EX-99.2 3 0003.txt UNAUDITED PRO FORMA FINANCIAL INFORMATION ITEM 7B UNAUDITED PRO FORMA FINANCIAL INFORMATION On May 5, 2000, the Company completed its previously announced merger with Firefly Technologies, Inc. ("Firefly"), a manufacturer of heads and related products for the optical storage industry as well as metrology, micro optics, switches and filters for the telecommunications industry located in Holliston, Mass. The Company issued approximately 2.3 million shares of its common stock in exchange for all of the outstanding capital stock and options of Firefly, a privately held company. This merger will be accounted for under the pooling of interests method of accounting, and accordingly, historical financial information in future reports will be restated to include Firefly. The Zygo Corporation Unaudited Pro Forma Financial Statements give effect to the combination of Zygo Corporation and Firefly through the issuance of Zygo Corporation Common Shares for the outstanding common stock and stock options of Firefly. The unaudited pro forma statements of operations presented in this document for the years ended June 30, 1999 and 1998, and for the nine months ended March 31, 2000 reflect the combination as if it had taken place on July 1, 1997. The unaudited pro forma consolidated condensed balance sheet gives effect to the combination as if it had taken place on March 31, 2000. The results of Firefly which had been a December 31 fiscal year end have been adjusted to conform to ZYGO's June 30 fiscal year end. The accompanying Zygo Corporation Unaudited Pro Forma Financial Statements are not necessarily indicative of what the actual operating results or financial position would have been had the combination actually taken place on July 1, 1997 and do not purport to indicate ZYGO's future results of operations. The fiscal June 30, 2000 independent audit is currently being conducted and the audited results for the years ended June 30, 1999 and 1998 will be included in the Fiscal Year 2000 Form 10-K, which will be filed on or before September 29, 2000. Audit adjustments, if any, for these periods will be reflected therein. 20
UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF EARNINGS FOR THE NINE MONTHS ENDED MARCH 31, 2000 (Thousands, except per share amounts) HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZYGO FIREFLY ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Net sales ............................................... $ 60,836 $ 2,537 -- $ 63,373 Cost of good sold ....................................... 35,538 1,400 -- 36,938 ---------- ---------- ----------- --------- Gross profit ................................... 25,298 1,137 -- 26,435 Selling, general and administrative expenses ............ 12,484 3,957 -- 16,441 Research, development and engineering expenses .......... 6,696 362 -- 7,058 Nonrecurring acquisition and failed merger costs ........ -- -- -- -- Amortization of goodwill and other intangibles .......... 1,205 13 -- 1,218 ---------- ---------- ----------- --------- Operating profit (loss) ........................ 4,913 (3,195) -- 1,718 ---------- ---------- ----------- --------- Other income (expense): Interest income ................................ 860 -- -- 860 Miscellaneous income (expense), net ............ (209) 36 -- (173) ---------- ---------- ----------- --------- 651 36 -- 687 ---------- ---------- ----------- --------- Earnings (loss) before income taxes and minority interest .................................... 5,564 (3,159) -- 2,405 Income tax expense ...................................... 1,833 90 -- 1,923 ---------- ---------- ----------- --------- Earnings (loss) before minority interest ................ 3,731 (3,249) -- 482 Minority interest ....................................... (67) -- -- (67) ---------- ---------- ----------- --------- Net earnings (loss) ..................................... $ 3,664 $ (3,249) $ -- $ 415 ========== ========== =========== ========= Earnings (loss) per share: Basic (1) ...................................... $ .32 $ .03 ========== ========= Diluted (1) .................................... $ .30 $ .03 ========== ========= Weighted average number of shares: Basic .......................................... 11,370 12,003 ========== ========= Diluted ........................................ 12,346 13,318 ========== ========= --------------- (1) The difference between basic shares outstanding and diluted shares outstanding is the assumed conversion of common stock equivalents (stock options) of 1,295,000 in the nine months ended March 31, 2000.
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UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF EARNINGS FOR THE TWELVE MONTHS ENDED JUNE 30, 1999 (Thousands, except per share amounts) HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZYGO FIREFLY ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Net sales ............................................... $ 60,838 $ 2,544 -- $ 63,382 Cost of good sold ....................................... 39,331 1,666 -- 40,997 ---------- ---------- ----------- --------- Gross profit ................................... 21,507 878 -- 22,385 Selling, general and administrative expenses ............ 18,966 667 -- 19,633 Research, development and engineering expenses .......... 9,185 -- -- 9,185 Nonrecurring acquisition and failed merger costs ........ -- -- -- -- Amortization of goodwill and other intangibles .......... 1,258 -- -- 1,258 ---------- ---------- ----------- --------- Operating profit (loss) ........................ (7,902) 211 -- (7,691) ---------- ---------- ----------- --------- Other income (expense): Interest income ................................ 1,147 1 -- 1,148 Miscellaneous (expense), net ................... (308) -- -- (308) ---------- ---------- ----------- --------- 839 1 -- 840 ---------- ---------- ----------- --------- Earnings (loss) before income taxes and minority interest .................................... (7,063) 212 -- (6,851) Income tax expense (benefit) ............................ (3,074) 99 -- (2,975) ---------- ---------- ----------- --------- Earnings (loss) before minority interest ................ (3,989) 113 -- (3,876) Minority interest ....................................... -- -- -- -- ---------- ---------- ----------- --------- Net earnings (loss) ..................................... $ (3,989) $ 113 $ -- $ (3,876) ========== ========== =========== ========= Earnings (loss) per share: Basic (1) ...................................... $ (.36) $ (.33) ========== ========= Diluted (1) .................................... $ (.36) $ (.33) ========== ========= Weighted average number of shares: Basic .......................................... 11,148 11,780 ========== ========= Diluted ........................................ 11,148 11,780 ========== ========= --------------- (1) As per generally accepted accounting principles, the computation of the net loss per share is based on the weighted average basic shares outstanding.
