Unaudited Condensed Combined Pro Forma Statement of Income for the three months ended April 30, 2008

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