EX-99.1 3 d469185dex991.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF MODUSLINK Unaudited Pro Forma Condensed Consolidated Financial Statements of ModusLink

Exhibit 99.1

The following unaudited pro forma consolidated financial information is presented to illustrate the effect of ModusLink Global Solution, Inc.’s (the “Company”) January 11, 2013 sale of substantially all of the assets of Tech for Less LLC (“TFL”) on its financial position and operating results. The unaudited pro forma consolidated balance sheet as of October 31, 2012 is based on the historical consolidated financial statements of the Company as of October 31, 2012 after giving effect to the transaction as if it had occurred on October 31, 2012. The unaudited pro forma consolidated statements of operations for the three months ended October 31, 2012 and 2011 and the fiscal years ended July 31, 2012, 2011 and 2010, are based on the historical consolidated financial statements of the Company for such periods after giving effect to the transaction as if it had occurred at the beginning of the earliest period presented. The unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical consolidated financial statements and notes contained in the Company’s 2012 Annual Report on Form 10-K, filed on January 11, 2013, and Quarterly Report on Form 10-Q for the quarter ended October 31, 2012 filed on January 11, 2013.

The preparation of the unaudited pro forma consolidated financial information is based on consolidated financial statements prepared in accordance with accounting principles generally accepted in the United Stated of America. These principles require the use of estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.

The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not represent what the actual results of operations or the financial position of the Company would have been had the transactions occurred on the respective dates assumed, nor is it indicative of the Company’s future operating results or financial position. The pro-forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that the Company’s management believes to be reasonable.

 


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Balance Sheet (Unaudited)

As of October 31, 2012

(In thousands)

 

     October 31, 2012
As Reported
    TFL Pro-Forma
Adjustments
    Pro-Forma  

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 58,355      $ 1,550  (1)    $ 59,905   

Available-for-sale securities

     130        —          130   

Accounts receivable, trade, net

     164,707        —          164,707   

Inventories, net

     89,793        (974 ) (2)      88,819   

Prepaid and other current assets

     10,323        (64 ) (2)      10,259   
  

 

 

   

 

 

   

 

 

 

Total current assets

     323,308        512        323,820   
  

 

 

   

 

 

   

 

 

 

Property and equipment, net

     39,951        (41 ) (3)      39,910   

Investments in affiliates

     11,080        —          11,080   

Goodwill

     3,058        —          3,058   

Intangible assets, net

     2,612        —          2,612   

Other assets

     6,686        —          6,686   
  

 

 

   

 

 

   

 

 

 
   $ 386,695      $ 471      $ 387,166   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDER’S EQUITY

      

Current liabilities:

      

Current installments of obligations under capital leases

   $ 93      $ —        $ 93   

Accounts payable

     141,630        —          141,630   

Current portion of accrued restructuring

     1,751        —          1,751   

Accrued income taxes

     335        —          335   

Accrued expenses

     46,074        224  (4)      46,298   

Other current liabilities

     26,542        —          26,542   

Current liabilities of discontinued operations

     1,393        —          1,393   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     217,818        224        218,042   
  

 

 

   

 

 

   

 

 

 

Long-term portion of accrued restructuring

     —          —          —     

Obligations under capital leases, less current installments

     72        —          72   

Other long-term liabilities

     10,627        —          10,627   

Non-current liabilities of discontinued operations

     101        —          101   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     228,618        224        228,842   
  

 

 

   

 

 

   

 

 

 

Stockholder’s equity:

      

Common stock

     438        —          438   

Additional paid-in capital

     7,390,375        —          7,390,375   

Accumulated deficit

     (7,247,435     247  (5)      (7,247,188

Accumulated other comprehensive income

     14,699        —          14,699   
  

 

 

   

 

 

   

 

 

 

Total stockholder’s equity

     158,077        247        158,324   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholder’s equity

   $ 386,695      $ 471      $ 387,166   
  

 

 

   

 

 

   

 

 

 

 

(1) To adjust cash for the estimated receipt of net proceeds from the sale of TFL.
(2) To eliminate direct assets included in the sale of TFL.
(3) To eliminate assets sold and the write-off of leashold improvements associated with TFL not included in the sale of the business.
(4) To recognize severance and other costs associated with the disposition.
(5) Includes approximately $0.2M on gain from sale of TFL


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Statement Of Operations (Unaudited)

For the three month period ended October 31, 2012

(In thousands, except per share data)

 

     October 31, 2012
As Reported
    TFL Pro-Forma
Adjustments (1)
    Pro-Forma  

Net revenue

   $ 200,656      $ (3,605   $ 197,051   

Cost of revenue

     181,973        (3,546     178,427   
  

 

 

   

 

 

   

 

