EX-99.1 3 ex99-1.txt PRO FORMA CONDENSED FINANCIAL STATEMENTS Exhibit 99.1 The following unaudited pro forma financial statements give effect to the disposition of the Latin American operations of Rural/Metro Corporation (the "Company") that was accounted for as discontinued operations when the transaction was consummated on September 27, 2002, in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). The unaudited pro forma condensed balance sheet assumes the disposition of the Latin American operations on June 30, 2002. Such pro forma information is based upon the historical balance sheet data of the Company and its Latin American subsidiaries as of such date. The unaudited pro forma condensed statements of operations give effect to the disposition of the Company's Latin American operations for the three years ended June 30, 2002 as if the disposition occurred on July 1, 1999. The unaudited pro forma information presented herein is shown for illustrative purposes only and is not necessarily indicative of the results that might have been achieved by the Company if the sale had been consummated as of the indicated dates. The unaudited pro forma financial information is based on and should be read in conjunction with the historical consolidated financial statements of the Company, together with the related notes thereto, which were filed with the Securities and Exchange Commission on Form 10-K/A for the period ended June 30, 2002. The unaudited pro forma condensed financial statements have been prepared by the Company based upon available information and certain assumptions that management believes are reasonable in the circumstances. RURAL/METRO CORPORATION PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED) JUNE 30, 2002
RURAL/METRO LATIN AMERICAN PRO FORMA CORPORATION OPERATIONS ADJUSTMENTS (1) COMBINED ----------- ---------- --------------- --------- ASSETS Accounts receivable, net $ 99,115 $ (798) $ 98,317 Other current assets 31,645 (436) 31,209 --------- --------- --------- --------- Total current assets 130,760 (1,234) -- 129,526 PROPERTY AND EQUIPMENT, net 48,532 (334) 48,198 GOODWILL 41,244 (77) 41,167 OTHER ASSETS 16,902 (1,221) 454 16,135 --------- --------- --------- --------- $ 237,438 $ (2,866) $ 454 $ 235,026 ========= ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accrued liabilities $ 73,719 $ (4,821) $ 68,898 Other current liabilities 29,003 (851) 28,152 --------- --------- --------- --------- Total current liabilities 102,722 (5,672) 97,050 LONG-TERM DEBT, net of current portion 298,529 (33) 298,496 Other liabilities 1,127 -- 1,127 --------- --------- --------- --------- Total liabilities 402,378 (5,705) -- 396,673 --------- --------- --------- --------- MINORITY INTEREST 379 379 --------- --------- --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Common stock Rural/Metro Corporation 138,629 138,629 Latin American Operations - Equity 13,155 (13,155) -- Accumulated deficit (313,025) 13,609 (299,416) Accumulated other comprehensive income (loss) 10,316 (10,316) -- Treasury stock (1,239) (1,239) --------- --------- --------- --------- Total stockholders' equity (deficit) (165,319) 2,839 454 (162,026) --------- --------- --------- --------- $ 237,438 $ (2,866) $ 454 $ 235,026 ========= ========= ========= =========
(1)- The pro forma condensed balance sheet gives effect to the disposition of the Latin American operations for the assumption of net liabilities, including the forgiveness of intercompany debt in the amount of $454. The nonrecurring gain on sale of $13.6 million has been reflected in the accumulated deficit in the pro forma balance sheet. RURAL/METRO CORPORATION PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2002
RURAL/METRO LATIN AMERICAN PRO FORMA CORPORATION OPERATIONS ADJUSTMENTS (1) COMBINED ----------- ---------- --------------- --------- NET REVENUE $ 497,038 $ (25,394) $ -- $ 471,644 --------- --------- --------- --------- OPERATING EXPENSES Payroll and employee benefits 287,307 (18,184) 269,123 Provision for doubtful accounts 69,900 (155) 69,745 Depreciation and amortization 16,210 57 16,267 Other operating expenses 97,640 (5,524) 92,116 Contract termination costs and related asset impairment charges (107) -- (107) Restructuring charge and other (718) -- (718) --------- --------- --------- --------- Total operating expenses 470,232 (23,806) -- 446,426 --------- --------- --------- --------- OPERATING INCOME 26,806 (1,588) -- 25,218 Interest expense, net (24,976) 139 (24,837) Other income, net 9 -- 9 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 1,839 (1,449) -- 390 INCOME TAX BENEFIT 2,050 5 2,055 --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS $ 3,889 $ (1,444) $ -- $ 2,445 ========= ========= ========= ========= Basic income from continuing operations per share $ 0.26 $ 0.16 ========= ========= Diluted income from continuing operations per share $ 0.25 $ 0.16 ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC 15,190 15,190 ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED 15,773 15,773 ========= =========
