EX-99.2 4 d72678_ex99-2.txt PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Exhibit 99.2 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2007 (Dollars in thousands, except par value)
Effect of Change in Unaudited Unaudited Unaudited Accounting Pro Forma Pro Forma Historical Principle Adjustments Balance sheet ------------------------------------------------------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 13,594 $ -- $ 38,281 (a) $ 51,875 Accounts receivable, less allowance for doubtful accounts of $1,789 88,947 -- (31,739) (b) 57,208 Inventories 83,169 13,333 (e) (39,159) (b) 57,343 Deferred income taxes 195 -- -- 195 Prepaid taxes 2,527 -- -- 2,527 Other current assets 6,921 -- (1,358) (b) 5,563 ------------------------------------------------------------------------------------------------------------------------ Total current assets 195,353 13,333 (33,975) 174,711 Property, plant and equipment, net 97,405 -- (16,145) (b) 81,260 Deferred income taxes 638 -- -- 638 Intangible and other assets, net 36,483 -- (19,459) (b) 17,024 Goodwill 68,692 -- (8,944) (b) 59,748 ------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 398,571 $ 13,333 $(78,523) $ 333,381 ------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 6,289 $ -- $ (4,991) (b) $ 1,298 Accounts payable 54,124 -- (14,622) (b) 39,502 Book overdrafts 1,828 -- -- 1,828 Accrued liabilities 22,618 -- (7,910) (b) 14,708 Other current liabilities 11,199 -- (2,440) (b) 8,759 ------------------------------------------------------------------------------------------------------------------------ Total current liabilities 96,058 -- (29,963) 66,095 Deferred income taxes 10,502 -- -- 10,502 Long-term debt 155,595 -- (32,433) (b) 123,162 Other liabilities 36,073 -- (6,257) (b) 29,816 ------------------------------------------------------------------------------------------------------------------------ Total liabilities 298,228 -- (68,653) 229,575 ------------------------------------------------------------------------------------------------------------------------
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2007 (CONTINUED) (Dollars in thousands, except par value)
Effect of Change in Unaudited Unaudited Unaudited Accounting Pro Forma Pro Forma Historical Principle Adjustments Balance sheet ---------------------------------------------------------------------------------------------------------------------- Minority interest $ 12,150 $ -- $ -- $ 12,150 Stockholders' equity: Common stock, $.01 par value, 75,000,000 shares authorized; 29,042,467 shares issued; 25,650,620 shares outstanding. 290 -- -- 290 Additional paid-in capital 74,306 -- -- 74,306 Treasury stock, at cost, 3,391,847 shares (47,111) -- -- (47,111) Accumulated other comprehensive loss (13,944) -- (14,870) (g) (28,814) Retained earnings 74,652 13,333 (e) 5,000 (f) 92,985 ---------------------------------------------------------------------------------------------------------------------- Total stockholders' equity 88,193 13,333 (9,870) 91,656 ---------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 398,571 $ 13,333 $ (78,523) $ 333,381 ======================================================================================================================
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, 2007 (Dollars in thousands, except per share data)
Effect of Unaudited Change in Unaudited Pro Forma Unaudited Accounting Pro Forma Statement of Historical Principle Adjustments Operations ------------------------------------------------------------------------------------------------------------------------ NET SALES $ 130,809 $ -- $ (42,345) (c) $ 88,464 COST OF SALES 111,252 (1,556) (e) (33,986) (c) 75,710 ----------------------------------------------------------- GROSS PROFIT 19,557 1,556 (8,359) 12,754 OPERATING EXPENSES: Selling, general and administrative expenses 17,088 -- (5,050) (c) 12,038 Research and development expenses 5,773 -- (4,266) (c) 1,507 Gain on sale of Shanghai, China plant (15,162) -- -- (15,162) ----------------------------------------------------------- OPERATING INCOME FROM CONTINUING OPERATIONS 11,858 1,556 957 14,371 ----------------------------------------------------------- Interest expense, net 2,708 -- (520) (d) 2,188 Other income, net (161) -- (470) (c) (631) ----------------------------------------------------------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST 9,311 1,556 1,947 12,814 Provision for income taxes 2,209 -- (2,152) (c) 57 ----------------------------------------------------------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST 7,102 1,556 4,099 12,757 Minority interest 4,528 -- -- 4,528 ----------------------------------------------------------- NET INCOME FROM CONTINUING OPERATIONS $ 2,574 $ 1,556 $ 4,099 $ 8,229 =========================================================== Earnings per share: Basic: Net Income from continuing operations $ 0.10 $ 0.32 ------------ ------------ Diluted: Net Income from continuing operations $ 0.10 $ 0.22 ------------ ------------ Weighted average of common stock outstanding- Basic 25,650,623 25,650,623 Weighted average of common stock outstanding- Diluted 45,771,688 45,771,688
