSTMENTS The unauadited pro forma condensed combined income statements include the adjustments necessary to give effect to the purchase price as if it had occurred as of January 1, 2002 for income statement purposes and on December 28, 2002 for balance sheet purposes. Accordingly, the adjustments reflect the allocation of the purchase price and the elimination of Schleicher equity balances. (c) Exhibits 23.1 Consent of Bodensee Treuhand GmbH 99.1 Press release dated April 17, 2003 * 99.2 Schleicher & Co. International Aktiengesellschaft audited financial statements for the short fiscal year ended December 31, 2002
- -------------------- * Previously filed as part of the initial Form 8-K filed on April 29, 2003. SIGNATURES Pursuant to the requirements of the Securities Act of 1934, Escalade, Incorporated has duly caused this report to be signed on its behalf in Evansville, Indiana by the undersigned hereunto duly authorized. Date: 6 June 2003 ESCALADE, INCORPORATED By: /s/ John R. Wilson ------------------ Vice President and Chief Financial Officer INDEX TO EXHIBITS
NUMBER DESCRIPTION - ------ ----------- 23.1 Consent of Bodensee Treuhand GmbH 99.1 Press release dated April 17, 2003 99.2 Schleicher & Co. International Aktiengesellschaft audited financial statements for the short fiscal year ended December 31, 2002
EX-23.1 3 l01312aexv23w1.txt EX-23.1 CONSENT EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements 33-16279, 333-52475 and 333-52477 of Escalade, Incorporated (Company) on Form S-8 of our report dated April 11, 2003, with respect to the financial statements of Schleicher & Co. International Aktiengesellschaft for the short fiscal year ended December 31, 2002 included in this Current Report on Form 8-K/A of Escalade, Incorporated dated June 6, 2003. /s/ BODENSEE TREUHAND GMBH Meersburg, Germany June 6, 2003 EX-99.1 4 l01312aexv99w1.txt EX-99.1 PRESS RELEASE EXHIBIT 99.1 PRESS RELEASE ESCALADE INC. COMPLETES TENDER OFFER FOR SCHLEICHER & CO. INTERNATIONAL AG Evansville, Indiana, USA (April 17, 2003). Escalade, Inc. (NASDAQ: ESCA) announced that Martin Yale Industries, Inc. (Martin Yale), a wholly owned subsidiary of Escalade Inc., has successfully completed its tender offer for Schleicher & Co. International AG (Schleicher). Martin Yale now owns 97.2%, or 2,784,603 shares. The remaining minority shares will be purchased under the "squeeze-out" provisions in German Corporate Law. "This business combination has significant synergies that have immediate benefits to both companies" stated Bill Reed, CEO and President of Escalade, Inc. "Martin Yale gains instant access to the European market place through the well developed sales channels of Schleicher, and Schleicher will increase its market presence in both the United States and Europe through its association with the strong brand strength of Martin Yale." Schleicher, headquartered in Markdorf, Germany, is a world leader in the manufacture and distribution of data shredders with subsidiaries in Austria, Czech Republic, China, England, France, India and the USA. Schleicher products are sold under the popular "intimus", " Taros", "Papermonster", and "Olympia" trademarks and include small personal shredders, a complete range of office shredders, high capacity industrial paper shredders, and high security shredders used by governmental agencies around the world. Schleicher also offers Automatic Paper Removal Systems for large office Buildings under the name of VacuShred. For the nine months ended December 31, 2002, Schleicher reported sales of 32 million Euro, approximately 30 million US dollars. For more information on Schleicher visit: www.schleicher.de Martin Yale is a leading supplier of office products, business machines, and graphic arts equipment sold under the "Martin Yale", "Premier", "Master", and "Mead Hatcher" brand names. For more information on Martin Yale visit: www.martinyale.com. Escalade is a quality manufacturer and marketer of sporting goods and office/graphic arts products sold worldwide by better resellers. For more information on Escalade, Inc., please contact John R. Wilson, Vice President and CFO at 812/467-1265 or C.W. (Bill) Reed, President and CEO at 260/563-0621. For more Information on Schleicher please contact the Office of the President & CEO, Dr. E. Leopold Dieck at +49 (0) 7544-60150 EX-99.2 5 l01312aexv99w2.txt EX-99.2 FINANCIAL STATEMENTS EXHIBIT 99.2 [COVER] SCHLEICHER & Co. INTERNATIONAL AKTIENGESELLSCHAFT THE SHREDDER COMPANY BUSINESS REPORT SHORT FISCAL YEAR APRIL 1, 2002 - DECEMBER 31, 2002 CONSOLIDATED BALANCE SHEET AND BALANCE SHEET FOR SCHLEICHER & CO. INTERNATIONAL AG AS PER DECEMBER 31, 2002
EURO IN THOUSANDS - ----------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED SI AG - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Annex December, 31 2002 March 31, 2002 December, 31 2002 March 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------------- FIXED ASSETS (1) Intangible assets 91 98 77 78 Tangible assets 4.025 4.284 3.572 3.704 Financial assets 248 44 5.122 4.867 - ----------------------------------------------------------------------------------------------------------------------------------- 4.364 4.426 8.771 8.649 CURRENT ASSETS INVENTORIES (2) 10.080 10.297 3.623 3.685 RECEIVABLES AND OTHER ASSETS (3) Trade receivables 8.651 9.640 2.682 2.967 Other receivables and assets 862 975 2.911 2.046 - ----------------------------------------------------------------------------------------------------------------------------------- 9.513 10.615 5.593 5.013 MEANS OF PAYMENT (4) 1.005 356 43 33 DEFERRED TAXES (5) 606 673 -- -- PREPAID EXPENSES (6) 145 178 89 55 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 25.713 26.545 18.119 17.435
