Attached files
file | filename |
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8-K/A - UniTek Global Services, Inc. | v180658_8ka.htm |
EX-99.1 - UniTek Global Services, Inc. | v180658_ex99-1.htm |
EX-23.1 - UniTek Global Services, Inc. | v180658_ex23-1.htm |
Exhibit
99.2
Berliner
Communications, Inc.
UNAUDITED
PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Table
of Contents
Page
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Unaudited Pro-Forma Condensed
Combined Balance Sheet as of December 31, 2009
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2
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Unaudited
Pro-Forma Condensed Combined Statement of Operations for the year ended
December 31, 2009
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3
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Notes to Unaudited Pro-Forma
Condensed Combined Financial Statements
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4
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The
following unaudited pro-forma condensed combined financial statements are based
on the historical financial statements of Berliner Communications, Inc. (“BCI”,
“we”, “us”, or “our”) and UniTek Holdings, Inc. (“UniTek”) after giving effect
to our Agreement and Plan of Merger and the assumptions and adjustments
described in the accompanying notes to the unaudited pro-forma condensed
combined financial statements. This Agreement and Plan of Merger was consummated
on January 27, 2010.
The
pro-forma data is for informational purposes only and may not necessarily
reflect future results of operations or financial position or what the results
of operations or financial position would have been had BCI and UniTek been
operating as combined entities for the periods presented. The unaudited
pro-forma condensed combined financial statements should be read in conjunction
with the historical financial statements, including the notes thereto, of BCI
included in our Form 10-K for the year ended June 30, 2009 and in our Form 10-K
for the six months ended December 31, 2009, and the historical financial
statements included elsewhere in this Form 8-K/A.
The
unaudited pro-forma condensed combined balance sheet as of December 31, 2009
assumes the Agreement and Plan of Merger occurred on December 31,
2009. The unaudited pro-forma condensed combined statement of
operations for the year ended December 31, 2009 assumes that the combination
took place at the beginning of the period presented.
The
unaudited pro-forma condensed combined financial statements do not take into
consideration any benefits or additional expenses which may or may not result
from the combination.
The
unaudited pro-forma condensed combined balance sheet includes purchase price
adjustments prepared on the basis that UniTek is the accounting acquirer of
Berliner. The allocation of the purchase price is a preliminary
allocation to identifiable net assets, net liabilities and commitments acquired.
UniTek intends to conduct an appraisal of these assets, liabilities and
commitments and will consider a potential adjustment to the purchase price
allocation based upon the results of this appraisal.
1
Berliner
Communications, Inc.
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Unaudited
Pro-Forma Condensed Combined Balance Sheet
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December
31, 2009
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|||||||||||||||||
(Amounts
in thousands)
|
|||||||||||||||||
Historical
|
Historical
|
Pro-Forma
|
Pro-Forma
|
||||||||||||||
ASSETS
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UniTek
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Berliner
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Adjustments
|
Combined
|
|||||||||||||
CURRENT
ASSETS
|
|||||||||||||||||
Cash, cash
equivalents, and restricted
cash
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$ | 2,396 | $ | 1,518 |
(a)
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$ | 12,500 | $ | 4,656 | ||||||||
(b)
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(5,518 | ) | |||||||||||||||
(c)
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(2,000 | ) | |||||||||||||||
(g)
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(3,200 | ) | |||||||||||||||
(h)
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(1,040 | ) | |||||||||||||||
Accounts
receivable and unbilled revenue,
net
|
24,680 | 26,573 |
|
51,253 | |||||||||||||
Income tax
receivable
|
- | 2,251 |
|
2,251 | |||||||||||||
Inventories
|
8,326 | 999 |
|
9,325 | |||||||||||||
Prepaid expenses
and other current assets
|
3,804 | 670 |
|
4,474 | |||||||||||||
39,206 | 32,011 |
|
742 | 71,959 | |||||||||||||
Property and
equipment, net
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20,665 | 2,064 |
(d)
|
629 | 23,358 | ||||||||||||
Amortizable
intangible assets, net
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26,941 | 353 |
(e)
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(353 | ) | 29,419 | |||||||||||
(f)
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2,478 | ||||||||||||||||