 

 

Gross profit

     18,683        (59     18,624   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling, general and administrative

     25,024        (883     24,141   

Amortization of intangible assets

     285        —          285   

Impairment of goodwill & intangible assets

     —          —          —     

Restructuring, net

     1,479        (9     1,470   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     26,788        (892     25,896   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (8,105     833        (7,272
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest income

     78        —          78   

Interest expense

     (99     —          (99

Other gains (losses)

     (1,319     (2     (1,321

Equity in losses of affiliates and impairments

     (310     —          (310
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (1,650     (2     (1,652
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     (9,755     831        (8,924

Income tax expense (benefit)

     909        —          909   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (10,664     831        (9,833

Income (loss) from discontinued operations, net of tax

     4        —          4   
  

 

 

   

 

 

   

 

 

 

Net Income (loss)

   $ (10,660   $ 831      $ (9,829
  

 

 

   

 

 

   

 

 

 

Basic and diluted earnings (loss) per share:

      

Income (loss) from continuing operations

   $ (0.24     $ (0.23

Income (loss) from discontinued operations

   $ —          $ —     
  

 

 

     

 

 

 

Net income (loss)

   $ (0.24     $ (0.23
  

 

 

     

 

 

 

Shares used in computing basic earnings per share

     43,589          43,589   
  

 

 

     

 

 

 

Shares used in computing diluted earnings per share

     43,589          43,589   
  

 

 

     

 

 

 

 

(1) To eliminate the revenues and direct operating expenses for TFL.


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Statement Of Operations (Unaudited)

For the three month period ended October 31, 2011

(In thousands, except per share data)

 

     October 31, 2011
As Reported
    TFL Pro-Forma
Adjustments (1)
    Pro-Forma  

Net revenue

   $ 205,908      $ (8,079   $ 197,829   

Cost of revenue

     180,437        (8,379     172,058   
  

 

 

   

 

 

   

 

 

 

Gross profit

     25,471        300        25,171   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling, general and administrative

     22,198        (1,048     21,150   

Amortization of intangible assets

     332        (47     285   

Impairment of goodwill & intangible assets

     —          —          —     

Restructuring, net

     755        —          755   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     23,285        (1,095     22,190   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     2,186        1,395        3,581   
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest income

     122        —          122   

Interest expense

     (90     —          (90

Other gains (losses)

     1,225        2        1,227   

Equity in losses of affiliates and impairments

     (427     —          (427
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     830        2        830   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     3,016        1,397        4,413   

Income tax expense (benefit)

     1,871        —          1,871   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     1,145        1,397        2,542   

Income (loss) from discontinued operations, net of tax

     —          —          —     
  

 

 

   

 

 

   

 

 

 

Net Income (loss)

   $ 1,145      $ 1,397      $ 2,542   
  

 

 

   

 

 

   

 

 

 

Basic and diluted earnings (loss) per share:

      

Income (loss) from continuing operations

   $ 0.03        $ 0.06   

Income (loss) from discontinued operations

   $ —          $ —     
  

 

 

     

 

 

 

Net income (loss)

   $ 0.03        $ 0.06   
  

 

 

     

 

 

 

Shares used in computing basic earnings per share

     43,315          43,315   
  

 

 

     

 

 

 

Shares used in computing diluted earnings per share

     43,318          43,318   
  

 

 

     

 

 

 

 

(1) To eliminate the revenues and direct operating expenses for TFL.


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Statement Of Operations (Unaudited)

For the twelve month period ended July 31, 2012

(In thousands, except per share data)

 

     July 31, 2012
As Reported
    TFL Pro-Forma
Adjustments (1)
    Pro-Forma  

Net revenue

   $ 739,891      $ (25,944   $ 713,947   

Cost of revenue

     675,579        (30,191     645,388   
  

 

 

   

 

 

   

 

 

 

Gross profit

     64,312        4,247        68,559   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling, general and administrative

     99,409        (4,672     94,737   

Amortization of intangible assets

     1,279        (140     1,139   

Impairment of goodwill & intangible assets

     2,062        (934     1,128   

Restructuring, net

     7,455        (1,039     6,416   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     110,205        (6,785     103,420   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (45,893     11,032        (34,861
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest income

     380        —          380   

Interest expense

     (373     —          (373

Other gains (losses)

     14,431        (41     14,390   

Equity in losses of affiliates and impairments

     (4,109     —          (4,109
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     10,329        (41     10,288   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     (35,564     10,991        (24,573

Income tax expense (benefit)

     3,035        —          3,035   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (38,599     10,991        (27,608

Income (loss) from discontinued operations, net of tax

     491        —          491   
  

 

 

   

 

 

   

 

 

 

Net Income (loss)

