Attached files
| file | filename |
|---|---|
| 8-K/A - Corporate Resource Services, Inc. | v201880_8ka.htm |
| EX-99.1 - Corporate Resource Services, Inc. | v201880_ex99-1.htm |
Exhibit
99.2
Corporate
Resource Services, Inc. and Subsidiaries
Unaudited
Pro Forma Condensed Consolidated Financial Statements
The
following unaudited pro forma condensed consolidated balance sheet as of June
30, 2010 combines the historical consolidated balance sheet of Corporate
Resource Services, Inc. (the "Company") and its subsidiaries as of June 30,
2010, and the balance sheet of Tri-Overload Staffing, Inc. ("TOS") as of June
30, 2010 under the “as if pooling-of-interest method” of accounting, as these
two entities are under common control, giving effect to the acquisition of TOS
pursuant to a merger of TOS into a wholly-owned subsidiary of Corporate Resource
Services, Inc. on August 27, 2010 (the "TOS Acquisition"), as if it had occurred
on June 30, 2010.
The
following unaudited pro forma condensed consolidated statements of operations
for the year ended September 30, 2009 combine the historical consolidated
statements of operations of Corporate Resource Services, Inc. and its
subsidiaries for the year ended September 30, 2009, the statements of operations
of GT Systems, Inc. and Affiliates (acquired on April 5, 2010 (the "CRD
Acquisition")) for the year ended December 31, 2009, and the statements of
operations for American Multiline Corporation, the predecessor of TOS for the
year ended June 30, 2009 giving effect to the TOS Acquisition as if it had
occurred on October 1, 2008.
The
following unaudited pro forma condensed consolidated statements of operations
for the nine months ended June 30, 2010 combine the historical consolidated
statements of operations of Corporate Resource Services, Inc. and its
subsidiaries for the, the nine months ended June 30, 2010, and the statements of
operations of GT Systems, Inc. and Affiliates for the six month period ended
March 31, 2010, and the statements of operations of TOS for the nine months
period ended March 31, 2010, in each case giving effect to the TOS Acquisition
as if it had occurred on October 1, 2009.
The
unaudited pro forma condensed consolidated financial statements have been
prepared giving effect to, among other things, the TOS Acquisition which will be
accounted for as an "as if pooling-of-interest" in accordance with ASC 805-50
for business combinations for entities under common control, and the acquisition
of assets of GT Systems, Inc. and Affiliates which was accounted for as an
acquisition in accordance with ASC 805-10 "Business
Combinations". Since the Company and TOS are deemed entities under
common control, the acquisition will be recorded using the as if
pooling-of-interest method and the financial information for all periods
presented subsequent to July 20, 2009, the date the entities came under common
control, will be presented as if the entities had been combined.
The
unaudited pro forma condensed consolidated financial statements are based on the
estimates and assumptions set forth in the notes to such statements, which have
been made solely for purposes of developing such pro forma
information. The pro forma adjustments are based upon available
information and certain assumptions that are factually supportable and that we
believe are reasonable under the circumstances, and are subject to
revision. The unaudited pro forma condensed consolidated financial
statements are presented for informational purposes only, and we cannot assure
you that the assumptions used in the preparation of the unaudited pro forma
condensed consolidated financial statements will ultimately prove to be
correct. The unaudited pro forma information is not necessarily
indicative of the financial position or results of operations that may have
actually occurred had the TOS Acquisition taken place on the dates noted or the
future financial position or operating results of the combined
company.