- ----------------------------------------------------------------------------------------------------------------------------------- EQUITY AND LIABILITIES Annex December, 31 2002 March 31, 2002 December, 31 2002 March 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------------- EQUITY (7) Subscribed capital Ordinary shares (31 March 2002 = 2.800.000/ 31 December 2002 = 2.866.000 voting rights) 7.327 7.158 7.327 7.158 Net accumulated losses - 2.013 - 1.080 - 2.532 - 1.790 Balancing item currency conversion - 10 874 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- 5.304 6.952 4.795 5.368 ACCRUALS (8) Accruals for pensions 856 853 856 853 Other accruals 1.353 1.254 816 760 - ----------------------------------------------------------------------------------------------------------------------------------- 2.209 2.106 1.672 1.613 LIABILITIES (9) 18.195 17.483 11.652 10.454 DEFERRED INCOME (10) 5 3 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL EQUITY AND LIABILITIES 25.713 26.545 18.119 17.435
1 CONSOLIDATED INCOME STATEMENT AND INCOME STATEMENT FOR SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002
EURO IN THOUSANDS - ----------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED SI AG - ----------------------------------------------------------------------------------------------------------------------------- Annex December, 31 2002 March 31, 2002 December, 31 2002 March 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------- SALES (11) 32.265 46.835 17.078 23.716 Inventory increase/decrease 25 - 628 75 - 193 Other operating income (12) 508 1.188 514 397 Cost of materials (13) - 17.692 - 25.511 - 10.006 - 13.663 Personnel expenses (14) - 8.045 - 10.829 - 4.396 - 5.649 Depreciation on intangible fixed assets and tangible assets (15) - 492 - 934 - 351 - 576 Other operating expenses (16) - 6.648 - 9.465 - 3.041 - 3.903 Amortization of financial assets -- - 40 -- - 235 Interest (17) - 808 - 1.125 - 603 - 787 - ----------------------------------------------------------------------------------------------------------------------------- RESULTS FROM ORDINARY ACTIVITIES - 887 - 509 - 730 - 893 Taxes on income 52 233 -- -- Other taxes - 98 - 136 - 12 - 16 - ----------------------------------------------------------------------------------------------------------------------------- NET LOSS - 933 - 412 - 742 - 909
APPROPRIATION OF RETAINED PROFITS December, 31 2002 March 31, 2002 December, 31 2002 March 31, 2002 - ------------------------------------------------------------------------------------------------------------------------- NET LOSS - 933 - 412 - 742 - 909 Retained profits brought forward - 1.080 - 798 - 1.790 - 881 Releases from capital reserve -- 130 -- -- - ------------------------------------------------------------------------------------------------------------------------- NET ACCUMULATED LOSSES - 2.013 - 1.080 - 2.532 - 1.790
DETERMINATION TO EBITDA
December, 31 2002 March 31, 2002 December, 31 2002 March 31, 2002 - ------------------------------------------------------------------------------------------------------------------------ RESULTS FROM ORDINARY ACTIVITIES - 887 - 509 - 730 - 893 Interest 808 1.125 603 787 Amortization of financial assets -- 40 -- 235 - ------------------------------------------------------------------------------------------------------------------------ EBIT - 79 656 - 127 129 Depreciation on intangible fixed assets and tangible assets 492 934 351 576 - ------------------------------------------------------------------------------------------------------------------------ EBITDA 413 1.590 224 705
2 FUNDS STATEMENT AND SEGMENT REPORT FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002
FUNDS STATEMENT EURO IN THOUSANDS - ------------------------------------------------------------------------------------------------------------- CONSOLIDATED SI AG ------------------------------------------------ 31/12/2002 2001/02 31/12/2002 2001/02 ------------------------------------------------ Deficit (-) / Surplus for the year - 933 - 412 - 742 - 909 Depreciation on fixed assets 492 974 351 811 Deduction (-) / addition to reserves 102 - 394 59 117 Other income affecting payment (-) 67 - 560 0 0 Profit (-) / loss from the sale of fixed assets - 4 - 1 - 5 - 3 Deduction / addition (-) to inventories, trade debtors and other assets 1.352 2.920 - 552 1.372 Addition to trade creditors and other liabilities 714 -2.080 1.198 -1.108 - ------------------------------------------------------------------------------------------------------------- INFLOW OF FUNDS FROM OPERATING ACTIVITIES 1.790 447 309 280 Inward payments from the sale of fixed assets 12 3 10 8 Outward payments for investment in intangible assets and fixed assets - 286 - 394 - 223 - 245 Outward payments for financial investments - 204 - 18 - 255 - 18 - ------------------------------------------------------------------------------------------------------------- OUTFLOW OF FUNDS FROM INVESTMENT ACTIVITY - 478 - 409 - 468 - 255 Inward payments from the taking out of loans 169 -- 169 -- Inflows from assumption of loans 0 0 0 0 - ------------------------------------------------------------------------------------------------------------- INFLOW OF FUNDS FROM FINANCING ACTIVITY 169 0 169 0 CHANGES TO THE LEVEL OF FUNDS 1.481 38 10 25 Currency-related value changes - 832 82 0 0 Level of funds at the start of the period 356 236 33 8 - ------------------------------------------------------------------------------------------------------------- LEVEL OF FUNDS AT THE END OF THE PERIOD 1.005 356 43 33
