DELAWARE (State or Other Jurisdiction of Incorporation or Organization) | 94-2669985 (I.R.S. Employer Identification No.) | ||||
6024 SILVER CREEK VALLEY ROAD, SAN JOSE, CALIFORNIA (Address of Principal Executive Offices) | 95138 (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(a) | Financial Statements of Business Acquired |
The audited consolidated financial statements of ZMDI as of and for the year ended December 31, 2014 are in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and, as required by this Item 9.01 (a), are included as Exhibit 99.1 hereto; The unaudited condensed consolidated financial statements of ZMDI are in accordance with International Accounting Standards 34, Interim Financial Reporting, (“IAS 34”) as of and for the six-month period ended June 30, 2015, and, as required by this Item 9.01 (a), are included as Exhibit 99.2 hereto. |
The Independent Auditors’ Report, issued by Deloitte & Touche GmbH, dated February 9, 2016, relating to ZMDI’s audited consolidated financial statements described above (and which report expresses a qualified opinion relating to the omission of comparative financial information as required by IFRS as issued by the IASB, as discussed in Note 2 to the consolidated financial statements), is included hereto as Exhibit 99.1. |
(b) | Pro Forma Financial Information |
The unaudited pro forma financial information for IDT, after giving effect to the acquisition of ZMDI and adjustments described in such pro forma financial information, is included hereto as Exhibit 99.3. |
(d) | Exhibits |
Exhibit Number | Description | |
23.1 | Consent of Independent Auditors, Deloitte & Touche GmbH. | |
99.1 | Audited consolidated financial statements of ZMDI, which are in accordance with IFRS as issued by the IASB, as of and for the year ended December 31, 2014, and the notes related thereto. | |
99.2 | Unaudited condensed consolidated financial statements of ZMDI, which are in accordance with IAS34, as of and for the six-month period ended June 30, 2015, and the notes related thereto. | |
99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet as of September 27, 2015, and Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended September 27, 2015 and for the year ended March 29, 2015. |
INTEGRATED DEVICE TECHNOLOGY, INC. Registrant | |||
By: | /s/ Brian C. White | ||
Brian C. White | |||
Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit Number | Description | |
23.1 | Consent of Independent Auditors, Deloitte & Touche GmbH. | |
99.1 | Audited consolidated financial statements of ZMDI which are in accordance with IFRS as issued by the IASB, as of and for the year ended December 31, 2014, and the notes related thereto. | |
99.2 | Unaudited condensed consolidated financial statements of ZMDI, which are in accordance with IAS34, as of and for the six-month period ended June 30, 2015, and the notes related thereto | |
99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet as of September 27, 2015, and Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended September 27, 2015 and for the year ended March 29, 2015 |
Zentrum Mikroelektronik Dresden AG, |
Dresden, Germany |
Consolidated Statement of Financial Position |
as of December 31, 2014 |
ASSETS | Note | kEUR | kEUR | |||
Non-current assets | ||||||
Intangible assets | ||||||
Concessions, industrial and similar rights, and licenses | 14 | 763 | ||||
Goodwill | 15 | 168 | ||||
Development assets | 16 | 6,119 | ||||
7,050 | ||||||
Property, plant and equipment | 17 | 7,231 | ||||
7,231 | ||||||
Investments and Loans | 18 | |||||
Loans to shareholder | 11,498 | |||||
11,498 | ||||||
25,779 | ||||||
Other assets | 5 | |||||
Deferred tax assets | 13 | 4,122 | ||||
4,127 | ||||||
29,906 | ||||||
Current assets | ||||||
Inventories | 19 | 18,203 | ||||
18,203 | ||||||
Receivables and other assets | 20 | |||||
Trade receivables | 3,741 | |||||
Other assets | 2,030 | |||||
5,771 | ||||||
Cash and cash equivalents | 21 | 4,199 | ||||
4,199 | ||||||
28,173 | ||||||
58,079 |
LIABILITIES AND EQUITY | ||||||
Note | kEUR | kEUR | ||||
Equity | 22 | |||||
Capital stock | 15,750 | |||||
Capital reserves | 20,580 | |||||
Retained earnings and net accumulated deficit | (2,734 | ) | ||||
Translation adjustment | 2,289 | |||||
35,885 | ||||||
Non-current liabilities | ||||||
Other non-current provisions | 23 | 303 | ||||
Liabilities to banks | 30 | 7,562 | ||||
Liabilities from finance leases | 24 | 1,549 | ||||
9.414 | ||||||
Current liabilities | ||||||
Tax provisions | 26 | 132 | ||||
Other current provisions | 23 | 4,448 | ||||
Liabilities to banks | 26 | 2,606 | ||||
Payments received on account of orders | 8 | |||||
Trade payables | 27 | 3,747 | ||||
Liabilities from finance leases | 24 | 1,061 | ||||
Other current liabilities | 25 | 778 | ||||
12,780 | ||||||
58,079 |
Note | kEUR | kEUR | |||
Revenue | 3 | 61,063 | |||
Changes in inventories of finished goods and work in progress | 4 | 2,360 | |||
Other own work capitalized | 5 | 2,361 | |||
Other operating income | 6 | 3,138 | |||
Cost of materials | 7 | ||||
a) Cost of raw materials, consumables and supplies | -20,002 | ||||
b) Cost of purchased services | -4,710 | ||||
-24,712 | |||||
Personnel expenses | 8 | ||||
a) Wages and salaries | -23,984 | ||||
b) Social security, post-employment costs and other employee benefits | -3,604 | ||||
-27,588 | |||||
Amortization and impairments of intangible assets and depreciation and impairments of property, plant and equipment | 9 | -4,261 | |||
Other operating expenses | 10 | -12,935 | |||
Result from ordinary activities | -574 | ||||
Investment income | 452 | ||||
Other interest and similar income | 3 | ||||
Profit from joint ventures | 11 | 128 | |||
Interest and similar expenses | 12 | -365 | |||
Loss before taxes | -356 | ||||
Income taxes | 13 | -10 | |||
Consolidated loss for the period | -366 |
kEUR | |
Loss for the year | -366 |
Currency translation effects1 | -190 |
Total comprehensive loss for year | -556 |
Consolidated loss attributable to | |
– Owners of the ZMDI-Group | -366 |
Total comprehensive loss attributable to | |
– Owners of the ZMDI-Group | -556 |
Capital stock | Capital reserves | Retained earnings and net accumulated deficit | Translation adjustment | Total equity | ||||||
kEUR | kEUR | kEUR | kEUR | kEUR | ||||||
Balance at January 1, 2014 | 15,750 | 28,480 | -6,241 | 2,479 | 40,468 | |||||
Loss for the year | — | — | -366 | — | -366 | |||||
Net income directly recognized in equity | — | — | — | — | — | |||||
Currency translation effects | — | — | — | -190 | -190 | |||||
Total comprehensive loss for the financial year | — | — | -366 | -190 | -556 | |||||
Payment of dividends | — | -2,000 | — | — | -2,000 | |||||
Buy-back of own shares | — | -2,027 | — | — | -2,027 | |||||
Withdrawal from capital reserves | — | -3,873 | 3,873 | — | — | |||||
Balance at December 31, 2014 | 15,750 | 20,580 | -2,734 | 2,289 | 35,885 |
Note | 2014 | |
32 | kEUR | |
Consolidated loss for the period | -366 | |
Adjustments for: Income tax expense recognized in profit or loss | 10 | |
Income taxes received | 11 | |
Depreciation, impairment and amortization | 4,261 | |
Financial result | -218 | |
Change in inventories | -1,237 | |
Change in trade receivables | 3,252 | |
Change in trade payables | -3,580 | |
Change in other current and non-current assets and liabilities | -36 | |
Other non-cash transactions | -22 | |
Cash flows from operating activities | 2,075 | |
Purchases of intangible assets | -2,528 | |
