EX-99.2 5 a10-3483_1ex99d2.htm EX-99.2

Exhibit 99.2

 

PRO FORMA FINANCIAL STATEMENTS

 

The following Unaudited Pro Forma Balance Sheet and Unaudited Pro Forma Income Statements give effect to the disposition by the Company of Intirion Corporation (“Intirion”).  These pro forma presentations have been prepared utilizing historical financial statements and notes thereto, as well as pro forma adjustments as described in the Notes to the Unaudited Pro Forma Financial Statements.

 

The Unaudited Pro Forma Balance Sheet has been prepared assuming the disposition occurred on September 30, 2009. The Unaudited Pro Forma Income Statements for the years ended December 31, 2006, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009 include the operating results of the Company and Intirion assuming the disposition occurred on January 1, 2006.

 

The Unaudited Pro Forma Balance Sheet and the Unaudited Pro Forma Income Statement are presented for illustrative purposes only and do not purport to represent what the Company’s results of operations or financial position would have been had the disposition of Intirion occurred on the dates indicated or the results of operations or financial position which may be obtained in the future. Such pro forma financial statements are qualified in their entirety by reference to, and should be read in conjunction with, the historical audited consolidated financial statements of the Company. The pro forma financial statements should also be read in conjunction with the accompanying notes thereto.

 

The disposition has been accounted for as a discontinued operation. The Unaudited Pro Forma Income Statement as of September 30, 2009 reflects the reduction in interest expense of $280 resulting from the $8,000 reduction in the Company’s debt from the net proceeds of the disposition.  The adjustment to the income statement net of taxes is $172.

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA  INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2006

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(b)

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Facilities management revenue

 

$

232,181

 

$

 

 

 

$

232,181

 

Product sales

 

47,146

 

30,410

 

 

 

16,736

 

Total revenue

 

279,327

 

30,410

 

 

248,917

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Cost of facilities management revenue

 

153,861

 

 

 

 

153,861

 

Depreciation and amortization

 

35,156

 

369

 

 

 

34,787

 

Cost of product sales

 

37,352

 

24,012

 

 

 

13,340

 

Total cost of revenue

 

226,369

 

24,381

 

 

201,988

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

52,958

 

6,029

 

 

46,929

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

General, administration, sales and marketing

 

34,074

 

4,367

 

 

 

29,707

 

Depreciation and amortization

 

1,589

 

116

 

 

 

1,473

 

(Gain) loss on sale of assets, net

 

(32

)

 

 

 

(32

)

Loss on early extinguishment of debt

 

73

 

 

 

 

 

 

Impairment of assets

 

2,502

 

 

 

 

2,502

 

Total operating expenses

 

38,206

 

4,483

 

 

33,650

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

14,752

 

1,546

 

 

13,206

 

Interest (income) expense

 

13,653

 

(163

)

 

 

13,816

 

Loss related to derivative instruments

 

96

 

 

 

 

96

 

Other

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,003

 

1,709

 

 

(706

)

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

147

 

663

 

 

(516

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

856

 

$

1,046

 

$

 

$

(190

)

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.07

 

$

 

 

 

$

(0.01

)

Net income per common share - diluted

 

$

0.06

 

$

 

 

 

$

(0.01

)

Weighted average common shares outstanding - basic

 

13,008

 

 

 

 

13,008

 

Weighted average common shares outstanding - diluted

 

13,448

 

 

 

 

13,448

 

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2007

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(b)

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Facilities management revenue

 

$

242,803

 

$

 

 

 

$

242,803

 

Product sales

 

53,099

 

33,418

 

 

 

19,681

 

Total revenue

 

295,902

 

33,418

 

 

262,484

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Cost of facilities management revenue

 

162,839

 

 

 

 

162,839

 

Depreciation and amortization

 

37,410

 

246

 

 

 

37,164

 

Cost of product sales

 

40,347

 

25,645

 

 

 

14,702

 

Total cost of revenue

 

240,596

 

25,891

 

 

214,705

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

55,306

 

7,527

 

 

47,779

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

General, administration, sales and marketing

 

34,439

 

4,961

 

 

 

29,478

 

Depreciation and amortization

 

1,611

 

120

 

 

 

1,491

 

(Gain) loss on sale of assets, net

 

(254

)

48

 

 

 

(302

)

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

35,796

 

5,129

 

 

30,667

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

19,510

 

2,398

 

 

17,112

 

Interest (income) expense

 

13,745

 

(208

)

 

 

13,953

 

Loss related to derivative instruments

 

1,737

 

 

 

 

1,737

 

Other

 

 

 

 

 

 

 

Income before provision for income taxes

 

4,028

 

2,606

 

 

1,422

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

1,509

 

1,003

 

 

506

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,519

 

$

1,603

 

$

 

$

916

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.19

 

$

 

 

 

$

0.07

 

Net income per common share - diluted

 

$

0.18

 

$

 

 

 

$

0.07

 

Weighted average common shares outstanding - basic

 

13,209

 

 

 

 

13,209

 