SEGMENT REPORT AS PER ART. 297 SECTION 1 POINT 2 HGB
SHREDDERS OTHER OFFICE PRODUCTS TOTAL DIVISION 31/12/2002 2001/02 31/12/2002 2001/02 31/12/2002 2001/02 - --------------------------------------------------------------------------------------------------------------------- Sales revenues (external sales) T(euro) 23.430 33.839 8.835 12.996 32.265 46.835 Sales % 72,6 72,3 27,4 27,7 100 100 EBITDA* T(euro) 252 1.444 161 146 413 1.590 Fixed assets T(euro) 4.275 4.316 89 110 4.364 4.426 Investments T(euro) 478 402 12 10 490 412 Depreciation T(euro) 459 896 33 38 492 934 Workforce on average for the year 214 211 35 38 249 249
*EBITDA = Earnings before interest, taxes, depreciation and amortization 3 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 I. PRINCIPLES OF ACCOUNTING The consolidated annual statements and the consolidated status report as well as the annual statements and the status report of SCHLEICHER & Co. INTERNATIONAL AKTIENGESELLSCHAFT (referred to in the following as SI AG) for the truncated financial year ending December 31, 2002 (April 1, 2002 to December 31, 2002) were drawn up on the basis of the accounting regulations of the German Commercial Code and the supplementary stipulations of the Stock Corporation Act. The consolidated and SI AG income statements were drawn up on the basis of the total expenditure method. In the balance sheets and income statements, items have been grouped together. These are broken down in the Notes. The consolidated annual statements and the SI AG annual statements are drawn up in THOUSANDS OF EURO. The indications made in the Notes are also in THOUSANDS OF EURO, unless otherwise indicated. II. SCOPE OF CONSOLIDATION The consolidated annual statement encompasses SI AG and one domestic as well as five foreign subsidiaries which are under the uniform direction of SI AG. SI AG disposes directly of all the voting rights of the consolidated companies. III. CURRENCY TRANSLATION In the annual statements of SI AG, receivables in foreign currencies are posted at the middle exchange rate on the balance sheet date. Translation of the annual statements of the foreign subsidiaries drawn up in local currency into euro takes place in the balance sheet at the middle exchange rate on the balance sheet date. Shareholders' equity is shown at historical values. The clearing accounts for receivables and payable are posted in euro. The items of the income statement are posted at the middle exchange rates of the relevant annual average rates. The results for the year are converted at the middle exchange rates on the balance sheet date. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 Differences from the translation of balance sheet items are shown in the position Balancing items currency translation. Differences arising from the translation of items of the income statement are shown under other operating expenses and do not impact earnings. IV. PRINCIPLES OF CONSOLDIATION In the capital consolidation, the acquisition costs of shares in subsidiaries are offset against the book value of the equity share allocated to these shares in accordance with Article 301 Section 1 point 1 German Commercial Code at the time of their acquisition or at the time of initial consolidation. In accordance with Article 309 section 1 point 3 German Commercial Code differences have been offset against reserves. Receivables and payables between the Group companies have been offset. During the course of intercompany elimination, internal sales are offset against the corresponding expenses or recategorized as changes to inventory changes. Other income from services between consolidated companies are offset against the relevant expenditure of the consolidated companies. In the consolidated income statement expenditure and income of the subsidiaries replace the investment earnings. V. PRINCIPLES OF ACCOUNTING AND VALUATION The annual financial statements of Group companies included in the consolidation have been audited by independent auditors and received an unqualified audit opinion. The account allocation and accounting regulations binding upon all the subsidiaries secures a uniform method of valuation throughout the Group. Valuation takes place in accordance with the following principles. Intangible assets are capitalized at their acquisition cost. Depreciation takes place on a straight-line basis. Fixed assets are carried at acquisition cost, less scheduled straight-line depreciation determined according to the anticipated useful life. Additions to moveable fixed assets during the first six 5 months of the year are subject to full depreciation, additions in the second half of the year to half the annual rate of depreciation. Low-value items are fully written off in the year of acquisition. Non-scheduled depreciation generally takes place when the value of the item determined according