Attached files
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8-K/A - 8-K/A - MESA LABORATORIES INC /CO/ | a12-17103_18ka.htm |
EX-99.2 - EX-99.2 - MESA LABORATORIES INC /CO/ | a12-17103_1ex99d2.htm |
EX-99.1 - EX-99.1 - MESA LABORATORIES INC /CO/ | a12-17103_1ex99d1.htm |
Exhibit 99.3
UNAUDITED MESA LABORATORIES, INC. PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
As used in this report, we, us, our, Mesa or Company refer to Mesa Laboratories, Inc. The unaudited pro forma condensed combined financial statements present the impact on our financial position and results of operations from our asset acquisition of Bios International Corporation, or Bios. We paid a purchase price of $16,660,000, subject to customary purchase price adjustments. We may pay up to an additional $6,710,000 to the sellers depending on the revenue growth after a three-year period. We acquired the assets used or held for use in connection with Bios and specific liabilities of Bios. We borrowed $11,000,000 under our Credit Facility to finance the acquisition, with the balance being paid from available cash.
The unaudited pro forma condensed combined financial statements as of and for the years ended March 31, 2012 and 2011, have been prepared based on certain pro forma adjustments to our historical financial statements as set forth in our Annual Report on Form 10-K for the years ended March 31, 2012 and 2011, as filed with the Securities and Exchange Commission, and are qualified in their entirety by reference to such historical financial statements and related notes contained in those reports. The historic financial statements for Bios were derived from the audited financial statements for Bios as of and for the years ended December 31, 2011 and 2010. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical financial statements and related notes thereto.
The unaudited pro forma condensed combined balance sheets as of March 31, 2012 and 2011, have been prepared as if the transaction had occurred on that date. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on April 1, 2010.
These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, and the pro forma adjustments are based on a preliminary valuation of the estimated fair value of the net assets acquired and the contingent consideration. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed at the dates indicated or what results would be for any future periods.
MESA LABORATORIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 2012
(Dollars in thousands)
|
|
Mesa |
|
Bios |
|
Combined |
|
Pro Forma |
|
Mesa |
| |||||
ASSETS |
| |||||||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
|
$ |
7,191 |
|
$ |
40 |
|
$ |
7,231 |
|
$ |
(16,700 |
)(b) |
$ |
1,531 |
|
|
|
|
|
|
|
|
|
11,000 |
(c) |
|
| |||||
Accounts receivable, net |
|
6,486 |
|
807 |
|
7,293 |
|
(267 |
)(b) |
7,026 |
| |||||
Inventory, net |
|
4,438 |
|
963 |
|
5,401 |
|
(52 |
)(b) |
5,349 |
| |||||
Other |
|
1,046 |
|
16 |
|
1,062 |
|
(16 |
)(b) |
1,046 |
| |||||
Total current assets |
|
19,161 |
|
1,826 |
|
20,987 |
|
(6,035 |
) |
14,952 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Property, plant and equipment, and other |
|
7,266 |
|
97 |
|
7,363 |
|
(6 |
)(b) |
7,357 |
| |||||
Intangibles, net |
|
9,819 |
|
|
|
9,819 |
|
8,228 |
(b) |
18,047 |
| |||||
Goodwill |
|
14,450 |
|
|
|
14,450 |
|
9,200 |
(b) |
23,650 |
| |||||
|
|
$ |
50,696 |
|
$ |
1,923 |
|
$ |
52,619 |
|
$ |
11,387 |
|
$ |
64,006 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
LIABILITIES AND STOCKHOLDERS EQUITY |
| |||||||||||||||
Current liabilities |
|
$ |
4,262 |
|
$ |
254 |
|
$ |
4,516 |
|
$ |
(184 |
)(b) |
$ |
4,332 |
|
Long-term debt |
|
|
|
|
|
|
|
11,000 |
(c) |
11,000 |
| |||||
Contingent purchase price |
|
|
|
|
|
|
|
2,240 |
(b) |
2,240 |
| |||||
Other long-term liabilities |
|
2,519 |
|
|
|
2,519 |
|
|
|
2,519 |
| |||||
Total liabilities |
|
6,781 |
|
254 |
|
7,035 |
|
13,056 |
|
20,091 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equity: |
|
|
|
|
|
|
|
|
|
|
| |||||
Common stock |
|
6,303 |
|
|
|
6,303 |
|
|
|
6,303 |
| |||||
Members equity |
|
|
|
10 |
|
10 |
|
(10 |
)(b) |
|
| |||||
Retained earnings |
|
37,612 |
|
1,659 |
|
39,271 |
|
(1,659 |
)(b) |
37,612 |
| |||||
Total equity |
|
43,915 |
|
1,669 |
|
45,584 |
|
(1,669 |
) |
43,915 |
| |||||
|
|
$ |
50,696 |
|
$ |
1,923 |
|
$ |
52,619 |
|
$ |
11,387 |
|
$ |
64,006 |
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
