EX-99 3 ex_99.txt EXHIBIT 99 General DataComm Industries, Inc. Unaudited Consolidated Financial Statements August 31, 2003 CAUTIONARY STATEMENT The accompanying balance sheet as of August 31, 2003 and the related statement of operations for the one month ended August 31, 2003 have not been reviewed by the Company's outside auditors, PricewaterhouseCoopers LLP. In addition, due to the Company's bankruptcy status, the audits for the fiscal years ended September 30, 2001 and 2002 have not been completed. Such audits and reviews are currently in process. Although management is not aware of any material adjustments to the August 31, 2003 financial statements that may arise as a result of the audits and reviews by PricewaterhouseCoopers LLP, until such audits and reviews are complete, there can be no assurance that such adjustments will not be required, and therefore, such financial statements should be considered in that context. The Company intends to file a Form 10-K for the fiscal year ended September 30, 2003 upon completion of the independent audit for that year. General DataComm Industries, Inc. Consolidated Balance Sheet August 31, 2003 (Unaudited) In thousands August 2003 ---------- ASSETS: Current Assets: --------------- Cash and cash equivalents $ 1,701 Accounts receivable 4,100 Notes receivable 95 Inventories 3,983 Other current assets 827 ---------- 10,706 Property, plant and equipment, net 2 Land and buildings 4,314 Other assets 4 ---------- Total Assets $ 15,026 ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: -------------------- Liabilities not subject to compromise ------------------------------------- Accounts payable, trade 498 Accrued payroll and payroll-related costs 941 Net current liabilities of discontinued operations 31 Accrued expenses and other current liab 4,242 ---------- 5,712 Liabilities subject to compromise --------------------------------- Revolving credit loan $ 17 Notes payable 20,611 7 3/4% Convertible debentures 3,000 Accounts payable, trade 19,944 Accrued payroll and payroll-related costs 706 Accrued expenses and other current liab 12,228 ---------- 56,506 ---------- Total Liabilities 62,218 Redeemable 5% Preferred Stock 3,043 Stockholders' equity: --------------------- Preferred stock 788 Common stock 3,346 Paid-in-capital 191,327 Accumulated deficit (244,257) Less: Treasury stock (1,439) ---------- (50,235) ---------- Total Liabilities and Stockholders' Equity $ 15,026 ========== The preceding cautionary statement and accompanying note are an integral part of these financial statements. General DataComm Industries, Inc. Consolidated Statement of Operations One Fiscal Month Ended August 31, 2003 (Unaudited) ($$ in 000's) Sales $ 1,888 Cost of Sales 861 ------- Gross Margin 1,027 Operating Expenses: Selling, general & administrative 597 Research & development 230 ------- 827 Operating income 200 Interest expense(contractual interest/fees $322) 341 Other, net -- ------- Earnings(loss) before reorganization items, income taxes and discontinued operations (141) Reorganization items: Professional fees 389 ------- Gain(loss) before income taxes and discontinued operations (530) Income tax provision 13 ------- Income(loss) before discontinued operations (543) Income(loss) from discontinued operations -- Gain on sale of discontinued operations -- ------- Net income(loss) $ (543) ======= The preceding cautionary statement and accompanying note are an integral part of these financial statements. General DataComm Industries, Inc. Notes to Unaudited Consolidated Financial Statements August 31, 2003 Note 1: Basis of Presentation ------------------------------ On August 5, 2003 the Bankruptcy Court for the District of Delaware approved the Company's Reorganization Plan and on September 15, 2003 the Company emerged from bankruptcy. Reference is made to the Forms 8-K previously filed on August 5 and September 17 and 18, 2003 for further information on these events. The Financial Statements for the one month ending August 31, 2003 are prepared on the basis that the Company was still in bankruptcy at that time. Furthermore, the following adjustments are anticipated to be recorded in month and quarter ended September 30, 2003. (1) A gain of approximately $4.7 million to record the settlement of litigation with a supplier. (2) A gain of up to approximately $3 million to adjust the outstanding loan balance to reflect the terms of the new loan agreement in the Reorganization Plan. Such gain may be reduced depending on the ultimate determination of the fair value of the new loan agreement. (3) The conversion of 40,000 shares of 5% preferred stock with a potential redemption value of $1,000,000 into 14,847 post-split shares of common stock.