   $ (38,108   $ 10,991      $ (27,117
  

 

 

   

 

 

   

 

 

 

Basic and diluted earnings (loss) per share:

      

Income (loss) from continuing operations

   $ (0.88     $ (0.63

Income (loss) from discontinued operations

   $ 0.01        $ 0.01   
  

 

 

     

 

 

 

Net income (loss)

   $ (0.87     $ (0.62
  

 

 

     

 

 

 

Shares used in computing basic earnings per share

     43,565          43,565   
  

 

 

     

 

 

 

Shares used in computing diluted earnings per share

     43,565          43,565   
  

 

 

     

 

 

 

 

(1) To eliminate the revenues and direct operating expenses for TFL.


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Statement Of Operations (Unaudited)

For the twelve month period ended July 31, 2011

(In thousands, except per share data)

 

     July 31, 2011
As Reported
    TFL Pro-Forma
Adjustments (1)
    Pro-Forma  

Net revenue

   $ 873,748      $ (29,471   $ 844,277   

Cost of revenue

     792,809        (29,148     763,661   
  

 

 

   

 

 

   

 

 

 

Gross profit

     80,939        (323     80,616   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling, general and administrative

     85,187        (4,477     80,710   

Amortization of intangible assets

     5,457        —          5,457   

Impairment of goodwill & intangible assets

     27,166        (11,984     15,182   

Restructuring, net

     795        —          795   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     118,605        (16,461     102,144   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (37,666     16,138        (21,528
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest income

     238        —          238   

Interest expense

     (462     —          (462

Other gains (losses)

     8,882        10        8,892   

Equity in losses of affiliates and impairments

     (4,308     —          (4,308
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     4,350        10        4,360   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     (33,316     16,148        (17,168

Income tax expense (benefit)

     819        —          819   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (34,135     16,148        (17,987

Income (loss) from discontinued operations, net of tax

     (330     —          (330
  

 

 

   

 

 

   

 

 

 

Net Income (loss)

   $ (34,465   $ 16,148      $ (18,317
  

 

 

   

 

 

   

 

 

 

Basic and diluted earnings (loss) per share:

      

Income (loss) from continuing operations

   $ (0.79     $ (0.42

Income (loss) from discontinued operations

   $ (0.01     $ —     
  

 

 

     

 

 

 

Net income (loss)

   $ (0.80     $ (0.42
  

 

 

     

 

 

 

Shares used in computing basic earnings per share

     43,294          43,294   
  

 

 

     

 

 

 

Shares used in computing diluted earnings per share

     43,294          43,294   
  

 

 

     

 

 

 

 

(1) To eliminate the revenues and direct operating expenses for TFL.


MODUSLINK GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES

Pro-Forma Consolidated Statement Of Operations (Unaudited)

For the twelve month period ended July 31, 2010

(In thousands, except per share data)

     July 31, 2010
As Reported
    TFL Pro-Forma
Adjustments (1)
    Pro-Forma  

Net revenue

   $ 918,445      $ (23,712   $ 894,733   

Cost of revenue

     807,416        (20,437     786,979   
  

 

 

   

 

 

   

 

 

 

Gross profit

     111,029        (3,275     107,754   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling, general and administrative

     92,855        (4,501     88,354   

Amortization of intangible assets

     6,308        (11,018     (4,710

Impairment of goodwill & intangible assets

     25,800        —          25,800   

Restructuring, net

     (965     —          (965
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     123,998        (15,519     108,479   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (12,969     12,244        (725
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest income

     298        —          298   

Interest expense

     (573     —          (573

Other gains (losses)

     (988     —          (988

Equity in losses of affiliates and impairments

     (2,129     —          (2,129
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (3,392     —          (3,392
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     (16,361     12,244        (4,117

Income tax expense (benefit)

     5,162        —          5,162   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (21,523     12,244        (9,279

Income (loss) from discontinued operations, net of tax

     (2,318     —          (2,318
  

 

 

   

 

 

   

 

 

 

Net Income (loss)

   $ (23,841   $ 12,244      $ (11,597
  

 

 

   

 

 

   

 

 

 

Basic and diluted earnings (loss) per share:

      

Income (loss) from continuing operations

   $ (0.49     $ (0.21

Income (loss) from discontinued operations

   $ (0.05     $ (0.05
  

 

 

     

 

 

 

Net income (loss)

   $ (0.54     $ (0.26
  

 

 

     

 

 

 

Shares used in computing basic earnings per share

     44,104          44,104   
  

 

 

     

 

 

 

Shares used in computing diluted earnings per share

     44,104          44,104   
  

 

 

     

 

 

 

 

(1) To eliminate the revenues and direct operating expenses for TFL.