Delaware | 000-23441 | 94-3065014 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
Exhibit No. | Description | ||
2.1 | Share Purchase Agreement, dated as of March 30, 2012, by and among Power Integrations Netherlands B.V., Power Integrations Limited and Heinz Rüedi.* | ||
23.1 | Consent of Independent Auditors | ||
99.1 | Concept Group Consolidated Financial Statements as of and for the year ended December 31, 2011. | ||
99.2 | Pro Forma Financial Information as of and for the year ended December 31, 2011. | ||
Power Integrations, Inc. | |||||
By: | /s/ Sandeep Nayyar | ||||
Name: | Sandeep Nayyar | ||||
Title: | Chief Financial Officer | ||||
Exhibit No. | Description | ||
2.1 | Share Purchase Agreement, dated as of March 30, 2012, by and among Power Integrations Netherlands B.V., Power Integrations Limited and Heinz Rüedi.* | ||
23.1 | Consent of Independent Auditors | ||
99.1 | Concept Group Consolidated Financial Statements as of and for the year ended December 31, 2011. | ||
99.2 | Pro Forma Financial Information as of and for the year ended December 31, 2011. |
Exhibit 23.1 |
Deloitte AG | ||||
/s/ Bernd Pietrus | /s/Alain Wenger | |||
Bernd Pietrus | Alain Wenger | |||
Licensed Audit Expert | Licensed Audit Expert | |||
Auditor in Charge | ||||
Zürich, July 16, 2012 | ||||
BPI/AWE |
Exhibit 99.1 |
Deloitte AG | ||||
/s/ Bernd Pietrus | /s/Alain Wenger | |||
Bernd Pietrus | Alain Wenger | |||
Licensed Audit Expert | Licensed Audit Expert | |||
Auditor in Charge | ||||
Zürich, July 9, 2012 | ||||
BPI/AWE/dem |
Year Ended | ||||||
Note | December 31, 2011 | |||||
Net revenues | 28,747,664 | 100.0 | % | |||
Change in inventory | (366,841 | ) | ||||
Cost of revenues | (10,147,432 | ) | ||||
Gross Profit | 18,233,391 | 63.4 | % | |||
Personnel expenses | (5,787,054 | ) | ||||
Rent expenses | (86,459 | ) | ||||
Car expenses | (164,235 | ) | ||||
Maintenance | (136,042 | ) | ||||
Insurances and charges | (71,713 | ) | ||||
Energy water auxiliary material | (38,968 | ) | ||||
Office and administration | (761,726 | ) | ||||
Marketing | (590,323 | ) | ||||
Different operating expenses | (2,978 | ) | ||||
Total Operating Expenses | (7,639,498 | ) | (26.6 | )% | ||
Earnings before depreciation, interest and taxes | 10,593,893 | 36.9 | % | |||
Depreciation | 3) | (380,037 | ) | |||
Earnings Before Interest and Taxes | 10,213,856 | 35.5 | % | |||
Financial expenses | 6) | (964,421 | ) | |||
Financial income | 6) | 109,850 | ||||
Other expenses | 7) | (215,724 | ) | |||
Other income | 7) | 126,417 | ||||
Pretax Profit | 9,269,978 | 32.2 | % | |||
Taxes | 8) | (1,777,800 | ) | |||
Net Income | 7,492,178 | 26.1 | % |
Year Ended | ||||||
Note | December 31, 2011 | |||||
Assets | ||||||
Cash and cash equivalents | 9) | 5,953,630 | ||||
Accounts receivable | 10) | 2,689,504 | ||||
Allowance for doubtful accounts | (50,000 | ) | ||||
Other receivables | 11) | 1,694,243 | ||||
Inventories | 12) | 6,138,016 | ||||
Prepaid expenses | 13) | 1,424,919 | ||||
Total current assets | 17,850,312 | 70.3 | % | |||
Current account shareholder | 18) | 1,946,021 | ||||
Loan, third parties | 18) | 171,362 | ||||
Tangible assets | 14) | 5,437,277 | ||||
Total non-current assets | 7,554,660 | 29.7 | % | |||
Total assets | 25,404,972 | 100.0 | % | |||
Liabilities and shareholders' equity | ||||||
Accounts payable | 711,776 | |||||
Other payables | 1,426,403 | |||||
Provision for vacation | 90,400 | |||||
Accrued expenses | 15) | 559,149 | ||||
Total current liabilities | 2,787,728 | |||||
Long-term provisions | 16) | 1,010,444 | ||||
