8-K/A 1 rsh8ka.txt INITIAL FILING ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM 8-K/A Current Report for Event Occurring November 12, 2001 of REYNOLDS, SMITH AND HILLS, INC. a Florida Corporation IRS Employer Identification No. 59-2986466 SEC File Number 0-18984 4651 Salisbury Road Jacksonville, Florida 32256 (904) 296-2000 ================================================================================ Item 2. Acquisition or Disposition of Assets. This Form 8-K/A amends the current report on Form 8-K dated November 13, 2001 to correct the Pro Forma Financial Information included in Item 7(b). The Pro Forma Financial Information contained in this Form 8-K/A amends and restates in its entirety the Pro Forma Financial Information contained in the Form 8-K dated November 13, 2001. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Pro Forma Financial Information The Unaudited Pro Forma Consolidated Financial Statements of the Company giving effect to the acquisition of Sylva Engineering Corporation: Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2001 Unaudited Pro Forma Consolidated Statement of Operations for the three months ended June 30, 2001 Unaudited Pro Forma Consolidated Statement of Operations for the year ended March 31, 2001 Notes to Unaudited Pro Forma Consolidated Financial Statements Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. Dated: November 20, 2001 REYNOLDS, SMITH AND HILLS, INC. By: /s/Kenneth R. Jacobson ---------------------------------------- Name: Kenneth R. Jacobson ---------------------------------------- Title: Chief Financial Officer, Executive Vice ---------------------------------------- President, and General Counsel ------------------------------ Reynolds, Smith & Hills, Inc. Unaudited Pro Forma Consolidated Financial Statements For The Acquisition Of Sylva Engineering Corporation The following unaudited pro forma consolidated financial statements and explanatory notes reflect the acquisition of Sylva Engineering Corporation ("Sylva") by Reynolds, Smith & Hills, Inc. ("RS&H" or the "Company"). On November 12, 2001, RS&H completed its acquisition of 100% of the issued and outstanding capital stock of Sylva in exchange for a $700,000 cash payment at closing, $200,000 cash withheld by RS&H to serve as security for the obligations of the shareholders of Sylva under the Stock Purchase Agreement, a $745,000 subordinated promissory note payable in monthly installments and 15,000 shares of RS&H common stock. The Stock Purchase Agreement also provides for an additional contingent purchase price of up to $700,000 based upon the financial performance, of the existing offices of Sylva, the Houston office of RS&H and any new offices of the Company which commence operations in the state of Texas after the closing of the transaction, over the first four successive twelve month periods following the closing. The pro forma balance sheet assumes that the acquisition was consummated on June 30, 2001. The pro forma consolidated statement of operations for the year ended March 31, 2001 assumes that the acquisition was consummated on April 1, 2000 and the pro forma consolidated statement of operations for the three months ended June 30, 2001 assumes that the acquisition was consummated on April 1, 2001. Certain pro forma adjustments are based on preliminary estimates. Final allocations will be made on the basis of further evaluations and, therefore, such allocations may differ from those reflected in the pro forma financial statements. The pro forma statement of operations is not necessarily indicative of the results of operations of RS&H had the Sylva acquisition occurred at the beginning of the periods presented, nor is it necessarily indicative of the results of future operations. These statements should be read in conjunction with the separate historical financial statements and notes thereto of RS&H (incorporated by reference in RS&H's Annual Report on Form 10-K for the year ended March 31, 2001) and Sylva included herein. Reynolds, Smith