Attached files
| file | filename |
|---|---|
| 8-K/A - EDAC TECHNOLOGIES CORP | edactech8ka081512.htm |
| EX-99.3 - EDAC TECHNOLOGIES CORP | ex99-3.htm |
| EX-99.1 - EDAC TECHNOLOGIES CORP | ex99-1.htm |
| EX-23.1 - EDAC TECHNOLOGIES CORP | ex23-1.htm |
Exhibit 99.2
Introduction
On June 1, 2012, , EDAC Technologies Corporation (“EDAC”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with EBTEC Corporation (“EBTEC”), pursuant to which EDAC acquired all of the outstanding stock of EBTEC for approximately $11 million (the “Acquisition”). The Acquisition closed simultaneously therewith. Approximately 85% of the purchase price was paid in cash, funded by financing through TD Bank, N.A. (“TD Bank”). The remaining 15% was funded through the issuance by EDAC of its common stock to two of the three shareholders of EBTEC. The Purchase Agreement contains customary representations and warranties by EDAC and EBTEC, and customary covenants and agreements between the parties.
The unaudited pro forma financial statements include all material pro forma adjustments necessary for their preparation, as required by Article 11 of Regulation S-X and, accordingly, do not assume any benefits from cost savings or synergies of operations of the combined company.
The pro-forma adjustments are based upon available information and certain assumptions that management believes are reasonable. The unaudited pro-forma consolidated statements do not purport to represent what the financial condition or results of operations would actually have been had these transactions in fact occurred as of the date indicated above or to project results of operations for these periods indicated or for any other period. This unaudited pro-forma consolidated financial information should be read in conjunction with the consolidated financial statements included in the EDAC Form 10-K and appearing elsewhere in the Form 8-K/A.
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EDAC TECHNOLOGIES CORPORATION
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UNAUDITED PRO-FORMA STATEMENT of INCOME
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For the Three Months Ended March 31, 2012
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(in thousands except per share amounts)
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Historical
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Consolidated
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Pro-Forma
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Pro-Forma
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EDAC
(unaudited)
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EBTEC
(unaudited)
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Adjustments
(unaudited)
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Total
(unaudited)
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Sales
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$ | 24,030 | $ | 3,586 | (1) | $ | (1 | ) | $ | 27,615 | ||||||||||
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Cost of Sales
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19,673 | 2,642 | (1), (11) | 134 | 22,449 | |||||||||||||||
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Gross Profit
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4,357 | 944 | (135 | ) | 5,166 | |||||||||||||||
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Selling, General, and Administrative Expenses
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2,248 | 577 | (2) | (31 | ) | 2,794 | ||||||||||||||
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Income from operations
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2,109 | 367 | (104 | ) | 2,372 | |||||||||||||||
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Non-operating Income (Expense):
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Interest Expense
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(208 | ) | (33 | ) | (3) | (65 | ) | (306 | ) | |||||||||||
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Income Before Income Taxes
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1,901 | 334 | (169 | ) | 2,066 | |||||||||||||||
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Provision for Income Taxes
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646 | 139 | (4) | (83 | ) | 702 | ||||||||||||||
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Net Income
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$ | 1,255 | $ | 195 | $ | (86 | ) | $ | 1,364 | |||||||||||
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Comprehensive income
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$ | 1,608 | $ | 202 | $ | (86 | ) | $ | 1,724 | |||||||||||
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Basic Income Per Common Share:
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$ | 0.25 | (5) | $ | 0.26 | |||||||||||||||
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Diluted Income Per Common Share:
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$ | 0.23 | (5) | $ | 0.24 | |||||||||||||||
See notes to unaudited pro forma financial statements.