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JANUARY 31, 2007 (Dollars in thousands, except per share data)
Effect of Unaudited Change in Unaudited Pro Forma Unaudited Accounting Pro Forma Statement of Historical Principle Adjustments Operations -------------------------------------------------------------------------------------------------------------------------- NET SALES $ 524,580 $ -- $ (186,749) (c) $ 337,831 COST OF SALES 443,489 (3,344) (e) (145,919) (c) 294,226 ------------------------------------------------------------- GROSS PROFIT 81,091 3,344 (40,830) 43,605 OPERATING EXPENSES: Selling, general and administrative expenses 68,413 -- (23,101) (c) 45,312 Research and development expenses 27,302 -- (20,773) (c) 6,529 Goodwill impairment 13,947 -- (13,947) (c) -- ------------------------------------------------------------- OPERATING LOSS FROM CONTINUING OPERATIONS (28,571) 3,344 16,991 (8,236) ------------------------------------------------------------- Interest expense, net 13,437 -- (2,134) (d) 11,303 Other expense, net 1,245 -- 148 (c) 1,393 ------------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST (43,253) 3,344 18,977 (20,932) Provision for income taxes 4,094 -- (2,975) (c) 1,119 ------------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (47,347) 3,344 21,952 (22,051) Minority interest (1,273) -- -- (1,273) ------------------------------------------------------------- NET LOSS FROM CONTINUING OPERATIONS $ (46,074) $ 3,344 $ 21,952 $ (20,778) ============================================================= Loss per share: Basic: Net loss from continuing operations $ (1.80) $ (0.81) ------------ ------------ Diluted: Net loss from continuing operations $ (1.80) $ (0.81) ------------ ------------ Weighted average of common stock outstanding- Basic 25,590,448 25,590,448 Weighted average of common stock outstanding- Diluted 25,590,448 25,590,448
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JANUARY 31, 2006 (Dollars in thousands, except per share data)
Effect of Unaudited Change in Unaudited Pro Forma Unaudited Accounting Pro Forma Statement of Historical Principle Adjustments Operations -------------------------------------------------------------------------------------------------------------------------- NET SALES $ 497,407 $ -- $ (186,305) (c) $ 311,102 COST OF SALES 405,754 (3,442) (e) (141,882) (c) 260,430 ------------------------------------------------------------- GROSS PROFIT 91,653 3,442 (44,423) 50,672 OPERATING EXPENSES: Selling, general and administrative expenses 70,557 -- (26,366) (c) 44,191 Research and development expenses 25,128 -- (18,967) (c) 6,161 Identifiable intangible asset impairment 20,045 -- (20,045) (c) -- Goodwill impairment 13,674 -- (13,674) (c) -- ------------------------------------------------------------- OPERATING LOSS FROM CONTINUING OPERATIONS (37,751) 3,442 34,629 320 ------------------------------------------------------------- Interest expense, net 10,487 -- (645) (d) 9,842 Other (income) expense, net (21) -- 280 (c) 259 ------------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST (48,217) 3,442 34,994 (9,781) Provision for income taxes 12,362 (363) (e) (3,169) (c) 8,830 ------------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (60,579) 3,805 38,163 (18,611) Minority interest 83 -- -- 83 ------------------------------------------------------------- NET LOSS FROM CONTINUING OPERATIONS $ (60,662) $ 3,805 $ 38,163 $ (18,694) ============================================================= Loss per share: Basic: Net loss from continuing operations $ (2.39) $ (0.74) ------------ ------------ Diluted: Net loss from continuing operations $ (2.39) $ (0.74) ------------ ------------ Weighted average of common stock outstanding- Basic 25,379,717 25,379,717 Weighted average of common stock outstanding- Diluted 25,379,717 25,379,717
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JANUARY 31, 2005 (Dollars in thousands, except per share data)
Effect of Unaudited Change in Unaudited Pro Forma Unaudited Accounting Pro Forma Statement of Historical Principle Adjustments Operations ------------------------------------------------------------------------------------------------------------------------ NET SALES $ 414,738 $ (111,546) (c) $ 303,192 COST OF SALES 341,969 (951) (e) (81,404) (c) 259,614 ----------------------------------------------------------- GROSS PROFIT 72,769 951 (30,142) 43,578 OPERATING EXPENSES: Selling, general and administrative expenses 53,591 -- (16,345) (c) 37,246 Research and development expenses 18,641 -- (11,831) (c) 6,810 Identifiable intangible asset impairment 464 -- (464) (c) -- Goodwill impairment 74,233 -- (74,233) (c) -- ----------------------------------------------------------- OPERATING LOSS FROM CONTINUING OPERATIONS (74,160) 951 72,731 (478) ----------------------------------------------------------- Interest expense, net 5,015 -- (280) (d) 4,735 Other expense, net 1,612 -- (647) (c) 965 ----------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST (80,787) 951 73,658 (6,178) Benefit for income taxes (21,289) 377 (e) 17,778 (c) (3,134) ----------------------------------------------------------- LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (59,498) 574 55,880 (3,044) Minority interest (5) -- -- (5) ----------------------------------------------------------- NET LOSS FROM CONTINUING OPERATIONS $ (59,493) $ 574 $ 55,880 $ (3,039) =========================================================== Loss per share: Basic: Net loss from continuing operations $ (2.35) $ (0.12) ------------ ------------ Diluted: Net loss from continuing operations $ (2.35) $ (0.12) ------------ ------------ Weighted average of common stock outstanding- Basic 25,349,488 25,349,488 Weighted average of common stock outstanding- Diluted 25,349,488 25,349,488
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) 1. BASIS OF PRESENTATION The accompanying unaudited pro forma consolidated financial statements give effect to the pro forma adjustments necessary to reflect the disposition of the Power Electronics Division as if the disposition was effective for the periods presented in the pro forma statements of operations and as of April 30, 2007, in the pro forma consolidated balance sheet. The Company's historical amounts represent our consolidated balance sheet and statements of operations derived from our Annual report on Form 10-K for the years ended January 31, 2007, 2006 and 2005 and quarterly report on Form 10-Q for the period ended April 30, 2007. While the historical results of operations of the Power Electronics Division include general corporate allocations for certain functions historically provided by C&D Technologies, Inc. such as accounting, human resources, information systems and executive administrative costs, for the purposes of these pro forma financial statements no amounts for these general corporate expenses have been allocated in the pro forma adjustments and are included within the results of our continuing operating segments. Effective February 1, 2007, the Company has begun classifying certain costs, which were previously classified as cost of sales, as selling, general and administrative expenses. For comparative purposes, the years ended January 31, 2007, 2006 and 2005, have been revised to classify $7,506, $8,745 and $6,111, respectively, of such costs as selling, general and administrative expenses which were previously classified as cost of sales. The following table summarizes this revision. Years Ended --------------------------------------- January 31, January 31, January 31, 2007 2006 2005 --------------------------------------- Reclassfied amount $ 7,506 $ 8,745 $ 6,111 On of September 7, 2007, the Company changed the method of accounting for its inventory from the last-in, first-out ("LIFO") to the first-in, first-out ("FIFO") method. In accordance with Statement of Financial Accounting Standards No. 154, "Accounting Changes and Error Corrections", the Company has retrospectively applied this change in method of inventory costing to all prior periods. 2. PRO FORMA ADJUSTMENTS The unaudited pro forma consolidated statements of operations and balance sheet reflect the effect of the following pro forma adjustments: a) The proforma balance sheet has been prepared as if the sale occurred on April 30, 2007 and reflects the assignment of debt of $4,991 and the repayment of the Company's line of credit facility of $32,433, which are required to be repaid as a result of the sale. b) The elimination of assets and liabilities associated with the Power Electronics Division included in the Company's historical consolidated financials statements. c) Reduction of revenue and expenses are the result of the disposition of the Power Electronics division. Indirect expenses, such as corporate overheads, which previously were allocated to our Power Electronic division, are included within the results of our continuing operating segments. d) To reflect the interest expense associated with the Power Electronics Division. The Company is required to use a portion of the proceeds from the sale of the Power Electronics Division to repay a portion of its outstanding debt. In accordance with EITF No. 87-24, "Allocation of Interest to Discontinued Operations", interest of debt that is required to be repaid as a result of the disposal transaction has been allocated to the discontinued operations. e) To reflect the change in method of accounting for the Company's inventory. f) To reflect the estimated pro forma gain on the sale. The estimated pro forma gain is based on management's best estimate and is subject to change for final working capital adjustments in accordance with the sale agreement. g) To reflect the elimination of cumulative translation adjustment.