Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - SIFCO INDUSTRIES INC | d277700dex992.htm |
| EX-99.4 - EX-99.4 - SIFCO INDUSTRIES INC | d277700dex994.htm |
| 8-K/A - 8-K/A - SIFCO INDUSTRIES INC | d277700d8ka.htm |
Exhibit 99.3
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
UNAUDITED CONDENSED BALANCE SHEET
September 30, 2011
| September 30, 2011 |
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| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: |
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| Cash |
$ | 3,226,036 | ||
| Accounts receivable, trade |
3,837,755 | |||
| Inventories |
3,527,869 | |||
| Prepaid expenses and other assets |
122,377 | |||
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| Total current assets |
10,714,037 | |||
| Property and equipment, net |
564,132 | |||
| Deposits |
14,571 | |||
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| $ | 11,292,740 | |||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 344,467 | ||
| Accrued liabilities |
433,087 | |||
| Income tax payable |
1,488 | |||
| Current portion of obligation under capital lease |
30,231 | |||
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| Total current liabilities |
809,273 | |||
| Obligations under capital lease |
32,451 | |||
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| Total liabilities |
841,724 | |||
| Shareholders’ equity |
10,451,016 | |||
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| $ | 11,292,740 | |||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
Nine months ended September 30, 2011
| Nine months Ended September 30 2011 |
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| (Unaudited) | ||||
| Net sales |
$ | 15,089,693 | ||
| Cost of goods sold |
10,407,542 | |||
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| Gross profit |
4,682,151 | |||
| Selling, general and administrative expenses |
1,492,886 | |||
| Loss on disposal of equipment |
499 | |||
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| Income from operations |
3,188,766 | |||
| Interest expense |
(3,882 | ) | ||
| Interest income |
596 | |||
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| Total other expense, net |
(3,286 | ) | ||
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| Income before provision for taxes |
3,185,480 | |||
| Provision for taxes |
47,782 | |||
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| Net income |
$ | 3,137,698 | ||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Nine months ended September 30, 2011
|
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Total Shareholders’ Equity |
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| Shares | Amount | |||||||||||||||||||
| Balances, December 31, 2010 |
1,775 | $ | 1,750,000 | $ | 286,645 | $ | 6,976,673 | $ | 9,013,318 | |||||||||||
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| Net income |
— | — | — | 3,137,698 | 3,137,698 | |||||||||||||||
| Shareholder distributions |
— | — | — | (1,700,000 | ) | (1,700,000 | ) | |||||||||||||
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| Balances, September 30, 2011 |
1,775 | $ | 1,750,000 | $ | 286,645 | $ | 8,414,371 | $ | 10,451,016 | |||||||||||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
UNAUDITED CONDENSED STATEMENT OF CASHFLOWS
Nine months ended September 30, 2011
| Nine months Ended September 30 2011 |
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| (Unaudited) | ||||
| Cash flows from operating activities: |
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| Net income |
$ | 3,137,698 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization |
176,383 | |||
| Loss on disposal of equipment |
500 | |||
| Changes in operating assets and liabilities: |
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| Accounts receivable, trade |
(1,405,312 | ) | ||
| Inventories |
(196,286 | ) | ||
| Prepaid expenses and other assets |
(88,187 | ) | ||
| Accounts payable |
113,423 | |||
| Accrued liabilities |
(21,347 | ) | ||
| Income tax payable |
40 | |||
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| Net cash provided by operating activities |
1,716,912 | |||
| Cash flows from investing activities: |
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| Purchases of property and equipment |
(42,371 | ) | ||
| Proceeds from sale of equipment |
500 | |||
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| Net cash used for investing activities |
(41,871 | ) | ||
| Cash flows from financing activities: |
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| Payments on obligation under capital lease |
(27,342 | ) | ||
| Shareholder distributions |
(1,700,000 | ) | ||
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| Net cash used for financing activities |
(1,727,342 | ) | ||
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| Increase in cash and cash equivalents |
(52,301 | ) | ||
| Cash and cash equivalents at the beginning of the period |
3,278,337 | |||
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| Cash and cash equivalents at the end of the period |
$ | 3,226,036 | ||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
UNAUDITED CONDENSED STATEMENT OF CASHFLOWS
Nine months ended September 30, 2011
| Nine months Ended September 30, 2011 |
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| (Unaudited) | ||||
| Supplemental disclosure of cash flow information: |
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| Cash paid for interest |
$ | 10,119 | ||
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| Cash paid for income taxes |
$ | 46,500 | ||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
GEL INDUSTRIES, INC.
DBA QUALITY ALUMINUM FORGE, INC.
NOTES TO UNADITED CONDENSED FINANCIAL STATEMENTS
Nine months ended September 30, 2011
| 1. | Summary of Significant Accounting Policies |
These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in Gel Industries, Inc. DBA Quality Aluminum Forge, Inc. (“Company”) fiscal 2010 audited financial statements.
| 2. | Inventories |
Inventories consist of the following:
| September 30, 2011 | ||||
| Raw materials |
$ | 361,943 | ||
| Work-in-process |
2,351,959 | |||
| Finished goods |
813,967 | |||
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| $ | 3,527,869 | |||
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| 3. | Line of Credit |
The Company has a revolving bank line of credit up to $1,500,000 providing for borrowings up to a percentage of eligible accounts receivable and inventories as defined in the agreement. There were no outstanding balances on the line of credit at September 30, 2011. During 2011, the interest rate available to the Company was at either the greater of the bank’s prime rate, the LIBOR rate plus 2.00 percent per annum, or 3.50 percent. The line of credit is secured by substantially all of the Company’s assets and personally guaranteed by the majority shareholder up to $300,000. The line of credit expires on October 1, 2011.
The line of credit agreement with the bank requires the Company to meet various financial covenants.
| 4. | Related Party Transactions: |
The Company leases office space from related parties under two operating lease which expire in May 2015. Rental expense paid to the related parties for the nine months ended September 30, 2011 totaled approximately $81,000.
| 5. | Subsequent Event: |
On October 28, 2011, the Company sold its forging business and substantially all of the related operating assets to Forge Acquisition, LLC, a wholly-owned subsidiary of SIFCO Industries, Inc. (“SIFCO”). The purchase price for the forging business and related operating assets is approximately $24.0 million payable in cash, subject to certain adjustments related principally to the delivered working capital level and/or indemnification holdback provisions under the purchase agreement. In addition, SIFCO assumed certain current operating liabilities of the forging business.