EX-99.1 2 dex991.htm UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA AS OF DECEMBER 31, 2004 Unaudited Pro Forma consolidated financial data as of December 31, 2004

Exhibit 99.1

 

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2004

(dollars in thousands)

 

    

Rural/Metro

Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Corp.


    Pro Forma
Rural/Metro
Operating
Company, LLC*


 
ASSETS                                 

Current assets:

                                

Cash

   $ 10,109     $ (4,588 )(1)   $ 249        $ 249  
               (2,722 )(2)                
               (2,550 )(3)                

Accounts receivable, net of allowance for doubtful accounts of $65,142 and $59,430 at December 31, 2004 and June 30, 2004, respectively

     67,421       —         67,421       67,421  

Receivable from insurers

     8,371       —         8,371       8,371  

Inventories

     12,017       —         12,017       12,017  

Prepaid expenses and other assets

     8,353       —         8,353       8,353  
    


 


 


 


Total current assets

     106,271       (9,860 )     96,411       96,411  

Property and equipment, net

     41,904       —         41,904       41,904  

Goodwill

     40,850       —         40,850       40,850  

Insurance deposits

     6,453       —         6,453       6,453  

Other assets

     11,889       10,250  (4)     16,104       14,394  
               (6,035 )(5)                
    


 


 


 


     $ 207,367     $ (5,645 )   $ 201,722     $ 200,012  
    


 


 


 


LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’/MEMBERS’ DEFICIT                                 

Current liabilities:

                                

Accounts payable

   $ 9,520     $ (560 )(6)   $ 8,960     $ 9,520  

Accrued liabilities

     55,208       (4,588 )(1)     50,620       50,620  

Deferred revenue

     19,008       —         19,008       19,008  

Current portion of long-term debt

     1,515       1,200  (7)     2,715       2,715  
    


 


 


 


Total current liabilities

     85,251       (3,948 )     81,303       81,863  

Long-term debt, net of current portion

     303,440       (302,472 )(8)     309,768       259,768  
               308,800   (9)                

Deferred income taxes

     650       —         650       650  
    


 


 


 


Total liabilities

     389,341       2,380       391,721       342,281  
    


 


 


 


Minority interest

     1,481       —         1,481       1,481  

Stockholders’ deficit

     (183,455 )     (2,550 )(3)     (191,480 )        

Members’ deficit

             (6,035 )(5)             (143,750 )
               560    (6)                
    


 


 


 


     $ 207,367     $ (5,645 )   $ 201,722     $ 200,012  
    


 


 


 



(1)   To record the payment of accrued interest relating to the existing senior credit facility and existing senior notes.
(2)   To record the payment of transaction fees and expenses.
(3)   To record the estimated tender premium and consent solicitation fee related to the existing senior notes.
(4)   To record deferred financing costs associated with our new indebtedness.
(5)   To reflect the write-off of deferred financing costs associated with the existing credit facility and senior notes.
(6)   To record the estimated tax benefit relating to the write-off of deferred financing fees and tender premium and consent solicitation fee on existing senior notes at an effective tax rate of 6.5%.
(7)   To record the current portion of the new Term Loan B.
(8)   To reflect the repayment of $152.6 million of long-term debt related to the existing senior secured credit facility and $149.9 million related to the existing 7 7/8% senior notes.
(9)   To record $118.8 million of long-term debt related to the new senior secured credit facility, $140.0 million of long-term debt related to the new senior subordinated notes offered hereby and $50.0 million gross proceeds of new senior discount notes offered hereby.

 

*   Reflects the elimination of the senior discount notes and related debt issuance costs retained by Rural/Metro Corp.