and Hills, Inc. Unaudited Pro Forma Consolidated Balance Sheet June 30, 2001 -------------------------------------------------------------------------------- Sylva Reynolds, Smith Engineering Pro Forma Pro Forma and Hills, Inc. (a) Corporation (b) Adjustments Totals ---------------- --------------- ---------------- ---------------- Assets Current Assets: Cash $ 160,000 $ 167,000 $ (700,000)(c) 750,000 (d) $ 377,000 Accounts Receivable 9,374,000 1,551,000 -- 10,925,000 Unbilled service revenue 6,152,000 169,000 -- 6,321,000 Prepaid expenses and other current assets 116,000 43,000 -- 159,000 Deferred income taxes 718,000 718,000 ------- ------- ------- ------- Total Current assets 16,520,000 1,930,000 50,000 18,500,000 Property and Equipment, net 2,276,000 254,000 -- 2,530,000 Other assets 165,000 131,000 -- 296,000 Cost in excess of net assets of acquired businesses 1,174,000 647,000 (c) 1,821,000 --------- ------- ------- --------- $20,135,000 $ 2,315,000 $ 697,000 $23,147,000 =========== ============ ============ =========== Liabilities and Shareholders Equity Current liabilities: Current portion of long term debt and capital lease obligations $ -- $ 11,000 $ 220,000 (c) 150,000 (d) $ 381,000 Accounts payable 2,917,000 262,000 200,000 (c) 3,379,000 Accrued payroll 1,190,000 1,190,000 Accrued incentive compensation 1,643,000 1,643,000 Accrued expenses 1,152,000 194,000 -- 1,346,000 Deferred income taxes 442,000 -- 442,000 Unearned service revenue 4,331,000 120,000 -- 4,451,000 --------- ------- ------- --------- Total current liabilities 11,233,000 1,029,000 570,000 12,832,000 Subordinated promissory note 525,000 (c) 525,000 Line of Credit 600,000 (d) 600,000 Deferred income taxes 204,000 32,000 -- 236,000 Other liabilities 318,000 1,000 -- 319,000 ------- ----- ------- ------- 11,755,000 1,062,000 1,695,000 14,512,000 Shareholders Equity: Common stock 5,000 1,000 (1,000)(c) 5,000 Paid in capital 3,672,000 -- -- 255,000 (c) 3,927,000 Retained earnings 4,703,000 1,252,000 (1,252,000)(c) 4,703,000 --------- --------- ---------- --------- Total shareholders equity 8,380,000 1,253,000 (998,000) 8,635,000 --------- --------- -------- --------- $20,135,000 $ 2,315,000 $ 697,000 $23,147,000 =========== ============ ============ ===========

See notes to unaudited pro forma consolidated financial statements. Reynolds, Smith and Hills, Inc. Unaudited Pro Forma Consolidated Statement of Operations Three Months Ended June 30, 2001 -------------------------------------------------------------------------------- Sylva Reynolds, Smith Engineering Pro Forma Pro Forma and Hills, Inc. (a) Corporation (b) Adjustments Totals --------------- ----------- ----------- --------- Revenue $ 16,441,000 $ 1,425,000 $ -- $17,866,000 Subcontractor and other direct costs 4,409,000 229,000 -- 4,638,000 --------- ------- ------ --------- Net service revenue 12,032,000 1,196,000 -- 13,228,000 Cost of services 4,711,000 792,000 -- 5,503,000 --------- ------- ------ --------- Gross profit 7,321,000 404,000 -- 7,725,000 Selling, general and administrative expenses 6,887,000 148,000 11,000 (c) 7,046,000 --------- ------- ------ --------- Operating income 434,000 256,000 (11,000) 679,000 Other income (expense): Interest and other income 15,000 -- -- 15,000 Interest expense (4,000) -- (16,000)(d) (9,000)(e) (29,000) ------ ------ ------ ------- Income before income taxes 445,000 256,000 (36,000) 665,000 Income tax expense (benefit) 206,000 91,000 (12,000)(f) 285,000 ------- ------ ------- ------- Net income $ 239,000 $ 165,000 $ (24,000) $ 380,000 ============ ============ ============ ============