Goodwill
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137,827 | 2,284 |
(e)
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(2,284 | ) | 140,678 | |||||||||||
(f)
|
2,851 | ||||||||||||||||
Deferred tax
assets - long-term
|
109 | - |
|
109 | |||||||||||||
Other long-term
assets
|
7,093 | 283 |
(h)
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1,040 | 8,416 | ||||||||||||
Total
Assets
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$ | 231,841 | $ | 36,995 |
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$ | 5,103 | $ | 273,939 | ||||||||
LIABILITIES,
PREFERRED STOCK, AND STOCKHOLDERS' EQUITY
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|||||||||||||||||
LIABILITIES
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|||||||||||||||||
Accounts
payable
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$ | 19,301 | $ | 8,586 | $ | - | $ | 27,887 | |||||||||
Accrued
expenses
|
23,330 | 4,906 | 28,236 | ||||||||||||||
Current portion of
long-term debt
|
33,006 | 5,851 |
(b)
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(5,518 | ) | 31,339 | |||||||||||
(c)
|
(2,000 | ) | |||||||||||||||
Income tax
payable
|
187 | 187 | |||||||||||||||
Current portion of
capital lease obligations and vehicle
loans
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5,097 | 206 | 5,303 | ||||||||||||||
80,921 | 19,549 | (7,518 | ) | 92,952 | |||||||||||||
Long-term debt,
net of current portion
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127,162 | 4 | 127,166 | ||||||||||||||
Long-term capital
lease obligations and vehicle loans, net of current
portion
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4,244 | 234 | 4,478 | ||||||||||||||
Deferred tax
liabilities - long term
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- | 146 | 146 | ||||||||||||||
Other long-term
liabilities
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- | 484 | 484 | ||||||||||||||
Total
liabilities
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212,327 | 20,417 | (7,518 | ) | 225,226 | ||||||||||||
Preferred
stock
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- | - | (a) | 12,500 | 12,500 | ||||||||||||
STOCKHOLDERS'
EQUITY
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|||||||||||||||||
Common
stock
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1,091 | 1 | (j) | (1,089 | ) | 3 | |||||||||||
Additional paid-in
capital
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112,747 | 25,814 |
(i)
|
4,410 | 142,971 | ||||||||||||
Accumulated other
comprehensive income
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61 | - |
|
61 | |||||||||||||
Accumulated
deficit
|
(94,385 | ) | (9,237 | ) |
(g)
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(3,200 | ) | (106,822 | ) | ||||||||
Total
stockholders' equity
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19,514 | 16,578 | 121 | 36,213 | |||||||||||||
Total liabilities,
preferred stock, and stockholders'
equity
|
$ | 231,841 | $ | 36,995 | $ | 5,103 | $ | 273,939 |
2
Berliner
Communications, Inc.
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Unaudited
Pro-Forma Condensed Combined Statement of Operations
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For
the Year Ended December 31, 2009
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(Amounts
in thousands, except per share amounts)
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|||||||||||||||||
Historical
|
Historical
|
Pro-Forma
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Pro-Forma
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||||||||||||||
UniTek
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Berliner
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Adjustments
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Combined
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||||||||||||||
Revenues (1)
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$ | 278,302 | $ | 69,755 |
(p)
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$ | (342 | ) | $ | 347,715 | |||||||
Costs of
revenues
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237,914 | 52,323 |
(o)
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13,561 | 303,456 | ||||||||||||
(p)
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(342 | ) | |||||||||||||||
Gross
profit
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40,388 | 17,432 |
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(13,561 | ) | 44,259 | |||||||||||
Selling, general and
administrative expenses
|
26,860 | 21,839 |
(o)
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(13,561 | ) | 35,138 | |||||||||||
Asset
impairment
|
38,431 | - |
|
38,431 | |||||||||||||
Depreciation and
amortization
|
26,878 | 1,291 |
(k)
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1,504 | 29,673 | ||||||||||||
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|||||||||||||||||
Operating
loss
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(51,781 | ) | (5,698 | ) |
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(1,504 | ) | (58,983 | ) | ||||||||