Deferred tax liabilities | 2,371,547 | |||||
Total liabilities | 6,169,719 | 24.3 | % | |||
Share capital | 100,000 | |||||
Legal reserves | 17) | 100,000 | ||||
Retained earnings | 17) | 11,543,075 | ||||
Consolidated net income | 7,492,178 | |||||
Total equity | 19,235,253 | 75.7 | % | |||
Total liabilities and shareholders' equity | 25,404,972 | 100.0 | % |
Note | Share Capital | Legal Reserves | Retained Earnings | Total Equity | |||||||||
Balance at December 31, 2010 | 17) | 100,000 | 100,000 | 14,843,075 | 15,043,075 | ||||||||
Dividend payment | 17) | — | — | (3,300,000 | ) | (3,300,000 | ) | ||||||
Consolidated net income | 17) | — | — | 7,492,178 | 7,492,178 | ||||||||
Balance at December 31, 2011 | 17) | 100,000 | 100,000 | 19,035,253 | 19,235,253 |
Year Ended | ||||
Note | December 31, 2011 | |||
Consolidated net income | 7,492,178 | |||
Depreciation and amortization | 14) | 380,037 | ||
Depreciation and amortization (non operating assets) | — | |||
Gains (-) / losses (+) on sale of non-current assets | 19,884 | |||
Changes in provisions | 15) | (1,466,094 | ) | |
Cash flow from operating activities before changes in net working capital | 6,426,005 | |||
Movement in accounts receivable | (909,903 | ) | ||
Movement in inventories | (366,301 | ) | ||
Movement in other receivables and prepaid expenses | (440,208 | ) | ||
Movement in accounts payable | (382,473 | ) | ||
Movement in other current liabilities and accrued expenses | (581,360 | ) | ||
Cash flow from operating activities | 3,745,760 | |||
Investments in tangible assets | 14) | (453,058 | ) | |
Divestments of tangible assets | 48,889 | |||
Investments in real estate non-operating | (543,080 | ) | ||
Increase of loans granted to others | (47,125 | ) | ||
Cash flow from investing activities | (994,374 | ) | ||
Increase (+) / repayment (-) of loans to shareholders | (641,780 | ) | ||
Dividend distribution to shareholders | (3,300,000 | ) | ||
Cash flow from financing activities | (3,941,780 | ) | ||
Net cash flow | (1,190,394 | ) | ||
Increase (+) / decrease (-) of cash and cash equivalents | (1,190,394 | ) | ||
Cash and cash equivalents at beginning of period | 7,144,024 | |||
Cash and cash equivalents at end of period | 5,953,630 |
Notes to the consolidated financial statements |
• | The consolidated financial statements cover the period from January 1 to December 31 the balance sheet date therefore is December 31. |
• | For CT-Concept Technologie AG and Concept Beteiligunen AG, this period corresponds to their fiscal year. For the CT-Concept Holding AG, with its fiscal year end June 30, interim financial statements from January 1 to December 31 were prepared. |
• | No third party minority interests in these companies exists. The 10% holding in CT-Concept Holding AG of the sole shareholder is not treated as minority interests, as all group companies are wholly owned by Heinz Rüedi. |
• | The capital consolidation is carried out in accordance with Swiss GAAP FER 30 and based on the purchase method. This means that the equity of subsidiaries as of the time of acquisition is offset against the purchase price or as of date of foundation offset against the carrying amount of the investment in the parent organization. |
• | Since the current Concept Group structure results from 'internal' restructuring (mainly due to tax reasons), the consolidation reserves from the first consolidation in prior year (January 1, 2010) were fully reported as retained earnings (except for paid-in share capital), which reflects the actual circumstances. |