Proceeds from sale of property, plant and equipment | 1,182 | |
Purchases of property, plant and equipment | -2,172 | |
Net cash inflow on acquisition | 4 | |
Dividends received | 265 | |
Interest received | 3 | |
Cash flows used in investing activities | -3,246 | |
Payment for buy-back of shares | -2,027 | |
Dividends paid to owners of the company | -2,000 | |
Proceeds from borrowings | 6,000 | |
Repayment of borrowings | -2,349 | |
Interest paid | -502 | |
Cash flows used in financing activities | -878 | |
Change in cash and cash equivalents | -2,049 | |
Exchange-rate changes in cash and cash equivalents | -182 | |
Liquid funds at the beginning of the year | 6,139 | |
Liquid funds at the end of the year | 3,908 |
a) | Group of consolidated entities and subsidiaries |
• | has power over the investee; |
• | is exposed, or has rights, to variable returns from its involvement with the investee; and |
• | has the ability to use its power to affect its returns. |
• | Property, plant and equipment: kEUR 10 |
• | Inventories: kEUR 525 |
• | Cash and cash equivalents: kEUR 269 |
• | Other current assets: kEUR 731 |
• | Trade payables: kEUR 1,270 |
• | Other current liabilities: kEUR 71 |
Country | Name and location of the company | Principal activity | Consolidation status | Capital share as of Dec. 31, 2014 | |
% | |||||
Group of consolidated entities | |||||
a) Germany | Zentrum Mikroelektronik Dresden AG, Dresden (parent company) | ||||
b) Abroad | |||||
U.S. | ZMD America Inc., Santa Clara | sales support and marketing service | V | 100,0 | |
Hong Kong | ZMD Fareast Ltd. | sales support and investment in Senterra Ltd. | V | 100,0 | |
Bulgaria | ZMD Eastern Europe EOOD, Varna | development activities | V | 100,0 | |
Hong Kong | Senterra Ltd. | sales service | V | 100,0 | |
China | Shenteran Ltd., Shenzhen | sales service | V | 100,0 |
b) | Consolidation principles |
d) | Currency translation |
Currency | Exchange rate on balance sheet date Dec. 31, 2014 | Average rate 2014 |
USD | 1.2155 | 1.3285 |
HKD | 9.4260 | 10.3025 |
Lew | 1.9558 | 1.9558 |
a) | Basis of presentation |
Years | |
Technical equipment and machinery | 7 to 10 |
Other equipment | 7 to 10 |
Operating and office equipment | 3 to 10 |
a) | Financial assets measured at fair value through profit or loss, |
b) | Financial assets held-for-sale, |
c) | Loans and receivables |
• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; |
• | Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and |
• | Level 3 inputs are unobservable inputs for the asset or liability. |
Dec. 31, 2014 | |||||||||||||
Financial assets | Level | Fair Value | Carrying amounts | Balance sheet values | |||||||||
Cash and cash equivalents | Loans and receivables | Derivative financial instruments | Assets held-for-sale | Trade securities | Total carrying amounts | ||||||||
Cash and cash equivalents | n/a | 4,199 | 4,199 | — | — | — | — | 4,199 | |||||
Trade receivables | n/a | 3,741 | — | 3,741 | — | — | — | 3,741 | |||||
Other current assets | n/a | 2,030 | — | 2,030 | — | — | — | 2,030 | |||||
Non-current financial assets | 2 | 12,220 | — | 11,498 | — | — | — | 11,498 | |||||
Total | 22,190 | 4,199 | 17,269 | — | — | — | 21,468 |
Dec. 31, 2014 | ||||||||||
Financial liabilities | Level | Fair Value | Carrying amounts | Balance sheet values | ||||||
Other liabilities | Derivative financial instruments | outside of IAS 39 | Total carrying amounts | |||||||
Current financial liabilities | n/a | 3,668 | 2,606 | — | 1,061 | 3,668 | ||||
Trade payables | n/a | 3,747 | 3,747 | — | — | 3,747 | ||||
Other current liabilities | n/a | 918 | 918 | — | — | 918 | ||||
Non-current financial liabilities | 2 | 9,111 | 7,562 | — | 1,549 | 9,111 | ||||
Total | 17,444 | 14,833 | — | 2,610 | 17,444 |
c) | Impacts of new and changed accounting standards |
• | Amendments to IAS 32 Offsetting Rules and Disclosure Requirements (applicable for financial years starting on or after January 1, 2014) |
• | Amendments to IAS 36 Recoverable Amount for Non-Financial Assets (applicable for financial years starting on or after January 1, 2014) |
• | Amendments to IAS 39 Continuation of Hedge Accounting Despite Novation of Derivatives (applicable for financial years starting on or after January 1, 2014) |
• | Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities (applicable for financial years starting on or after January 1, 2014) |
• | IFRIC 21 Levies - Recognition of a Liability for a Levy Imposed by a Government (applicable for financial years starting on or after January 1, 2014) |
• | Annual Improvements to IFRSs 2010-2012 Cycle |
• | Annual Improvements to IFRSs 2011-2013 Cycle |
• | Amendments to IFRS 10 and IAS 28 (applicable for financial years starting on or after January 1, 2016) |
• | Amendments to IAS 1 Disclosure Initiative (applicable for financial years starting on or after January 1, 2016) |
• | Amendment to IAS 19 Employee Benefits (applicable for financial years starting on or after July 1, 2014) |
• | Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (applicable for financial years starting on or after January 1, 2016) |
• | Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortization (applicable for financial years starting on or after January 1, 2016) |
• | IFRS 15 Revenue from Contracts with Customers (applicable for financial years starting on or after January 1, 2018) |
• | IFRS 16 Leases (applicable for financial years starting on or after January 1, 2019) |
• | IFRS 9 (2010) Financial Instruments (applicable for financial years starting on or after January 1, 2018) |
• | IFRS 14 - relates to first-time IFRS users, applicable for financial years starting on or after January 1, 2016 |
• | Amendments to IAS 16 and IAS 41, relate to agriculture companies, applicable for financial years starting on or after January 1, 2016 |
• | Amendments to IFRS 10, IFRS 12 and IAS 28 - relate to investment companies, applicable for financial years starting on or after January 1, 2016 |
2014 | |||
Business lines | kEUR | % | |
Automotive | 29,991 | 49,1 | |
Sensing | 30,227 | 49,5 | |
Power | 845 | 1,4 | |
61,063 | 100,0 |
2014 | ||
kEUR | % | |
Sales markets | ||
Germany | 20,791 | 34,0 |
Abroad | 40,272 | 66,0 |
61,063 | 100,0 |
2014 | ||
kEUR | % | |
Exclusive products | 34,013 | 55,7 |
Standard products | 27,050 | 44,3 |
61,063 | 100,0 |
2014 | |
kEUR | |
Finished goods | 1,736 |
Work and services in progress | 624 |
2,360 |
2014 | |
kEUR | |
Capitalized development costs | 2,347 |
Capitalized ancillary services on PP&E | 14 |
2,361 |
2014 | |
kEUR | |
Grants for research and development | 823 |
Income from currency effects | 663 |
Reversal of provisions | 569 |
Income from management services | 88 |
Income from reimbursements | 252 |
Other | 743 |
3,138 |
2014 | |
kEUR | |
Cost of raw materials, consumables and supplies | 20,002 |
Cost of purchased services | 4,710 |
24,712 |
2014 | |
kEUR | |
Wages and salaries | 23,984 |
Social security | 3,604 |
27,588 |
2014 | |
kEUR | |
Amortization and impairments of intangible assets and depreciation and impairments of property, plant and equipment | 4,261 |
2014 | |
kEUR | |
Operational expenses | 6,177 |
Administrative costs | 3,492 |
Selling costs | 3,077 |
Other expenses | 189 |
12,935 |
2014 | |
kEUR | |
Exchange losses/currency evaluation | 18 |
Increase in allowances on receivables | 102 |
Expenses from other periods | 21 |
Other | 48 |
189 |
2014 | |
kEUR | |
Senterra Ltd. | 128*) |
*) | According to Senterra’s interim financial statements as of August 31, 2014 |