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EDAC TECHNOLOGIES CORPORATION
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PRO-FORMA STATEMENT of INCOME
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For the Fiscal Year Ended December 31, 2011
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(in thousands except per share amounts)
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Historical
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Consolidated
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EDAC
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EBTEC
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Pro-Forma
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2011
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2011
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Adjustments
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Pro Forma
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Sales
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$ | 86,633 | $ | 12,585 | (1) | - | $ | 99,218 | ||||||||||||
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Cost of Sales
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72,256 | 8,862 | (1), (11) | 233 | 81,351 | |||||||||||||||
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Gross Profit
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14,377 | 3,723 | (233 | ) | 17,867 | |||||||||||||||
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Selling, General and Administrative Expenses
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7,983 | 2,393 | (2) | (228 | ) | 10,148 | ||||||||||||||
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Income from Operations
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6,394 | 1,330 | (5 | ) | 7,719 | |||||||||||||||
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Non-Operating Income (Expense):
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Interest Expense
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(1,015 | ) | (166 | ) | (3) | (162 | ) | (1,343 | ) | |||||||||||
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Income before Provision For Income Taxes
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5,379 | 1,164 | (167 | ) | 6,376 | |||||||||||||||
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Provision for Income Taxes
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1,829 | 398 | (4) | (59 | ) | 2,168 | ||||||||||||||
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Net Income
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$ | 3,550 | $ | 766 | $ | (108 | ) | $ | 4,208 | |||||||||||
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Comprehensive income
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$ | 2,940 | $ | 770 | $ | (108 | ) | $ | 3,602 | |||||||||||
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Basic Income Per Common Share:
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$ | 0.72 | (5) | $ | 0.83 | |||||||||||||||
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Diluted Income Per Common Share:
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$ | 0.68 | (5) | $ | 0.78 | |||||||||||||||
See notes to unaudited pro forma financial statements
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EDAC TECHNOLOGIES CORPORATION
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Unaudited Pro-Forma Consolidated Balance Sheet
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As of March 31, 2012
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(in thousands)
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Historical
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Consolidated
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EDAC
(unaudited)
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EBTEC
(unaudited)
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Adjustments
(unaudited)
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Pro-Forma
(unaudited)
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ASSETS
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CURRENT ASSETS:
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Cash
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$ | 1,816 | $ | 132 | $ | 1,948 | ||||||||||||||
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Accounts receivable (net of allowance for
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for doubtful accounts)
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19,823 | 1,857 | (6) | $ | (1 | ) | 21,679 | |||||||||||||
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Inventories, net
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22,873 | 922 | (7) | 96 | 23,891 | |||||||||||||||
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Prepaid expenses and other current assets
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428 | 134 | 562 | |||||||||||||||||
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Prepaid taxes
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- | 21 | 21 | |||||||||||||||||
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Deferred income taxes
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1,951 | 129 | 2,080 | |||||||||||||||||
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Total current assets
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46,891 | 3,195 | 95 | 50,181 | ||||||||||||||||
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PROPERTY, PLANT AND EQUIPMENT
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27,034 | 4,838 | (7) | 1,334 | 33,206 | |||||||||||||||
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OTHER ASSETS:
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Goodwill and other intangibles
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- | - | (7) | 4,390 | 4,390 | |||||||||||||||
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Other
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102 | 7 | 109 | |||||||||||||||||
| 102 | 7 | 4,390 | 4,499 | |||||||||||||||||
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TOTAL ASSETS
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$ | 74,027 | $ | 8,040 | $ | 5,819 | $ | 87,886 | ||||||||||||
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Lines of credit
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$ | 6,595 | $ | - | (8) | $ | - | $ | 9,144 | |||||||||||
| (9) | 2,549 | |||||||||||||||||||
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Current portion of long-term debt
