EX-99 5 ex99-2.txt EX. 99.2: PRO FORMA FINANCIAL INFORMATION Exhibit 99.2 GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET As of September 30, 2006
Discontinued Pro-Forma - Pro Forma As Reported Operations Adjustments Notes Adjusted ASSETS Current Assets: Cash and cash equivalents $ 64,150 $ - $ 23,934 ( a )$ 88,084 Restricted cash 2,295 - (934) ( b ) 1,361 Accounts receivable, net 51,884 (11,712) - 40,172 Current portion of long-term receivable 2,163 - - 2,163 Inventories, net 18,041 (8,616) - 9,425 Prepaid expenses and other current assets 18,764 (1,471) - 17,293 Assets related to discontinued operations - 30,319 (30,319) ( c ) - --------------- -------------- -------------- -------------- Total Current Assets 157,297 8,520 (7,319) 158,498 Restricted cash 22,248 - - 22,248 Property, plant and equipment, net 66,586 (8,520) - 58,066 Long-term receivable 6,754 - - 6,754 Goodwill 2,382 - - 2,382 Intangible assets 58,874 - - 58,874 Deferred income taxes 2,858 - - 2,858 Other assets 5,172 - - 5,172 --------------- -------------- -------------- -------------- TOTAL ASSETS $ 322,171 $ - $ (7,319) $ 314,852 =============== ============== ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 35,916 $ (3,167)$ - $ 32,749 Accrued and other liabilities 40,026 (4,882) - 35,144 Income taxes payable 8,411 - - 8,411 Deferred income taxes 233 - - 233 Deferred revenue 4,038 (4,038) - - Loans from employees 1,127 - - 1,127 Current portion of long-term debt 20,131 - - 20,131 Accrued liabilities, discontinued operations 108 12,262 (12,262) ( c ) 108 --------------- -------------- -------------- -------------- Total Current Liabilities 109,990 175 (12,262) 97,903 Other non-current liabilities 3,694 (175) - 3,519 Loans from employees 3,752 - - 3,752 Long-term debt 51,938 - - 51,938 Pension and other defined benefit obligations 34,042 - - 34,042 Deferred income taxes 9,805 - - 9,805 --------------- -------------- -------------- -------------- Total Liabilities 213,221 - (12,262) 200,959 Minority interest in subsidiary company 871 - - 871 Stockholders' Equity 108,079 - 4,943 113,022 --------------- -------------- -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 322,171 $ - $ (7,319) $ 314,852 =============== ============== ============== ==============
GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Nine months ended September 30, 2006 (In thousands, except per share amounts)
Less Discontinued Pro-Forma - Pro-Forma - As Reported Operations Adjustments Notes As Adjusted REVENUES: Product sales $ 199,801 $ (29,234) $ - $ 170,567 Service revenues 73,951 (15,816) - 58,135 ----------- ------------ ------------- ------------ Total Revenues 273,752 (45,050) - 228,702 ----------- ------------ ------------- ------------ COST of REVENUES : Cost of sales 157,566 (12,571) - 144,995 Cost of services 53,459 (8,744) - 44,715 ----------- ------------ ------------- ------------ Total Cost of Revenues 211,025 (21,315) - 189,710 ----------- ------------ ------------- ------------ GROSS MARGIN 62,727 (23,735) - 38,992 OPERATING EXPENSES: Selling, general and administrative expense 53,935 (19,394) 866 (d ) 35,407 Research and development expense 12,171 (12,171) - - Amortization of intangible assets 5,818 - - 5,818 ----------- ------------ ------------- ------------ Total Operating Expenses 71,924 (31,565) 866 41,225 ----------- ------------ ------------- ------------ OPERATING LOSS (9,197) 7,830 (866) (2,233) ----------- ------------ ------------- ------------ OTHER INCOME (EXPENSE): Interest income 3,151 (1,864) 1,864 (e) 3,151 Interest expense (4,541) (58) 58 (f) (4,541) Loss on currency swap, net (2,059) - - (2,059) Transaction gain, net 1,153 99 - 1,252 Other income (expense), net (88) (4) - (92) ----------- ------------ ------------- ------------ Total Other Expense (2,384) (1,827) 1,922 (2,289) ----------- ------------ ------------- ------------ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME (11,581) 6,003 1,056 (4,522) TAXES AND EXTRAORDINARY ITEM Provision for income taxes 2,625 (377) - 2,248 Minority interest (114) - - (114) LOSS FROM CONTINUING OPERATIONS BEFORE ----------- ------------ ------------- ------------ EXTRAORDINARY ITEM $ (14,092) $ 6,380 $ 1,056 $ (6,656) =========== ============ ============= ============ LOSS PER WEIGHTED AVERAGE COMMON SHARE: Loss from continuing operations $ (0.21) $ (0.10) LOSS PER COMMON SHARE --- ASSUMING DILUTION: Loss from continuing operations $ (0.21) $ (0.10)
GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Year ended December 31, 2005 (In thousands, except per share amounts)
Less Discontinued Pro-Forma - Pro-Forma - As Reported Operations Adjustments Notes As Adjusted REVENUES: Product sales $ 190,893 $ (53,055) $ - $ 137,838 Service revenues 76,925 (25,175) - 51,750 ----------- ------------ ------------ ------------ Total Revenues 267,818 (78,230) - 189,588 ----------- ------------ ------------ ------------ COST of REVENUES : Cost of sales 135,515 (20,672) - 114,843 Cost of services 48,921 (12,478) - 36,443 ----------- ------------ ------------ ------------ Total Cost of Revenues 184,436 (33,150) - 151,286 ----------- ------------ ------------ ------------ GROSS MARGIN 83,382 (45,080) - 38,302 OPERATING INCOME: Selling, general and administrative expense 52,350 (28,162) 3,273 (d ) 27,461 Research and development expense 14,102 (14,102) - - Amortization of intangible assets 3,729 - - 3,729 ----------- ------------ ------------ ------------ Total Operating Expenses 70,181 (42,264) 3,273 31,190 ----------- ------------ ------------ ------------ OPERATING INCOME 13,201 (2,816) (3,273) 7,112 ----------- ------------ ------------ ------------ OTHER INCOME (EXPENSE): Interest income 2,914 (2,156) 2,156 (e) 2,914 Interest expense (3,631) 6 (6) (f) (3,631) Gain on currency swap, net 789 - - 789 Transaction loss, net (1,914) 57 - (1,857) Other income (expense), net 100 (24) - 76 ----------- ------------ ------------ ------------ Total Other Expense (1,742) (2,117) 2,150 (1,709) ----------- ------------ ------------ ------------ INCOME FROM CONTINUING OPERATIONS BEFORE INCOME 11,459 (4,933) (1,123) 5,403 TAXES Provision for income taxes 3,761 (257) - 3,504 Minority interest 114 - - 114 ----------- ------------ ------------ ------------ INCOME FROM CONTINUING OPERATIONS $ 7,584 $ (4,676) $ (1,123) $ 1,785 =========== ============ ============ ============ INCOME PER WEIGHTED AVERAGE COMMON SHARE: Income from continuing operations $ 0.11 $ 0.03 INCOME PER COMMON SHARE --- ASSUMING DILUTION: Income from continuing operations $ 0.11 $ 0.03
GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Year ended December 31, 2004 (In thousands, except per share amounts)
Less Discontinued Pro-Forma - Pro-Forma - As Reported Operations Adjustments Notes As Adjusted REVENUES: Product sales $ 30,423 $ (30,423) $ $ - Service revenues 20,152 (20,152) - ----------- ------------ ------------ ------------ Total Revenues 50,575 (50,575) - - ----------- ------------ ------------ ------------ COST of REVENUES : Cost of sales 16,491 (16,491) - Cost of services 9,380 (9,380) - ----------- ------------ ------------ ------------ Total Cost of Revenues 25,871 (25,871) - - ----------- ------------ ------------ ------------ GROSS MARGIN 24,704 (24,704) - - OPERATING EXPENSES: Selling, general and administrative expense 20,577 (20,577) 5,252 (d ) 5,252 Research and development expense 13,396 (13,396) - - ----------- ------------ ------------ ------------ Total Operating Expenses 33,973 (33,973) 5,252 5,252 ----------- ------------ ------------ ------------ OPERATING LOSS (9,269) 9,269 (5,252) (5,252) ----------- ------------ ------------ ------------ OTHER INCOME (EXPENSE): Interest income 1,203 (1,203) 1,203 (e) 1,203 Interest expense (228) 228 (228) (f) (228) Other income (expense), net 99 (99) - - ----------- ------------ ------------ ------------ Total Other Income 1,074 (1,074) 975 975 ----------- ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME (8,195) 8,195 (4,277) (4,277) TAXES Benefit for income taxes (55) 55 - - ----------- ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS $ (8,140) $ 8,140 $ (4,277) $ (4,277) =========== ============ ============ ============ LOSS PER WEIGHTED AVERAGE COMMON SHARE: Loss from continuing operations $ (0.12) $ (0.06) LOSS PER COMMON SHARE --- ASSUMING DILUTION: Loss from continuing operations $ (0.12) $ (0.06)
GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Year ended December 31, 2003 (In thousands, except per share amounts)
Less Discontinued Pro-Forma - Pro-Forma - As Reported Operations Adjustments Notes As Adjusted REVENUES: Product sales $ 40,795 $ (40,795) $ $ - Service revenues 17,364 (17,364) - ----------- ------------ ------------ ------------ Total Revenues 58,159 (58,159) - - ----------- ------------ ------------ ------------ COST of REVENUES : Cost of sales 20,619 (20,619) - Cost of services 10,383 (10,383) - ----------- ------------ ------------ ------------ Total Cost of Revenues 31,002 (31,002) - - ----------- ------------ ------------ ------------ GROSS MARGIN 27,157 (27,157) - - OPERATING EXPENSES: Selling, general and administrative expense 24,922 (24,922) 4,853 (d ) 4,853 Research and development expense 18,187 (18,187) - ----------- ------------ ------------ ------------ Total Operating Expenses 43,109 (43,109) 4,853 4,853 ----------- ------------ ------------ ------------ OPERATING LOSS (15,952) 15,952 (4,853) (4,853) ----------- ------------ ------------ ------------ OTHER INCOME (EXPENSE): Interest income 1,489 (1,489) 1,489 (e) 1,489 Interest expense (61) 61 (61) (f) (61) Other income (expense), net 53 (53) - - ----------- ------------ ------------ ------------ Total Other Income 1,481 (1,481) 1,428 1,428 ----------- ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME (14,471) 14,471 (3,425) (3,425) TAXES Provision for income taxes 27 (27) - - ----------- ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE $ (14,498) $ 14,498 $ (3,425) $ (3,425) =========== ============ ============ ============ LOSS PER WEIGHTED AVERAGE COMMON SHARE: Loss from continuing operations $ (0.22) $ (0.05) LOSS PER COMMON SHARE --- ASSUMING DILUTION: Loss from continuing operations $ (0.22) $ (0.05)
GLENAYRE TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The pro forma adjustments related to the unaudited pro forma condensed consoldiated balance sheet as of September 30, 2006 assume the disposition took place on September 30, 2006 and are as follows: ( a ) Represents estimated total cash proceeds of $25 million from the sale of the Messaging business net of approximately $2 million of transaction costs and the release of $934,000 of restricted cash. These amounts do not reflect any adjustments based on net working capital as of the closing. ( b ) Represents the release of $934,000 of restricted cash as disclosed in item ( a ). ( c ) Represents the elimination of the assets and liabilities of the Messaging business. The pro forma adjustments related to the unaudited pro forma condensed statements of operations for the nine months ended September 30, 2006 and for the years ended December 31, 2005, 2004 and 2003 assume the disposition took place on January 1, 2003 and are as follows: ( d ) Represents an adjustment to add back allocated corporate overhead costs. Approximately 20% of the Company's corporate overhead costs were allocated to the Messaging business subsequent to the acquisition of Universal Music Group's U.S. and central European manufacturing and distribution operations on June 1, 2005 by the Company's EDC division. Prior to the EDC acquisition all corporate overhead was allocated to the Messaging business. ( e ) Represents adjustments to add back interest income on cash and short-term investments held at the corporate level. ( f ) Represents adjustments to add back interest expense on various obligations at the corporate level.