(1)- The pro forma condensed statement of operations gives effect to the disposition of the Latin American operations as if the transaction occured on July 1, 1999. The results of the Latin American operations have been removed from the pro forma condensed statement of operations. A nonrecurring gain of $12.5 million has not been included in the pro forma condensed statement of operations but was reflected in the historical statement of operations when the transaction was consummated on September 27, 2002. RURAL/METRO CORPORATION PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2001
RURAL/METRO LATIN AMERICAN PRO FORMA CORPORATION OPERATIONS ADJUSTMENTS (1) COMBINED ----------- ---------- --------------- --------- NET REVENUE $ 504,316 $ (43,089) $ -- $ 461,227 --------- --------- --------- --------- OPERATING EXPENSES Payroll and employee benefits 301,055 (29,079) 271,976 Provision for doubtful accounts 102,470 (1,427) 101,043 Depreciation and amortization 29,161 (3,420) 25,741 Other operating expenses 142,009 (20,193) 121,816 Asset impairment charges 94,353 (46,303) 48,050 Loss on disposition of clinic operations 9,374 9,374 Contract termination costs and related asset impairment charges 9,256 -- 9,256 Restructuring charge and other 9,091 9,091 --------- --------- --------- --------- Total operating expenses 696,769 (100,422) -- 596,347 --------- --------- --------- --------- OPERATING LOSS (192,453) 57,333 -- (135,120) Interest expense, net (30,001) (87) (30,088) Other expense, net (2,402) -- (2,402) --------- --------- --------- --------- LOSS BEFORE INCOME TAXES (224,856) 57,246 -- (167,610) INCOME TAX PROVISION (1,875) (1,408) (3,283) --------- --------- --------- --------- LOSS FROM CONTINUING OPERATIONS $(226,731) $ 55,838 $ -- $(170,893) ========= ========= ========= ========= Basic loss from continuing operations per share $ (15.38) $ (11.59) ========= ========= Diluted loss from continuing operations per share $ (15.38) $ (11.59) ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC 14,744 14,744 ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED 14,744 14,744 ========= =========
(1)- The pro forma condensed statement of operations gives effect to the disposition of the Latin American operations as if the transaction occured on July 1, 1999. The results of the Latin American operations have been removed from the pro forma condensed statement of operations. A nonrecurring gain of $12.5 million has not been included in the pro forma condensed statement of operations but was reflected in the historical statement of operations when the transaction was consummated on September 27, 2002. RURAL/METRO CORPORATION PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2000
RURAL/METRO LATIN AMERICAN PRO FORMA CORPORATION OPERATIONS ADJUSTMENTS (1) COMBINED ----------- ---------- --------------- --------- NET REVENUE $ 570,074 $ (52,607) $ -- $ 517,467 --------- --------- --------- --------- OPERATING EXPENSES Payroll and employee benefits 323,285 (30,124) 293,161 Provision for doubtful accounts 95,623 (2,597) 93,026 Provision for doubtful accounts - change in estimate 65,000 -- 65,000 Depreciation and amortization 33,696 (3,397) 30,299 Other operating expenses 127,743 (15,917) 111,826 Restructuring charge and other 34,047 (1,183) 32,864 --------- --------- --------- --------- Total operating expenses 679,394 (53,218) -- 626,176 --------- --------- --------- --------- OPERATING LOSS (109,320) 611 -- (108,709) Interest expense, net (25,939) 536 (25,403) Other income, net 2,890 -- 2,890 --------- --------- --------- --------- LOSS BEFORE INCOME TAXES (132,369) 1,147 -- (131,222) INCOME TAX BENEFIT 32,837 919 33,756 --------- --------- --------- --------- LOSS FROM CONTINUING OPERATIONS $ (99,532) $ 2,066 $ -- $ (97,466) ========= ========= ========= ========= Basic loss from continuing operations per share $ (6.82) $ (6.68) ========= ========= Diluted loss from continuing operations per share $ (6.82) $ (6.68) ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC 14,592 14,592 ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED 14,592 14,592 ========= =========
(1)- The pro forma condensed statement of operations gives effect to the disposition of the Latin American operations as if the transaction occured on July 1, 1999. The results of the Latin American operations have been removed from the pro forma condensed statement of operations. A nonrecurring gain of $12.5 million has not been included in the pro forma condensed statement of operations but was reflected in the historical statement of operations when the transaction was consummated on September 27, 2002.