EX-99.2 4 d50335exv99w2.htm UNAUDITED FINANCIAL STATEMENTS exv99w2
 

Exhibit 99.2
APEX MICROTECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
                 
    May 4, 2007     November 17, 2006  
    (unaudited)          
Assets
                
Current assets:
                
Cash and cash equivalents
   $ (132 )   $ 77  
Accounts receivable, net
     3,673       3,060  
Inventories
     2,565       2,598  
Other current assets
     425       418  
 
            
Total current assets
     6,531       6,153  
 
                
Property and equipment, net
     2,966       3,038  
Intangibles and other, net
     88       114  
 
            
Total assets
   $ 9,585     $ 9,305  
 
            
 
                
Liabilities and Stockholders’ Deficiency
                
Current liabilities:
                
Accounts payable
   $ 432     $ 398  
Current portion of long-term debt
     1,724       2,265  
Income taxes payable
     664       —  
Other accrued liabilities
     1,370       2,147  
 
            
Total current liabilities
     4,190       4,810  
 
                
Other long-term obligations
     5,220       5,635  
 
                
Stockholders’ deficiency:
                
Capital stock
     5,936       5,885  
Accumulated deficit
     (5,761 )     (7,025 )
 
            
Total stockholders’ deficiency
     175       (1,140 )
 
            
Total liabilities and stockholders’ deficiency
   $ 9,585     $ 9,305  
 
            

 

 

APEX MICROTECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands; unaudited)
                 
    Six Months Ended  
    May 4, 2007     May 5, 2006  
 
                
Net sales
   $ 8,655     $ 8,311  
Cost of sales
     3,087       3,146  
 
            
Gross margin
     5,568       5,165  
 
            
 
                
Operating expenses:
                
Research and development
     1,091       1,119  
Selling, general and administrative
     2,211       2,003  
 
            
Total operating expenses
     3,302       3,122  
 
            
Income from operations
     2,266       2,043  
 
                
Interest income, net
     (320 )     (415 )
 
            
Income before income taxes
     1,946       1,628  
Provision (benefit) for income taxes
     681       570  
 
            
Net income
   $ 1,265     $ 1,058  
 
            

 

 

Apex Microtechnology Corporation
Consolidated Statement of Cash Flows
(in thousands; unaudited)
                 
    Six Months Ended  
    May 4, 2007     May 5, 2006  
Operating Activities:
                
Net Income
   $ 1,265     $ 1,058  
Adj. to Reconcile Net Income to Net Cash:
                
-Depreciation & Amortization
     195       217  
-(Gain)/Loss on Sale of Assets
     (2 )     —  
-Cash Paid for Interest
     287       381  
-Changes in Operating Assets & Liabilities:
                
-Accounts Receivable
     (613 )     482  
-Inventory
     (8 )     (217 )
-Prepaid Expense
     34       (30 )
-Accounts Payable
     34       104  
-Income Taxes Payable
     531       420  
-Due to Affiliate
     (36 )     (25 )
-Accrued Expenses
     (478 )     (103 )
 
            
Cash Provided By Operations
     1,209       2,284  
 
                
Investing Activities:
                
Purchase of Property, Plant, & Equipment
     (97 )     (77 )
Proceeds from Disposal of Assets
     2       —  
 
            
Cash Used In Investing Activities
     (95 )     (77 )
 
                
Financing Activities:
                
Repayment of Short and Long Term Loans
     (1,243 )     (2,296 )
Proceeds from Sale of Stock
     —       12  
Restricted Stock
     50       34  
 
            
Cash Used In Financing Activities
     (1,193 )     (2,250 )
 
            
 
                
Increase (Decrease) in Cash
     (79 )     (42 )
 
                
Cash & Equivalents, Beginning of Period
     (53 )     (130 )
 
            
 
                
Cash & Equivalents, End of Period
   $ (132 )   $ (172 )
 
            
 
                
Supplementary Disclosure of Cash Flow Information:
                
Cash Received (Paid) for Income Taxes
     (150 )     (150 )

 

 

Unaudited Notes to Consolidated Condensed Financial Statements
1.   Basis of Presentation
     The consolidated condensed financial statements have been prepared by Apex Microtechnology Corporation (“we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“Commission”). The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations. As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended November 17, 2006. In our opinion, the financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows, for those periods presented. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses, as well as disclosure of contingent assets and liabilities. Actual results could differ from those estimates and assumptions. Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.
2.   Accounts Receivable, net
          The following are the components of accounts receivable (in thousands):
                 
    May 4,     Nov. 17,  
    2007     2006  
Gross accounts receivable
   $ 3,694     $ 3,081  
Allowance for doubtful accounts
     (21 )     (21 )
 
            
 
   $ 3,673     $ 3,060  
 
            
3.   Inventories
          The following are the components of inventory (in thousands):
                 
    May 4, 2007     Nov. 17, 2006  
Work in-process
   $ 1,913     $ 2,091  
Finished goods
     652       507  
 
            
 
   $ 2,565     $ 2,598  
 
            
4.   Income Taxes
     The Company recorded income tax expense of $681 thousand during the first six months of fiscal year 2007. However, the annualized effective income tax rate is expected to differ from the federal statutory income tax rate of 35% due to the effect of state income taxes offset by Federal tax benefits, the extra-territorial income (ETI) exclusion, the manufacturing deduction, and federal and state research and development credits. Effective January 1, 2005, the America Jobs Creation Act of 2004, repealed the ETI exclusion for transactions entered into after 2004 with two years of transition relief (2005-2006) and phases in the manufacturer’s deduction through 2010. During the transition period, the Act provides a deduction equal to 80% of the original ETI exclusion in 2005, 60% in 2006 and no exclusions thereafter.
5.   Subsequent Events
     On July 11, 2007, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Cirrus Logic, Inc., (“Cirrus”) a Delaware corporation. The Merger Agreement provides for the acquisition of the Company by

 

 

Cirrus pursuant to the merger of Merger Sub with the Company, with Cirrus being the surviving corporation (the “Merger”), which occurred on July 24, 2007.
     Subject to the terms of the Merger Agreement, Cirrus paid an aggregate cash consideration of approximately $42.5 million, subject to certain adjustments based upon the Company’s net working capital immediately prior to the closing date. In addition, Cirrus placed $6.3 million of the purchase price into an escrow account to indemnify Cirrus against losses resulting from any breaches of the Company’s representations, warranties, covenants and agreements, certain environmental matters, claims regarding dissenting shareholders and certain other matters. To the extent that the escrow fund is insufficient, the Company’s equity holders have agreed to indemnify Cirrus for losses resulting from breaches of certain of the Company’s representations and warranties, covenants and agreements, and certain environmental matters, subject to the limitations set forth in the Merger Agreement.