• | Intercompany balances and transactions, as well as gains arising from such transactions, are eliminated in full. |
• | Foreign currency assets and liabilities are translated into Swiss Francs at the exchange rate prevailing on the balance sheet date (€ 1.21605 / $ 0.92271). Foreign currency transactions are translated into local currency using the fixed exchange rate prevailing on the date of transaction. The fixed exchange rate is adjusted periodically. Foreign exchange gains and losses resulting from the settlement of such transactions and from translations at year-end are recognized in the statement of income. |
• | In accordance with Swiss GAAP FER 2, valuation principles are either historical cost, production cost or present value. Within the individual balance sheet items, valuation principles are applied consistently. Necessary depreciation and valuation adjustments are systematically identified and recorded. |
• | Receivables are carried at nominal value. The foreign currencies are converted into Swiss francs at the exchange rates prevailing on the balance sheet date. |
• | The creditworthiness of receivables and the payment behavior of customers are considered as very good. There is no history of material accounts receivable write-offs. Therefore, the allowance for doubtful debts is established relatively low with CHF 50,000. |
• | Inventory is stated at the lower of cost or market. The extensive hidden reserves on inventory in the statutory financial statements have been dissolved. |
• | In prior years an allowance of 2.5% was made for discard, obsolete items and general storage risks. A revised procurement policy, combined with generally declining world market supplier prices in electronics and falling exchange rates have led to an increase of the lump-sum allowance from 2.5% in the preceding 3 years to 5% (2008), 10% (2009), 15% (2010). As of December 31, 2011 the lump-sum allowance has been lowered to 5% based on detailed assessment principles as well as lower market values and the current exchange rates. |
• | Operating property is valued at historical cost and depreciated linear over their estimated useful life. |
• | Location: Johann-Renfer-Strasse 15, Biel |
acquisition / construction costs 1999 – 2001 | CHF 920,000 | |
estimated construction period | 1986 | |
estimated useful life | 40 years | |
annual depreciation | CHF 23,000 | |
residual value | CHF 633,313 |
• | The non-operating real estate includes land and accumulated development- and construction costs. They are valued at historical cost and not depreciated. |
• | Tangible assets are measured at historical cost and depreciated linear over their estimated useful lives. |
Leasehold improvements | linear depreciation / amortization within | 15 years | ||
Measuring and production machinery | linear depreciation / amortization within | 10 - 12 years | ||
Tools, production equipment | linear depreciation / amortization within | 3 years | ||
Office furniture | linear depreciation / amortization within | 15 years | ||
Computer equipment, software | linear depreciation / amortization within | 4 years | ||
Vehicles | linear depreciation / amortization within | 5 years |
• | Provisions are recognized only if Concept Group has a present obligation to a third party as a result of a past event. Further it needs to be probable that an outflow of resources will be required to settle the obligation and the obligation can be reliably estimated. |
