Pro Forma Unaudited Condensed Combined Statements of Income for Lakeland and Qualytextil (Three Months Ended April 30, 2008)

Contract Categories: Mergers & Acquisitions › Plan of Reorganization Agreements
Summary

This document presents the unaudited pro forma condensed combined income statements for Lakeland and Qualytextil for the three months ended April 30, 2008. It shows how the companies’ financial results would look if Lakeland had acquired Qualytextil during that period. The statements include adjustments for interest expenses related to the acquisition loan and tax effects. The purpose is to provide investors with a clearer picture of the combined company’s potential financial performance after the acquisition.

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EX-10.26 5 v180264_ex10-26.htm
Exhibit 10.26
 
PROFORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF INCOME
            
Combined
  
   
Historical
              
Pro forma
  
 ($000 USD)
        
Qualytextil
                    
For the three months ended April 30, 2008
  
AS REPORTED
    
US GAAP /USD
    
Adjustment
    
Adjustment
    
Three months ended
  
Income Statement Data:
  
4/30/08
    
4/30/08
       (1 )     (2 )  
4/30/08
  
Net sales
   $ 27,280     $ 1,965     $ -     $ -     $ 29,245  
Cost of goods sold
     20,601       756       -       -       21,357  
Gross profit
     6,679       1,209       -       -       7,888  
Operating expenses
     5,231       830       -       -       6,061  
Operating profit
     1,448       379       -       -       1,827  
Interest expense
     (100 )     (206 )     (131 )     206       (231 )
Interest income
     30       59       -       -       89  
Income before income taxes
     1,378       232       (131 )     206       1,685  
Income tax expense
     485       35       (47 )     31       504  
Net Income
   $ 893     $ 197     $ (84 )   $ 175     $ 1,181  
Net income per share
   $ 0.16                             $ 0.22  
   # shares used for basic EPS
     5,487,260                               5,487,260  
ACCRETIVE TO EPS:
                                   $ 0.06  
 
 
 
 
Exhibit 10.26



NOTES TO: PROFORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF INCOME
Three months ended April 30, 2008
   
   
Adjustment
Needed
  
         
(1) Adjustment to reflect interest- Expense that would have been incurred on loan to finance purchase of Qualytextil
   $ 13,344  
         
Interest rate assumed on proforma loan.  Used Lakeland’s actual weighted average interest rate for the period + 40 BPS which is the pricing adjustment created by the higher leverage resulting from the purchase price borrowing
     3.93 %
         
Additional interest expense on purchase loan pro forma
   $ 131  
         
Tax rate - The Company considers the rate of 36% to be appropriate as it represents the applicable tax effect on interest expense incurred on the loan assumed in USD. The Company did not use the effective tax rate which is 25.0%, since the rate is affected by various factors not relevant to the current transaction including income from various foreign subsidiaries, deductions etc.
     36 %
         
Tax benefit on additional interest expense
   $ 47  
         
 (2) Adjustment to add back interest expense on Qualytextil books  as the debt has been repaid as a result of this transaction