to the above principles exceeds the value attributable to it on the closing date on a sustained basis. In the 2002 financial year, there were no cases of non-scheduled depreciation. Shares in Group companies and participations are shown at the lower of acquisition cost or market. Loans are carried at the nominal amount. Raw materials and supplies, consumables and advance payments are shown at the lower of acquisition cost or current value. Work in progress and finished goods are valued at manufacturing cost. This includes production material, material overheads, production labor costs, production overheads and administrative overheads, where these may be capitalized in accordance with commercial law. Appropriate consideration is given to inventory risks in the consolidated balance sheet with relevant deductions. Inventories resulting from deliveries between Group companies are carried in the consolidated balance sheet at Group manufacturing costs, with inter-group profits being eliminated. Group manufacturing costs are calculated in line with the valuation principles at SI AG. Receivables and other assets are valued taking into account all recognizable risks. Sufficient value adjustments have been made to cover general risks on receivables. Due to the loss situation, the consolidated annual financial statements for the year ending December 31, 2002 do not contain accruals and deferrals from the interim results for future tax relief. Provisions for pensions are assessed in accordance on the basis of the 1998 mortality tables using an interest rate of 6%. All identifiable risks have been taken into account in assessing other provisions which have been established at a level deemed necessary according to reasonable business judgment. Liabilities are valued at nominal value. VI. NOTES ON THE BALANCE SHEET AND INCOME STATEMENT (1) FIXED ASSETS The items grouped in the consolidated and the SI AG balance sheets are broken down in detail in the following. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 DEVELOPMENT OF CONSOLIDATED FIXED ASSETS
Procure- Exchange Book Book Depre- ment/ rate Additions A Deductions D Accumu- value value ciation Manufacturing diff- Book- Book- lated 31/12/ 31/03/ financial costs erence transfer T transfer T depreciation 2002 2002 year - ------------------------------------------------------------------------------------------------------------------------------------ INTANGIBLE ASSETS Patents and trademarks 1.197 -- -- 44 D 1.153 -- -- -- Software and similar rights 1.258 - 21 37 A 4 D 1.201 69 89 56 Payments on account 9 -- 13 A -- -- 22 9 -- - ------------------------------------------------------------------------------------------------------------------------------------ 2.464 - 21 50 A 48 D 2.354 91 98 56 TANGIBLE ASSETS Land and leasehold rights and buildings, including buildings on third- party land 5.231 - 40 10 A -- 1.923 3.278 3.376 96 Technical plant and machinery 117 -- -- -- 115 2 2 -- Other fixtures, 8.606 - 218 226 A 172 D 7.719 745 884 340 tools and equipment 22 T Payments on account and tangible assets in course of construction 22 -- -- 22 D -- -- 22 -- - ------------------------------------------------------------------------------------------------------------------------------------ 13.976 - 258 236 A 172 D 9.757 4.025 4.284 436 22 T 22 T FINANCIAL ASSETS Shares in affiliated undertakings 1.877 -- -- -- 1.877 -- -- -- Investments 78 -- 204 A -- 34 248 44 -- Other loans 7 -- -- -- 7 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ 1.962 -- 204 A -- 1.918 248 44 -- - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL 18.402 - 279 490 A 220 D 14.029 4.364 4.426 492 22 T 22 T
7 DEVELOPMENT OF SI AG FIXED ASSETS
Procurement Book Book Depreci- manufac- Additions A Deductions D Accumu- value value ation turing Book- Book- lated 31/03/ 31/03/ financial costs transfer T transfer T depreciation 2002 2001 year - --------------------------------------------------------------------------------------------------------------------------------- INTANGIBLE ASSETS Patents and trademarks 1.197 -- 44 D 1.153 -- -- -- Software and similar rights 1.114 37 A 4 D 1.091 56 69 50 Payments on account 9 12 A -- -- 21 9 -- - --------------------------------------------------------------------------------------------------------------------------------- 2.320 49 A 48 D 2.244 77 78 50 TANGIBLE ASSETS Land and leasehold rights and buildings, including buildings on third- party land 4.877 -- -- 1.711 3.166 3.254 88 Technical plant and machinery 117 -- -- 115 2 2 -- Other fixtures, 6.474 152 A 137 D 6.107 404 426 213 tools and equipment 22 T Payments on account and tangible assets in course of construction 22 -- 22 T -- -- 22 -- - --------------------------------------------------------------------------------------------------------------------------------- 11.490 152 A 137 D 7.933 3.572 3.704 301 22 T 22 T FINANCIAL ASSETS Shares in affiliated undertakings 6.902 51 A -- 2.079 4.874 4.823 -- Investments 78 204 A -- 34 248 44 -- - --------------------------------------------------------------------------------------------------------------------------------- 6.980 255 A -- 2.113 5.122 4.867 -- - --------------------------------------------------------------------------------------------------------------------------------- TOTAL 20.790 456 A 185 D 12.290 8.771 8.649 351 22 T 22 T