• | In February 2011 the Concept Group obtained the final tax invoices for the years 2008 to 2010. The amount due is presented as a current liability in the balance sheet. |
• | Deferred income taxes are recognized on the differences between the carrying amounts of assets in the Swiss GAAP FER financial statements and the corresponding tax bases. Deferred tax liabilities are generally recognized for all taxable temporary differences and are calculated at the full tax rate (25.0%). |
• | Net revenues comprise the sales of products. Revenue is recognized if it is probable that the economic benefits will accrue to the Group and the amount can be estimated reliably. Revenue is recognized upon transfer of the risks and rewards of ownership of the goods to the customer. |
• | The Company sponsors a defined benefit pension plan in accordance with the legal requirements of Switzerland. The plan assets are held in legally autonomous trustee-administered funds that are subject to Swiss law and provides benefits in the event of retirement, death or disability. Benefits are based on age, years of service and salary. The plan is financed by contributions by both the employee and the Company. The Company's contributions to the pension plan are charged to the consolidated statement of income in the year to which they relate. As of December 31, 2011, the pension fund reported a coverage rate of 100%. The pension fund is a fully insured solution that provides insurance protection to ensure the plan assets equal the plan obligations. |
• | Forward exchange contracts and options are used to hedge against some currency risks arising from business operations. Hedge transactions, like the underlying transactions, are shown at market value and changes in the market value are recognized in the statement of income. There were no forward exchange contracts outstanding as of December 31, 2011. |
• | Revenues are generated principally from the industrial market. |
• | The following table represents revenues by geographic region for the year ended December 31, 2011. |
Geographic Region | Revenue (in CHF) | ||
China | 15,127,192 | ||
US | 4,868,500 | ||
EMEA | 8,424,227 | ||
APAC | 327,745 | ||
Total revenue | 28,747,664 |
• | Depreciation is based on the accounting principles disclosed in Note 3e) and were applied consistent to the prior year. |
• | Financial expenses include bank charges, exchange rate differences on cash accounts and current accounts to shareholder as well as loan interests to shareholder. |
• | Financial income mainly consists of interests payments obtained from the shareholder. Furthermore, the financial income includes interest income on bank accounts and loans from third parties. |
Other expenses / Income Item | Expenses | Income | |||
(in CHF) | |||||
Taxes from previous years (difference to received final tax bills 2008 - 2010) | 47,541 | — | |||
Jefferies Project Canton | 117,400 | — | |||
Loss on sale of a vehicle | 19,884 | — | |||
Inventory impairment due to water damage in Thailand | 30,000 | — | |||
Miscellaneous items (from previous years) | 899 | 73,017 | |||
Change in warranty provision | — | 53,400 | |||
215,724 | 126,417 |
(in CHF) | ||
Income taxes for the fiscal year | 1,864,338 | |
Change in deferred tax provision | (86,538 | ) |
Total Taxes | 1,777,800 |
• | Cash and cash equivalents include almost exclusively balances with banks. |
December 31, | |||
2011 | |||
Receivables in CHF | CHF | 31,228 | |
Receivables in Euro | Euro | 466,438 | |
Receivables in USD | $ | 2,266,290 |
At December 31, | |||
Material items: | 2011 (in CHF) | ||