Corporate
Resource Services, Inc. and Subsidiaries
Unaudited
Pro Forma Condensed Consolidated Balance Sheet
June
30, 2010
|
Company
|
Tri-Overload
|
Pro
Forma
|
Pro
Forma
|
|||||||||||||
|
(As Reported)
|
Staffing, Inc.
|
Adjustments
|
Consolidated
|
|||||||||||||
|
Assets
|
||||||||||||||||
|
Current
Assets
|
$ | 4,665,000 | $ | 3,841,781 | $ | - | $ | 8,506,781 | ||||||||
|
Property
and Equipment
|
817,000 | 305,912 | - | 1,122,912 | ||||||||||||
|
Intangible
Assets
|
5,240,000 | 1,495,474 | - | 6,735,474 | ||||||||||||
|
Other
Assets
|
27,000 | 205,252 | - | 232,252 | ||||||||||||
| $ | 10,749,000 | $ | 5,848,419 | $ | - | $ | 16,597,419 | |||||||||
|
Liabilities
and Stockholders' Equity
|
||||||||||||||||
|
Current
Liabilities
|
$ | 9,443,000 | $ | 5,833,353 | $ | - | $ | 15,276,353 | ||||||||
|
Non-current
Liabilities
|
1,368,000 | 100,000 | - | 1,468,000 | ||||||||||||
|
Stockholders'
Equity (Deficit)
|
(62,000 | ) | (84,934 | ) | - | (1) | (146,934 | ) | ||||||||
| $ | 10,749,000 | $ | 5,848,419 | $ | - | $ | 16,597,419 | |||||||||
|
(1)
|
Issuance
of stock in connection with the TOS Acquisition did not increase equity
due to the “as if pooling-of-interest method” of presenting the
transaction.
|
Corporate
Resource Services, Inc. and Subsidiaries
Unaudited
Pro Forma Condensed Consolidated Statement of Operations
Year
Ended September 30, 2009
|
American
|
||||||||||||||||||||
|
Company
|
GT
Systems, Inc.
|
Multiline
|
||||||||||||||||||
|
(As
Reported)
|
and
Affiliates
|
Corporation
|
||||||||||||||||||
|
Year
Ended
|
Year
Ended
|
Year
Ended
|
Pro
Forma
|
Pro
Forma
|
||||||||||||||||
|
Sept. 30, 2009
|
Dec. 31, 2009
|
June 30, 2009 (a)
|
Adjustments
|
Consolidated
|
||||||||||||||||
|
Revenue
|
$ | 56,989,000 | $ | 93,926,742 | $ | 37,667,317 | (1) | $ | (21,129,033 | ) | ||||||||||
| (2) | (68,607 | ) | $ | 167,385,419 | ||||||||||||||||
|
Direct
Cost of Services
|
49,647,000 | 70,899,521 | 30,958,420 | (1) | (18,014,760 | ) | ||||||||||||||
| (3) | (531,743 | ) | 132,958,438 | |||||||||||||||||
|
Gross
Profit
|
7,342,000 | 23,027,221 | 6,708,897 | (2,651,137 | ) | 34,426,981 | ||||||||||||||
|
Operating
Expenses
|
7,710,000 | 26,917,588 | 8,293,290 | (1) | (3,819,931 | ) | ||||||||||||||
| (4) | (2,028,353 | ) | ||||||||||||||||||
| (6) | (597,000 | ) | 36,475,594 | |||||||||||||||||
|
Loss
From Operations
|
(368,000 | ) | (3,890,367 | ) | (1,584,393 | ) | 3,794,147 | (2,048,613 | ) | |||||||||||
|
Non-Operating
Expenses
|
510,000 | 1,720,172 | 229,740 | (1) | (590,375 | ) | ||||||||||||||
| (5) | (334,196 | ) | 1,535,341 | |||||||||||||||||
|
Net
Loss
|
$ | (878,000 | ) | $ | (5,610,539 | ) | $ | (1,814,133 | ) | $ | 4,718,718 | $ | (3,583,954 | ) | ||||||
|
Net
Loss Per Share:
|
||||||||||||||||||||
|
Basic
|
$ | (0.04 | ) | $ | (0.16 | ) | ||||||||||||||
|
Diluted
|
$ | (0.04 | ) | $ | (0.16 | ) | ||||||||||||||
|
Weighted
Average Shares Outstanding:
|
||||||||||||||||||||
|
Basic
|
22,511,000 | 22,511,000 | ||||||||||||||||||
|
Diluted
|
22,511,000 | 22,511,000 | ||||||||||||||||||
(a) -
Predecessor company of Tri-Overload Staffing, Inc.