2014 | |
kEUR | |
Interest on non-current liabilities | 208 |
Interest on current liabilities | 82 |
Other | 75 |
365 |
kEUR | Interest income | Interest expense | from other expenses/ income | from subsequent measurement | Net result 2014 | |||||||||
Fair Value | Currency translation | Impairment | ||||||||||||
Issued loans and receivables | 445 | -82 | — | 6 | 5 | — | 374 | |||||||
Liabilities accounted for at amortized cost | 0 | -395 | — | — | — | — | -395 | |||||||
Total net result | 445 | -477 | — | 6 | 5 | — | -21 | |||||||
thereof recognized: | ||||||||||||||
– through profit or loss | 445 | -477 | — | 6 | 5 | — | -21 | |||||||
– directly in equity | — | — | — | — | — | — | — |
2014 | |
kEUR | |
Current tax income (-) Germany | 80 |
Current tax expense (-) abroad | -62 |
Deferred tax expense (-) Germany | -49 |
Deferred tax income (-) abroad | 21 |
-10 |
2014 | calculated tax effect of the reporting year | Currency effects | actual tax effect of the reporting year (profit/loss) | |||||
kEUR | kEUR | kEUR | kEUR | |||||
Deferred tax assets and/or tax liabilities from | ||||||||
Loss carry forwards | 3,447 | 276 | -24 | 252 | ||||
Temporary differences | ||||||||
– intangible assets | 764 | -273 | — | -273 | ||||
Other | -89 | -7 | -7 | |||||
4,122 | -4 | -24 | -28 |
2014 | ||
kEUR | ||
Earnings before taxes | (356 | ) |
Income tax rate (incl. trade tax) of ZMD AG | 31.02 | % |
Expected income tax income | (110 | ) |
Tax rate differences abroad | (78 | ) |
Effect from tax rate changes | — | |
Tax reductions on account of tax-free income | (44 | ) |
Tax increases on account of non-deductible expenses | 79 | |
Tax expenses and income from other periods | (80 | ) |
Change in unrecognized deferred tax assets | 206 | |
Other | 37 | |
Disclosed income tax expense | 10 | |
Effective tax burden | -3% |
Historical cost | Amortization | |||
kEUR | kEUR | |||
Balance at Jan. 1, 2014 | 3,081 | 2,175 | ||
Effect of foreign currency exchange differences | 2 | — | ||
Additions | 180 | 325 | ||
Balance at Dec. 31, 2014 | 3,263 | 2,500 |
Historical cost | Impairment | ||||
kEUR | kEUR | ||||
Jan. 1, 2014 | 1,409 | 1,409 | |||
Acquisitions through business combinations | 168 | — | |||
Dec. 31, 2014 | 1,577 | 1,409 |
Historical cost | Amortization | ||
kEUR | kEUR | ||
Jan. 1, 2014 | 28,958 | 22,766 | |
Additions | 2,347 | 2,420 | |
Dec. 31, 2014 | 31,305 | 25,186 |
Dec. 31, 2014 | |
Carrying amount | kEUR |
Technical equipment and machinery | 56 |
Other equipment, operating and office equipment | 6,868 |
Prepayments and assets under construction | 307 |
7,231 |
Technical Equipment and Machinery | Other equipment, operating and office equipment | Prepayments and assets under construction | Total | |||||
Historical cost | kEUR | kEUR | kEUR | kEUR | ||||
Jan. 1, 2014 | 3,123 | 25,077 | 88 | 28,288 | ||||
Acquisitions through business combinations | — | 10 | — | 10 | ||||
Effect of foreign currency exchange differences | — | 23 | — | 23 | ||||
Additions | — | 1,868 | 307 | 2,175 | ||||
Reclassifications | — | 88 | (88 | ) | — | |||
Disposals | 261 | 168 | — | 429 | ||||
Dec. 31, 2014 | 2,862 | 26,898 | 307 | 30,067 |
Accumulated depreciation and impairment | Technical Equipment and Machinery | Other equipment, operating and office equipment | Prepayments and assets under construction | Total | ||||
kEUR | kEUR | kEUR | kEUR | |||||
Jan. 1, 2014 | 2,999 | 18,709 | — | 21,708 | ||||
Effect of foreign currency exchange differences | — | 14 | — | 14 | ||||
Additions | 68 | 1,477 | — | 1,515 | ||||
Reclassifications | — | — | — | — | ||||
Disposals | 261 | 140 | — | 401 | ||||
Dec. 31, 2014 | 2,806 | 20,030 | — | 22,836 |
a. | Loans to shareholder |
Dec. 31, 2014 | |
kEUR | |
Loans including interest | 11,498 |
b. | Investments accounted for using the equity method |
Dec. 31, 2014 | |
kEUR | |
Raw materials, consumables and supplies | 782 |
Work and services in progress | 12,375 |
Finished goods and merchandise | 5,046 |
18,203 |
Dec. 31, 2014 | |
kEUR | |
Trade receivables | 3,741 |
Other assets | 1,662 |
Tax receivables | 368 |
5,771 |
Dec. 31, 2014 | |
kEUR | |
up to 30 days | 441 |
30 to 60 days | 27 |
60 to 90 days | 13 |
more than 90 days | 134 |
615 |
2014 | ||
kEUR | ||
Balance at the beginning of the year | 144 | |
Amounts received in course of the financial year from impaired receivables | — | |
Receivables derecognized due to final default | -144 | |
New allowances | 102 | |
Balance at the end of the year | 102 |
Dec. 31, 2014 | ||
kEUR | ||
Current EUR accounts | 1,943 | |
Current USD accounts | 1,891 | |
Current HKD accounts | 74 | |
Overnight money and fixed-term deposits | — | |
Liquid funds | 3,908 | |
Restricted cash | 291 | |
4,199 |
a. | Capital stock |
b. | Capital reserves |
kEUR | |
Dec. 31, 2013 | 28,480 |
Purchase and redemption of own shares | -2,027 |
Withdrawal from capital reserves | |
Dividends for 2013 | -2,000 |
Capital dividend reserve for 2014 | -1,300 |
Reclassification to retained earnings | -2,573 |
Dec. 31, 2014 | 20,580 |
Dec. 31, 2014 | ||||
Current | Non-current | Total | ||
Provisions for partial retirement | 152 | 126 | 278 | |
Taxes | 132 | — | 132 | |
Staff | 2,541 | — | 2,541 | |
Warranty | 110 | — | 110 | |
Other | 1,585 | 177 | 1,762 | |
Total | 4,580 | 303 | 4,883 |
Jan. 1, 2014 | Translation differences | Use | Release | Addition | Reclassifi-cations | Dec. 31, 2014 | ||||
kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | ||||
Early-retirement obligations | 73 | — | — | — | 85 | -32 | 126 | |||
Other | 177 | — | — | — | 42 | -42 | 177 | |||
Total | 250 | — | — | — | 127 | -74 | 303 |
Jan. 1, 2014 | Translation differences | Use | Release | Addition | Reclassifi-cations | Dec. 31, 2014 | |||||
kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | |||||
Tax | 165 | — | 37 | 1 | 5 | — | 132 | ||||
Staff | 1,260 | 36 | 691 | 308 | 2,424 | 32 | 2,753 | ||||
Warranty | 80 | — | — | — | 30 | — | 110 | ||||
Other | 1,860 | 41 | 1,201 | 260 | 1,103 | 42 | 1,585 | ||||
Total | 3,365 | 77 | 1,929 | 569 | 3,562 | 74 | 4,580 |
Dec. 31, 2014 | ||
Current | Non-current | Total |
1,061 | 1,549 | 2,610 |
Dec. 31, 2014 | |
kEUR | |
Due within one year | 1,132 |
Due between one and five years | 1,618 |
2,750 | |
Future interest component of finance leases | 140 |
Present value from finance lease | 2,610 |
Thereof due within one year | 1,061 |
Thereof due between one and five years | 1,549 |
Dec. 31, 2014 | |
kEUR | |
Social security contributions | 34 |
Liabilities to employees | 32 |
Other | 346 |
Liabilities from payroll and church taxes | 366 |
Total | 778 |
Counterparty | Repayment Date | Interest rate (% p.a.) | Liability as of Dec. 31, 2014(kEUR) | |
Deutsche Bank AG | December 31 2018 | 2.5 % - 2.6 % | 7,500 | |
HSH Nordbank AG | April 9 2016 | 3.0 % + Euribor | 2,345 | |
Ostsächische Sparkasse | December 30 2017 | 3.09% | 323 | |
10,168 |
Dec. 31, 2014 | |
kEUR | |
3,747 |
Residual terms | ||||
Up to one year | Between one and five years | More than five years | ||
kEUR | kEUR | kEUR | ||
Maintenance agreements/licenses | 1,541 | 1,003 | — | |
Rental agreements for business premises | 1,403 | 5,836 | 1,592 | |
Other operating lease arrangements | 396 | 618 | — | |
3,340 | 7,457 | 1,592 |
• | the revaluation and devaluation of the EUR towards the USD by 5% |
• | a parallel shift of the interest yields of all currencies by 50 basis points (0.50%-points) |
a) | Currency risks |
b) | Risk of changing interest rates |