Federal Tax Authorities | |||
(VAT-receivable for the 4th quarter 2011) | 255,067 | ||
Employer contribution reserve (Sammelstiftung Swiss Life) | |||
(at nominal value / limited intended use) | 337,208 | ||
Advanced payment to supplier CCS AG, Lyss | 1,099,693 | ||
Other | 2,275 | ||
Total | 1,694,243 |
At December 31, | |||
2011 (in CHF) | |||
Raw materials | 891,830 | ||
Work in process | 4,364,345 | ||
Finished goods | 881,841 | ||
Total | 6,138,016 |
Tangible assets schedule | Leasehold improvements | Measuring instruments Machines Furniture | Computer Equipment | Vehicles | Total | ||||||||||
(in CHF) | |||||||||||||||
At Cost | |||||||||||||||
Opening balance January 1, 2011 | 245,470 | 1,485,004 | 1,578,416 | 1,096,631 | 4,405,521 | ||||||||||
Additions | 13,647 | 312,521 | 50,458 | 76,432 | 453,058 | ||||||||||
Disposals | — | — | — | (68,773 | ) | (68,773 | ) | ||||||||
Closing balance December 31, 2011 | 259,117 | 1,797,525 | 1,628,874 | 1,104,290 | 4,789,806 | ||||||||||
Accumulated Depreciation | |||||||||||||||
Opening balance January 1, 2011 | (127,791 | ) | (539,092 | ) | (1,262,997 | ) | (949,307 | ) | (2,879,187 | ) | |||||
Disposals | — | — | — | 68,773 | 68,773 | ||||||||||
Depreciation | (16,820 | ) | (143,565 | ) | (125,375 | ) | (71,277 | ) | (357,037 | ) | |||||
Closing balance December 31, 2011 | (144,611 | ) | (682,657 | ) | (1,388,372 | ) | (951,811 | ) | (3,167,451 | ) | |||||
Net Book Value | |||||||||||||||
Balance December 31, 2011 | 114,506 | 1,114,868 | 240,502 | 152,479 | 1,622,355 |
Real estate schedule | Real estate - operating Renferstr.15 | Construction in Progress | Land | Total | ||||||||
(in CHF) | ||||||||||||
At Cost | ||||||||||||
Opening balance January 1, 2011 | 920,000 | 408,356 | 2,230,173 | 3,558,529 | ||||||||
Additions | — | 542,463 | 617 | 543,080 | ||||||||
Disposals | — | — | — | — | ||||||||
Closing balance December 31, 2011 | 920,000 | 950,819 | 2,230,790 | 4,101,609 | ||||||||
Accumulated Depreciation | ||||||||||||
Opening balance January 1, 2011 | (263,687 | ) | — | — | (263,687 | ) | ||||||
Disposals | — | — | — | — | ||||||||
Depreciation | (23,000 | ) | — | — | (23,000 | ) | ||||||
Closing balance December 31, 2011 | (286,687 | ) | — | — | (286,687 | ) | ||||||
Net Book Value | ||||||||||||
Closing balance December 31, 2011 | 633,313 | 950,819 | 2,230,790 | 3,814,922 |
December 31, 2011 | |||
Fire insurance values | (in CHF) | ||
Real estate (without construction insurance) | 1,552,000 | ||
Tangible assets, inventories, electronic equipment | 7,550,000 |
Long-Term Provisions as of December 31, 2011 (in CHF) | ||||||||
Other Liabilities | Income Tax 2011 | Total | ||||||
Opening balance at January 1, 2011 | 100,000 | — | 100,000 | |||||
Additions | — | 963,844 | 963,844 | |||||
Reduction | (39,300 | ) | — | (39,300 | ) | |||
Fulfilled during year 2011 | (14,100 | ) | — | (14,100 | ) | |||
Closing balance December 31, 2011 | 46,600 | 963,844 | 1,010,444 |
As of December 31, 2011 | |||
Transaction | (in CHF) | ||
Current account due from shareholder | 1,946,021 | ||
Total current account shareholder | 1,946,021 | ||
Loan to M. Hornkamp | 69,587 | ||
Loan to EJ-Premium Cars | 101,775 | ||
Total loan to third parties | 171,362 | ||
Receivable Smart Building Systems AG | 17,665 | ||
Total amount due from related parties | 2,135,048 |
Off-balance sheet lease commitments, payable | As of December 31, 2011 (in CHF) | ||
not later than 1 year | 124,980 | ||
later than 1 year but not later than 2 years | 86,233 | ||