MESA LABORATORIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 2011
(Dollars in thousands)
|
|
Mesa |
|
Bios |
|
Combined |
|
Pro Forma |
|
Mesa |
| |||||
ASSETS |
| |||||||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
|
$ |
3,546 |
|
$ |
368 |
|
$ |
3,914 |
|
$ |
(17,028 |
)(b) |
$ |
(2,114 |
) |
|
|
|
|
|
|
|
|
11,000 |
(c) |
|
| |||||
Accounts receivable, net |
|
7,017 |
|
650 |
|
7,667 |
|
(110 |
)(b) |
7,557 |
| |||||
Inventory, net |
|
5,714 |
|
798 |
|
6,512 |
|
113 |
(b) |
6,625 |
| |||||
Other |
|
1,041 |
|
|
|
1,041 |
|
|
|
1,041 |
| |||||
Total current assets |
|
17,318 |
|
1,816 |
|
19,134 |
|
(6,025 |
) |
13,109 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Property, plant and equipment, and other |
|
7,308 |
|
61 |
|
7,369 |
|
30 |
(b) |
7,399 |
| |||||
Intangibles, net |
|
11,484 |
|
|
|
11,484 |
|
8,228 |
(b) |
19,712 |
| |||||
Goodwill |
|
14,450 |
|
|
|
14,450 |
|
9,200 |
(b) |
23,650 |
| |||||
|
|
$ |
50,560 |
|
$ |
1,877 |
|
$ |
52,437 |
|
$ |
11,433 |
|
$ |
63,870 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
LIABILITIES AND STOCKHOLDERS EQUITY |
| |||||||||||||||
Current liabilities |
|
$ |
9,931 |
|
$ |
232 |
|
$ |
10,163 |
|
(162 |
)(b) |
$ |
10,001 |
| |
Long-term debt |
|
|
|
|
|
|
|
11,000 |
(c) |
11,000 |
| |||||
Contingent purchase price |
|
|
|
|
|
|
|
2,240 |
(b) |
2,240 |
| |||||
Other long-term liabilities |
|
4,212 |
|
|
|
4,212 |
|
|
|
4,212 |
| |||||
Total liabilities |
|
14,143 |
|
232 |
|
14,375 |
|
13,078 |
|
27,453 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equity: |
|
|
|
|
|
|
|
|
|
|
| |||||
Common stock |
|
5,068 |
|
|
|
5,068 |
|
|
|
5,068 |
| |||||
Members equity |
|
|
|
10 |
|
10 |
|
(10 |
)(b) |
|
| |||||
Retained earnings |
|
31,349 |
|
1,635 |
|
32,984 |
|
(1,635 |
)(b) |
31,349 |
| |||||
Total equity |
|
36,417 |
|
1,645 |
|
38,062 |
|
(1,645 |
) |
36,417 |
| |||||
|
|
$ |
50,560 |
|
$ |
1,877 |
|
$ |
52,437 |
|
$ |
11,433 |
|
$ |
63,870 |
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
MESA LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Year Ended March 31, 2012
(Amounts in thousands except earnings per share)
(Amounts in Thousands except |
|
Mesa |
|
Bios |
|
Combined |
|
Pro Forma |
|
Mesa |
| |||||
Revenue |
|
$ |
39,616 |
|
$ |
6,786 |
|
$ |
46,402 |
|
$ |
|
|
$ |
46,402 |
|
Cost of revenue |
|
16,105 |
|
2,277 |
|
18,382 |
|
|
|
18,382 |
| |||||
Gross profit |
|
23,511 |
|
4,509 |
|
28,020 |
|
|
|
28,020 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Selling |
|
3,909 |
|
806 |
|
4,715 |
|
|
|
4,715 |
| |||||
General and administrative |
|
5,416 |
|
1,241 |
|
6,657 |
|
1,108 |
(d) |
7,765 |
| |||||
Research and development |
|
1,359 |
|
493 |
|
1,852 |
|
|
|
1,852 |
| |||||
Impairment of intangible |
|
350 |
|
|
|
350 |
|
|
|
350 |
| |||||
Total operating expense |
|
11,034 |
|
2,540 |
|
13,574 |
|
1,108 |
|
14,682 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
|
12,477 |
|
1,969 |
|
14,446 |
|
(1,108 |
) |
13,338 |
| |||||
Other income (expense) |
|
(146 |
) |
1 |
|
(145 |
) |
(165 |
)(e) |
(310 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings before taxes |
|
12,331 |
|
1,970 |
|
14,301 |
|
(1,273 |
) |
13,028 |
| |||||
Income taxes |
|
4,412 |
|
|
|
4,412 |
|
485 |
(f) |
4,897 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income |
|
$ |
7,919 |
|
$ |
1,970 |
|
$ |
9,889 |
|
$ |
(1,758 |
) |
$ |
8,131 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
$ |
2.41 |
|
|
|
|
|
|
|
$ |
2.48 |
| |||
Diluted |
|
2.29 |
|
|
|
|
|
|
|
2.35 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shares outstanding |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
3,285 |
|
|
|
|
|
|
|
3,285 |
| |||||
Diluted |
|
3,462 |
|
|
|
|
|
|
|
3,462 |
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
MESA LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Year Ended March 31, 2011
(Amounts in thousands except earnings per share)
(Amounts in Thousands except |
|
Mesa |
|
Bios |
|
Combined |
|
Pro Forma |
|
Mesa |
| |||||
Revenue |
|
$ |
34,227 |
|
$ |
6,273 |
|
$ |
40,500 |
|
$ |
|
|
$ |
40,500 |
|
Cost of revenue |
|
14,659 |
|
2,037 |
|
16,696 |
|
|
|
16,696 |
| |||||
Gross profit |
|
19,568 |
|
4,236 |
|
23,804 |
|
|
|
23,804 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Selling |
|
3,687 |
|
850 |
|
4,537 |
|
|
|
4,537 |
| |||||
General and administrative |
|
4,576 |
|
1,038 |
|
5,614 |
|
1,108 |
(d) |
6,722 |
| |||||
Research and development |