Carrying amount Dec. 31, 2014 | Cash flow up to one year | Cash flow between one and five years | Cash flow more than five years | |||
kEUR | kEUR | kEUR | kEUR | |||
Non-derivative financial liabilities | ||||||
Liabilities to banks | 10,168 | 2,846 | 7,828 | — | ||
Liabilities from finance leases | 2,610 | 1,132 | 1,618 | — | ||
Other non-interest-bearing liabilities | 787 | 787 | — | — |
2014 | |
Blue-collar workers | 33 |
White-collar workers | 340 |
373 | |
Apprentices | 1 |
374 |
a) | Related companies |
Dec. 31, 2014 | |
kEUR | |
Loans including interest | 11,498 |
b) | Related persons |
2014 | ||
kEUR | ||
Remuneration of management members in key positions - Salary kEUR 1,235 - Variable/bonus payments kEUR 646 - Insurance kEUR 33 | 1,914 | |
Remuneration of Supervisory Board | 67 | |
1,981 |
2014 | |
kEUR | |
Annual audit fees | 89 |
Other assurance services | 75 |
Tax compliance services | 109 |
Total auditor fee | 273 |
Germany/U.S. | California | |
Resolution of the general shareholders meeting | July 9, 2001 September 4, 2002 (amendment resolution) January 20, 2003 (amendment resolution) March 29, 2004 (amendment resolution) December 5, 2007 (amendment resolution) December 1, 2010 (amendment resolution) June 28, 2012 (amendment resolution) | January 20, 2003 (amendment resolution) March 29, 2004 (amendment resolution) |
Authorized capital | indefinite authorized capital EUR 449,750 | |
Max. numbers of options | 449,750 | |
Strike price | EUR 10.85 (July 9, 2001) | |
EUR 5.00 (Change of strike price as of September 4, 2002) | EUR 5.50 | |
Waiting period | 48 % of the granted option rights at earliest two years after their issue (basic holding period) further 6% of the respectively granted option rights after expiration of three months after end of the basic holding period, the last 4% thus after expiration of two years and three months after expiration of the basic holding period. | 50 % of the granted option rights at the soonest two years after their issue (basic holding period) further 2 % of the respectively granted option rights after expiration of one month after end of the basic holding period, the last 2 % thus after expiration of two years and one month after expiration of the basic holding period |
Assignment of options | ||
– Executive Management Board | up to 33.9 % | |
– Management | up to 33.9 % | |
– Employees | up to 32.2 % |
(a) | Initial public offer of ZMD AG's shares at a German stock exchange ("IPO") |
(b) | Sale of the ZMD AG (more than 75 % of the company's shares) to a third party ("Trade Sale") or |
(c) | Merger of the ZMD AG as transferring entity with another company that is not an affiliated company within the meaning of Sec.15 et seq. AktG and in accordance with the provisions of the German Law Regulating Transformation of Companies ("Merger"). |
– | if reaching the performance target "IPO", ZMD AG has the right to grant a cash compensation to the option owner rather than no-par value shares. |
– | if reaching the performance targets "Merger" or "Trade Sale", ZMD AG has the obligation to grant a cash compensation to the option owner rather than no-par value shares The cash compensation is computed as the difference between the strike price and the average XETRA closing rate for one share of ZMD AG on the 20 trading days before exercise of the option right, if the strike price is lower than the relevant average closing rate. If the strike price is higher, no cash compensation must be paid. If during the exercise period no shares of ZMD AG were traded on a German stock market, the cash compensation for each exercised option right corresponds to the difference between the strike price and the value of the share, which is then computed based on the following rules: |
– | In case the performance target "Trade Sale" is realized, the value of a share of the company is the purchase price paid for a share of the company within the scope of the trade sale. |
– | In case the performance target "Merger" is realized, the value of a share of the company is the value of a share of the company taken as basis for the measurement of the exchange ratio within the merger agreement. |
Number of options | ||
Outstanding options on January 1 | 233,000 | |
Vested options on January 1 | — | |
Additions | — | |
Granted options | — | |
Exercised options | — | |
Forfeited options | -2,000 | |
Exercisable options | — | |
Outstanding options on December 31 | 231,000 | |
Total volume of the stock option program | 449,750 |
Germany/U.S. | ||
Resolution of the general shareholders' meeting | December 5, 2007 (amendment resolution) May 20, 2010 (amendment resolution) December 1, 2010 (amendment resolution) June 28, 2012 (amendment resolution) | |
Authorized capital | indefinite authorized capital EUR 730,250 | |
Max. numbers of options | 730,250 | |
Strike price | EUR 5.00 | |
Waiting period | 48 % of the granted option rights at earliest two years after their issue (basic holding period) further 6 % of the respectively granted option rights after expiration of three months after end of the basic holding period, the last 4 % thus after expiration of two years and three months after expiration of the basic holding period. | |
Assignment of options | ||
– Executive Management Board | up to 40.0 % | |
– Management | up to 5.0 % | |
– Employees | up to 55.0 % |
Numbers of options | ||
Outstanding options on January 1 | 631,818 | |
Vested options on January 1 | — | |
Additions | — | |
Granted options | — | |
Exercised options | — | |
Forfeited options | -48,300 | |
Exercisable options | — | |
Outstanding options on December 31 | 583,518 | |
Total volume of the option program | 730,250 |
• | Sale of ZMD AG (share deal) |
• | Sale of at least 40 % of the assets held by ZMD AG (asset deal) |
• | Initial public offer of ZMD AG (IPO) |
Number of options | ||
Outstanding options on January 1 | — | |
Granted options | 740,000 | |
Exercised options | — | |
Forfeited options | — | |
Exercisable options | — | |
Outstanding options on December 31 | 740,000 | |
Total volume of the option program | 760,482 |
ASSETS | ||||
June 30, 2015 | December 31, 2014 | |||
Note | kEUR | kEUR | ||
Non-current assets | ||||
Intangible assets | ||||
Concession, industrial and similar rights, an licenses | 712 | 763 | ||
Goodwill | 168 | 168 | ||
Development work | 6,735 | 6,119 | ||
7,615 | 7,050 | |||
Property, plant and equipment | 7,302 | 7,231 | ||
Investment and Loans | ||||
Loans to shareholder | 7, 9 | 11,721 | 11,498 | |
Other assets | 7 | 7 | 5 | |
Deferred tax assets | 5,965 | 4,122 | ||
5,972 | 4,127 | |||
32,610 | 29,906 | |||
Current assets | ||||
Inventories | 5 | 17,934 | 18,203 | |
Receivables and other assets | ||||
Trade receivables | 7 | 3,973 | 3,741 | |
Other assets | 7 | 2,175 | 2,030 | |
6,148 | 5,771 | |||
Cash and cash equivalents | 7 | 5,628 | 4,199 | |
29,710 | 28,173 | |||
62,320 | 58,079 |
LIABILITIES AND EQUITY | |||||
June 30, 2015 | December 31, 2014 | ||||
Note | kEUR | kEUR | |||
Equity | 6 | ||||
Capital stock | 15,750 | 15,750 | |||
Capital reserves | 20,580 | 20,580 | |||
Retained earnings and accumulated deficit | -930 | -2,734 | |||
Translation adjustment | 2,142 | 2,289 | |||
37,542 | 35,885 | ||||
Non-current liabilities | |||||
Other non-current provisions | 304 | 303 | |||
Liabilities to banks | 7 | 5,978 | 7,562 | ||
Liabilities from finance leases | 7 | 1,694 | 1,549 | ||
7,976 | 9,414 | ||||
Current liabilities | |||||
Tax provisions | 121 | 132 | |||
Other current provisions | 4,935 | 4,448 | |||