Corporate
Resource Services, Inc. and Subsidiaries
Notes
to Unaudited Pro forma Condensed Consolidated Financial Statements
Year
Ended September 30, 2009
Basis
of Presentation
The pro
forma condensed consolidated statement of operations included the results of the
Company for the year ended September 30, 2009, American Multiline Corporation,
the predecessor company of Tri-Overload Staffing, Inc. for the year ended June
30, 2009 and GT Systems Inc. and Affiliates for the year ended December 31,
2009.
Pro
Forma Adjustments
|
(1)
|
To
eliminate the historical operating results of Integrated Consulting Group
of NY, LLC, an affiliate of GT Systems, Inc. that was not part of the CRD
Acquisition.
|
|
Revenue
|
$ | (21,129,033 | ) | |
|
Direct
cost of services
|
(18,014,760 | ) | ||
|
Operating
expenses
|
(3,819,931 | ) | ||
|
Non-operating
expenses
|
(590,375 | ) |
|
(2)
|
To
eliminate revenues that are not anticipated to reoccur upon consummation
of the CRD Acquisition.
|
|
Revenues
|
$ | (68,607 | ) |
|
(3)
|
To
reflect reduction in staff worker's compensation costs that management
anticipates will not reoccur upon consummation of the CRD
Acquisition.
|
|
Worker's
compensation expense
|
$ | (531,743 | ) |
|
(4)
|
Adjustment
to eliminate operating expenses related to acquisition costs and savings
on expenses that management does not expect to reoccur after the CRD
Acquisition.
|
|
Rent
expense that reflects renegotiation of leaseholds
|
$ | (694,854 | ) | |
|
Legal
and professional fees
|
(1,193,960 | ) | ||
|
Elimination
of duplicate computer and other expenses
|
(139,539 | ) | ||
|
Operating
expenses
|
$ | (2,028,353 | ) |
|
(5)
|
To
adjust non-operating expenses that management does not expect to reoccur
upon consummation of the CRD Acquisition due to elimination of GT Systems
debt.
|
|
Interest
and finance costs
|
$ | (334,196 | ) |
|
(6)
|
To
adjust operating expenses that management does not expect to reoccur after
the TOS Acquisition.
|
|
Reduction
of payroll and related benefits and rent
|
$ | (597,000 | ) |
Corporate
Resource Services, Inc. and Subsidiaries
Unaudited
Pro Forma Condensed Consolidated Statement of Operations
Nine
Months Ended June 30, 2010
|
Company
|
GT
Systems, Inc.
|
Tri-Overload
|
||||||||||||||||||
|
(As
Reported)
|
and
Affiliates
|
Staffing,
Inc.
