EX-99.2 3 dex992.htm PRO FORMA FINANCIAL INFORMATION Pro forma financial information

Exhibit 99.2

KENSEY NASH CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma consolidated financial statements have been prepared to give effect to the sale, on May 30, 2008, by Kensey Nash Corporation (“Kensey Nash” or the “Company”) to The Spectranetics Corporation (“Spectranetics”) of the Company’s endovascular business.

The unaudited pro forma consolidated balance sheet presents the financial position of Kensey Nash as of March 31, 2008, giving effect to the sale of the endovascular business as if it occurred on such date. The unaudited pro forma consolidated statements of income for the nine months ended March 31, 2008 and for the year ended June 30, 2007 give effect to the sale of the endovascular business as if it occurred at the beginning of each such period.

The unaudited pro forma consolidated statements of income do not include nonrecurring charges or credits directly attributable to the sale of the endovascular business.

The unaudited pro forma consolidated financial statements are prepared in accordance with Article 11 of Regulation S-X, and are based on and should be read in conjunction with, and are qualified in their entirety by, the historical consolidated financial statements, notes and management discussion and analysis thereto of the Company.

The unaudited pro forma financial statement information is based upon currently available information, and is subject to a number of estimates and assumptions that the Company believes are reasonable under the circumstances and was prepared to illustrate the estimated effects of the transaction if it had occurred on the dates indicated; actual amounts would have differed from these estimated amounts. The unaudited pro forma consolidated financial statements may be subject to adjustments based on the actual carrying value of net assets sold at the date of closing, among other considerations, and is not necessarily indicative of the results or financial condition that would have been reported had such transaction actually occurred on the dates specified, nor is it necessarily indicative of the Company’s future operating results or financial condition. The pro forma adjustments are described in the notes.


KENSEY NASH CORPORATION

UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2008

 

     Kensey Nash Corp.
Historical

(As Reported)
    Endovascular
Disposition
Adjustments
          Kensey Nash Corp.
Pro Forma

(As Adjusted)
 

ASSETS

        

CURRENT ASSETS:

        

Cash and cash equivalents

   $ 36,162,488     $ 10,000,000     (a )   $ 46,162,488  

Investments

     19,693,945       —           19,693,945  

Trade receivables, net

     7,689,299       (792,805 )   (b )     6,896,494  

Royalties receivable

     6,484,881       —           6,484,881  

Other receivables

     649,023       (42,077 )   (b )     606,946  

Inventory

     10,121,295       (1,178,976 )   (b )     8,942,319  

Deferred tax asset, current portion

     2,816,764       (30,915 )   (b )     2,785,849  

Prepaid expenses and other

     2,004,601       2,242,555     (b )     4,247,156  
                          

Total current assets

     85,622,296       10,197,782         95,820,078  
                          

PROPERTY, PLANT AND EQUIPMENT, AT COST:

        

Land

     4,883,591       —           4,883,591  

Building

     45,741,159       —           45,741,159  

Machinery, furniture and equipment

     30,746,388       (3,392,554 )   (b )     27,353,834  

Construction in progress - new facility

     149,664       —           149,664  

Construction in progress

     1,970,296       (298,465 )   (b )     1,671,831  
                          

Total property, plant and equipment

     83,491,098       (3,691,019 )       79,800,079  

Accumulated depreciation

     (20,538,604 )     1,333,635     (b )     (19,204,969 )
                          

Net property, plant and equipment

     62,952,494       (2,357,384 )       60,595,110  
                          

OTHER ASSETS:

        

Deferred tax asset, non-current portion

     364,304       105,757     (b )     470,061  

Acquired patents and other intangibles, net

     5,387,466       (1,352,083 )   (b )     4,035,383  

Goodwill

     10,723,924       (6,357,651 )   (b )     4,366,273  

Other non-current assets

     106,622       —           106,622  
                          

Total other assets

     16,582,316       (7,603,977 )       8,978,339  
                          

TOTAL

   $ 165,157,106     $ 236,421       $ 165,393,527  
                          

LIABILITIES AND STOCKHOLDERS’ EQUITY

        