Liabilities to banks | 7 | 5,826 | 2,606 | ||
Payments received on account for orders | — | 8 | |||
Trade payables | 7 | 3,748 | 3,747 | ||
Liabilities from finance leases | 7 | 978 | 1,061 | ||
Other current liabilities | 7 | 1,194 | 778 | ||
16,802 | 12,780 | ||||
62,320 | 58,079 |
June 30, 2015 | June 30, 2014 | ||
Note | kEUR | kEUR | |
1. Revenue | 32,697 | 30,399 | |
2. Changes in inventories of finished goods and work in progress | -513 | 1,506 | |
3. Other own work capitalized | 1,470 | 1,524 | |
4. Other operating income | 1,944 | 1,148 | |
5. Cost of materials | 5 | 10,489 | 12,948 |
6. Personnel expenses | 3 | 14,903 | 13,549 |
7. Amortization and impairments of intangible assets and depreciation and impairments of property, plant and equipment | 1,779 | 2,453 | |
8. Other operating expenses | 7,156 | 6,100 | |
9. Result from ordinary activities | 1,271 | -473 | |
10. Investment Income | 223 | 224 | |
11. Other interest and similar income | 1 | 2 | |
12. Interest and similar expenses | 178 | 192 | |
13. Earnings before taxes | 1,317 | -439 | |
14. Income taxes benefit/(expense) | 1,787 | -1,127 | |
15. Profit (loss) for the period | 3,104 | -1,566 |
June 30, 2015 | June 30, 2014 | |
kEUR | kEUR | |
Profit (loss) for the period | 3,104 | -1,566 |
Currency translation effects1 | -147 | -13 |
Total comprehensive income (loss) for the period | 2,957 | -1,579 |
Consolidated income (loss) attributable to | ||
– Owners of the ZMDI-Group | 3,104 | -1,566 |
Total comprehensive income (loss) attributable to | ||
– Owners of the ZMDI-Group | 2,957 | -1,579 |
Capital stock | Capital reserves | Retained earnings and net accumulated deficit | Translation adjustment | Total equity | ||||||
kEUR | kEUR | kEUR | kEUR | kEUR | ||||||
Balance at January 1, 2014 | 15,750 | 28,480 | -6,241 | 2,479 | 40,468 | |||||
Profit (loss) for the period | — | — | -1,566 | — | -1,566 | |||||
Net income directly recognized in equity | — | — | — | — | — | |||||
Total comprehensive income for the period | — | — | -1,566 | — | -1,566 | |||||
Currency translation effects | — | — | — | -13 | -13 | |||||
Dividends | — | — | — | — | — | |||||
Buy-back of own shares | — | -2,027 | — | — | -2,027 | |||||
Withdrawal from capital reserves | — | -2,000 | — | — | -2,000 | |||||
Balance at June 30, 2014 | 15,750 | 24,453 | -7,807 | 2,466 | 34,862 | |||||
Balance at January 1, 2015 | 15,750 | 20,580 | -2,734 | 2,289 | 35,885 | |||||
Profit (loss) for the period | — | — | 3,104 | — | 3,104 | |||||
Net income directly recognized in equity | — | — | — | — | — | |||||
Total comprehensive income for the period | — | — | 3,104 | — | 3,104 | |||||
Currency translation effects | — | — | — | -147 | -147 | |||||
Dividends | — | — | -1,300 | — | -1,300 | |||||
Buy-back of own shares | — | — | — | — | — | |||||
Withdrawal from capital reserves | — | — | — | — | — | |||||
Balance at June 30, 2015 | 15,750 | 20,580 | -930 | 2,142 | 37,542 |
June 30, 2015 | June 30, 2014 | |||
kEUR | kEUR | |||
Consolidated profit (loss) for the period | 3,104 | -1,566 | ||
Adjustments for: Income tax benefit/(expense)recognized in profit or loss | -1,787 | 1,127 | ||
Income taxes paid | -48 | -25 | ||
Depreciation, impairment, and amortization | 1,779 | 2,453 | ||
Financial result | -46 | -34 | ||
Change in inventories | 270 | -2,443 | ||
Change in trade receivables | -231 | 2,137 | ||
Change in trade payables | 1 | 386 | ||
Change in other current and non-current assets and liabilities | 232 | 29 | ||
Cash flow from operating activities | 3,274 | 2,064 | ||
Purchases of intangible assets | -1,563 | -1,570 | ||
Proceeds from sale of property, plant and equipment | — | 708 | ||
Purchases of property, plant and equipment | -855 | -1,192 | ||
Net cash outflow on acquisition of subsidiaries | — | — | ||
Dividends received from investments accounted for using the equity method | — | — | ||
Interest received | 1 | 2 | ||
Cash flow from investing activities | -2,417 | -2,052 | ||
Payment for buy-back of shares | — | -2,027 | ||
Dividends paid to owners of the company | -820 | -1,273 | ||
Proceeds from borrowings | 3,462 | 3,500 | ||
Repayment of borrowings | -1,783 | -1,104 | ||
Interest paid | -170 | -187 | ||
Cash flow from financing activities | 689 | -1,091 | ||
Change in cash and cash equivalents | ||||
Exchange-rate changes in cash and cash equivalents | -147 | -13 | ||
Liquid funds at the beginning of the period | 3,908 | 6,139 | ||
Liquid funds at the end of period | 5,307 | 5,047 |
a) | Basis of preparation |
b) | Use of judgements and estimates |
c) | Changes in accounting policies |
June 30, 2015 | June 30, 2014 | |
kEUR | kEUR | |
Wages and salaries | 13,038 | 11,791 |
Social security | 1,865 | 1,758 |
14,903 | 13,549 |
June 30, 2015 | June 30, 2014 | |
kEUR | TEUR | |
Dividends declared | 1,300 | 2,000 |
• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; |
• | Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and |
• | Level 3 inputs are unobservable inputs for the asset or liability. |
June 30, 2015 | |||||||||||||
Financial assets | Level | Fair Value | Carrying amounts | Balance sheet values | |||||||||
Cash and cash equivalents | Loans and receivables | Derivative financial instruments | Assets held-for-sale | Trade securities | Total carrying amounts | ||||||||
Cash and Cash equivalents | n/a | 5,628 | 5,628 | — | — | — | — | 5,628 | |||||
Trade receivables | n/a | 3,973 | — | 3,973 | — | — | — | 3,973 | |||||
Other current assets | n/a | 1,700 | — | 1,700 | — | — | — | 1,700 | |||||
Non-current financial assets | 2 | 12,228 | — | 11,721 | — | — | — | 11,721 | |||||
Total | 23,529 | 5,628 | 17,394 | — | — | — | 23,022 |
June 30, 2015 | ||||||||||
Financial liabilities | Level | Fair Value | Carrying amounts | Balance sheet values | ||||||
Other liabilities | Derivative financial instruments | outside of IAS 39 | Total carrying amounts | |||||||
Current financial liabilities | n/a | 6,804 | 5,826 | — | 978 | 6,804 | ||||
Trade payables | n/a | 3,748 | 3,748 | — | — | 3,748 | ||||
Other current liabilities | n/a | 1,040 | 1,040 | — | — | 1,040 | ||||
Non-current financial liabilities | 2 | 7,673 | 5,978 | — | 1,694 | 7,672 | ||||
Total | 19,265 | 16,592 | — | 2,672 | 19,264 |
December 31, 2014 | |||||||||||||
Financial assets | Level | Fair Value | Carrying amounts | Balance sheet values | |||||||||
Cash and cash equivalents | Loans and receivables | Derivative financial instruments | Assets held-for-sale | Trade securities | Total carrying amounts | ||||||||
Cash and cash equivalents | n/a | 4,199 | 4,199 | — | — | — | — | 4,199 | |||||
Trade receivables | n/a | 3,741 | — | 3,741 | — | — | — | 3,741 | |||||
Other current assets | n/a | 2,030 | — | 2,030 | — | — | — | 2,030 | |||||
Non-current financial assets | 2 | 12,220 | — | 11,498 | — | — | — | 11,498 | |||||
Total | 22,190 | 4,199 | 17,269 | — | — | — | 21,468 |
December 31, 2014 | ||||||||||
Financial liabilities | Level | Fair Value | Carrying amounts | Balance sheet values | ||||||
Other liabilities | Derivative financial instruments | outside of IAS 39 | Total carrying amounts | |||||||
Current financial liabilities | n/a | 3,668 | 2,607 | — | 1,061 | 3,668 | ||||
Trade payables | n/a | 3,747 | 3,747 | — | — | 3,747 | ||||
Other current liabilities | n/a | 918 | 918 | — | — | 918 | ||||
Non-current financial liabilities | 2 | 9,111 | 7,562 | — | 1,549 | 9,111 | ||||
Total | 17,444 | 14,834 | — | 2,610 | 17,444 |
June 30, 2015 | December 31, 2014 | |
kEUR | kEUR | |