later than 2 years but not later than 3 years | 9,677 | ||
later than 3 years | — | ||
Total off-balance sheet lease commitments | 220,890 |
As of December 31, 2011 (in CHF) | |||
Contingent liabilities | |||
Retention bonus in favor of employees | 963,000 | ||
Assets pledged as security for liabilities | — | ||
Liability toward pension fund | — | ||
Risk assessment by the Board of Directors | |||
The Board of Directors has analyzed and assessed the risk of the Group and - where necessary - initiated the appropriate measures. |
Reconciliation of consolidated statement of income | |||
Year Ended December 31, 2011 (in CHF) | |||
Swiss GAAP FER - Net income | 7,492,178 | ||
Incremental pension related expense | (30,627 | ) | |
Tax effect of above adjustments | 7,657 | ||
U.S. GAAP - Net (loss) earnings | 7,469,208 |
Reconciliation of total shareholders' equity | |||
Year Ended December 31, 2011 (in CHF) | |||
Swiss GAAP FER | 19,235,253 | ||
Adjustments: | |||
Unfunded pension obligation | (769,299 | ) | |
Tax effect of unfunded pension obligation | 192,325 | ||
U.S. GAAP | 18,658,279 |
Year Ended December 31, 2011 | |||||
Investment | (in CHF) | ||||
Semiconductor system FINN | Konrad GmbH | 156,000 | |||
Vehicle Shenzen representative office | China | 31,525 | |||
BMW 330d | EJ Premium Cars GmbH | 44,908 | |||
Non-operating real estate (development and construction cost) | Miscellaneous | 543,079 |
• | The consolidated statements of cash flow show the changes in cash and cash equivalents. The statements of cash flow for the year ended December 31, 2011 shows a negative cash flow of CHF 1,190,394. |
• | The cash flow from operating activities shows that CHF 6,426,005 have been generated, whereas CHF 2,680,245 are committed in current assets (primarily receivables and inventories). |
• | The cash flow from investing activities shows investments of CHF 994,374 in assets and non-operating properties during the financial year. |
• | The cash flow from financing activities shows that CHF 3,941,780 have been distributed as dividends and loan increases to the shareholders. |
Exhibit 99.2 |
As of December 31, 2011 | |||||||||||||||
Power Integrations | Concept | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||
ASSETS | |||||||||||||||
CURRENT ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 139,836 | $ | 6,336 | $ | (124,957 | ) | (a) | $ | 21,215 | |||||
Short-term marketable securities | 40,899 | — | — | 40,899 | |||||||||||
Accounts receivable, net | 9,396 | 2,809 | — | 12,205 | |||||||||||
Inventories | 52,010 | 6,533 | 4,044 | (b) | 62,587 | ||||||||||
Deferred tax assets | 892 | — | — | 892 | |||||||||||
Prepaid expenses and other current assets | 7,068 | 2,961 | — | 10,029 | |||||||||||
Total current assets | 250,101 | 18,639 | (120,913 | ) | 147,827 | ||||||||||
LONG-TERM MARKETABLE SECURITIES | 32,041 | — | — | 32,041 | |||||||||||
PROPERTY AND EQUIPMENT, net | 88,241 | 5,787 | (3,443 | ) | (c) | 90,585 | |||||||||
989 | (b) | 989 | |||||||||||||
INTANGIBLE ASSETS, net | 8,852 | — | 44,050 | (d) | 52,902 | ||||||||||
GOODWILL | 14,786 | — | 66,420 | (d) | 81,206 | ||||||||||
DEFERRED TAX ASSETS | 12,387 | — | — | 12,387 | |||||||||||
OTHER ASSETS | 26,511 | 2,253 | (2,253 | ) | (c) | 26,511 | |||||||||
Total assets | $ | 432,919 | $ | 26,679 | $ | (15,150 | ) | $ | 444,448 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||
Accounts payable | $ | 16,532 | $ | 758 | $ | — | $ | 17,290 | |||||||
Accrued payroll and related expenses | 5,911 | 97 | — | 6,008 | |||||||||||