CURRENT LIABILITIES:

        

Accounts payable

   $ 2,531,940     $ (48,617 )   (b )   $ 2,483,323  

Accrued expenses

     4,556,050       5,647,059     (b )     10,203,109  

Other current liabilities

     493,533       (1,052 )   (c )     492,481  

Current portion of debt

     1,400,000       —           1,400,000  

Deferred revenue

     612,188       —           612,188  
                          

Total current liabilities

     9,593,711       5,597,390         15,191,101  
                          

OTHER LIABILITIES:

        

Long-term debt

     33,133,333       —           33,133,333  

Deferred revenue, non-current

     533,530       —           533,530  

Other non-current liabilities

     4,139,547       —           4,139,547  
                          

Total liabilities

     47,400,121       5,597,390         52,997,511  
                          

COMMITMENTS AND CONTINGENCIES

     —         —           —    

STOCKHOLDERS’ EQUITY:

        

Preferred stock, $.001 par value, 100,000 shares authorized, no shares issued or outstanding at March 31, 2008

     —         —           —    

Common stock, $.001 par value, 25,000,000 shares authorized, 11,728,494 shares issued and outstanding at March 31, 2008

     11,714       —           11,714  

Capital in excess of par value

     78,305,951       —           78,305,951  

Retained earnings

     41,965,791       (5,181,473 )   (d )     36,784,318  

Accumulated other comprehensive loss

     (2,526,471 )     (179,496 )   (b )     (2,705,967 )
                          

Total stockholders’ equity

     117,756,985       (5,360,969 )       112,396,016  
                          

TOTAL

   $ 165,157,106     $ 236,421       $ 165,393,527  
                          

See notes to unaudited pro forma condensed consolidated financial statements.


KENSEY NASH CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED MARCH 31, 2008

 

     Kensey Nash Corp.
Historical

(As Reported)
    Endovascular
Disposition
Adjustments (e)
          Kensey Nash Corp.
Pro Forma

(As Adjusted)
 

REVENUES:

        

Net sales

        

Biomaterial sales

   $ 34,208,033     $ —         $ 34,208,033  

Endovascular sales

     4,584,230       (2,782,012 )   (f )     1,802,218  
                          

Total net sales

     38,792,263       (2,782,012 )       36,010,251  

Royalty income

     19,026,779       —           19,026,779  
                          

Total revenues

     57,819,042       (2,782,012 )       55,037,030  
                          

OPERATING COSTS AND EXPENSES:

        

Cost of products sold

     18,114,483       (231,165 )   (g )     17,883,318  

Research and development

     12,861,180       (173,839 )   (g )     12,687,341  

Sales and marketing

     10,514,806       (10,236,751 )   (h )     278,055  

General and administrative

     7,975,825       (36,545 )   (g )     7,939,280  
                          

Total operating costs and expenses

     49,466,294       (10,678,300 )       38,787,994  
                          

INCOME FROM OPERATIONS

     8,352,748       7,896,288         16,249,036  
                          

OTHER (EXPENSE)/INCOME:

        

Interest income

     1,350,250       —           1,350,250  

Interest expense

     (977,539 )     —           (977,539 )

Other (loss)/income

     (94,056 )     7,794     (j )     (86,262 )
                          

Total other income - net

     278,655       7,794         286,449  
                          

INCOME BEFORE INCOME TAX

     8,631,403       7,904,082         16,535,485  
        

Income tax expense

     (2,746,659 )     (2,687,388 )   (i )     (5,434,047 )
                          

NET INCOME

   $ 5,884,744     $ 5,216,694       $ 11,101,438  
                          

BASIC EARNINGS PER SHARE

   $ 0.49     $ 0.44       $ 0.93  
                          

DILUTED EARNINGS PER SHARE

   $ 0.47     $ 0.42       $ 0.88  
                          

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

     11,985,264       11,985,264         11,985,264  
                          

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

     12,545,845       12,545,845         12,545,845  
                          

See notes to unaudited pro forma consolidated financial statements.


