Attached files
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8-K - FORM 8-K - KEYW HOLDING CORP | v323886_8k.htm |
EX-99.2 - EXHIBIT 99.2 - KEYW HOLDING CORP | v323886_ex-99x2.htm |
EX-99.1 - EXHIBIT 99.1 - KEYW HOLDING CORP | v323886_ex-99x1.htm |
EX-23.1 - EXHIBIT 23.1 - KEYW HOLDING CORP | v323886_ex23-1.htm |
EX-23.2 - EXHIBIT 23.2 - KEYW HOLDING CORP | v323886_ex23-2.htm |
Exhibit 99.3
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following tables set forth: (1) summary statement of operations data for Poole & Associates Inc. (Poole) for the six months ended June 30, 2012, and the year ended March 31, 2012, (2) summary statement of operations data for Sensage, Inc. (Sensage) for the six months ended June 30, 2012, and the year ended December 31, 2011 and (3) the summary balance sheet data for each of Poole and Sensage as of June 30, 2012. The KEYW Holding Corporation (KEYW) entered into a definitive stock purchase agreement for the acquisition of Poole on September 10, 2012, and a definitive merger agreement for the acquisition of Sensage on September 13, 2012. The summary statement of operations data for Poole and Sensage presented in the tables below have been derived, respectively, from Pooles and Sensages audited and unaudited financial statements and related notes.
The unaudited pro forma statement of operations data for the six months ended June 30, 2012, and the year ended December 31, 2011, in the tables below has been prepared to give pro forma effect to the acquisitions of Poole, Sensage and, for the year ended December 31, 2011, other acquisitions during 2011. The unaudited pro forma statement of operations gives effect to these transactions as if they had occurred at the beginning of the period presented. The unaudited pro forma balance sheet in the table below has been prepared to give pro forma effect to the acquisitions of Poole and Sensage as if they closed on June 30, 2012. This data is subject, and gives effect, to the assumptions and adjustments described in the notes accompanying the unaudited pro forma financial information below. The unaudited pro forma data is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the acquisitions been consummated on the dates indicated.
Pro Forma Statement of Operations Data
Year ended December 31, 2011(2) | KEYW (audited) |
Poole (audited) |
Sensage (audited) |
2011 Acquisitions(1) (unaudited) |
Pro Forma Adjustments (unaudited) |
Pro Forma Combined (unaudited) |
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(in thousands, except per share data) | ||||||||||||||||||||||||
Revenue | 190,587 | 40,587 | 11,858 | 24,566 | | 267,598 | ||||||||||||||||||
Cost of Revenues(3) | 133,950 | 29,337 | 2,490 | 12,234 | 2,678 | (4) | 180,689 | |||||||||||||||||
Gross Profit | 56,637 | 11,250 | 9,368 | 12,332 | (2,678 | ) | 86,909 | |||||||||||||||||
Operating Expenses | 41,399 | 9,064 | 9,639 | 8,579 | (2,678 | )(4) | 66,003 | |||||||||||||||||
Intangible Amortization | 13,410 | | | | 14,815 | (5) | 28,225 | |||||||||||||||||
Operating Income (Loss) | 1,828 | 2,186 | (271 | ) | 3,753 | (14,815 | ) | (7,319 | ) | |||||||||||||||
Non-Operating Expense | 1,075 | 419 | 251 | 9,100 | (6) | 10,845 | ||||||||||||||||||
Income (Loss) Before Taxes | 753 | 2,186 | (690 | ) | 3,502 | (23,915 | ) | (18,164 | ) | |||||||||||||||
Tax Expense | 218 | 866 | 2 | 2,257 | (9,566 | ) | (6,223 | ) | ||||||||||||||||
Net Income (Loss) | 535 | 1,320 | (692 | ) | 1,245 | (14,349 | ) | (11,941 | ) | |||||||||||||||
Basic Earnings (Loss) Per Share | 0.02 | n/a | n/a | n/a | (0.43 | ) | ||||||||||||||||||
Fully Diluted Earnings (Loss) Per Share |
0.02 | n/a | n/a | n/a | n/a | |||||||||||||||||||
Weighted Average Common Shares Outstanding |
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Basic | 25,991,914 | n/a | n/a | 1,718,817 | (7) | 27,710,731 | ||||||||||||||||||
Diluted | 28,903,869 | n/a | n/a | 1,718,817 | 30,622,686 |