Deferred income on sales to distributors | 7,883 | — | — | 7,883 | |||||||||||
Deferred tax liabilities | — | — | 1,011 | (e) | 1,011 | ||||||||||
Other accrued liabilities | 2,305 | 2,113 | — | 4,418 | |||||||||||
Total current liabilities | 32,631 | 2,968 | 1,011 | 36,610 | |||||||||||
LONG-TERM INCOME TAXES PAYABLE | 34,368 | 1,026 | — | 35,394 | |||||||||||
DEFERRED TAX LIABILITIES | — | 2,319 | 3,696 | (e) | 6,015 | ||||||||||
OTHER LIABILITIES | — | 509 | — | 509 | |||||||||||
Total liabilities | 66,999 | 6,822 | 4,707 | 78,528 | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||
Common stock | 28 | 106 | (106 | ) | (f) | 28 | |||||||||
Additional paid-in capital | 158,646 | — | — | 158,646 | |||||||||||
Accumulated other comprehensive income / (loss) | 50 | (614 | ) | 614 | (f) | 50 | |||||||||
Retained earnings | 207,196 | 20,365 | (20,365 | ) | (f) | 207,196 | |||||||||
Total stockholders’ equity | 365,920 | 19,857 | (19,857 | ) | 365,920 | ||||||||||
Total liabilities and stockholders’ equity | $ | 432,919 | $ | 26,679 | $ | (15,150 | ) | $ | 444,448 |
For the Year Ended December 31, 2011 | |||||||||||||||
Power | Pro Forma | Pro Forma | |||||||||||||
Integrations | Concept | Adjustments | Combined | ||||||||||||
NET REVENUES | $ | 298,739 | $ | 32,690 | $ | — | $ | 331,429 | |||||||
COST OF REVENUES | 158,093 | 14,266 | 2,240 | (g) | 174,599 | ||||||||||
4,044 | (g) | 4,044 | |||||||||||||
GROSS PROFIT | 140,646 | 18,424 | (6,284 | ) | 152,786 | ||||||||||
OPERATING EXPENSES: | |||||||||||||||
Research and development | 40,295 | 1,666 | — | 41,961 | |||||||||||
Sales and marketing | 32,624 | 1,930 | 4,373 | (g) | 38,927 | ||||||||||
General and administrative | 24,508 | 3,018 | (414 | ) | (h) | 27,112 | |||||||||
Total operating expenses | 97,427 | 6,614 | 3,959 | 108,000 | |||||||||||
INCOME FROM OPERATIONS | 43,219 | 11,810 | (10,243 | ) | 44,786 | ||||||||||
OTHER INCOME | |||||||||||||||
Other income (expense), net | 1,876 | (1,510 | ) | — | 366 | ||||||||||
Total other income (expense) | 1,876 | (1,510 | ) | — | 366 | ||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 45,095 | 10,300 | (10,243 | ) | 45,152 | ||||||||||
PROVISION FOR INCOME TAXES | 10,804 | 2,040 | (2,561 | ) | (i) | 10,283 | |||||||||
NET INCOME | $ | 34,291 | $ | 8,260 | $ | (7,682 | ) | $ | 34,869 | ||||||
EARNINGS PER SHARE: | |||||||||||||||
Basic | $ | 1.20 | $ | 1.22 | |||||||||||
Diluted | $ | 1.14 | $ | 1.16 | |||||||||||
SHARES USED IN PER SHARE CALCULATION: | |||||||||||||||
Basic | 28,609 | 28,609 | |||||||||||||
Diluted | 29,964 | 29,964 |
Total Amount | ||||||
Assets Acquired | (in thousands) | |||||
Cash | $ | 12,033 | ||||
Accounts receivable | 2,809 | |||||
Inventories | 10,577 | |||||
Prepaid expenses and other current assets | 2,961 | |||||
Property and equipment, net | 3,333 | |||||
Intangible assets: | ||||||
Developed technology | 23,750 | |||||
Tradename | 3,600 | |||||
Customer relationships | 16,700 | |||||
Goodwill | 66,420 | |||||
Total assets acquired | 142,183 | |||||
Liabilities assumed | ||||||
Accounts payable | 758 | |||||
Accrued payroll and related expenses | 97 | |||||
Other accrued liabilities | 2,113 | |||||
Long term taxes payable | 1,026 | |||||
Deferred tax liabilities | 7,027 | |||||
Other liabilities | 509 | |||||
Total liabilities assumed | 11,530 | |||||
Total purchase price | $ | 130,653 |
Fair Value Amount | Estimated Useful Life | Pro Forma First Year Amortization | ||||||||
(in thousands) | (in years) | (in thousands) | ||||||||
Developed technology | $ | 23,750 | 4 -12 | $ | 2,240 | |||||