Loans including interest | 11,721 | 11,498 |
June 30, 2015 | June 30, 2014 | |
kEUR | kEUR | |
Remuneration of management members in key positions | 983 | 957 |
Remuneration of Supervisory Board | 36 | 34 |
1,019 | 991 |
• | the costs to integrate the operations of IDT and ZMDI; |
• | any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Acquisition; or |
• | the costs necessary to achieve any such cost savings, operating synergies and revenue enhancements. |
IDT Historical September 27, 2015 | ZMDI Historical June 30, 2015 | Pro Forma Adjustments (Note 6) | Pro Forma Combined | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 91,557 | $ | 6,329 | $ | — | $ | 97,886 | |||||||
Short-term investments | 467,364 | — | (307,030 | ) | A | 160,334 | |||||||||
Accounts receivable, net | 63,373 | 4,468 | — | 67,841 | |||||||||||
Inventories | 43,946 | 10,394 | 9,430 | B | 63,770 | ||||||||||
Income tax receivable | 165 | — | — | 165 | |||||||||||
Prepayments and other current assets | 14,930 | 2,446 | — | 17,376 | |||||||||||
Total current assets | 681,335 | 23,637 | (297,600 | ) | 407,372 | ||||||||||
Property, plant and equipment, net | 64,890 | 8,599 | — | 73,489 | |||||||||||
Goodwill | 135,644 | 189 | 191,137 | C | 326,970 | ||||||||||
Other intangible assets, net | 12,983 | 413 | 125,787 | D | 139,183 | ||||||||||
Deferred non-current tax assets | 643 | 6,708 | (6,708 | ) | E | 643 | |||||||||
Loans to shareholder | — | 13,180 | (13,180 | ) | F | — | |||||||||
Other assets | 24,844 | 8 | — | 24,852 | |||||||||||
Total Assets | $ | 920,339 | $ | 52,734 | $ | (564 | ) | $ | 972,509 | ||||||
Liabilities and stockholders' equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | 31,730 | 4,215 | — | 35,945 | |||||||||||
Accrued compensation and related expenses | 27,492 | 3,338 | — | 30,830 | |||||||||||
Deferred income on shipments to distributors | 11,476 | — | — | 11,476 | |||||||||||
Current portion of long-term debt | — | 7,651 | — | 7,651 | |||||||||||
Deferred tax liabilities | 1,629 | — | — | 1,629 | |||||||||||
Other current liabilities | 11,305 | 3,691 | 2,195 | G | 17,191 | ||||||||||
Total current liabilities | 83,632 | 18,895 | 2,195 | 104,722 | |||||||||||
Deferred tax liabilities | 1,135 | — | 23,467 | E | 24,602 | ||||||||||
Long-term income tax payable | 226 | 839 | — | 1,065 | |||||||||||
Long-term debt | — | 8,627 | — | 8,627 | |||||||||||
Other long-term liabilities | 19,619 | 342 | — | 19,961 | |||||||||||
Total liabilities | 104,612 | 28,703 | 25,662 | 158,977 | |||||||||||
Common stock | 1,359,655 | 40,853 | (40,853 | ) | H | 1,359,655 | |||||||||
Accumulated and other comprehensive income | (4,474 | ) | 2,409 | (2,409 | ) | I | (4,474 | ) | |||||||
Retained earnings (accumulated deficit) | (539,454 | ) | (19,231 | ) | 17,036 | J | (541,649 | ) | |||||||
Total liabilities and stockholders' equity | $ | 920,339 | $ | 52,734 | $ | (564 | ) | $ | 972,509 |
IDT Historical Six months Ended September 27, 2015 | ZMDI Historical Six months Ended June 30, 2015 | Pro Forma Adjustments (Note 6) | Pro Forma Combined | ||||||||||||
Revenues | $ | 330,405 | $ | 36,536 | $ | — | $ | 366,941 | |||||||
Cost of revenues | 124,625 | 14,769 | 5,504 | K | 144,898 | ||||||||||
Gross profit | 205,780 | 21,767 | (5,504 | ) | 222,043 | ||||||||||
Operating expenses: | |||||||||||||||
Research and development | 69,055 | 8,965 | — | 78,020 | |||||||||||
Selling, general and administrative | 57,370 | 13,010 | 3,173 | K | 73,533 | ||||||||||
Total operating expenses | 126,425 | 21,775 | 3,173 | 151,573 | |||||||||||
Operating income | 79,355 | (208 | ) | (8,677 | ) | 70,470 | |||||||||
Interest income and other, net | 2,834 | 813 | (1,290 | ) | L | 2,357 | |||||||||
Income (loss) from continuing operations before income taxes | 82,189 | 605 | (9,967 | ) | 72,827 | ||||||||||
Provision (benefit) for income taxes | 1,046 | (1,997 | ) | (505 | ) | M | (1,456 | ) | |||||||
Net income (loss) from continuing operations | $ | 81,143 | $ | 2,602 | $ | (9,462 | ) | $ | 74,283 | ||||||
Basic net income (loss) per share - continuing operations | $ | 0.55 | $ | 0.50 | |||||||||||
Diluted net income (loss) per share - continuing operations | $ | 0.53 | $ | 0.49 | |||||||||||
Weighted average shares: | |||||||||||||||
Basic | 148,058 | 148,058 | |||||||||||||
Diluted | 152,997 | 152,997 |
IDT Historical Year Ended March 29, 2015 | ZMDI Historical Year Ended December 31, 2014 | Pro Forma Adjustments (Note 6) | Pro Forma Combined | ||||||||||||
Revenues | $ | 572,905 | $ | 81,165 | $ | — | $ | 654,070 | |||||||
Cost of revenues | 227,601 | 35,713 | 22,054 | B,K | 285,368 | ||||||||||
Gross profit | 345,304 | 45,452 | (22,054 | ) | 368,702 | ||||||||||
Operating expenses: | |||||||||||||||
Research and development | 127,688 | 22,098 | — | 149,786 | |||||||||||
Selling, general and administrative | 106,469 | 26,348 | 14,950 | K | 147,767 | ||||||||||
Total operating expenses | 234,157 | 48,446 | 14,950 | 297,553 | |||||||||||
Operating income | 111,147 | (2,994 | ) | (37,004 | ) | 71,149 | |||||||||
Interest income and other, net | 4,791 | 1,712 | (2,579 | ) | L | 3,924 | |||||||||
Income (loss) from continuing operations before income taxes | 115,938 | (1,282 | ) | (39,583 | ) | 75,073 | |||||||||
Provision (benefit) for income taxes | 1,357 | 13 | (11,882 | ) | M | (10,512 | ) | ||||||||
Net income (loss) from continuing operations | 114,581 | (1,295 | ) | (27,701 | ) | 85,585 | |||||||||
Discontinued operations: | |||||||||||||||
Gain from divestiture | 16,840 | — | — | 16,840 | |||||||||||
Loss from discontinued operations before income taxes | (37,237 | ) | — | — | (37,237 | ) | |||||||||
Benefit from income taxes | 275 | — | — | 275 | |||||||||||
Net income (loss) from discontinued operations | (20,672 | ) | — | — | (20,672 | ) | |||||||||
Net income (loss) | $ | 93,909 | $ | (1,295 | ) | $ | (27,701 | ) | $ | 64,913 | |||||
Basic net income (loss) per share - continuing operations | $ | 0.77 | $ | 0.58 | |||||||||||
Basic net income (loss) per share - discontinued operations | (0.14 | ) | (0.14 | ) | |||||||||||
Basic net income (loss) per share | $ | 0.63 | $ | 0.44 | |||||||||||
Diluted net income (loss) per share - continuing operations | $ | 0.74 | $ | 0.56 | |||||||||||
Diluted net income (loss) per share - discontinued operations | (0.13 | ) | (0.13 | ) | |||||||||||
Diluted net income (loss) per share | $ | 0.61 | $ | 0.43 | |||||||||||
Weighted average shares: | |||||||||||||||
Basic | 148,714 | 148,714 | |||||||||||||
Diluted | 153,983 | 153,983 |
• | the costs to integrate the operations of IDT and ZMDI; |
• | any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Acquisition; or |
• | the costs necessary to achieve any such cost savings, operating synergies and revenue enhancements. |
Average daily closing exchange rate for the six months ended June 30, 2015: | US$1.1174/€1 |
Average daily closing exchange rate for the year ended December 31, 2014: | US$1.3292/€1 |
Average daily closing exchange rate for the six months ended September 27, 2015: | US$1.1087/€1 |
Average daily closing exchange rate for the year ended March 29, 2015: | US$1.2715/€1 |
Closing exchange rate as of June 30, 2015: | US$1.1245/€1 |
Closing exchange rate as of December 7, 2015: | US$1.0874/€1 |
(in thousands) | Fair Value | ||
Cash | $ | 6,329 | |
Accounts receivable | 4,468 | ||
Inventories | 19,823 | ||
Property, plant and equipment, net | 8,599 | ||
Other assets | 2,454 | ||
Intangible assets | 126,200 | ||
Goodwill | 191,326 | ||