Weighted average common shares outstanding - diluted

 

13,680

 

 

 

 

13,680

 

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2008

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(b)

 

Adjustments

 

 

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Facilities management revenue

 

$

306,089

 

$

 

 

 

 

 

$

306,089

 

Product sales

 

57,504

 

36,364

 

 

 

 

 

21,140

 

Total revenue

 

363,593

 

36,364

 

 

 

 

327,229

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Cost of facilities management revenue

 

207,233

 

 

 

 

 

 

207,233

 

Depreciation and amortization

 

47,499

 

338

 

 

 

 

 

47,161

 

Cost of product sales

 

44,892

 

27,605

 

 

 

 

 

17,287

 

Total cost of revenue

 

299,624

 

27,943

 

 

 

 

271,681

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

63,969

 

8,421

 

 

 

 

55,548

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

General, administration, sales and marketing

 

38,566

 

5,255

 

 

 

 

 

33,311

 

Depreciation and amortization

 

1,724

 

110

 

 

 

 

 

1,614

 

(Gain) loss on sale of assets, net

 

(21

)

48

 

 

 

 

 

(69

)

Loss On Early Extinguishment of Debt

 

207

 

 

 

 

 

 

 

207

 

Total operating expenses

 

40,476

 

5,413

 

 

 

 

35,063

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

23,493

 

3,008

 

 

 

 

20,485

 

Interest (income) expense

 

20,871

 

(162

)

(280

)

(h)

 

20,753

 

Loss related to derivative instruments

 

1,804

 

 

 

 

 

 

1,804

 

Other

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

818

 

3,170

 

280

 

 

 

(2,072

)

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

277

 

1,200

 

108

 

(h)

 

(815

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

541

 

$

1,970

 

$

172

 

 

 

$

(1,257

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.04

 

$

 

 

 

 

 

$

(0.09

)

Net income per common share - diluted

 

$

0.04

 

$

 

 

 

 

 

$

(0.09

)

Weighted average common shares outstanding - basic

 

13,346

 

 

 

 

 

 

13,346

 

Weighted average common shares outstanding - diluted

 

13,706

 

 

 

 

 

 

13,346

 

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA  BALANCE SHEET

AS OF SEPTEMBER 30, 2009

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(c)

 

Adjustments

 

 

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,171

 

$

139

 

 

 

 

 

$

16,032

 

Investment Securities

 

 

 

 

 

 

 

0

 

Trade receivables, net of allowance for doubtful accounts

 

8,701

 

3,549

 

 

 

 

 

5,152

 

Inventory of finished goods, net

 

6,703

 

4,757

 

 

 

 

 

1,946

 

Deferred income taxes

 

840

 

259

 

 

 

 

 

581

 

Prepaid facilities management rent and other current assets

 

12,633

 

698

 

 

 

 

 

11,935

 

Total current assets

 

45,048

 

9,402

 

 

 

 

35,646

 

Property, plant and equipment, net

 

136,017

 

1,862

 

 

 

 

 

134,155

 

Goodwill

 

59,375

 

223

 

 

 

 

 

59,152

 

Intangible assets, net

 

212,265

 

453

 

 

 

 

 

211,812

 

Prepaid facilities management rent and other assets

 

14,372

 

2,465

 

 

 

 

 

11,907

 

Intercompany account

 

 

16,177

 

(16,177

)

(d)

 

0

 

Total assets

 

$

467,077

 

$

30,582

 

$

(16,177

)

 

 

$

452,672

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Current portion of notes payable and capital lease obligations

 

$

5,595

 

$

 

$

(4,000

)

(g)

 

$

1,595

 

Trade accounts payable and accrued expenses

 

8,655

 

3,519

 

668

 

(e),(f)

 

5,804

 

Accrued facilities management rent

 

20,351

 

 

 

 

 

 

20,351

 

Accrued expenses

 

14,412

 

867

 

300

 

(e)

 

13,845

 

Deferred revenues and deposits

 

989

 

957

 

 

 

 

 

32

 

Total current liabilities

 

50,002

 

5,343

 

(3,032

)

 

 

41,627

 

Long-term debt and capital lease obligations

 

267,856

 

 

(4,000

)

(g)

 

263,856

 

Deferred income taxes

 

36,932

 

784

 

 

 

 

 

36,148

 

Other liabilities

 

9,895

 

729

 

 

 

 

 

9,166

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

102,392

 

23,726

 

23,209

 

(d),(e),(f)

 

101,875

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

467,077

 

$

30,582

 

$

16,177

 

 

 

$

452,672

 

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(b)

 

Adjustments

 

 

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Facilities management revenue

 

$

224,392

 

$

 

 

 

 

 

$

224,392

 

Product sales

 

44,191

 

28,318

 

 

 

 

 

15,873

 

Total revenue

 

268,583

 

28,318

 

 

 

 

240,265

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Cost of facilities management revenue

 

151,852

 

 

 

 

 

 

151,852

 

Depreciation and amortization

 

34,854

 

256

 

 

 

 

 

34,598

 