Tradename | 3,600 | 2 | 1,800 | |||||||
Customer relationships | 16,700 | 10 | 2,573 | |||||||
Total Concept intangibles | $ | 44,050 | $ | 6,613 |
CONSOLIDATED BALANCE SHEET (presented in accordance with US GAAP, in thousands) | ||||||
Concept | ||||||
As of December 31, 2011 | ||||||
In Swiss Francs | In US Dollars | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 5,954 | $ | 6,336 | |||
Accounts receivable, net | 2,640 | 2,809 | ||||
Inventories | 6,138 | 6,533 | ||||
Prepaid expenses and other current assets | 2,782 | 2,961 | ||||
Total current assets | 17,514 | 18,639 | ||||
PROPERTY AND EQUIPMENT, net | 5,437 | 5,787 | ||||
OTHER ASSETS | 2,117 | 2,253 | ||||
Total assets | 25,068 | $ | 26,679 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Accounts payable | 712 | $ | 758 | |||
Accrued payroll and related expenses | 90 | 97 | ||||
Other accrued liabilities | 1,986 | 2,113 | ||||
Total current liabilities | 2,788 | 2,968 | ||||
LONG-TERM INCOME TAXES PAYABLE | 964 | 1,026 | ||||
DEFERRED TAX LIABILITIES | 2,179 | 2,319 | ||||
OTHER LIABILITIES | 479 | 509 | ||||
Total liabilities | 6,410 | 6,822 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||
STOCKHOLDERS’ EQUITY: | ||||||
Common stock | 100 | 106 | ||||
Accumulated other comprehensive loss | (577 | ) | (614 | ) | ||
Retained earnings | 19,135 | 20,365 | ||||
Total stockholders’ equity | 18,658 | 19,857 | ||||
Total liabilities and stockholders’ equity | 25,068 | $ | 26,679 |
CONSOLIDATED STATEMENT OF INCOME (presented in accordance with US GAAP, in thousands) | ||||||
Concept | ||||||
For the Year Ended December 31, 2011 | ||||||
In Swiss Francs | In US Dollars | |||||
NET REVENUES | 29,023 | $ | 32,690 | |||
COST OF REVENUES | 12,674 | 14,266 | ||||
GROSS PROFIT | 16,349 | 18,424 | ||||
OPERATING EXPENSES: | ||||||
Research and development | 1,475 | 1,666 | ||||
Sales and marketing | 1,720 | 1,930 | ||||
General and administrative | 2,669 | 3,018 | ||||
Total operating expenses | 5,864 | 6,614 | ||||
INCOME FROM OPERATIONS | 10,485 | 11,810 | ||||
OTHER INCOME | ||||||
Other income / (expense), net | (1,246 | ) | (1,510 | ) | ||
Total other income (expense) | (1,246 | ) | (1,510 | ) | ||
INCOME BEFORE PROVISION FOR INCOME TAXES | 9,239 | 10,300 | ||||
PROVISION FOR INCOME TAXES | 1,770 | 2,040 | ||||
NET INCOME | 7,469 | $ | 8,260 |
a) | To record the $130.7 million total cash used to fund the acquisition of Concept, including cash assumed, less $5.7 million withheld to settle shareholder obligations, per the Purchase Agreement. |
b) | To reflect the estimated fair value of inventory and property plant and equipment acquired at December 31, 2011. |
c) | To adjust for the related assets of Concept not acquired by the Company as per the Purchase Agreement. |
d) | To record the estimated fair value of identifiable intangible assets and goodwill from the acquisition of Concept. |
e) | To record long-term and short-term deferred tax liabilities for intangible assets acquired and an inventory and property plant and equipment markup. |
f) | To eliminate the historical stockholders' equity of Concept. |
g) | To record amortization of the fair value of identifiable intangible assets and additional cost of revenues related to the inventory markup from the acquisition of Concept. |
h) | To record the elimination of previously recorded non-recurring acquisition related costs for the year ended December 31, 2011. |
i) | To record the tax effect of the pro forma adjustments (g) and (h) calculated at the statutory rate of 25%. |