KENSEY NASH CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEAR ENDED JUNE 30, 2007

 

     Kensey Nash Corp.
Historical

(As Reported)
    Endovascular
Disposition
Adjustments (e)
          Kensey Nash Corp.
Pro Forma

(As Adjusted)
 

REVENUES:

        

Net sales

        

Biomaterial sales

   $ 41,116,112     $ —         $ 41,116,112  

Endovascular sales

     3,786,257       (2,203,388 )   (f )     1,582,869  
                          

Total net sales

     44,902,369       (2,203,388 )       42,698,981  

Royalty income

     24,592,076       —           24,592,076  
                          

Total revenues

     69,494,445       (2,203,388 )       67,291,057  
                          

OPERATING COSTS AND EXPENSES:

        

Cost of products sold

     24,621,727       (214,460 )   (g )     24,407,267  

Research and development

     20,265,046       (311,197 )   (g )     19,953,849  

Sales and marketing

     12,524,501       (12,112,148 )   (h )     412,353  

General and administrative

     8,299,525       (37,581 )   (g )     8,261,944  
                          

Total operating costs and expenses

     65,710,799       (12,675,386 )       53,035,413  
                          

INCOME FROM OPERATIONS

     3,783,646       10,471,998         14,255,644  
                          

OTHER INCOME (EXPENSE):

        

Interest income

     1,087,023       —           1,087,023  

Interest expense

     (427,121 )     —           (427,121 )

Other (loss)/income

     (22,981 )     29,645     (j )     6,664  
                          

Total other income - net

     636,921       29,645         666,566  
                          

INCOME BEFORE INCOME TAX

     4,420,567       10,501,643         14,922,210  

Income tax expense

     (787,416 )     (3,570,559 )   (i )     (4,357,975 )
                          

NET INCOME

   $ 3,633,151     $ 6,931,084       $ 10,564,235  
                          

BASIC EARNINGS PER SHARE

   $ 0.31     $ 0.59       $ 0.90  
                          

DILUTED EARNINGS PER SHARE

   $ 0.29     $ 0.55       $ 0.84  
                          

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

     11,773,317       11,773,317         11,773,317  
                          

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

     12,580,526       12,580,526         12,580,526  
                          

See notes to unaudited pro forma consolidated financial statements.


KENSEY NASH CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: PRO FORMA ADJUSTMENTS

Pro forma adjustments relating to the unaudited pro forma consolidated financial statements of Kensey Nash are the following:

BALANCE SHEET

 

  a. To record the net consideration received for the sale of the endovascular business.

 

  b. To eliminate the assets and liabilities sold and reflect other non-recurring adjustments as part of the endovascular transaction.

 

  c. To reflect equity-based liability adjustments due to the sale of the endovascular business.

 

  d. To reflect an estimate of equity adjustments and the tax benefit from the estimated loss due to the sale of the endovascular business.

STATEMENTS OF INCOME

 

  e. Management believes all adjustments presented are directly attributable to the sale of the endovascular business and will not continue after the transaction. These adjustments do not reflect the removal of related indirect corporate expenses incurred by Kensey Nash.

 

  f. To reflect the revenues related to Kensey Nash’s endovascular business at Kensey Nash’s new transfer prices to Spectranetics.

 

  g. To reflect the depreciation and amortization of the assets sold related to Kensey Nash’s endovascular business.

 

  h. To reflect estimated sales and marketing costs related to Kensey Nash’s endovascular business.

 

  i. To reflect estimated income tax benefit at a 34% statutory rate on the sale of the endovascular business.

 

  j. To reflect the gain or loss on disposition of assets prior to the sale of Kensey Nash’s endovascular business to Spectranetics.