Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - PC TEL INC | d414682d8ka.htm |
| EX-23 - EX-23 - PC TEL INC | d414682dex23.htm |
| EX-99.2 - EX-99.2 - PC TEL INC | d414682dex992.htm |
| EX-99.1 - EX-99.1 - PC TEL INC | d414682dex991.htm |
EXHIBIT 99.3
PCTEL, INC
Pro Forma Financial Statements
PCTEL, Inc.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(in thousands, except per share data)
The unaudited condensed consolidated pro forma financial statements include the financial statement information for PCTEL, Inc. (PCTEL) and TelWorx. TelWorx includes the condensed consolidated financial results of TelWorx Communications, LLC, TelWorx U.K. Limited, TowerWorx LLC and TowerWorx International, Inc. Scronce Real Estate LLC is not included in the unaudited condensed consolidated pro forma financial statements.
The unaudited condensed consolidated pro forma balance sheet combines the condensed consolidated balance sheet of PCTEL as of June 30, 2012 and the balance sheet of TelWorx, giving effect to the acquisition as if it had occurred June 30, 2012. The unaudited pro forma consolidated financial information has been prepared using the purchase method of accounting in which the total cost of the TelWorx acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. This allocation has been done on a preliminary basis and is subject to change pending final determination of fair values for the acquired assets and assumed liabilities and a final analysis of the total purchase price paid, including direct costs of the acquisition. The adjustments included in the unaudited condensed consolidated pro forma financial statements represent the preliminary determination of such adjustments based upon currently available information. Accordingly, the actual fair value of the assets acquired, liabilities assumed and the related adjustments may differ from those reflected in this Current Report on Form 8-K/A.
The unaudited condensed consolidated pro forma statement of operations for the year ended June 30, 2012 combines the condensed consolidated statement of operations of PCTEL for the six months ended June 30, 2012 and the unaudited condensed consolidated statements of operations for TelWorx for the six months ended June 30, 2012 as if the acquisition had occurred on January 1, 2012.
The unaudited condensed consolidated pro forma statement of operations for the year ended December 31, 2011 combines the condensed consolidated statement of operations of PCTEL for the year ended December 31, 2011 and the audited condensed consolidated statements of operations for TelWorx for the year ended December 31, 2011 as if the merger had occurred on January 1, 2011.
No pro forma effects have been given to any operational or other synergies that may be realized from the TelWorx acquisition. The unaudited pro forma condensed consolidated financial information is based on the estimates and assumptions described in the notes to the unaudited condensed consolidated pro forma financial statements.
The unaudited condensed consolidated pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that might have been achieved had the transaction occurred as of an earlier date, and they are not necessarily indicative of future operating results or financial position. These pro forma amounts do not, therefore, project PCTEL’s financial position or results of operations for any future date or period. The accompanying unaudited condensed consolidated pro forma financial information should be read in conjunction with the historical financial statements and the related notes thereto of PCTEL, which are included in its Annual Report on Form 10-K and its Quarterly Reports on Forms 10-Q, as well as other financial information included elsewhere in this Current Report on Form 8-K/A.
PCTEL, INC.
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET (Unaudited)
June 30, 2012
(in thousands, except share data)
| PCTEL, Inc. (as Reported) |
TelWorx | Proforma Adjustments |
PCTEL, Inc. (Pro Forma) |
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| ASSETS |
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| Cash and cash equivalents |
$ | 27,790 | $ | 11,790 | ||||||||||||
| Short-term investment securities |
37,174 | 0 | (16,000 | )(b) | 37,174 | |||||||||||
| Accounts receivable, net of allowance for doubtful accounts of $120 at June 30, 2012 |
14,578 | 1,566 | (a) | 0 | 16,144 | |||||||||||
| Inventories, net |
13,728 | 1,752 | (a) | 74 | (a) | 15,554 | ||||||||||
| Deferred tax assets, net |
896 | 0 | 0 | 896 | ||||||||||||
| Prepaid expenses and other assets |
1,288 | 0 | 0 | 1,288 | ||||||||||||
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| Total current assets |