(1) | For a description of these acquisitions, see Note 2 to the financial statements contained in KEYWs Annual Report on Form 10-K for the year ended December 31, 2011. |
(2) | Poole financials are for the year ended March 31, 2012. |
(3) | Cost of revenues excludes intangible amortization expense as shown separately below. |
(4) | Adjustment to Poole's cost of revenue and operating expense to include fringe benefit expense associated with direct labor in cost of revenue versus operating expense. |
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(5) | Intangible amortization that would have been recorded if the acquisitions of JKA Technologies, Inc. (JKA), Forbes Analytic Software, Inc. (FASI), Flight Landata, Inc. (FLD), Poole, and Sensage had been completed on January 1, 2011. |
(6) | Estimated interest expense for the acquisitions of JKA, FASI, FLD, Poole, and Sensage if they had been completed on January 1, 2011. |
(7) | Includes the shares issued for the acquisitions of JKA and FASI, and the estimated number of shares to be issued for the acquisitions of Poole, and Sensage as if they had been acquired as of January 1, 2011. This amount was adjusted for the shares outstanding that are already included in the KEYW average shares calculation. $7.5 million in stock consideration potentially issuable in connection with the Sensage acquisition was excluded because it is based on an earn out which Sensage may or may not achieve. The actual number of shares issued for the acquisitions of the Poole and Sensage will depend upon factors including future prices of our common stock. |
Six months ended June 30, 2012 | KEYW (unaudited) |
Poole (unaudited) |
Sensage (unaudited) |
Pro Forma Adjustments (unaudited) |
Pro Forma Combined (unaudited) |
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(in thousands, except per share data) | ||||||||||||||||||||
Revenue | 111,931 | 24,272 | 4,369 | | 140,572 | |||||||||||||||
Cost of Revenues(1) | 74,069 | 17,840 | 1,413 | 1,530 | (2) | 94,852 | ||||||||||||||
Gross Profit | 37,862 | 6,432 | 2,956 | (1,530 | ) | 45,720 | ||||||||||||||
Operating Expenses | 26,501 | 5,441 | 4,398 | (1,530 | )(2) | 34,810 | ||||||||||||||
Intangible Amortization | 9,738 | | 4,500 | (3) | 14,238 | |||||||||||||||
Operating Income (Loss) | 1,623 | 991 | (1,442 | ) | (4,500 | ) | (3,328 | ) | ||||||||||||
Non-Operating Expense | 864 | 204 | 4,550 | (4) | 5,618 | |||||||||||||||
Income (Loss) Before Taxes | 759 | 991 | (1,647 | ) | (9,050 | ) | (8,947 | ) | ||||||||||||
Tax Expense | 266 | 411 | 2 | (3,620 | ) | (2,941 | ) | |||||||||||||
Net Income (Loss) | 493 | 580 | (1,648 | ) | (5,430 | ) | (6,005 | ) | ||||||||||||
Basic Earnings (Loss) Per Share | 0.02 | n/a | n/a | n/a | (0.22 | ) | ||||||||||||||
Fully Diluted Earnings (Loss) Per Share | 0.02 | n/a | n/a | n/a | n/a | |||||||||||||||
Weighted Average Common Shares Outstanding |
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Basic | 25,679,720 | n/a | n/a | 1,583,333 | (5) | 27,263,053 | ||||||||||||||
Diluted | 28,085,331 | n/a | n/a | 1,583,333 | 29,668,664 |
(1) | Cost of revenues excludes intangible amortization expense as shown separately below. |
(2) | Adjustment to Poole's cost of revenue and operating expense to include fringe benefit expense associated with direct labor in cost of revenue versus operating expense. |
(3) | Intangible amortization that would have been recorded if the acquisitions of Poole and Sensage had been completed on January 1, 2012. |
(4) | Estimated interest expense for the acquisitions of Poole and Sensage if they had been completed on January 1, 2012. |