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Interest income
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- | (14 | ) |
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(14 | ) | |||||||||||
Interest expense
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18,825 | 299 |
(l)
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1,720 | 21,282 | ||||||||||||
(m)
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378 | ||||||||||||||||
(n)
|
60 | ||||||||||||||||
Amortization of deferred financing
costs
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- | 60 |
(n)
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(60 | ) | - | |||||||||||
Other expense
(income)
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284 | (38 | ) | - | 246 | ||||||||||||
Loss from continuing operations before income
taxes
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(70,890 | ) | (6,005 | ) | (3,602 | ) | (80,497 | ) | |||||||||
Benefit
(provision) for income taxes
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4,743 | (1,697 | ) | 3,046 | |||||||||||||
Loss from continuing
operations
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$ | (66,147 | ) | $ | (7,702 | ) | $ | (3,602 | ) | $ | (77,451 | ) | |||||
Loss from continuing operations
per common share:
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|||||||||||||||||
Basic
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$ | (0.61 | ) | $ | (0.29 | ) | $ | (0.57 | ) | ||||||||
Diluted
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$ | (0.61 | ) | $ | (0.29 | ) | $ | (0.57 | ) | ||||||||
Weighted average number of common shares
outstanding:
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|||||||||||||||||
Basic
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109,096 | 26,516 | 135,612 | ||||||||||||||
Diluted
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109,096 | 26,516 | 135,612 |
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(1)
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UniTek
2009 revenue does not include revenue from discontinued operations of
$12.1 million which includes $9.9 million of revenue from satellite
fulfillment markets provided to DirecTV as part of the market swap
transaction discussed in Note 4 of the UniTek Holdings, Inc. 2009
financial statements. The discontinued markets were exchanged
with DirecTV for new markets which are estimated to offset the lost
revenue from these discontinued
markets.
|
3
Berliner
Communications, Inc.
Notes
to Unaudited Pro-Forma Condensed Combined Financial
Statements
1. Basis
of Presentation
The
accompanying unaudited pro-forma condensed combined balance sheet is derived
from the historical balance sheets of UniTek Holdings, Inc., a Delaware
corporation (“UniTek”) and Berliner Communications, Inc. at December 31, 2009.
The unaudited pro-forma condensed combined balance sheet reflects the merger
with UniTek by our wholly owned subsidiary, BCI East, Inc. as if it had occurred
on December 31, 2009.
The
accompanying unaudited pro-forma condensed combined statement of operations for
the year ended December 31, 2009 assumes that the merger took place at the
beginning of the period presented.
In
accordance with the rules and regulations of the SEC, unaudited financial
statements may omit or condense information and disclosures normally required
for a complete set of financial statements prepared in accordance with generally
accepted accounting principles. However, management believes that the notes to
the financial statements as presented contain disclosures adequate to make the
information presented useful and not misleading.
The
adjustments necessary to fairly present the unaudited pro-forma condensed
combined financial statements have been made based on available information and,
in the opinion of management, are reasonable. Assumptions underlying the
pro-forma adjustments are described below in the accompanying notes, which
should be read in conjunction with these unaudited pro-forma condensed combined
financial statements.
The
unaudited pro-forma condensed combined financial data is for comparative
purposes only and does not purport to represent what our financial position or
results of operations would actually have been had the events noted above in
fact occurred on the assumed dates or to project the financial position or
results of operations for any future date or future period. The unaudited
pro-forma condensed combined financial data should be read in conjunction with
the notes hereto.
2. Merger
Transaction
On
January 27, 2010, Berliner Communications, Inc. (“Berliner”,“we”, “us”, “the
Company”), BCI East, Inc., a Delaware corporation and a wholly owned subsidiary
of the Company (“Merger Sub”), and UniTek entered into an Agreement and Plan of
Merger (the “Merger Agreement”), pursuant to which Merger Sub merged (the
“Merger”) with and into Unitek and Unitek became a wholly owned subsidiary of
the Company. The time on January 27, 2010 at which the Merger became effective
is referred to as the “Effective Time”.