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UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF EARNINGS FOR THE TWELVE MONTHS ENDED JUNE 30, 1998 (Thousands, except per share amounts) HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZYGO FIREFLY ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Net sales ............................................... $ 97,871 $ 1,213 -- $ 99,084 Cost of good sold ....................................... 56,729 906 -- 57,635 ---------- ---------- ----------- --------- Gross profit ................................... 41,142 307 -- 41,449 Selling, general and administrative expenses ............ 18,354 370 -- 18,724 Research, development and engineering expenses .......... 9,844 -- -- 9,844 Nonrecurring acquisition and failed merger costs ........ 1,920 -- -- 1,920 Amortization of goodwill and other intangibles .......... 793 -- -- 793 ---------- ---------- ----------- --------- Operating profit (loss) ........................ 10,231 (63) -- 10,168 ---------- ---------- ----------- --------- Other income (expense): Interest income ................................ 1,100 -- -- 1,100 Miscellaneous income (expense), net ............ (248) -- -- (248) ---------- ---------- ----------- --------- 852 -- -- 852 ---------- ---------- ----------- --------- Earnings (loss) before income taxes and minority interest .................................... 11,083 (63) -- 11,020 Income tax expense ...................................... 3,969 22 3,991 ---------- ---------- ----------- --------- Earnings (loss) before minority interest ................ 7,114 (85) -- 7,029 Minority interest ....................................... -- -- -- -- ---------- ---------- ----------- --------- Net earnings (loss) ..................................... $ 7,114 $ (85) $ -- $ 7,029 ========== ========== =========== ========= Earnings (loss) per share: Basic (1) ...................................... $ .65 $ .61 ========== ========= Diluted (1) .................................... $ .58 $ .55 ========== ========= Weighted average number of shares: Basic .......................................... 10,890 11,480 ========== ========= Diluted ........................................ 12,235 12,877 ========== ========= --------------- (1) The difference between basic shares outstanding and diluted shares outstanding is the assumed conversion of common stock equivalents (stock options) of 1,397,000 in the twelve months ended June 30, 1998.
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UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 (Thousands, except per share amounts) HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZYGO FIREFLY ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Assets Current assets: Cash and cash equivalents .......................... $ 22,991 $ 151 -- $23,142 Marketable securities .............................. 8,270 -- -- 8,270 Receivables ........................................ 21,525 205 -- 21,730 Inventories ........................................ 11,693 100 -- 11,793 Costs in excess billings ........................... 2,529 -- -- 2,529 Income taxes receivable ............................ 1,633 4 -- 1,637 Prepaid expenses and taxes ......................... 769 22 -- 791 Deferred income taxes .............................. 3,678 28 -- 3,706 ---------- ---------- ----------- --------- Total current assets ........................... 73,088 510 -- 73,598 Property, plant and equipment, net ...................... 16,291 218 -- 16,509 Goodwill and other intangible assets .................... 10,068 300 -- 10,368 ---------- ---------- ----------- --------- Total assets ............................................ $ 99,447 $ 1,028 -- $ 100,475 ========== ========== =========== ========= Liabilities and Stockholder's Equity Current liabilities: -- Accounts payable ................................... $ 9,043 $ 265 -- $ 9,308 Accrued expenses and progress payments ............. 6,699 111 -- 6,810 ---------- ---------- ----------- --------- Total current liabilities ...................... 15,742 376 -- 16,118 Notes Payable ........................................... -- 86 -- 86 Deferred income taxes ................................... 2,213 9 -- 2,222 Minority interest ....................................... 223 -- -- 223 Stockholders' equity .................................... 81,269 557 -- 81,826 ---------- ---------- ----------- --------- Total liabilities and stockholders' equity .............. $ 99,447 $ 1,028 -- $ 100,475 ========== ========== =========== =========
24 NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: PRINCIPLES OF CONSOLIDATION The pro forma consolidated balance sheet at March 31, 2000 and the consolidated statements of earnings for the nine months ended March 31, 2000 and for the years ended June 30, 1999 and 1998 are unaudited but, in the opinion of the Company, include all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of the results. The consolidated statements include the accounts of Zygo Corporation and all consolidated subsidiaries, including a consolidated joint venture, which the Company entered into in October 1999. The minority interest represents the 40% of the joint venture not owned by the Company. The results of operations for the nine-month periods ended March 31, 2000 are not necessarily indicative of the results to be expected for the full year. The Pro Forma Statements of Earnings presented herein have been prepared to reflect the pooling of interests of Zygo Corporation and Firefly Technologies Inc., as if 100% of the capital stock and stock options of Firefly had been acquired on July 1, 1997. The Pro Forma Balance Sheets presented herein have been prepared to reflect the pooling of interests of Zygo Corporation and Firefly Technologies, Inc., as if the merger had taken place on March 31, 2000. NOTE 2: PRO FORMA ADJUSTMENTS No Pro Forma adjustments were necessary to reflect the combination of Zygo and Firefly. 25