See notes to unaudited pro forma consolidated financial statements. Reynolds, Smith and Hills, Inc. Unaudited Pro Forma Consolidated Statement of Operations Year Ended March 31, 2001 -------------------------------------------------------------------------------- Sylva Reynolds, Smith (a) Engineering (b) Pro Forma Pro Forma and Hills, Inc. Corporation Adjustments Totals ----------------- --------------- -------------- ---------------- Revenue $ 58,519,000 $ 4,665,000 $ - $ 63,184,000 Subcontractor and other direct costs 14,112,000 1,222,000 - 15,334,000 ---------- --------- ------ ---------- Net service revenue 44,407,000 3,443,000 - 47,850,000 Cost of services 16,594,000 2,212,000 - 18,806,000 ---------- --------- ------ ---------- Gross profit 27,813,000 1,231,000 - 29,044,000 Selling, general and administrative expenses 26,551,000 713,000 43,000 (c) 27,307,000 ---------- ------- ------ ---------- Operating income 1,262,000 518,000 (43,000) 1,737,000 Other income (expense): Interest and other income 41,000 - - 41,000 Interest expense (19,000) - (63,000) (d) - - (38,000) (e) (120,000) ------- ------- ------- -------- Income before income taxes 1,284,000 518,000 (144,000) 1,658,000 Income tax expense (benefit) 546,000 182,000 (49,000) (f) 679,000 ------- ------- ------- ------- Net income $ 738,000 $ 336,000 $ (95,000) $ 979,000 ============== ============ ============ =========

See notes to unaudited pro forma consolidated financial statements. REYNOLDS, SMITH AND HILLS, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS (a) This column represents the consolidated balance sheet of RS&H at June 30, 2001. (b) This column represents the balance sheet of Sylva at June 30, 2001. (c) Represents the purchase price of $1,900,000 consisting of $700,000 cash, $200,000 cash withheld related to obligations of the shareholders of Sylva under the Stock Purchase Agreement, $745,000 subordinated promissory note and 15,000 shares of RS&H common stock at $17/share in exchange for all of the outstanding common stock of Sylva. The resulting excess of the total purchase price over the fair values of the net assets acquired, has been allocated to goodwill for pro forma purposes. (d) Represents borrowings under a long term note agreement (the "Note") to fund the acquisition of Sylva. The Note is for five years with equal monthly principal payments of $12,500. Interest on the Note is equal to the 30 day LIBOR rate plus 2.9%. 2. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2001 (a) This column represents the consolidated statement of operations of RS&H for the three months ended June 30, 2001. (b) This column represents the statement of operations of Sylva for the three months ended June 30, 2001. (c) Represents additional amortization expense expected to be incurred related to the excess purchase price over the net tangible assets acquired as if the purchase had taken place on April 1, 2001. For pro forma purposes, the entire excess has been allocated to goodwill with an estimated useful life of 15 years. (d) Represents interest on the subordinated note at 8.5% as if the purchase had taken place on April 1, 2001. (e) Represents three months interest expense on the Note used to fund the cash portion of the Sylva acquisition. (f) Represents the income tax effect of the entries provided above at (c), (d) & (e) at RS&H's effective tax rate of 34%. REYNOLDS, SMITH AND HILLS, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 3. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE YEAR ENDED MARCH 31, 2001 (a) This column represents the consolidated statement of operations of RS&H for the year ended March 31, 2001. (b) This column represents the consolidated statement of operations of Sylva for the year ended December 31, 2000. (c) Represents additional amortization expense expected to be incurred related to the excess purchase price over the net tangible assets acquired as if the purchase had taken place on April 1, 2000. For pro forma purposes, the entire excess has been allocated to goodwill with an estimated useful life of 15 years. (d) Represents interest on the subordinated note at 8.5% as if the purchase had taken place on April 1, 2000. (e) Represents 12 months interest expense on the Note used to fund the cash portion of the Sylva acquisition. (f) Represents the income tax effect of the entries provided above at (c), (d) & (e) at RS&H's effective tax rate of 34%.

REYNOLDS SMITH & HILLS INC 8-K/A