Unaudited Condensed Combined Pro Forma Statement of Income for the year ended January 31, 2008

EX-10.25 4 ex10-25.htm EXHIBIT 10.25 ex10-25.htm
Exhibit 10.25
 
PROFORMA UNAUDITED CONDENSED COMBINED  STATEMENTS  OF INCOME
  
Combined
  
   
Historical
              
Pro forma
  
 ($000 USD)
        
QUALYTEXTIL
                    
Fiscal Year ended January 31, 2008
  
AS REPORTED
    
US GAAP /USD
    
Adjustment
    
Adjustment
        
Income Statement Data:
  
1/31/08
    
12/31/07
    
 (1)
    
 (2)
    
1/31/08
  
Net sales
   $ 95,740     $ 8,518     $ -     $ -     $ 104,258  
Cost of goods sold
     73,383       4,324       -       -       77,707  
Gross profit
     22,357       4,194       -       -       26,551  
Operating expenses
     17,374       2,847       -       -       20,221  
Operating profit
     4,983       1,347       -       -       6,330  
Other income
     145       14       -       -       159  
Interest expense
     (330 )     (680 )     (789 )     680       (1,119 )
Interest income
     67       2       -       -       69  
Income before income taxes
     4,865       683       (789 )     680       5,439  
Income tax expense
     1,574       104       (284 )     104       1,498  
Net Income
   $ 3,291     $ 579     $ (505 )   $ 576     $ 3,942  
Net income per share
   $ 0.60                             $ 0.71  
    # shares used for basic EPS
     5,522,751                               5,522,751  
ACCRETIVE TO EPS:
                                   $ 0.11  
 
 
 
 
 
 
 
Exhibit 10.25


NOTES TO: PROFORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF INCOME
Fiscal year ended January 31, 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
     5.91 %
         
Additional interest expense on purchase loan pro forma
   $ 789  
         
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 32.3%, 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
   $ 284  
         
 (2) Adjustment to add back interest expense on Qualytextil books as the debt has been repaid as a result of this transaction