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2,389 | 522 | (8 | ) | (522 | ) | 5,205 | |||||||||||||
| (9) | 2,816 | |||||||||||||||||||
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Trade accounts payable
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10,968 | 770 | (6) | (31 | ) | 11,707 | ||||||||||||||
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Employee compensation and amounts
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withheld
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2,242 | - | 2,242 | |||||||||||||||||
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Accrued expenses
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2,260 | 683 | 2,943 | |||||||||||||||||
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Customer advances
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431 | - | 431 | |||||||||||||||||
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Total current liabilities
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24,885 | 1,975 | 4,812 | 31,672 | ||||||||||||||||
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LONG-TERM LIABILITIES
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Long-term debt, less current portion
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11,569 | 1,360 | (8) | (1,535 | ) | 15,473 | ||||||||||||||
| (9) | 4,079 | |||||||||||||||||||
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Obligation under interest rate swap
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175 | 175 | ||||||||||||||||||
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Pension liabilities, less current portion
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1,941 | - | 1,941 | |||||||||||||||||
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Deferred income taxes
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5,162 | 1,253 | (6 | ) | 6,409 | |||||||||||||||
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Total long-term liabilities
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18,672 | 2,788 | 2,538 | 23,998 | ||||||||||||||||
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COMMITMENTS AND CONTINGENCIES
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- | - | - | |||||||||||||||||
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SHAREHOLDERS' EQUITY:
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Common stock
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13 | 100 | (7) | (100 | ) | 13 | ||||||||||||||
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Additional paid-in capital
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12,768 | - | (10) | 1,650 | 14,418 | |||||||||||||||
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Retained earnings
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20,435 | 3,286 | (7) | (3,190 | ) | 20,531 | ||||||||||||||
| 33,216 | 3,386 | (1,640 | ) | 34,962 | ||||||||||||||||
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Less: accumulated other comprehensive loss
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2,746 | 109 | (7) | (109 | ) | 2,746 | ||||||||||||||
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Total shareholders' equity
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30,470 | 3,277 | (1,531 | ) | 32,216 | |||||||||||||||
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TOTAL LIABILITIES AND
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SHAREHOLDERS' EQUITY
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$ | 74,027 | $ | 8,040 | $ | 5,819 | $ | 87,886 | ||||||||||||
See notes to unaudited pro forma financial statements.
4
EDAC Technologies Corporation
Notes to Unaudited Pro-Forma Financial Statements
The following numbered notes are referenced on the Unaudited Pro-Forma Balance Sheets and Statements of Income. These unaudited pro-forma statements reflect balances for EDAC and EBTEC as of and for the three months ended March 31, 2012 and for the fiscal year ended December 31, 2011. The unaudited pro-forma financial statements are based upon the EDAC historical financial statements that were filed with the SEC in the EDAC Form 10-K on March 8, 2012, the EDAC Form 10-Q on May 1, 2012, the EDAC Form 10-Q on April 28, 2011, and the historical financial statements included elsewhere in this Form 8-K/A for EBTEC, adjusted to give effect to the following items:
1. Elimination of sales transactions between EDAC and EBTEC.
2. Elimination of EBTEC’s former parent’s corporate charge and legal fees associated with the sale of EBTEC to EDAC.
3. Elimination of EBTEC’s interest and recording of interest expense on the debt used to acquire EBTEC.
4. Consideration for income taxes utilizing the tax rate that was applicable to EDAC for each period presented.
5. Recording of the effect on EDAC’s EPS of 150,523 shares issued to partially pay the acquisition price for EBTEC.
6. Elimination of intercompany balances between EDAC and EBTEC, and EBTEC and Aquasium (former parent).
7. Recognition of adjustment to fair value of assets including inventory, property, plant and equipment, intangibles and the recording of the excess of the purchase price over net assets acquired recorded as goodwill and the elimination of EBTEC’s equity. The allocation of the purchase price is provisional.
8. Elimination of EBTEC’s debt which was paid off by the seller at the closing.
9. Recording of debt incurred by EDAC for the acquisition of EBTEC.
10. Recording of EDAC stock issued as part of the acquisition price for EBTEC to partially pay the acquisition price for EBTEC.
11. Depreciation on step up of assets to fair value and amortization of intangible assets valued at an estimated $300 with an estimated useful life of 15 years
The $11,095 purchase price of EBTEC has been recorded at the fair value of assets, liabilities and goodwill of EBTEC. Approximately $1,650 of the purchase price was funded through the issuance of 150,523 shares of the Company’s common stock. The balance of the purchase price, less $217 cash acquired, was paid in cash in the amount of $9,227. The allocation of the purchase price is provisional.
The unaudited pro-forma consolidated balance sheet as of March 31, 2012 gives effect to the transactions described above as if they occurred as of that date. The unaudited consolidated statements of income for the year ended December 31, 2011 and the three month period ended March 31, 2012 give effect to the transactions described above as if they occurred at the beginning of the respective periods.
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