Pursuant
to the terms and conditions of the Merger Agreement, at the Effective Time, each
outstanding share of common stock of Unitek (the “Unitek Common Stock”) was
converted into the right to receive 0.012 shares of series A preferred stock of
Berliner (the “Berliner Series A Preferred Stock”) and 0.4 shares of common
stock of Berliner (the “Berliner Common Stock”), and each share of series A
preferred stock of Unitek (the “Unitek Preferred Stock”) was converted into the
right to receive 0.02 shares of series B preferred stock of Berliner (the
“Berliner Series B Preferred Stock”: and, collectively with the Berliner Series
A Preferred Stock and the Berliner Common Stock, the “Merger Consideration”).
Each
share of Berliner Series A Preferred Stock will automatically be converted into
50 fully paid and non-assessable shares of Berliner Common Stock immediately
after such time that amended and restated articles of incorporation have been
filed and accepted with the State of Delaware. The ultimate effect of these
conversions was to effect an exchange of UniTek Common Stock for Berliner Common
Stock at a 1:1 ratio upon the completion of all necessary amendments to the
Company’s incorporation documents. The terms of the Berliner Series A
Preferred Stock and the Berliner Series B Preferred Stock are summarized in Item
5.03 in the Form 8-K filed with the Securities and Exchange Commission (“SEC”)
on January 27, 2010.
Based on
the number of shares of Unitek capital stock and Berliner capital stock
outstanding as of January 27, 2010, the stockholders of Unitek immediately prior
to the Effective Time will hold more than 80% of the voting capital stock of
Berliner outstanding immediately following the Merger. In addition, as part of
the Merger, options to acquire shares of Unitek Common Stock were converted into
options to acquire an equivalent amount of shares of Berliner
Common Stock (the “Substitute Options”), and warrants to acquire shares of
Unitek Common Stock were converted into warrants to acquire an equivalent amount
of shares of Berliner Common Stock (the “Substitute Warrants”). The Substitute
Options and the Substitute Warrants retain the same (or substantially
equivalent) vesting, exercisability and expiration terms as the original Unitek
options and warrants, respectively. The Substitute Options and the Substitute
Warrants are summarized in Items 5.02 and 5.03 to the Form 8-K filed with the
SEC on January 27, 2010.
4
Berliner
Communications, Inc.
Notes
to Unaudited Pro-Forma Condensed Combined Financial
Statements
Berliner
was the legal acquirer under the Merger and remains the registrant for
Securities and Exchange Commission (“SEC”) reporting purposes. The
Merger will be accounted for as a reverse acquisition with UniTek as the
accounting acquirer. The Merger will be accounted for as a purchase
business combination, using UniTek’s historical financial information and
accounting policies and applying fair value estimates to the acquired assets,
liabilities and commitments of Berliner as of January 27, 2010.
The
foregoing description of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the Merger Agreement, which was
filed as Exhibit 10.1 to the Form 8-K filed with the SEC on January 27, 2010 and
incorporated herein by reference.
3.
Pro-Forma Allocation of Purchase Price
The
allocation of the purchase price is a preliminary allocation to identifiable net
assets, net liabilities and commitments acquired. UniTek intends to conduct an
appraisal of these assets, liabilities and commitments and therefore it is
possible that the preliminary purchase price allocation will change based on the
results of this appraisal. UniTek will consider a potential
adjustment to the purchase price allocation based upon the results of this
appraisal.
The
preliminary purchase price, which was calculated based upon the fair value of
equity consideration, was allocated to the assets acquired and liabilities
assumed as follows (in thousands):
Cash
|
$ | 412 | ||
Accounts
receivable
|
27,675 | |||
Inventories
|
993 | |||
Prepaid
expenses and other assets
|
3,785 | |||
Property
and equipment
|
2,693 | |||
Non
compete agreements
|
408 | |||
Customer relationships
and backlog
|
2,070 | |||
Goodwill
|
2,851 | |||
Accounts
payable and accrued expenses
|
(12,087 | ) | ||
Line
of credit
|
(7,449 | ) | ||
Capital
lease obligations
|
(1,559 | ) | ||
Total
net assets acquired
|
$ | 19,792 |
5
4.