|
1,441 |
|
489 |
|
1,930 |
|
|
|
1,930 |
| |||||
Total operating expense |
|
9,704 |
|
2,377 |
|
12,081 |
|
1,108 |
|
13,189 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
|
9,864 |
|
1,859 |
|
11,723 |
|
(1,108 |
) |
10,615 |
| |||||
Other income (expense) |
|
(113 |
) |
(1 |
) |
(114 |
) |
(165 |
)(e) |
(279 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings before taxes |
|
9,751 |
|
1,858 |
|
11,609 |
|
(1,273 |
) |
10,336 |
| |||||
Income taxes |
|
3,568 |
|
|
|
3,568 |
|
455 |
(f) |
4,023 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income |
|
$ |
6,183 |
|
$ |
1,858 |
|
$ |
8,041 |
|
$ |
(1,728 |
) |
$ |
6,313 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
$ |
1.91 |
|
|
|
|
|
|
|
$ |
1.95 |
| |||
Diluted |
|
1.86 |
|
|
|
|
|
|
|
1.90 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shares outstanding |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
3,231 |
|
|
|
|
|
|
|
3,231 |
| |||||
Diluted |
|
3,330 |
|
|
|
|
|
|
|
3,330 |
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
NOTES TO UNAUDITED MESA LABORATORIES, INC.
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The historical financial information is derived from our historical financial statements and the historical financial statements of Bios International Corporation, or Bios. The pro forma adjustments have been prepared as if we acquired Bios on March 31, 2012 and 2011, for the balance sheets, and on April 1, 2010, for the statements of operations.
The pro forma combined financial statements reflect the following transactions:
· the acquisition of assets used or held for use in connection with Bios and specific liabilities of Bios; and
· the borrowing of $11,000,000 under our Credit Facility.
The unaudited pro forma condensed combined financial statements do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve.
Note 2. Pro Forma Adjustments and Assumptions
(a) Reflects 100% of the assets, liabilities, income and expenses of Bios.
(b) The following reflects the allocation of the consideration, subject to customary purchase price adjustments (dollars in thousands):
Cash consideration |
|
$ |
16,660 |
|
Preliminary contingent purchase price liability |
|
2,240 |
| |
Aggregate consideration |
|
$ |
18,900 |
|
|
|
|
| |
The purchase price was allocated as follows: |
|
|
| |
Accounts receivable, net |
|
$ |
540 |
|
Inventory |
|
911 |
| |
Property, plant and equipment |
|
63 |
| |
Other long-term assets |
|
28 |
| |
Intangibles |
|
8,228 |
| |
Goodwill |
|
9,200 |
| |
Current liabilities |
|
(70 |
) | |
Total purchase price allocation |
|
$ |
18,900 |
|
The acquisition of Bios was accounted for under the purchase method of accounting. The purchase price allocation was based on preliminary estimated fair values of the assets and liabilities acquired, including the preliminary contingent purchase price liability, which was estimated based on historic revenue growth rates. Our acquisition constitutes the acquisition of a business and was recognized at fair value. The allocation of purchase price is preliminary and subject to adjustments. Upon completing our valuation analysis, the preliminary contingent purchase price liability, and the allocation between intangibles and goodwill may change.
(c) Reflects $11,000,000 from borrowing against our Credit Facility.
(d) Reflects amortization of intangibles acquired over an estimated weighted-average useful life of 8 years. Since our valuation is preliminary, we have not completed an allocation of intangibles between the various categories of intellectual property, trade names, customer relationships, and non-compete agreements, which have different lives.
(e) Reflects the interest expense on the debt incurred to finance the acquisition, at 1.5%, based on the prevailing rate under our Credit Facility at the time of the transaction. As of March 31, 2012 and 2011, the effect of a 0.125% variance in the interest rates on pro forma interest expense would have been approximately $14,000 annually.
(f) To reflect income tax expense, because Bios was a pass-through entity for income tax purposes. Since this was an asset acquisition for tax purposes, the acquired intangibles and goodwill are deductible for tax purposes over 15 years. Estimated tax rates of 35.8% and 36.6%, respectively, were used for the years ended March 31, 2012 and 2011. These rates are based on Mesas effective tax rate and the impact of the asset acquisition of Bios.