Accounts Payable | (4,215) | ||
Accrued and other current liabilities | (14,679) | ||
Loans payable | (8,627) | ||
Deferred tax liability | (23,467) | ||
Other long term liabilities | (1,181) | ||
Total purchase price | $ | 307,030 |
Estimated Fair Value December 7, 2015 | Estimated Useful Life | ||||
Developed technology | $ | 75,600 | 7 | ||
Customer contracts and related relationships | 44,000 | 7 | |||
Order backlog | 5,800 | 1 | |||
Trade names and trademarks | 800 | 1 | |||
Total | $ | 126,200 |
Unaudited adjusted ZMDI Balance Sheet | |||||||||||||||||||||||
As of June 30, 2015 | |||||||||||||||||||||||
Reclassifications and IFRS to U.S. GAAP Adjustments (in EUR) | |||||||||||||||||||||||
(In thousands) | ZMDI Historical IFRS (in EUR) | Reclassifications between line items | Capitalized R&D Expense | Tax Impact | ZMDI U.S. GAAP (in EUR) | ZMDI U.S. GAAP (in USD) | |||||||||||||||||
Assets | (a) | (b) | ( c ) | ||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | € | 5,628 | € | — | € | — | € | — | € | 5,628 | $ | 6,329 | |||||||||||
Accounts receivable, net | 3,973 | — | — | — | 3,973 | 4,468 | |||||||||||||||||
Inventories | 17,934 | — | (8,691 | ) | — | 9,243 | 10,394 | ||||||||||||||||
Income tax receivable | — | — | — | — | — | — | |||||||||||||||||
Prepayments and other current assets | 2,175 | — | — | — | 2,175 | 2,446 | |||||||||||||||||
Total current assets | 29,710 | — | (8,691 | ) | — | 21,019 | 23,637 | ||||||||||||||||
Property, plant and equipment, net | 7,302 | 7,080 | (6,735 | ) | — | 7,647 | 8,599 | ||||||||||||||||
Goodwill | — | 168 | — | — | 168 | 189 | |||||||||||||||||
Other intangible assets, net | 7,615 | (7,248 | ) | — | 367 | 413 | |||||||||||||||||
Deferred non-current tax assets | 5,965 | — | — | — | 5,965 | 6,708 | |||||||||||||||||
Loans to shareholder | 11,721 | — | — | — | 11,721 | 13,180 | |||||||||||||||||
Other assets | 7 | — | — | — | 7 | 8 | |||||||||||||||||
Total Assets | € | 62,320 | € | — | € | (15,426 | ) | € | — | € | 46,894 | $ | 52,734 | ||||||||||
Liabilities and stockholders' equity | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | € | 3,748 | € | — | € | — | € | — | € | 3,748 | $ | 4,215 | |||||||||||
Accrued compensation and related expenses | — | 2,968 | — | — | 2,968 | 3,338 | |||||||||||||||||
Liabilities to banks | 5,826 | (5,826 | ) | — | — | — | — | ||||||||||||||||
Liabilities from finance leases | 978 | (978 | ) | — | — | — | — | ||||||||||||||||
Current portion of long-term debt | — | 6,804 | — | — | 6,804 | 7,651 | |||||||||||||||||
Deferred tax liabilities | 121 | (121 | ) | — | — | — | — | ||||||||||||||||
Other current liabilities | 6,129 | (2,847 | ) | — | — | 3,282 | 3,691 | ||||||||||||||||
Total current liabilities | 16,802 | — | — | — | 16,802 | 18,895 | |||||||||||||||||
Long-term income tax payable | — | — | — | 746 | 746 | 839 | |||||||||||||||||
Liabilities to banks | 5,978 | (5,978 | ) | — | — | — | — | ||||||||||||||||
Liabilities from finance leases | 1,694 | (1,694 | ) | — | — | — | — | ||||||||||||||||
Long-term debt | — | 7,672 | — | — | 7,672 | 8,627 | |||||||||||||||||
Other long-term liabilities | 304 | — | — | — | 304 | 342 | |||||||||||||||||
Total liabilities | 24,778 | — | — | 746 | 25,524 | 28,703 | |||||||||||||||||
Common Stock | — | 36,330 | — | — | 36,330 | 40,853 | |||||||||||||||||
Capital Stock | 15,750 | (15,750 | ) | — | — | — | — | ||||||||||||||||
Capital reserves | 20,580 | (20,580 | ) | — | — | — | — | ||||||||||||||||
Accumulated and other comprehensive income | 2,142 | — | — | — | 2,142 | 2,409 | |||||||||||||||||
Retained earnings (accumulated deficit) | (930 | ) | — | (15,426 | ) | (746 | ) | (17,102 | ) | (19,231 | ) | ||||||||||||
Total liabilities and stockholders' equity | € | 62,320 | € | — | € | (15,426 | ) | € | — | € | 46,894 | $ | 52,734 |
Unaudited adjusted ZMDI Statement of Operations | ||||||||||||||||||||
Six months ended June 30, 2015 | ||||||||||||||||||||
Reclassifications and IFRS to U.S. GAAP Adjustments (in EUR) | ||||||||||||||||||||
ZMDI Historical IFRS (in EUR) | Reclassifications between line items | Capitalized R&D Expense | ZMDI U.S. GAAP (in EUR) | ZMDI U.S. GAAP (in USD) | ||||||||||||||||
(a) | (b) | |||||||||||||||||||
Revenues | € | 32,697 | € | — | € | — | € | 32,697 | $ | 36,536 | ||||||||||
Changes in inventories of finished goods and work in progress | 513 | (513) | — | — | — | |||||||||||||||
Other own work capitalized | (1,470 | ) | 1,470 | — | — | — | ||||||||||||||
Cost of materials | 10,489 | (10,489 | ) | — | — | — | ||||||||||||||
Amortization and impairments of intangible assets and depreciation and impairments of property, plant and equipment | 1,779 | (1,779) | — | — | — | |||||||||||||||
Cost of revenues | — | 13,217 | — | 13,217 | 14,769 | |||||||||||||||
Gross profit | 21,386 | (1,906 | ) | — | 19,480 | 21,767 | ||||||||||||||
Operating expenses: | — | |||||||||||||||||||
Personnel expenses | 14,903 | (14,903 | ) | — | — | — | ||||||||||||||
Other operating expenses | 7,156 | (7,156 | ) | — | — | — | ||||||||||||||
Research and development | — | 7,248 | 775 | 8,023 | 8,965 | |||||||||||||||
Selling, general and administrative | — | 11,643 | — | 11,643 | 13,010 | |||||||||||||||
Total operating expenses | 22,059 | (3,168 | ) | 775 | 19,666 | 21,975 | ||||||||||||||
Operating income (loss) | (673 | ) | 1,262 | (775 | ) | (186 | ) | (208 | ) | |||||||||||
Other operating income | 1,944 | (1,944 | ) | — | — | — | ||||||||||||||
Investment income | 223 | (223 | ) | — | — | — | ||||||||||||||
Other interest and similar income | 1 | (1 | ) | — | — | — | ||||||||||||||
Interest and similar expenses | (178 | ) | 178 | — | — | — | ||||||||||||||
Interest income and other, net | — | 728 | — | 728 | 813 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 1,317 | — | (775) | 542 | 605 | |||||||||||||||
Benefit from income taxes | (1,787 | ) | — | — | (1,787 | ) | (1,997 | ) | ||||||||||||
Net income (loss) from continuing operations | € | 3,104 | € | — | € | (775 | ) | € | 2,329 | $ | 2,602 |
Unaudited adjusted ZMDI Statement of Operations | |||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||
Reclassifications and IFRS to U.S. GAAP Adjustments (in EUR) | |||||||||||||||||||
ZMDI Historical IFRS (in EUR) | Reclassifications between line items | Capitalized R&D Expense | ZMDI U.S. GAAP (in EUR) | ZMDI U.S. GAAP (in USD) | |||||||||||||||
( a ) | ( b ) | ||||||||||||||||||
Revenues | € | 61,063 | € | — | € | — | € | 61,063 | $ | 81,165 | |||||||||
Changes in inventories of finished goods and work in progress | (2,360 | ) | 2,360 | — | — | — | |||||||||||||
Other own work capitalized | (2,361 | ) | 2,361 | — | — | — | |||||||||||||
Cost of materials | 24,712 | (24,712 | ) | — | — | — | |||||||||||||
Amortization and impairments of intangible assets and depreciation and impairments of property, plant and equipment | 4,261 | (4,261 | ) | — | — | — | |||||||||||||
Cost of revenues | — | 26,868 | — | 26,868 | 35,713 | ||||||||||||||
Gross profit | 36,811 | (2,616 | ) | — | 34,195 | 45,452 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Personnel expenses | 27,588 | (27,588 | ) | — | — | — | |||||||||||||
Other operating expenses | 12,935 | (12,935 | ) | — | — | — | |||||||||||||
Research and development | — | 16,017 | 608 | 16,625 | 22,098 | ||||||||||||||
Selling, general and administrative | — | 19,822 | — | 19,822 | 26,348 | ||||||||||||||
Total operating expenses | 40,523 | (4,684 | ) | 608 | 36,447 | 48,446 | |||||||||||||