Cost of product sales

 

34,591

 

21,839

 

 

 

 

 

12,752

 

Total cost of revenue

 

221,297

 

22,095

 

 

 

 

199,202

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

47,286

 

6,223

 

 

 

 

41,063

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

General, administration, sales and marketing

 

28,349

 

3,859

 

 

 

 

 

24,490

 

Depreciation and amortization

 

1,284

 

81

 

 

 

 

 

1,203

 

(Gain) loss on sale of assets, net

 

(41

)

36

 

 

 

 

 

(77

)

Loss on early extinguishment of debt

 

207

 

 

 

 

 

 

 

 

 

Total operating expenses

 

29,799

 

3,976

 

 

 

 

25,616

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

17,487

 

2,247

 

 

 

 

15,240

 

Interest (income) expense

 

15,064

 

(102

)

(280

)

(h)

 

14,886

 

Gain related to derivative instruments

 

159

 

 

 

 

 

 

159

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

2,264

 

2,349

 

280

 

 

 

195

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

639

 

896

 

108

 

(h)

 

(149

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,625

 

$

1,453

 

$

172

 

 

 

$

344

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.12

 

$

 

 

 

 

 

$

0.03

 

Net income per common share - diluted

 

$

0.12

 

$

 

 

 

 

 

$

0.03

 

Weighted average common shares outstanding - basic

 

13,335

 

 

 

 

 

 

13,335

 

Weighted average common shares outstanding - diluted

 

13,690

 

 

 

 

 

 

13,498

 

 



 

MAC-GRAY CORPORATION

UNAUDITED PRO FORMA INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

(In thousands, except share data)

 

 

 

Mac-Gray Corp.

 

 

 

 

 

 

 

Mac-Gray Corp.

 

 

 

Consolidated (a)

 

Intirion Corp.(b)

 

Adjustments

 

 

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Facilities management revenue

 

$

232,022

 

$

 

 

 

 

 

$

232,022

 

Product sales

 

37,314

 

24,856

 

 

 

 

 

12,458

 

Total revenue

 

269,336

 

24,856

 

 

 

 

244,480

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Cost of facilities management revenue

 

157,680

 

 

 

 

 

 

157,680

 

Depreciation and amortization

 

36,858

 

228

 

 

 

 

 

36,630

 

Cost of product sales

 

28,769

 

18,847

 

 

 

 

 

9,922

 

Total cost of revenue

 

223,307

 

19,075

 

 

 

 

204,232

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

46,029

 

5,781

 

 

 

 

40,248

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

General, administration, sales and marketing

 

29,105

 

3,905

 

 

 

 

 

25,200

 

Depreciation and amortization

 

1,311

 

107

 

 

 

 

 

1,204

 

(Gain) loss on sale of assets, net

 

(552

)

24

 

 

 

 

 

(576

)

Loss On Early Extinguishment of Debt

 

 

 

 

 

 

 

 

 

Total operating expenses

 

29,864

 

4,036

 

 

 

 

25,828

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

16,165

 

1,745

 

 

 

 

14,420

 

Interest (income) expense

 

14,825

 

(148

)

(280

)

(h)

 

14,693

 

Gain related to derivative instruments

 

(558

)

 

 

 

 

 

(558

)

Other

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,898

 

1,893

 

280

 

 

 

285

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

911

 

908

 

108

 

(h)

 

111

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

987

 

$

985

 

$

172

 

 

 

$

174

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.07

 

$

 

 

 

 

 

$

0.01

 

Net income per common share - diluted

 

$

0.07

 

$

 

 

 

 

 

$

0.01

 

Weighted average common shares outstanding - basic

 

13,498

 

 

 

 

 

 

13,498

 

Weighted average common shares outstanding - diluted

 

13,895

 

 

 

 

 

 

13,895

 

 



 


NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS

 

(a)          These columns reflect the historical consolidated statement of earnings and consolidated balance sheet of Mac-Gray as appropriate

(b)         These columns reflect the removal of Intirion’s consolidated statement of earnings from the Mac-Gray historical consolidated financial statements

(c)          This column reflects the removal Intirion’s consolidated balance sheet from the Mac-Gray historical consolidated balance sheet

(d)         Represents the elimination of the intercompany payable to Intirion by Mac-Gray.  As a part of this transaction the intercompany payable by Mac-Gray is not required to be paid to Intirion

(e)          Represents the payment by Mac-Gray to Intirion of $300 and the related tax effect of $116 for accrued expenses incurred by Intirion for which Mac-Gray assumed responsibility

(f)            Represents the assumption by Mac-Gray of Intirion’s deferred tax liability and reclass to current tax payable

(g)         The net cash proceeds from the sale of Intirion will be used to reduce the term loan portion of Mac-Gray’s credit facility.

(h)         Represents the decrease of interest expense related to the reduction of Mac-Gray’s credit facility from the proceeds of the sale of Intirion and the related tax effect

 

The gain or loss on the disposition of Intirion is expected to be minimal and therefore no adjustment is reflected in the pro forma financial statements.