95,454 | 3,318 | (15,926 | ) | 82,846 | |||||||||||
| Property and equipment, net |
14,116 | 593 | (a) | 355 | (a) | 14,354 | ||||||||||
| Long-term investment securities |
1,054 | 0 | 0 | 1,054 | ||||||||||||
| Goodwill |
161 | 0 | 9,385 | (a) | 9,546 | |||||||||||
| Intangible assets, net |
7,842 | 0 | 5,318 | (a) | 13,160 | |||||||||||
| Deferred tax assets, net |
8,831 | 0 | 0 | 8,831 | ||||||||||||
| Other noncurrent assets |
1,501 | 0 | 0 | 1,501 | ||||||||||||
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| TOTAL ASSETS |
$ | 128,959 | $ | 3,911 | ($ | 1,578 | ) | $ | 131,292 | |||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Accounts payable |
$ | 6,278 | $ | 1,347 | (a) | $ | 0 | $ | 7,625 | |||||||
| Accrued liabilities |
4,200 | 12 | (a) | 974 | (b) | 5,186 | ||||||||||
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| Total current liabilities |
10,478 | 1,359 | 974 | 12,811 | ||||||||||||
| Long-term liabilities |
2,409 | 0 | 0 | 2,409 | ||||||||||||
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| Total liabilities |
12,887 | 1,359 | 974 | 15,220 | ||||||||||||
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| Redeemable equity |
800 | 0 | 0 | 800 | ||||||||||||
| Stockholders’ equity: |
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| Common stock, $0.001 par value, 100,000,000 shares authorized, 18,481,607 shares issued and outstanding at June 30, 2012 |
18 | 0 | 0 | 18 | ||||||||||||
| Additional paid-in capital |
137,865 | 0 | 0 | 137,865 | ||||||||||||
| Accumulated deficit |
(23,251 | ) | 2,552 | (2,552 | ) | (23,251 | ) | |||||||||
| Accumulated other comprehensive income |
109 | 0 | 0 | 109 | ||||||||||||
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| Total stockholders’ equity of PCTEL, Inc. |
114,741 | 2,552 | (2,552 | ) | 114,741 | |||||||||||
| Noncontrolling interest |
531 | 0 | 0 | 531 | ||||||||||||
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| Total equity |
115,272 | 2,552 | (2,552 | ) | 115,272 | |||||||||||
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| TOTAL LIABILITIES AND EQUITY |
$ | 128,959 | $ | 3,911 | ($ | 1,578 | ) | $ | 131,292 | |||||||
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* see accompanying footnotes to the pro forma financial statements
PCTEL, INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS (Unaudited)
Year Ended December 31,2011
(in thousands, except per share data)
| PCTEL, Inc. (as Reported) |
TelWorx | Proforma Adjustments |
PCTEL, Inc. (Pro Forma) |
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| REVENUES |
$ | 76,844 | $ | 18,118 | $ | 0 | $ | 94,962 | ||||||||
| COST OF REVENUES |
40,982 | 13,229 | 74 | (c) | 54,285 | |||||||||||
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| GROSS PROFIT |
35,862 | 4,889 | (74 | ) | 40,677 | |||||||||||
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| OPERATING EXPENSES: |
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| Research and development |
11,912 | 0 | 0 | 11,912 | ||||||||||||
| Sales and marketing |
10,492 | 2,407 | 0 | 12,899 | ||||||||||||
| General and administrative |
10,799 | 731 | 0 | 11,530 | ||||||||||||
| Amortization of intangible assets |
2,795 | 0 | 1,430 | (d) | 4,225 | |||||||||||
| Restructuring charges |
117 | 0 | 0 | 117 | ||||||||||||
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| Total operating expenses |
36,115 | 3,138 | 1,430 | 40,683 | ||||||||||||
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| OPERATING INCOME (LOSS) |
(253 | ) | 1,751 | (1,504 | ) | (6 | ) | |||||||||
| Other income (expense), net |
358 | (301 | ) | 142 | (e) | 199 | ||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
105 | 1,450 | (1,362 | ) | 193 | |||||||||||
| Expense (benefit) for income taxes |
216 | 0 | 0 | 216 | ||||||||||||
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| NET INCOME (LOSS) |
(111 | ) | 1,450 | (1,362 | ) | (23 | ) | |||||||||
| Less: Net loss attributable to noncontrolling interests |
(1,158 | ) | 0 | 0 | (1,158 | ) | ||||||||||
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| NET INCOME (LOSS) ATTRIBUTABLE TO PCTEL, INC. |
$ | 1,047 | $ | 1,450 | ($ | 1,362 | ) | $ | 1,135 | |||||||
| Less: adjustments to redemption value of noncontrolling interests |
(863 | ) | 0 | 0 | (863 | ) | ||||||||||
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| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |
$ | 184 | $ | 1,450 | ($ | 1,362 | ) | $ | 272 | |||||||
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| Basic Earnings per Share: |
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| Net income (loss) available to common shareholders |
$ | 0.01 | $ | 0.02 | ||||||||||||
| Diluted Earnings per Share: |