Operating loss | (3,712 | ) | 2,068 | (608 | ) | (2,252 | ) | (2,994 | ) | ||||||||||
Other operating income | 3,138 | (3,138 | ) | — | — | — | |||||||||||||
Investment income | 452 | (452 | ) | — | — | — | |||||||||||||
Other interest and similar income | 3 | (3 | ) | — | — | — | |||||||||||||
Profit from joint ventures | 128 | (128 | ) | — | — | — | |||||||||||||
Interest and similar expenses | (365 | ) | 365 | — | — | — | |||||||||||||
Interest income and other, net | — | 1,288 | — | 1,288 | 1,712 | ||||||||||||||
Loss from continuing operations before income taxes | (356 | ) | — | (608 | ) | (964 | ) | (1,282 | ) | ||||||||||
Provision from income taxes | 10 | — | — | 10 | 13 | ||||||||||||||
Net income (loss) from continuing operations | € | (366 | ) | € | — | € | (608 | ) | € | (974 | ) | $ | (1,295 | ) |
(a) | Certain items presented by ZMDI under IFRS have been reclassified in order to align with the presentation used by IDT under U.S. GAAP. |
• | separate disclosure of accrued employee costs on the face of the balance sheet; and |
• | software are included as part of fixed asset rather than part of intangible; and |
• | capital stock and capital reserve are presented as single line item rather than separate line items |
• | presentation of costs on a functional basis (cost of sales and selling, general and administrative expenses), rather than on a type basis (cost of material, depreciation, personnel expenses, etc) and a single line item for operating expenses; and |
• | presentation of other operating income as single line item rather than separate disclosure of each type of income and expenses on the face of the statement of operations. |
(b) | Under U.S GAAP, general research & development (R&D) expenses are not capitalized, whereas under IFRS are capitalized and amortized over 3 to 4 years. As a result, decreases of €8.7 million and €6.7 million are included in the balance sheet as of June 30, 2015 for inventories and fixed assets, respectively. In addition, a €0.6 million and €0.8 million increase to R&D expense is included in the statement of operations for the reversal of capitalization and amortization for the year ended December 31, 2014 and six month period ended June 30, 2015, respectively. |
(c) | Under U.S. GAAP, for uncertain tax positions (“UTP”), a two-step recognition and measurement approach is prescribed to determining the amount of tax benefit to recognize in the financial statements. The recognition step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The measurement step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Under IFRS, recognition is based on whether it is probable that an outflow of economic resources will occur. Measurement is based on an expected value or single best estimate of the most likely outcome. As a result of these differences, an increase to long-term income tax payables of € 0.7 million is included in the balance sheet as of June 30, 2015. |
Average daily closing exchange rate for the six months ended September 27, 2015: | US$1.1087/€1 |
Average daily closing exchange rate for the year ended March 29, 2015: | US$1.2715/€1 |
Closing exchange rate as of June 30, 2015: | US$1.1245/€1 |
Closing exchange rate as of December 7, 2015: | US$1.0874/€1 |
A | Total cash consideration | $ | (307,030 | ) | ||||
B | Adjustment and amortization for step-up in fair value of inventory acquired as part of ZMDI | $ | 9,430 | |||||
C | Adjustment to goodwill | |||||||
To eliminate ZMDI historical book value of goowill | $ | (189 | ) | |||||
To record the goodwill associated with the ZMDI acquisition | 191,326 | |||||||
$ | 191,137 | |||||||
D | Adjustments in acquired intangibles assets, net | |||||||
To eliminate ZMDI historical book value of intangible assets | $ | (413 | ) | |||||
To record the fair value of ZMDI identifiable intangible assets | 126,200 | |||||||
$ | 125,787 | |||||||
E | Adjustment to tax related line items | |||||||
To reclassify the deferred tax asset to net against the deferred tax liability | $ | (6,708 | ) | |||||
To record the net DTL with DTA associated with the ZMDI acquisition - long term | $ | 23,467 | ||||||
F | To eliminate the loan received from share holder immediately prior to the Acquisition. | $ | (13,180 | ) | ||||
G | Adjustments to record IDT transaction accrued expenses and adjust fair value of Other current liabilities | |||||||
To accrue transaction expense occurred by IDT | $ | 2,005 | ||||||
To accrue transaction expense occurred by ZMDI | 190 | |||||||
$ | 2,195 | |||||||
H | To eliminate ZMDI's common stock | $ | (40,853 | ) | ||||
I | To eliminate ZMDI historical accumulated other comprehensive loss | $ | (2,409 | ) | ||||
J | Adjustments in accumulated deficit | |||||||
To eliminate ZMDI historical retained earnings | $ | 19,231 | ||||||
Adjustments to record accrued expenses for acquisition | (2,195 | ) | ||||||
$ | 17,036 | |||||||
K | Adjustments to amortization of intangibles from acquisitions. | |||||||
For the year ended December 31, 2014 | ||||||||
To eliminate historical amortization from intangibles from acquisitions | ||||||||
Selling, general and administrative | $ | (86 | ) | |||||
To record amortization of identified intangibles acquired from ZMDI | ||||||||
Cost of revenues | $ | 12,624 | ||||||
Selling, general and administrative | $ | 15,036 | ||||||
For six month ended June 30, 2015 | ||||||||
To eliminate historical amortization from intangibles from acquisitions | ||||||||
Selling, general and administrative | $ | (35 | ) | |||||
To record amortization of identified intangibles acquired from ZMDI | ||||||||
Cost of revenues | $ | 5,504 | ||||||
Selling, general and administrative | $ | 3,207 | ||||||
L | The acquisition was funded through the use of approximately $307.0 million of cash held by IDT at the time of acquisition. Adjustments were made in the Pro Forma Financial Information to reduce interest income by an estimated amount of interest income that will be lost because of lower invested fund balances. A 0.84% rate of return was assumed based upon recent yields earned by IDT. | |||||||
Cash on hand | $ | 307,030 | ||||||
Interest rate | 0.84 | % | ||||||
Interest income for year ended March 29, 2015 | $ | 2,579 | ||||||
Interest income for 6 months ended September 27, 2015 | $ | 1,290 | ||||||
M | Adjustments to record the preliminary tax benefit on the preliminary adjusted pre-tax loss of ZMDI. IDT has used a tax rate of 31 percent to calculate the financing and acquisition-related adjustments. The tax rate may not be reflective of IDT’s effective tax rate for future periods after consummation of the Acquisition. |
Six Months Ended September 27, 2015 | Year Ended March 29, 2015 | |||||||
Net income from continuing operations attributable to IDT shareholders, basic and diluted as reported | $ | 81,143 | $ | 114,581 | ||||
Net loss from continuing operations attributable to ZMDI shareholders and other pro forma adjustments | (6,860 | ) | (28,996 | ) | ||||
Net income/(loss) from continuing operations attributable to parent entity shareholders, basic and diluted as combined | $ | 74,283 | $ | 85,585 | ||||
Pro forma weighted average shares outstanding, basic | 148,058 | 148,714 | ||||||
Net effect of dilutive equity awards | 4,939 | 5,269 | ||||||
Pro forma weighted average shares outstanding, diluted | 152,997 | 153,983 | ||||||
Pro forma net income/(loss) from continuing operations per share: | ||||||||
Basic | $ | 0.50 | $ | 0.58 | ||||
Diluted | $ | 0.49 | $ | 0.56 |