EX-99 4 ex99-2.txt EXHIBIT 99.2 - UNAUDITED PRO FORMA STATEMENTS EXHIBIT 99.2 ------------ ----------------------------------------------------- PARAGON TECHNOLOGIES, INC. ----------------------------------------------------- UNAUDITED PRO FORMA FINANCIAL STATEMENTS AS OF MARCH 31, 2005 PARAGON TECHNOLOGIES, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (IN THOUSANDS)
Historical Consolidated Pro Forma Pro Forma 3/31/2005 Adjustments Consolidated ------------ ----------- ------------ Assets ------ Current assets: Cash and cash equivalents $ 4,118 19,515 (A) 23,633 Receivables 5,862 (4,330) (B) 1,532 Costs and estimated earnings in excess of billings 1,040 (583) (B) 457 Inventories 1,627 (1,207) (B) 420 Deferred income tax benefits 897 (291) (B) 606 Prepaid expenses and other current assets 589 (346) (B) 243 ------------------------------------ -------------------- Total current assets 14,133 12,758 26,891 ------------------------------------ -------------------- Property, plant and equipment, at cost 3,949 (2,906) (B) 1,043 Less: accumulated depreciation 2,677 (1,834) (B) 843 ------------------------------------ -------------------- Net property, plant and equipment 1,272 (1,072) (B) 200 ------------------------------------ -------------------- Deferred income tax benefits - 258 (C) 258 Goodwill 17,657 (17,657) (B) - Other assets 10 10 ------------------------------------ -------------------- Total assets $33,072 (5,713) 27,359 ==================================== ====================
PARAGON TECHNOLOGIES, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (IN THOUSANDS)
Historical Consolidated Pro Forma Pro Forma 3/31/2005 Adjustments Consolidated ------------ ----------- ------------ Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable $ 2,535 (1,331) (B) 1,204 Customers' deposits and billings in excess of costs and estimated earnings 2,256 (1,141) (B) 1,115 Accrued salaries, wages, and commissions 411 (262) (B) 149 Income taxes payable 44 44 Accrued product warranty 595 (187) (B) 408 Deferred gain on sale-leaseback 165 165 Accrued other liabilities 981 (1) (B) 980 ------------------------------------ -------------------- Total current liabilities 6,987 (2,922) 4,065 ------------------------------------ -------------------- Long-term liabilities: Deferred gain on sale-leaseback 316 316 Deferred income taxes payable 2,253 (2,253) (B)(C) - ------------------------------------ -------------------- Total long-term liabilities 2,569 (2,253) 316 ------------------------------------ -------------------- Stockholders' equity: Common stock 4,267 4,267 Additional paid-in capital 8,008 8,008 Retained earnings 11,241 (538) (D) 10,703 ------------------------------------ -------------------- Total stockholders' equity 23,516 (538) 22,978 ------------------------------------ -------------------- Total liabilities and stockholders' equity $33,072 (5,713) 27,359 ==================================== ==================== NOTES: (A) To reflect the estimated net cash proceeds of approximately $23,055,000 (subject to working capital adjustments) less approximately $900,000 in professional fees and transaction expenses and $2,000,000 in estimated income taxes associated with the sale of certain assets and liabilities of Ermanco. (B) To reflect the sale of certain assets and liabilities of Ermanco. (C) To reclass long-term deferred income tax benefits of $258,000 from long-term deferred income taxes payable. (D) To reflect the estimated after-tax loss for financial statement purposes on the sale of certain assets and liabilities of Ermanco. Due to the fact that there is a final working capital adjustment, the final gain or loss on the transaction has not yet been determined.
PARAGON TECHNOLOGIES, INC. SELECTED UNAUDITED PRO FORMA FINANCIAL DATA The following selected unaudited pro forma consolidated statements of operations data gives effect to the sale of certain assets and liabilities of Ermanco as if the transaction occurred at the beginning of the 2004 fiscal year and at the beginning of the 2005 fiscal year. The pro forma data presented below should be read in conjunction with the Company's financial statements previously filed with the U.S. Securities and Exchange Commission and pro forma consolidated financial information and accompanying assumptions previously included elsewhere herein. Such data is not necessarily indicative of the results of operations that would have been achieved had the transaction described above occurred on the date indicated or that may be expected to occur in the future as a result of such transaction.
Paragon Technologies, Inc. Paragon Technologies, Inc. Unaudited Pro Forma Consolidated Unaudited Pro Forma Consolidated Statement Of Operations Statement Of Operations For The Year Ended December 31, 2004 For The Three Months Ended March 31, 2005 (In Thousands, Except Share And Per Share Data) (In Thousands, Except Share And Per Share Data) ----------------------------------------------- ----------------------------------------------- Historical (1) Pro Forma Historical (1) Pro Forma Consolidated Pro Forma Consolidated Consolidated Pro Forma Consolidated 12/31/2004 Adjustments Results 3/31/2005 Adjustments Results ---------- ----------- ------- --------- ----------- ------- Net sales $ 42,255 (30,553) (E) 11,702 $ 10,308 (6,442) (E) 3,866 Cost of sales 31,277 (23,462) (E) 7,815 7,696 (4,923) (E) 2,773 ------------------------ ----------- -------------------------- ---------- Gross profit on sales 10,978 (7,091) (E) 3,887 2,612 (1,519) (E) 1,093 ------------------------ ----------- -------------------------- ---------- Selling, general and administrative expenses 8,703 (4,546) (E) 4,157 2,329 (1,292) (E) 1,037 Product development costs 314 (138) (E) 176 43 (39) (E) 4 Interest expense 4 4 1 1 Interest income (76) (390) (F) (466) (13) (98) (F) (111) Other income, net (183) 80 (E) (103) (55) 15 (E) (40) ------------------------ ----------- -------------------------- ---------- 8,762 (4,994) 3,768 2,305 (1,414) 891 ------------------------ ----------- -------------------------- ---------- Earnings before income taxes 2,216 (2,097) 119 307 (105) 202 Income tax expense 743 (697) (G) 46 113 (35) (G) 78 ------------------------ ----------- -------------------------- ---------- Net earnings $ 1,473 (1,400) 73 $ 194 (70) 124 ======================== =========== ========================== ========== Basic earnings per share $ .34 .02 $ .05 .03 ============= =========== ============== ========== Diluted earnings per share $ .34 .02 $ .04 .03 ============= =========== ============== ========== Weighted average shares outstanding 4,278,065 4,278,065 4,266,323 4,266,323 Dilutive effect of stock options 72,232 72,232 47,425 47,425 ------------------------ ----------- -------------------------- ---------- Weighted average shares outstanding assuming dilution 4,350,297 4,350,297 4,313,748 4,313,748 ======================== =========== ========================== ========== NOTES: (1) The following sale of certain assets and liabilities of Ermanco adjustments reflect results of operations as if the sale of certain assets and liabilities of Ermanco, which was completed on August 5, 2005, had occurred on January 1, 2004 and January 1, 2005. The results of operations are derived from the Company's historical statement of operations for the year ended December 31, 2004 and the Company's historical statement of operations for the three months ended March 31, 2005. (E) To reflect the elimination of Ermanco's statement of operations activities. (F) To reflect an increase in interest income due to the availability of additional cash of approximately $19,500,000 from the sale of certain assets and liabilities of Ermanco. (G) To reflect the adjustment to record income tax expense at an effective rate of 38.62%.