Attached files
file | filename |
---|---|
8-K/A - FORM 8-K/A - IRIS INTERNATIONAL INC | c06812e8vkza.htm |
EX-99.1 - EXHIBIT 99.1 - IRIS INTERNATIONAL INC | c06812exv99w1.htm |
EX-23.1 - EXHIBIT 23.1 - IRIS INTERNATIONAL INC | c06812exv23w1.htm |
Exhibit 99.2
IRIS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED COMBINED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION
UNAUDITED CONDENSED COMBINED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed combined consolidated balance sheet as of June 30,
2010 gives effect to the acquisition of AlliedPath, Inc. (AlliedPath) by IRIS International, Inc.
(the Company) effective July 28, 2010, as if it had occurred on June 30, 2010. The following
unaudited pro forma condensed combined consolidated statements of operations for the year ended
December 31, 2009 and the six months ended June 30, 2010 give effect to the acquisition of
AlliedPath by the Company as if it had occurred on January 1, 2009. The Companys condensed
consolidated statement of operations information for the year ended December 31, 2009 was derived
from the consolidated statement of operations included in its 2009 Annual Report on Form 10-K. The
Companys condensed consolidated statement of operations information for the six months ended
June 30, 2010 was derived from its Quarterly Report on Form 10-Q for the six months ended June 30,
2010. AlliedPaths statement of operations information for the year ended December 31, 2009 was
derived from the audited statement of operations of AlliedPath included in Exhibit 99.1 to this
Current Report on Form 8-K. AlliedPaths statements of operations information for the six months
ended June 30, 2010 were derived from the unaudited statement of operations of AlliedPath included
in Exhibit 99.1 to this Current Report on Form 8-K.
The unaudited pro forma condensed combined consolidated financial information has been
prepared by the Companys management for illustrative purposes only and is not necessarily
indicative of the condensed consolidated financial position or the results of operations in future
periods or the results that actually would have been realized had the Company and Allied Path been
a combined company during the specified periods. The pro forma adjustments are based upon
assumptions that the Companys management believes are reasonable. The pro forma adjustments are
based on the information available at the time of the preparation of the unaudited pro forma
condensed combined consolidated financial statements. These statements, including any notes
thereto, are qualified in their entirety by reference to, and should be read in conjunction with,
the historical consolidated financial statements of the Company included in its Annual Report on
Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the six months
ended June 30, 2010 filed with the Securities and Exchange Commission.
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
As of June 30, 2010
(In thousands, except per share data)
As of June 30, 2010
Historical | Historical | Pro Forma | Pro Forma | |||||||||||||
IRIS | Allied Path | Adjustments | Combined | |||||||||||||
Assets |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 37,026 | $ | 172 | $ | (4,178 | ) (a) | $ | 33,020 | |||||||
Account Receivable, net |
18,127 | 14 | 18,141 | |||||||||||||
Inventories, net |
13,107 | 13,107 | ||||||||||||||
Prepaid expenses and other current assets |
1,807 | 35 | (2 | ) (a) | 1,840 | |||||||||||
Investment in sales-type leases, current portion |
3,499 | 3,499 | ||||||||||||||
Note receivable |
450 | (450 | ) | 0 | ||||||||||||
Deferred tax asset |
4,238 | 46 | (d) | 4,284 | ||||||||||||
Total Current Assets |
78,254 | 221 | (4,584 | ) | 73,891 | |||||||||||
Property and equipment, at cost, net |
9,357 | 532 | 9,889 | |||||||||||||
Goodwill |
2,450 | 1,176 | (d) | 3,626 | ||||||||||||
Core Technology, net |