 

1


UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED JUNE 30, 2004

(dollars in thousands)

 

     Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Operating
Company, LLC


 

Net revenue

   $ 526,603     $ —       $ 526,603     $ —       $ 526,603  

Operating expenses

                                        

Payroll and employee benefits

     277,549       —         277,549       —         277,549  

Provision for doubtful accounts

     87,268       —         87,268       —         87,268  

Depreciation and amortization

     11,404       —         11,404       —         11,404  

Other operating expenses

     114,855       —         114,855       —         114,855  
    


 


 


 


 


Total operating expenses

     491,076       —         491,076       —         491,076  
    


 


 


 


 


Operating income

     35,527       —         35,527       —         35,527  

Interest expense

     (29,243 )     25,952  (1)                        
               2,872  (2)                        
               (26,380 )(3)                        
               (1,276 )(4)     (28,075 )     6,445 (6)        
                               155 (7)     (21,475 )

Interest income

     97       —         97       —         97  
    


 


 


 


 


Income from continuing operations before income taxes and minority interest

     6,381       1,168       7,549       6,600       14,149  

Income tax provision

     (300 )     (55 )(5)     (355 )     (310 )(5)     (665 )

Minority interest

     475       —         475       —         475  
    


 


 


 


 


Income from continuing operations

     6,556       1,113       7,669       6,290       13,959  

Loss from discontinued operations

     (345 )     —         (345 )     —         (345 )
    


 


 


 


 


Net income

   $ 6,211     $ 1,113     $ 7,324     $ 6,290     $ 13,614  
    


 


 


 


 


 

(See accompanying notes)

 

2


UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE LAST TWELVE MONTHS ENDED DECEMBER 31, 2004

(dollars in thousands)

 

     Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Corp.


    Pro Forma
Adjustments


   

Pro Forma
Rural/Metro
Operating

Company, LLC


 

Net revenue

   $ 540,724     $ —       $ 540,724     $ —       $ 540,724  

Operating expenses

                                        

Payroll and employee benefits

     285,967       —         285,967       —         285,967  

Provision for doubtful accounts

     87,872       —         87,872       —         87,872  

Depreciation and amortization

     11,478       —         11,478       —         11,478  

Other operating expenses

     115,700       —         115,700       —         115,700  
    


 


 


 


 


Total operating expenses

     501,017       —         501,017       —         501,017  
    


 


 


 


 


Operating income

     39,707       —         39,707       —         39,707  

Interest expense

     (28,869 )     25,670  (1)                        
               2,679  (2)                        
               (26,956 )(3)                        
               (1,275 )(4)     (28,751 )     6,445 (6)        
                               155 (7)     (22,151 )

Interest income

     225       —         225       —         225  
    


 


 


 


 


Income from continuing operations before income taxes and minority interest

     11,063       118       11,181       6,600       17,781  

Income tax provision

     (634 )     (7 )     (641 )     (376 )(5)     (1,017 )

Minority interest

     966       —         966       —         966  
    


 


 


 


 


Income from continuing operations

     11,395       111       11,506       6,224       17,730  

Loss from discontinued operations

     (491 )     —         (491 )     —         (491 )
    


 


 


 


 


Net income

   $ 10,904     $ 111     $ 11,015     $ 6,224     $ 17,239  
    


 


 


 


 


 

(See accompanying notes)

 

3


UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED DECEMBER 31, 2004

(dollars in thousands)

 

     Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Operating
Company, LLC


 

Net revenue

   $ 273,680     $ —       $ 273,680     $ —       $ 273,680  

Operating expenses

                                        

Payroll and employee benefits

     146,149       —         146,149       —         146,149  

Provision for doubtful accounts

     42,054       —         42,054       —         42,054  

Depreciation and amortization

     5,677       —         5,677       —         5,677  

Other operating expenses

     57,083       —         57,083       —         57,083  
    


 


 


 


 


Total operating expenses

     250,963       —         250,963       —         250,963  
    


 


 


 


 


Operating income

     22,717       —         22,717       —         22,717  

Interest expense

     (14,834 )     13,118  (1)                        
               1,339  (2)                        
               (13,640 )(3)                        
               (638 )(4)     (14,655 )     3,125 (6)        
                               78 (7)     (11,452 )

Interest income

     179       —         179       —         179  
    


 