(5) | Includes the estimated number of shares to be issued for the acquisitions of Poole and Sensage as if they had been acquired as of January 1, 2012. This amount was adjusted for the shares outstanding that are already included in the KEYW average shares calculation. $7.5 million in stock consideration potentially issuable in connection with the Sensage acquisition was excluded because it is based on an earn out which Sensage may or may not achieve. The actual number of shares issued for the acquisitions of Poole and Sensage will depend upon factors including future prices of our common stock. |
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Pro Forma Balance Sheet
As of June 30, 2012 | KEYW (audited) |
Poole (audited) |
Sensage (audited) |
Pro Forma Adjustments (unaudited) |
Pro Forma Combined (unaudited) |
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Assets |
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Current Assets |
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Cash and Cash Equivalents | 234 | 185 | 2,549 | 2,968 | ||||||||||||||||
Receivables | 51,196 | 6,620 | 2,658 | 60,474 | ||||||||||||||||
Inventories, Net | 8,676 | 8,676 | ||||||||||||||||||
Prepaid Expenses | 2,973 | 32 | 205 | 3,210 | ||||||||||||||||
Income Tax Receivable | 27 | 27 | ||||||||||||||||||
Deferred Tax Asset, Current | 1,193 | 75 | 1,268 | |||||||||||||||||
Total current assets | 64,299 | 6,912 | 5,412 | 0 | 76,623 | |||||||||||||||
Property and Equipment, Net | 14,759 | 834 | 95 | 15,688 | ||||||||||||||||
Goodwill | 164,466 | 109,414 | (1) | 273,880 | ||||||||||||||||
Other Intangibles, Net | 29,264 | 37,000 | (1) | 66,264 | ||||||||||||||||
Deferred Tax Asset | 2,348 | 2,348 | ||||||||||||||||||
Other Assets | 212 | 35 | 165 | 412 | ||||||||||||||||
Total Assets | 275,348 | 7,781 | 5,672 | 146,414 | 435,215 | |||||||||||||||
Liabilities and Stockholders Equity |
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Current Liabilities: |
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Accounts Payable | 4,706 | 1,870 | 1,266 | 7,842 | ||||||||||||||||
Accrued Expenses | 4,611 | 1,407 | 6,018 | |||||||||||||||||
Accrued Salaries & Wages | 12,640 | 684 | 13,324 | |||||||||||||||||
Revolver | 52,200 | 131,000 | (1) | 183,200 | ||||||||||||||||
Income Tax Payable | 401 | 401 | ||||||||||||||||||
Current Portion of Notes Payable | 1,300 | (1,300 | )(2) | 0 | ||||||||||||||||
Current Maturities of Long-Term Debt | 921 | (921 | )(2) | 0 | ||||||||||||||||
Deferred Income Taxes | 1,591 | 1,591 | ||||||||||||||||||
Deferred Revenue | 4,083 | 4,083 | ||||||||||||||||||
Total Current Liabilities | 75,748 | 4,362 | 7,570 | 128,779 | 216,459 | |||||||||||||||
Long-Term Liabilities |
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Non-Current Deferred Tax Liability | 15,977 | 156 | 16,133 | |||||||||||||||||
Other Non-Current Liabilities | 3,851 | 3,851 | ||||||||||||||||||
Long-Term Debt, Net of Current Maturities | 956 | (956 | )(2) | 0 | ||||||||||||||||
Total Liabilities | 95,576 | 4,518 | 8,526 | 127,823 | 236,443 | |||||||||||||||
Commitments and Contingencies |
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Stockholders' Equity |
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Acquiree's Equity | 3,263 | (2,854 | ) | (409 | )(3)(4) | 0 | ||||||||||||||
Common Stock | 26 | 1 | (1) | 27 | ||||||||||||||||
Additional Paid-In Capital | 171,991 | 18,999 | (1) | 190,990 | ||||||||||||||||
Retained Earnings (Accumulated Deficit) | 7,755 | 7,755 | ||||||||||||||||||
Total Stockholders Equity (Deficit) | 179,772 | 3,263 | (2,854 | ) | 18,591 | 198,772 | ||||||||||||||
Total Liabilities and Stockholders Equity | 275,348 | 7,781 | 5,672 | 146,414 | 435,215 |
(1) | These amounts represent the recording of the purchase price for both Poole and Sensage. |
(2) | This represents the elimination of the outstanding debt as Sensage will be acquired debt free. |
(3) | This amount represents the elimination of the existing equity of the acquired companies against goodwill. |
(4) | Excludes KEYW shares that could be earned by Sensage as a result of achieving certain performance targets. |
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