8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 BREAKDOWN OF INVESTMENT HOLDINGS
SI AG holding Equity Net profit % capital(2) for the year(2) - -------------------------------------------------------------------------------------------------------------- SHARES IN AFFILIATED UNDERTAKINGS SCHLEICHER & Co. of AMERICA, Inc., Sanford / USA (1) (consolidated) holding 100% of shares in OLYMPIA BUSINESS SYSTEMS INC., Sanford / USA, (1) 100 4.023 38 SCHLEICHER & Co. INTERNATIONAL Ltd., Crawley / Great Britain (1) 100 405 - 295 SCHLEICHER & Co. Ges.m.b.H., Vienna / Austria (1) 100 - 37 0 SCHLEICHER INTERNATIONAL S.A.R.L., Champs-sur-Marne / France (1) 100 1.313 10 TAROS Trading GmbH, Markdorf / Germany (1) 100 8 2 HOLDINGS OSL Office Systems Ltd., Hong Kong 5 465(3) 72(3) SCHLEICHER INDIA Ltd., Neu Delhi / India 48(5) 193(4) 16(4) EKVITA spol. s r.o., Trutnov / Czech Republic 22 818 55 Gerd DAHLE Office Systems GmbH, Breitengu(beta)bach / Germany 40 --(6) --(6)
(1) These companies were consolidated with SI AG in the consolidated financial statements (2) Conversion into thousand euro was done at the rate on December 31, 2002. (3) For the financial year ending December 31, 2000. (4) For the financial year ending December 31, 2002. (5) After final approval by the Indian government. (6) Annual financial statements to December 31, 2002 were not available when the audit was completed. (2) INVENTORIES
CONSOLIDATED SI AG - ----------------------------------------------------------------------------------------------------------- 31/12/02 31/03/02 31/12/02 31/03/02 - ----------------------------------------------------------------------------------------------------------- Raw materials and supplies 2.521 2.801 1.682 1.733 Work in progress 523 575 306 299 Finished products and goods for resale 6.212 6.469 1.416 1.480 Payments on account 824 452 219 173 - ----------------------------------------------------------------------------------------------------------- TOTAL 10.080 10.297 3.623 3.685
9 (3) ACCCOUNTS RECEIVEABLE AND OTHER ASSETS
CONSOLIDATED SI AG - -------------------------------------------------------------------------------------------------------- 31/12/02 31/03/02 31/12/02 31/03/02 - -------------------------------------------------------------------------------------------------------- Trade debtors 8.651 9.640 2.682 2.967 Due from affiliated companies -- -- 2.475 1.658 Due to undertakings with which the company is linked by virtue of participation 124 65 124 65 Other assets 738 910 312 323 - -------------------------------------------------------------------------------------------------------- TOTAL 9.513 10.615 5.593 5.013
Amounts due from Group companies and amounts due from participating interests include trade receivables of 1,712 (previous year 958). The main items in other current assets are tax rebates, creditor positions and receivables from employees from travel advances. Other Group current assets include 56 positions with a remaining term of more than one year (previous year 37); other current assets in SI AG include 17 positions with a remaining term of more than one year (previous year 0). (4) CASH Cash includes cash in hand, deposits with the Deutsche Bundesbank, postal giro balances and deposits with commercial banks. (5) DEFERRED POSITION FOR FUTURE TAX RELIEF Group deferred taxes on the asset side have been taken from the consolidated balance sheets of the USA and UK subsidiaries. This position also includes deferred taxes on the loss carryforward. (6) PREPAID EXPENSES Prepaid expenses include payments made prior to the balance sheet date, where these represent expenses incurred for a certain period following the balance sheet date. 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 (7) SHAREHOLDERS' EQUITY The subscribed capital contains the share capital of EUR 7,327,046.34. The share capital is divided into 2,866,000 no-par ordinary bearer shares. Each share represents a portion of the subscribed capital of approx. EUR 2.56. The following changes have taken place in the consolidated equity in thousand EURO:
Consolidation Change in Deficit for goodwill currency Status the year Austria conversion Status 31/12/02 2002 2002 2002 31/03/02 - ---------------------------------------------------------------------------------------------------- Share capital 7.327 -- 169 -- 7.158 Capital reserve -- -- -- -- -- Balance sheet loss -2.013 - 933 -- -- -1.080 Balencing items Currency conversion - 10 -- -- - 884 874 - ---------------------------------------------------------------------------------------------------- TOTAL 5.304 - 933 169 - 884 6.952
As of December 31, 2002 there is valid, authorized capital totaling EURO 3,256,695.61. (8) PROVISIONS There are pension obligations totaling 856 (previous year 853). Other provisions relate largely to vacation salaries, vacation allowances, Christmas bonuses, flexitime, special remuneration/bonus payments, employer liability premiums, commission payments, warranty claims, costs for the annual financial statements and outstanding invoices for services already performed. 11 (9) LIABILITIES