 


 


 


Income from continuing operations before income taxes and minority interest

     8,062       179       8,241       3,203       11,444  

Income tax provision

     (523 )     (12 )(5)     (535 )     (208 )(5)     (743 )

Minority interest

     28       —         28       —         28  
    


 


 


 


 


Income from continuing operations

     7,567       167       7,734       2,995       10,729  

Loss from discontinued operations

     (93 )     —         (93 )     —         (93 )
    


 


 


 


 


Net income

   $ 7,474     $ 167     $ 7,641     $ 2,995     $ 10,636  
    


 


 


 


 


 

(See accompanying notes)

 

4


UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED DECEMBER 31, 2003

(dollars in thousands)

 

     Rural/Metro
Corp.


    Pro Forma
Adjustments


    Rural/Metro
Corp.


    Pro Forma
Adjustments


    Pro Forma
Rural/Metro
Operating
Company, LLC


 

Net revenue

   $ 259,559     $ —       $ 259,559     $ —       $ 259,559  

Operating expenses

                                        

Payroll and employee benefits

     137,731       —         137,731       —         137,731  

Provision for doubtful accounts

     41,450       —         41,450       —         41,450  

Depreciation and amortization

     5,603       —         5,603       —         5,603  

Other operating expenses

     56,238       —         56,238       —         56,238  
    


 


 


 


 


Total operating expenses

     241,022       —         241,022       —         241,022  
    


 


 


 


 


Operating income

     18,537       —         18,537       —         18,537  

Interest expense

     (15,208 )     13,400  (1)                        
               1,532  (2)                        
               (13,065 )(3)                        
               (638 )(4)     (13,979 )     3,125  (6)        
                               78  (7)     (10,776 )

Interest income

     51       —         51       —         51  
    


 


 


 


 


Income from continuing operations before income taxes and minority interest

     3,380       1,229       4,609       3,203       7,812  

Income tax provision

     (189 )     (69 )(5)     (258 )     (179 )(5)     (437 )

Minority interest

     (463 )     —         (463 )     —         (463 )
    


 


 


 


 


Income from continuing operations

     2,728       1,160       3,888       3,024       6,912  

Income from discontinued operations

     53       —         53       —         53  
    


 


 


 


 


Net income

   $ 2,781     $ 1,160     $ 3,941     $ 3,024     $ 6,965  
    


 


 


 


 


 

(See accompanying notes)

 

5


Notes to Pro Forma Statements of Income

 


(1) To eliminate interest expense from the existing senior credit facility and senior notes.
(2) To eliminate amortization of deferred financing costs from the existing senior credit facility and senior notes.
(3) Adjusted to record interest expense on:
  (a) the new senior discount notes assuming gross proceeds of $50.0 million at a rate of 12.50% compounded semi-annually;
  (b) the new senior subordinated notes assuming aggregate principal amount of $140.0 million at a rate of 9.75%; and
  (c) the new senior secured credit facility assuming borrowings of $120.0 million and an effective rate of LIBOR + 3.50%, a commitment fee of 0.50% on the $20.0 million undrawn revolving credit facility and a participation fee at an effective rate of 3.65% of the $15.0 million aggregate amount of the prefunded letter of credit facility.
(4) To record amortization of $10.3 million of deferred financing costs associated with the new senior secured credit facility over 6 years and the senior subordinated notes and senior discount notes over 10 years and 11 years, respectively.
(5) To adjust income tax expense as a result of additional interest expense, at an effective rate of 4.7% for the year ended June 30, 2004, 5.7% for the last twelve months ended December 31, 2004, 6.5% for the six months ended December 31, 2004 and 5.6% for the six months ended December 31, 2003.
(6) To eliminate interest expense on the new senior discount notes issued by Rural/Metro and assuming gross proceeds of $50.0 million at a rate of 12.50% compounded semi-annually.
(7) To eliminate amortization of deferred costs associated with the new senior discount notes issued by Rural/Metro.

 

6