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| Net income (loss) available to common shareholders |
$ | 0.01 | $ | 0.02 | ||||||||||||
| Weighted average shares—Basic |
17,186 | 17,186 | ||||||||||||||
| Weighted average shares—Diluted |
17,739 | 17,739 | ||||||||||||||
* see accompanying footnotes to the pro forma financial statements
PCTEL, INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended June 30, 2012
(in thousands, except per share data)
| PCTEL, Inc. (as Reported) |
TelWorx | Proforma Adjustments |
PCTEL, Inc. (Pro Forma) |
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| REVENUES |
$ | 37,154 | $ | 7,739 | $ | 0 | $ | 44,893 | ||||||||
| COST OF REVENUES |
21,306 | 6,009 | 0 | 27,318 | ||||||||||||
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| GROSS PROFIT |
15,848 | 1,730 | 0 | 17,575 | ||||||||||||
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| OPERATING EXPENSES: |
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| Research and development |
5,596 | 0 | 0 | 5,596 | ||||||||||||
| Sales and marketing |
5,096 | 1,049 | 0 | 6,145 | ||||||||||||
| General and administrative |
5,407 | 480 | 0 | 5,887 | ||||||||||||
| Amortization of intangible assets |
1,490 | 0 | 715 | (d) | 2,205 | |||||||||||
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| Total operating expenses |
17,589 | 1,529 | 715 | 19,833 | ||||||||||||
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| OPERATING INCOME (LOSS) |
(1,741 | ) | 201 | (715 | ) | (2,255 | ) | |||||||||
| Other income (expense), net |
114 | (83 | ) | 51 | (e) | 82 | ||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
(1,627 | ) | 118 | (664 | ) | (2,173 | ) | |||||||||
| Expense (benefit) for income taxes |
(379 | ) | 0 | 0 | (379 | ) | ||||||||||
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| NET INCOME (LOSS) |
(1,248 | ) | 118 | (664 | ) | (1,794 | ) | |||||||||
| Less: Net loss attributable to noncontrolling interests |
(687 | ) | 0 | 0 | (687 | ) | ||||||||||
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| NET INCOME (LOSS) ATTRIBUTABLE TO PCTEL, INC. |
($ | 561 | ) | $ | 118 | ($ | 664 | ) | ($ | 1,107 | ) | |||||
| Less: adjustments to redemption value of noncontrolling interests |
(648 | ) | 0 | 0 | (648 | ) | ||||||||||
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| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |
($ | 1,209 | ) | $ | 118 | ($ | 664 | ) | ($ | 1,755 | ) | |||||
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| Basic Earnings per Share: |
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| Net loss available to common shareholders |
($ | 0.07 | ) | ($ | 0.10 | ) | ||||||||||
| Diluted Earnings per Share: |
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| Net loss available to common shareholders |
($ | 0.07 | ) | ($ | 0.10 | ) | ||||||||||
| Weighted average shares—Basic |
17,317 | 17,317 | ||||||||||||||
| Weighted average shares—Diluted |
17,317 | 17,317 | ||||||||||||||
* see accompanying footnotes to the pro forma financial statements
PCTEL, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
(in thousands)
| (a) | To record the TelWorx Communications, LLC (“TelWorx”) transaction based on PCTEL, Inc.’s (“the Company”) initial allocation of the purchase price of $17.0 million. Allocation of assets include $1.8 million for inventories, $1.6 million for accounts receivable, $0.2 million for fixed assets, $5.3 million for amortizable intangible assets including customer relationships, trade names, intellectual property, and non-compete agreements, and $9.4 million of goodwill. Liabilities recorded in the transaction include $1.3 million of accounts payable and accrued liabilities. All assets and liabilities have been stated at their preliminary fair value. The Company is currently in the process of completing the fair value determination process. The final fair value by the Company may differ from the allocation reflected herein. |
| (b) | To record, cash of $16.0 million used to fund the acquisition of TelWorx and to record contingent consideration $1.0 million. |
| (c) | To record the sale of inventory costs which were grossed up to fair value at the acquisition date. |
| (d) | To record the amortization of intangible assets. |
| (e) | To record the reduction of interest income of $30 for the six months ended June 30, 2012 and $60 for the year ended December 31, 2011, and to remove the interest expense of $81 for the six months ended June 30, 2012, and $202 for the year ended December 31, 2011. The adjustment for interest income relates to the cash used for the acquisition. The interest expense relates to expense incurred by TelWorx for its lines of credit and other debt. |