Attached files

file filename
8-K/A - FORM 8-K/A - Constant Contact, Inc.b86228e8vkza.htm
EX-99.2 - EX-99.2 - Constant Contact, Inc.b86228exv99w2.htm
EX-23.1 - EX-23.1 - Constant Contact, Inc.b86228exv23w1.htm
EX-99.4 UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
Exhibit 99.4
CONSTANT CONTACT, INC.
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
On February 15, 2011, Constant Contact, Inc., a Delaware corporation (the “Company” or “Constant Contact”), acquired substantially all of the assets, excluding cash, of Bantam Networks, LLC, a Delaware limited liability company doing business as Bantam Live (the “Seller”), for a cash purchase price of $15,000,000 (subject to post-closing adjustment) and the assumption by the Company of post-closing liabilities under certain contracts of the Seller (the “Acquisition”). The Acquisition was completed pursuant to the Asset Purchase Agreement, dated as of February 15, 2011, between the Company and the Seller (the “Agreement”), which contains customary representations, warranties and indemnities of the Company and the Seller. The assets of the Seller acquired by the Company under the Agreement primarily include computer software source code, Internet domain names and other intellectual property rights that were used by the Seller in its contact management and social CRM business.
Constant Contact did not assume any of the known or unknown liabilities of Bantam Networks, LLC.
The unaudited pro forma combined consolidated statements of operations, referred to as the “Pro Forma Financial Statements” should be read in conjunction with:
    The accompanying notes to the Pro Forma Financial Statements;
 
    the separate unaudited historical financial statements of the Company as of and for the three months ended March 31, 2011 included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011 and filed with the Securities and Exchange Commission ("SEC") on May 2, 2011;
 
    the separate historical financial statements of the Company as of and for the year ended December 31, 2010 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and filed with the SEC on March 9, 2011 and,
 
    the separate historical financial statements of Bantam Networks, LLC as of and for the year ended December 31, 2010, which are included in Exhibit 99.2 to the Company’s Amendment No. 1 on Form 8-K/A filed with the SEC on May 3, 2011 and are incorporated by reference.
The Company has not provided a pro forma combined consolidated balance sheet as of March 31, 2011 because the acquisition of Bantam Networks, LLC is reflected in the Company’s unaudited condensed consolidated balance sheet as of March 31, 2011 included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011 and filed with the SEC on May 2, 2011. The unaudited pro forma combined consolidated statements of operations for the year ended December 31, 2010 and for the three months ended March 31, 2011 have been adjusted for the operational results of Bantam Networks, LLC as if the acquisition had occurred on January 1, 2010.
The Pro Forma Financial Statements are presented for illustrative purposes and do not purport to represent what the results of operations would actually have been if the merger occurred as of the dates indicated or what such results would be for any future periods.

 


 

CONSTANT CONTACT, INC.
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2010
(in thousands, except per share data)
                                 
    Historical     Historical     Proforma     Proforma  
    Constant Contact (1)     Bantam Networks (2)     Adjustments     Combined  
Revenue
  $ 174,231     $ 55     $ (55) (A)     174,231  
 
                       
                                 
Cost of revenue
    50,825       267     $ (199) (B)     50,893  
 
                       
                                 
Gross profit
    123,406       (212 )     144       123,338  
 
                       
                                 
Operating expenses:
                               
Research and development
    23,985       292               24,277  
Marketing and selling
    78,881       44               78,925  
General and administrative
    18,028       248               18,276  
 
                         
Total operating expenses
    120,894       584             121,478  
 
                       
                                 
Operating income (loss)
    2,512       (796 )     144       1,860  
Interest and other income
    341       1       (43) (C)     299  
 
                       
Income (loss) before income taxes
    2,853       (795 )     101       2,159  
Benefit (provision) for income taxes
    61             (316) (D)     (255 )
 
                       
Net income (loss)
  $ 2,914     $ (795 )   $ (215)     $ 1,904  
 
                       
                                 
Basic net income per share
  $ 0.10                     $ 0.07  
 
                           
                                 
Diluted net income per share
  $ 0.10                     $ 0.06  
 
                           
                                 
Basic weighted average shares outstanding
    28,765                       28,765  
 
                           
                                 
Diluted weighted average shares outstanding
    29,945                       29,945  
 
                           
 
(1)   As reported in Constant Contact, Inc.’s Annual Report on Form 10-K, as filed with the SEC on March 9, 2011.
 