Pro-Forma Adjustments
Balance Sheet
Adjustments
|
(a)
|
Proceeds from the issuance of 12.5
million shares of preferred stock issued in conjunction with the
Merger
|
(b)
|
Reflects the payment of the Berliner PNC
credit facility that was retired in conjunction with the Merger
|
(c)
|
Reflects payment required by the December
2009 amendment under UniTek’s First Lien Term B Credit facility
in conjunction with
the Merger
|
(d)
|
Adjustment to reflect estimated
fair value of
Berliner property and equipment at the date of the
acquisition
|
(e)
|
Adjustment to eliminate existing
Berliner goodwill and intangible assets
|
(f)
|
To record preliminary estimate of
goodwill and identifiable intangible assets from the purchase of
Berliner (in
thousands):
|
Customer
relationships
|
$ | 800 | ||
Backlog
|
1,270 | |||
Covenants not to
compete
|
408 | |||
Goodwill
|
2,851 | |||
$ | 5,329 |
(g)
|
To record estimated legal, accounting and other
fees required to close the Merger
|
(h)
|
To record deferred financing costs
associated with amendment required under UniTek First Lien and Second Lien
Credit Facilities
|
(i)
|
To record fair value
of equity transferred
as part of the Merger
|
(j) |
Adjustment
to state common stock at par value
post-Merger.
|
Statement of Operations
Adjustments
|
(k)
|
Reflects preliminary estimated
amortization of identifiable intangible assets from the purchase of
Berliner. Customer relationships
are estimated to be amortized over seven years, backlog is estimated to be
amortized over one year and covenants not to compete are estimated to be
amortized over 3.4 years
|
(l)
|
Incremental interest expense
from the credit
support fee required under the Credit Support Agreement
entered into with HM Capital as part of the Merger for the guaranty of the Holdings
Revolving Credit Facility. The fee is estimated at 6% of the
current balance of $28.6 million
|
(m)
|
Amortization of deferred financing
costs discussed at
Adjustment (h)
|
(n)
|
Reclassification of deferred
financing costs as interest expense to conform with historical UniTek
accounting policy
|
(o)
|
Reclassification of Berliner
SG&A costs to
conform with historical UniTek accounting policy
|
(p)
|
Reflects elimination of revenue
and associated costs between UniTek and Berliner for work completed in
2009
|
5. Reconciliation
of Loss from continuing operations to EBITDA
Below is
a reconciliation of net loss from continuing operations to EBITDA. UniTek
adjusted 2009 EBITDA is $19.4 million and adjusted combined pro-forma EBITDA is
$16.2 million.
(Amounts
in thousands)
|
||||||||
UniTek
|
|
|||||||
Year
Ended December 31,
|
Combined Pro-Forma |
|||||||
2009
|
2009
|
|||||||
Loss
from continuing operations
|
$ | (66,146 | ) | $ | (77,451 | ) | ||
Income
tax (benefit)
|
(4,743 | ) | (3,046 | ) | ||||
Other
expense
|
284 | 246 | ||||||
Interest,
net
|
18,825 | 21,268 | ||||||
Depreciation
and amortization
|
26,878 | 29,673 | ||||||
Asset
impairment
|
38,431 | 38,431 | ||||||
EBITDA
|
$ | 13,529 | $ | 9,121 | ||||
Stock
compensation expense (1)
|
1,688 | 2,089 | ||||||
Legacy
legal reserve
|
1,883 | 1,883 | ||||||
Pro-forma
EBITDA from market swap timing
|
1,093 | 1,093 | ||||||
Costs
to support Merger (2)
|
1,165 | 1,977 | ||||||
Adjusted
EBITDA
|
$ | 19,358 | $ | 16,163 |
(1)
|
Includes
$0.4 million of Berliner stock compensation costs in combined
pro-forma.
|
(2)
|
Includes
$0.8 million of costs included at Berliner in combined
pro-forma.
|
While
Adjusted EBITDA is a non-GAAP measure, it does represent a primary metric that
management uses to monitor the performance of the business and, as a
consequence, it is included in this document for supplementary information
purposes only.
6