CONSOLIDATED SI AG - ---------------------------------------------------------------------------------------------------------------- Remaining Remaining term term up to 1 year 31/12/02 31/03/02 up to 1 year 31/12/02 31/03/02 - ---------------------------------------------------------------------------------------------------------------- Amounts due to 10.786 10.899 10.828 8.571 8.582 8.458 banks (10.646) (8.458) Trade 4.969 4.969 4.163 2.279 2.279 1.206 creditors (4.163) (1.206) Amounts due to -- -- -- 345 345 490 affiliated companies (--) (490) Amounts due 146 146 -- 146 146 -- to group companies (--) (--) Amounts due 432 432 570 62 62 59 from taxes (570) (59) Liabilities within the 420 420 460 128 128 157 framework of social security (460) (157) Other liabilities 1.329 1.329 1.462 110 110 84 (1.462) (84) - ---------------------------------------------------------------------------------------------------------------- TOTAL 18.082 18.195 17.483 11.641 11.652 10.454 (17.301) (10.454)
Of the amounts due to banks and notes payable for SI AG and in the Group a total of 6,136 (previous year 6,136) are secured by liens on real estate, and for the Group 4,171 (previous year 4,358) and for SI AG 2,447 (previous year 2,322) are secured by the assignment of claims, the assignment of goods by way of security and the transfer of brands. SI AG has credit lines at Deutsche Bank, Hypo-Vereinsbank and Dresdner Bank totaling EUR 10.4 million, of which SI AG is able to transfer certain sums to the subsidiary in the UK. As of December 31, 2002, EUR 10.1 million of these credit lines were utilized. In addition, Deutsche Bank granted a credit line of EUR 0.5 million to TAROS Trading GmbH, of which EUR 0.4 million was utilized as of December 31, 2002. Trade payable at SI AG includes 2 to Group companies (previous year 12). (10) DEFERRED INCOME The deferred income items include revenues received prior to the balance sheet date where these represent income applicable to a certain period after this date. 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 (11) SALES REVENUES (Section 285 Art. 4 HGB)
CONSOLIDATED SI AG - ---------------------------------------------------------------------------------------------------------------------- 31/12/2002 % 2001/02 % 31/12/2002 % 2001/02 % - ---------------------------------------------------------------------------------------------------------------------- ACCORDING TO TYPES OF REVENUE Data shredders, parts, accessories and after-sales 23.430 73 33.839 72 17.078 100 23.716 100 Other office and communication products, accessories and after-sales 8.835 27 12.996 28 -- -- - ---------------------------------------------------------------------------------------------------------------------- TOTAL 32.265 100 46.835 100 17.078 100 23.716 100 ACCORDING TO REGIONS FEDERAL REPUBLIC OF GERMANY 3.332 10 4.488 10 3.332 20 4.488 19 Europe 16.520 51 24.437 52 7.639 45 11.439 48 North America 9.405 29 13.268 28 3.098 18 3.147 13 Other countries 3.008 10 4.642 10 3.009 17 4.642 20 - ---------------------------------------------------------------------------------------------------------------------- TOTAL EXPORT REVENUES 28.933 90 42.347 90 13.746 80 19.228 81 - ---------------------------------------------------------------------------------------------------------------------- TOTAL 32.265 100 46.835 100 17.078 100 23.716 100
(12) OTHER OPERATING INCOME
CONSOLIDATED SI AG - ------------------------------------------------------------------------------------------- 31/12/2002 2001/02 31/12/2002 2001/02 - ------------------------------------------------------------------------------------------- Income from sale of fixed assets 12 7 9 7 Income from the retransfer of provisions and discount on accounts receivable 207 144 151 38 Licence revenue, affiliated companies -- -- 131 164 Licence revenue, other 8 2 8 2 Consolidation Austria 51 155 -- -- Accruals and deferrals Olympia USA -- 623 -- -- - ------------------------------------------------------------------------------------------- SUBTOTAL 278 931 299 211 Others 230 257 215 186 - ------------------------------------------------------------------------------------------- TOTAL 508 1.188 514 397
Other operating income includes in particular income from currency translation, damages, vehicle utilization, canteen sales to employees and rents. 13 (13) COST OF MATERIALS The cost of materials includes all purchases of raw materials, consumables and supplies, purchased materials and other changes to the finished goods and work in progress, cash discounts, bonuses, as well as energy costs and expenses for the external processing of materials. (14) PERSONNEL EXPENSES
CONSOLIDATED SI AG - ------------------------------------------------------------------------------------------- 31/12/2002 2001/02 31/12/2002 2001/02 - ------------------------------------------------------------------------------------------- Wages and salaries 6.603 8.682 3.671 4.683 Social security and other related costs 1.309 1.942 647 837 Expenses for old-age pensions 133 205 78 129 of which unrelated to accounting period: (--) (32) (--) (32) - ------------------------------------------------------------------------------------------- TOTAL 8.045 10.829 4.396 5.649
NUMBER OF EMPLOYEES AS AN ANNUAL AVERAGE (Art. 285 Section 7 HGB)
CONSOLIDATED SI AG - ------------------------------------------------------------------------------------------- 31/12/2002 2001/02 31/12/2002 2001/02 - ------------------------------------------------------------------------------------------- Production 42 43 28 28 Logistics 20 21 16 16 Sales 100 98 44 41 Research & Development 11 10 9 8 Technical service 17 18 8 9 Administration 46 48 17 20 Trainees 13 11 13 11 - ------------------------------------------------------------------------------------------- TOTAL 249 249 135 133