(2)   As reported in Bantam Networks, LLC’s audited financial statements for the year ended December 31, 2010.
See accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Statements.

 


 

CONSTANT CONTACT, INC.
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 2011
(in thousands, except per share data)
                                 
    Historical     Historical     Proforma     Proforma  
    Constant Contact (1)     Bantam Networks (2)     Adjustments     Combined  
Revenue
  $ 50,015     $ 7     $ (7) (A)     50,015  
 
                       
                                 
Cost of revenue
    14,683       33     $ (25) (B)     14,691  
 
                       
                                 
Gross profit
    35,332       (26 )     18       35,324  
 
                       
                                 
Operating expenses:
                               
Research and development
    7,438       36               7,474  
Marketing and selling
    24,234       6               24,240  
General and administrative
    5,778       31               5,809  
 
                       
Total operating expenses
    37,450       73             37,523  
 
                       
                                 
Operating loss
    (2,118 )     (99 )     18       (2,199 )
Interest and other income
    89             (6) (C)     83  
 
                       
Loss before income taxes
    (2,029 )     (99 )     12       (2,116 )
Benefit (provision) for income taxes
    186             (40) (D)     146  
 
                       
Net loss
  $ (1,843 )   $ (99 )   $ (28)     $ (1,970 )
 
                       
                                 
Basic net loss per share
  $ (0.06 )                   $ (0.07 )
 
                           
                                 
Diluted net loss per share
  $ (0.06 )                   $ (0.07 )
 
                           
                                 
Basic weighted average shares outstanding
    29,310                       29,310  
 
                           
                                 
Diluted weighted average shares outstanding
    29,310                       29,310  
 
                           
 
(1)   As reported in Constant Contact, Inc.’s Quarterly Report on Form 10-Q, as filed with the SEC on May 2, 2011.
 
(2)   Unaudited financial information for the one and one half months that Bantam Networks, LLC was not included in the historical results of Constant Contact, Inc.
See accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Statements.

 


 

Constant Contact, Inc.
Notes to Unaudited Pro Forma Combined Consolidated Financial Statements
(in thousands)
A summary of the purchase price allocation for the acquisition of the business acquired of Bantam Networks, LLC is as follows:
         
Total cash consideration
  $ 15,000  
     
Purchase price allocation:
       
       
Identifiable intangible asset
    1,800  
     
Net assets acquired
    1,800  
Goodwill
  $ 13,200  
     
The amount assigned to Bantam Networks, LLC’s identifiable intangible asset acquired is based on the fair value determined as of the acquisition date. The excess of the purchase price over the identifiable intangible asset will be recorded as goodwill. In accordance with current accounting standards, the goodwill will not be amortized, but rather will be tested for impairment annually or more frequently if facts and circumstances warrant a review.
Pro forma adjustments reflect only those adjustments which are factually determinable and supportable. The unaudited pro forma combined consolidated statements of operations reflect the effect of the following pro forma adjustments:
  (A)   Adjustments to eliminate historical revenue of Bantam Networks, LLC as if the acquisition had occurred on January 1, 2010 as Constant Contact discontinued the paid product offering on the acquisition date.
 
  (B)   Adjustments to eliminate the historical amortization expense related to the historical value of Bantam Networks, LLC’s fixed assets as if the acquisition had occurred on January 1, 2010 as the capitalized software has not yet been placed in use by Constant Contact, Inc.
 
  (C)   Adjustments to record the estimated decrease in interest income earned on the reduced cash, cash equivalents and marketable securities as a result of the $15.0 million purchase price paid.
 
  (D)   Adjustments to record income tax expenses related to the amortization of goodwill for tax purposes utilizing federal and state statutory rates.