|
||||||||||||||||||
|
Nine
Mos. Ended
|
Six
Mos. Ended
|
Nine
Mos. Ended
|
Pro
Forma
|
Pro
Forma
|
||||||||||||||||
|
June 30, 2010
|
March 31, 2010
|
March 31, 2010 (a)
|
Adjustments
|
Consolidated
|
||||||||||||||||
|
Revenue
|
$ | 60,107,000 | $ | 48,695,498 | $ | 19,954,976 | (1) | $ | (12,631,741 | ) | $ | 116,125,733 | ||||||||
|
Direct
Cost of Services
|
50,747,000 | 35,722,696 | 15,902,875 | (1) | (10,444,638 | ) | ||||||||||||||
| (2) | (265,872 | ) | 91,662,061 | |||||||||||||||||
|
Gross
Profit
|
9,360,000 | 12,972,802 | 4,052,101 | (1,921,231 | ) | 24,463,672 | ||||||||||||||
|
Operating
Expenses
|
10,809,000 | 14,451,623 | 3,943,345 | (1) | (1,754,441 | ) | ||||||||||||||
| (3) | (1,625,381 | ) | ||||||||||||||||||
| (6) | (967,750 | ) | 24,856,396 | |||||||||||||||||
|
Loss
From Operations
|
(1,449,000 | ) | (1,478,821 | ) | 108,756 | 2,426,341 | (392,724 | ) | ||||||||||||
|
Non-Operating
Expenses
|
1,877,000 | 690,351 | 153,977 | (1) | (49,883 | ) | ||||||||||||||
| (5) | (482,000 | ) | ||||||||||||||||||
| (4) | (292,551 | ) | 1,896,894 | |||||||||||||||||
|
Net
Loss
|
$ | (3,326,000 | ) | $ | (2,169,172 | ) | $ | (45,221 | ) | $ | 3,250,775 | $ | (2,289,618 | ) | ||||||
|
Net
Loss Per Share:
|
||||||||||||||||||||
|
Basic
|
$ | (0.10 | ) | $ | (0.09 | ) | ||||||||||||||
|
Diluted
|
$ | (0.10 | ) | $ | (0.09 | ) | ||||||||||||||
|
Weighted
Average Shares Outstanding:
|
||||||||||||||||||||
|
Basic
|
26,201,000 | 26,201,000 | ||||||||||||||||||
|
Diluted
|
26,201,000 | 26,201,000 | ||||||||||||||||||
(a) -
American Multiline Corporation from July 1, 2009 through July 19, 2009 and TOS
from July 20, 2009 through March 31, 2010
Corporate
Resource Services, Inc. and Subsidiaries
Notes
to Unaudited Pro forma Condensed Consolidated Financial Statements
Nine
Months Ended June 30, 2009
Basis
of Presentation
The pro
forma condensed consolidated statement of operations included the results of the
Company for the nine months ended March 31, 2010; Tri-Overload Staffing, Inc.
for the nine months ended March 31, 2010 and GT Systems Inc. and Affiliates for
the six months ended March 31, 2010.
Pro
Forma Adjustments
|
(1)
|
To
eliminate the historical operating results of Integrated Consulting Group
of NY, LLC, an affiliate of GT Systems, Inc. that was not part of the CRD
Acquisition.
|
|
Revenue
|
$ | (12,631,741 | ) | |
|
Direct
cost of services
|
(10,444,638 | ) | ||
|
Operating
expenses
|
(1,754,441 | ) | ||
|
Non-operating
expenses
|
(49,883 | ) |
|
(2)
|
To
reflect reduction in staff worker's compensation costs that management
anticipates will not reoccur upon consummation of the CRD
Acquisition.
|
|
Worker's
compensation expense
|
$ | (265,872 | ) |
|
(3)
|
Adjustment
to eliminate operating expenses related to acquisition costs and savings
on expenses that management does not expect to reoccur after the CRD
Acquisition.
|
|
Rent
expense that reflects renegotiation of leaseholds
|
(539,473 | ) | ||
|
Legal
and professional fees
|
(694,941 | ) | ||
|
Bank
fees and advertising costs
|
(390,967 | ) | ||
|
Operating
expenses
|
||||
|
|
(1,625,381 | ) |
|
|
(4)
|
To
adjust non-operating expenses that management does not expect to reoccur
upon consummation of the CRD
Acquisition due to elimination of GT Systems
debt.
|
|
Interest
and finance costs
|
$ | (292,551 | ) |
|
(5)
|
To
adjust non-operating expenses that management does not expect to reoccur
upon consummation.
|
|
Corporate
Resource Services acquisition expenses
|
$ | (482,000 | ) |
|
(6)
|
To
adjust operating expenses that management does not expect to reoccur after
the TOS Acquisition.
|
|
Tri-Overload
Staffing restructuring costs incurred prior to acquisition
|
$ | (520,000 | ) | |
|
Reduction
of payroll and related benefits and rent
|
(447,750 | ) | ||
| $ | (967,750 | ) |