(15) DEPRECIATION ON TANGIBLE AND INTANGIBLE ASSETS Schedule depreciation on tangible and intangible assets totals 492 for the Group and 351 for SI AG. 14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND TO FINANCIAL STATEMENTS OF SCHLEICHER & CO. INTERNATIONAL AG FOR THE SHORT FISCAL YEAR FROM APRIL 1, 2002 TO DECEMBER 31, 2002 (16) OTHER OPERATING EXPENSES The other operating expenses predominantly include rents, leasing, maintenance, expenses for office and communication, freight charges, travel, advertising, consultancy and vehicle fleet costs. (17) INCOME FROM INTEREST
CONSOLIDATED SI AG - ------------------------------------------------------------------------------------------- 31/12/2002 2001/02 31/12/2002 2001/02 - ------------------------------------------------------------------------------------------- Other interest and similar income 5 12 23 38 of which from affiliated companies -- -- 22 29 Interest and similar expenses - 813 - 1.137 - 626 - 825 of which to affiliated companies -- -- - 16 - 28 - ------------------------------------------------------------------------------------------- TOTAL - 808 - 1.125 - 603 - 787
VII. CONTINGENCIES
CONSOLIDATED SI AG - ----------------------------------------------------------------------------------------- 31/12/02 31/03/02 31/12/02 31/03/02 - ----------------------------------------------------------------------------------------- Notes payable 1.380 706 -- -- Guarantees 8 8 8 8 Warranty of which against affiliated -- -- 1.724 1.979 companies -- -- 1.724 1.979
VIII. OTHER INFORMATION 1. TOTAL OTHER FINANCIAL OBLIGATIONS Other financial obligations for the 2003 financial year total 102 for SI AG (previous year 118) and 735 in the Group (previous year 759) from leasing contracts. 15 2. EXECUTIVE BOARD, SUPERVISORY BOARD AND THEIR REMUNERATION EXECUTIVE BOARD Dr. E. Leopold Dieck (Sole member of Board) Chairman of the Supervisory Board - Brodogradiliste (Shipyard) Punat AG, Punat/Croatia - Sun Lit Waterproof Insulation Engineering Co. Ltd., Beijing/Peoples Republic of China - Pfister International AG, Konstanz Members of the Supervisory Board - Marina Punat AG, Punat/Croatia - Aktiv Bau AG, Geldern - Sputz AG, Dusseldorf, till June 28, 2002 There is no information on the total remuneration of the Management Board in line with article 285 No. 9a German Commercial Code in line with Article 286 para. 4 German Commercial Code. Provision for vested pension rights of former Management Board members is 856 (previous year 853). They cover the entire obligation. Retirement pensions paid to this group of persons amount to 48 (previous year 48). MEMBERS OF THE SUPERVISORY BOARD Dietrich Walther (Chairman) Chairman of the Supervisory Board - Gold Zack AG, Mettmann, till April 23, 2002 - ce Consumer Electronic AG, Munich, till June 03, 2002 Member of the Supervisory Board - Porta Systems AG, Porta Westfalica, till July 16, 2002 Dipl.-lng. Albert Goldhammer, till October 24, 2002 (Vice Chairman) Chairman of Board of Directors - SCHLEICHER & Co. of AMERICA, Inc., USA Charles William Reed, since October 24, 2002 (Vice Chairman) Member of Board of Directors - ESCALADE, Inc., Evansville/Indiana, USA Hans Wrieden Chairman of the Administrative Board - Wilkhahn GmbH & Co., Bad Munder - EBS cash.com GmbH, Buchenbeuren Member of the Supervisory Board - Pako Immobilien AG, Mettmann - IFES AG, Potsdam - Gold Zack AG, Mettmann Dr. Klaus Kessler Member of the Supervisory Board - Kolbenschmidt Pierburg AG, Neckarsulm, till June 05, 2002 Marko Dietenberger (Employees' Representative) Wilhelm Schwenninger (Employees' Representative) Remuneration for the Supervisory Boards amounted for the short financial year 2002 in total to 17 (previous year 23) by SI AG and 4 (previous year 7) by the subsidiaries. 16 PROPOSAL FOR THE APPROPRIATION OF EARNINGS 3. INFORMATION IN LINE WITH ARTICLE 285ff NO. 16, 314 PARA.1 NO. 8 GERMAN COMMERCIAL CODE Schleicher largely fulfills the recommendations of the Government Commission. Positions in which we deviate from the recommendations do not relate to our Group and to SI AG or cannot be implemented at appropriate expense for a company of our size. The wording of the Declaration of Conformity can be accessed at www.schleicher.de. PROPOSAL FOR THE APPROPRIATION OF EARNINGS There is no proposal for the appropriation of earnings. Markdorf, April 11, 2003 SCHLEICHER & CO. INTERNATIONAL AKTIENGESELLSCHAFT THE EXECUTIVE BOARD /s/ DR. E. LEOPOLD DIECK DR. E. LEOPOLD DIECK 17 AUDIT CERTIFICATE AUDIT CERTIFICATE BY THE AUDITING OFFICER We audited the annual financial statements and the accounts prepared by SCHLEICHER & Co. INTERNATIONAL AKTIENGESELLSCHAFT and the consolidated financial statements drawn up by the company, as well as the company and consolidated status report for the truncated financial year from April 1, 2002 to December 31, 2002. The preparation of these documents in accordance with the regulations of German commercial law and the supplementary regulations of the articles of association is the responsibility of the company's Board of Management. Our responsibility is, based on our audit, to express an opinion of the annual financial statements and consolidated annual financial statement drawn up by the company and of the company and Group status report. We conducted our audit of the annual and consolidated financial statement in accordance with Article 317 of the German Commercial Code, in accordance with the generally accepted standards of the Institute of Sworn Public Auditors in Germany (IDW). These principles require that the audit is planned and performed to obtain reasonable assurance about whether the accounts and annual financial statements of the company and the consolidated financial statement drawn up by the company are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the information provided in the accounts and in the company and consolidated annual financial statements and the company and Group status report. The audit also includes evaluating the annual financial statements of the companies included in the consolidated financial statements, reviewing the definition of the group of consolidated companies, assessing the accounting and consolidating principles used and material assessments and estimates made by the General Management, as well as an appraisal of the overall presentation of the annual and consolidated financial statements and of the company and Group status report. It is our opinion that our audit provides a reasonable basis for our opinion. Our audit did not result in any objections or exceptions. It is our opinion that the annual and consolidated financial statements, with due regard to accounting principles, present a true and fair view of the net asset, financial and earnings position of the company and the Group taking into consideration. The Group and company status report provides an overall pertinent presentation of the situation of the company and the Group, and provides a fair description pf any risks related to future development. Meersburg, April 11, 2003 BODENSEE TREUHAND GMBH CHARTERED AUDITORS /s/ Michael Altmann Dipl.-Vw. Dr. rer. pol. Michael Altmann Auditor /s/ Wendelin J. Bottinger Dipl.-Kfm. Wendelin J. Bottinger Auditor 18 SCHLEICHER GROUP SCHLEICHER & CO. INTERNATIONAL AG Development, production and distribution of products and systems of office equipment. Capital: 7.327.046,34(euro) Bergheimer Stra(beta)e 6-12 D-88677 Markdorf / Germany Tel. +49 (0) 75 44 / 60-0 Fax +49 (0) 75 44 / 60-108 zentrale@schleicher.de www.schleicher.de - - TAROS TRADING GmbH Merchandise procurement and marketing Share: 100 %, Capital: 1,278,229.70(euro) Bergheimer Str. 6-12 88677 Markdorf / Germany Tel. +49(0)75 44 / 60-0 Fax +49(0)75 44 / 60-265 trading@schleicher.de - - SCHLEICHER & CO. Ges.m.b.H. Distribution Share: 100 %, Capital: 36,336.42(euro) Lembockgasse 49/1/B4-2 1230 Wien / Austria Tel. +43(0)1 / 8 92 36 50 Fax +43(0)1 / 8 92 36 36 intimus@netway.at - - SCHLEICHER INTERNATIONAL S.A.R.L. Development, production and distribution Share: 100 %, Capital: 1.270.783,30 (euro) 17, rue Albert Einstein 77420 Champs-sur-Marne / France Tel. +33(0)1 / 70 00 69 00 Fax +33(0)1 / 70 00 69 24 contact@schleicher-intimus.com - - SCHLEICHER & CO. INTERNATIONAL LTD. Distribution Share: 100 %, Capital:L 300,000 Unit C2 Fleming Centre, Fleming Way Crawley, West Sussex RH10 2NX / Great Britain Tel. +44(0)1 / 293 / 44 19 00 Fax +44(0)1 / 293 / 61 11 55 enquiries@intimus.co.uk - - SCHLEICHER INDIA LTD. Distribution Share: 48 %, Capital: Rupie INR 3,600,000 108 Deepshikha Building, Rajindra Place 110008 New Delhi / India Tel. +91(0)11 / 5 76 50 57 Fax +91(0)11 / 5 76 50 56 schleicher@vsnl.net - - SCHLEICHER & CO. OF AMERICA, INC. Development, production and distribution Share: 100 %, Capital: US $ 100,000 5715 Clyde Rhyne Drive Sanford, North Carolina 27330 / USA Tel. +1(1)919 / 7 75 73 18 Fax +1(1)919 / 7 74 87 31 soa@interpath.com www.intimus.com - - OLYMPIA BUSINESS SYSTEMS, INC. Distribution Share: 100 %, Capital: US $ 100,000 SCHLEICHER & Co. of AMERICA, Inc. 5715 Clyde Rhyne Drive Sanford, North Carolina 27330 / USA Tel. +1(1)919 / 7 75 73 18 Fax +1(1)919 / 7 74 87 31 soa@interpath.com - - SCHLEICHER & CO. INTERNATIONAL AG BEIJING REPRESENTATIVE OFFICE Distribution representation D6C, Tower D, Fuhua Mansion, East District 100027 Beijing / Peoples Republic of China Tel. +86(0)10 / 65 54 40 37 Fax +86(0)10 / 65 54 40 41 shilehe@public.bta.net.cn 19 - - SCHLEICHER & CO. INTERNATIONAL AG SHANGHAI REPRESENTATIVE OFFICE Distribution representation Golden Bridge Mansion, 2077 Yanan Xi Lu 200336 Shanghai / Peoples Republic of China Tel. and Fax +86(0)21 / 62 19 29 11 shilehe@sh163.net - - EKVITA spol. s r.o. Distribution Share: 22 %, Capital: CZK 27.851.000 Nachodska 6 54103 Trutnov / Czech Republic Tel. +42 0499 841133-5 Fax +42 0499 841136 info@ekvitatu.cz - - GERD DAHLE OFFICE SYSTEMS GmbH Distribution Share: 40 %, Capital: 87.500,00(euro) Tannenweg 6 96149 Breitengu(beta)bach / Germany Tel. +49(0)95 44 / 92 20-26 Fax +49(0)95 44 / 92 20-34 info@gerddahle.de www.gerddahle.de [SCHLEICHER MARKEN LOGO] [INTIMUS(R) LOGO] [TAROS LOGO] [PAPER MONSTER LOGO] [VACUSHRED LOGO] [SCHLEICHER LOGO] [SCHLEICHER KOOPERATIONEN LOGO] [MARTIN YALE LOGO] [PREMIER(R) LOGO] [OLYMPIA(R) LOGO] [PUZER PRO LOGO] [EKVITA LOGO] [PRIMA LOGO] [D.O.S. LOGO] 20 [BACK COVER] [SCHLEICHER & CO. INTERNATIONAL AG LOGO] THE SHREDDER COMPANY [CERTIFICATION LOGO] P.O. Box 1420 88672 Markdorf / Germany Tel. +49 (0) 75 44/60-0 Fax +49 (0) 75 44/60-108 zentrale@schleicher.de www.schleicher.de -----END PRIVACY-ENHANCED MESSAGE-----