1,410 | 3,090 | (d) | 4,500 | ||||||||||||
License |
1,604 | (d) | 1,604 | |||||||||||||
Covenant not to compete |
100 | (d) | 100 | |||||||||||||
Software development costs, net |
2,587 | 2,587 | ||||||||||||||
Deferred tax asset |
1,898 | 1,220 | (d) | 3,118 | ||||||||||||
Investment in sales-type leases, non-current |
8,886 | 8,886 | ||||||||||||||
Other assets |
884 | 32 | 6 | (d) | 922 | |||||||||||
Total Assets |
$ | 105,726 | $ | 785 | $ | 2,612 | $ | 109,123 | ||||||||
Liabilities and Stockholders Equity (Deficit) |
||||||||||||||||
Current Liabilities: |
||||||||||||||||
Accounts payable |
$ | 7,516 | $ | 332 | $ | (186 | ) (a) | $ | 7,662 | |||||||
Accrued expenses |
6,468 | 630 | (565 | ) (a) | 6,533 | |||||||||||
Deferred service contract revenues, current
portion |
3,027 | 3,027 | ||||||||||||||
Loans payable |
796 | (796 | ) (a) | (0 | ) | |||||||||||
Deferred tax liability |
88 | (d) | 88 | |||||||||||||
Total current liabilities |
17,011 | 1,758 | (1,459 | ) | 17,310 | |||||||||||
Deferred service contact revenues, non-current |
47 | 47 | ||||||||||||||
Capital lease obligations |
126 | 126 | ||||||||||||||
Other long term liabilities |
61 | 61 | ||||||||||||||
Earnout liability |
1,210 | (b) | 1,210 | |||||||||||||
Deferred tax liability |
1,701 | (d) | 1,701 | |||||||||||||
Total liabilities |
17,058 | 1,945 | 1,452 | 20,455 | ||||||||||||
Commitments and contingencies |
||||||||||||||||
Stockholders equity (deficit): |
||||||||||||||||
Common Stock |
182 | 1 | (1 | ) (a) | 182 | |||||||||||
Preferred stock |
1 | (1 | ) (a) | 0 | ||||||||||||
Additional paid-in-capital |
89,747 | 2,658 | (2,658 | ) (a) | 89,747 | |||||||||||
Other comprehensive income |
284 | 284 | ||||||||||||||
Accumulated deficit |
(1,545 | ) | (3,820 | ) | 3,820 | (c) | (1,545 | ) | ||||||||
Total Stockholders equity (deficit) |
88,668 | (1,160 | ) | 1,160 | 88,668 | |||||||||||
Total liabilities and stockholders equity
(deficit) |
$ | 105,726 | $ | 785 | $ | 2,612 | $ | 109,123 | ||||||||
See accompanying notes to unaudited pro forma condensed combined financial statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(In thousands, except per share data)
For the Year Ended December 31, 2009 | ||||||||||||||||
Historical | Historical | Pro Forma | Pro Forma | |||||||||||||
IRIS | Allied Path | Adjustments | Combined | |||||||||||||
Revenues |
$ | 92,566 | $ | 4 | $ | 92,570 | ||||||||||
Cost of goods |
43,901 | 94 | 43,995 | |||||||||||||
Gross profit (loss) |
48,665 | (90 | ) | 48,575 | ||||||||||||
Operating expenses |
40,854 | 2,185 | $ | 241 | (e) | 43,280 | ||||||||||
Operating income (loss) |
7,811 | (2,275 | ) | (241 | ) | 5,295 | ||||||||||
Other income(expense) |
894 | (3 | ) | (38 | ) (f) | 858 | ||||||||||
5 | (g) | |||||||||||||||
Income (loss) before provision of income taxes |
8,705 | (2,278 | ) | (274 | ) | (6,153 | ) | |||||||||
Provision for income taxes |
2,454 | (104 | )(h) | 2,350 | ||||||||||||
Net income (loss) |
$ | 6,251 | $ | (2,278 | ) | $ | (170 | ) | $ | 3,803 | ||||||
Net income per share-basic |
$ | 0.35 | $ | 0.21 | ||||||||||||
Net income per share-diluted |
$ | 0.35 | $ | 0.21 | ||||||||||||
Weighted average common shares outstanding-basic |
17,727 | 17,727 | ||||||||||||||
Weighted average common shares outstanding-diluted |
17,874 | 17,874 |
See accompanying notes to unaudited pro forma condensed combined financial statements
For the Six Months Ended June 30, 2010 | ||||||||||||||||
Historical | Historical | Pro Forma | Pro Forma | |||||||||||||
IRIS | Allied Path | Adjustments | Combined | |||||||||||||
Revenues |
$ | 52,668 | $ | 25 | $ | 52,693 | ||||||||||
Cost of goods |
24,919 | 257 | 25,176 | |||||||||||||
Gross profit (loss) |
27,749 | (232 | ) | 27,517 | ||||||||||||
Operating expenses |
25,089 | 987 | $ | 120 | (e) | 26,196 | ||||||||||
Operating income (loss) |
2,660 | (1,219 | ) | (120 | ) | 1,321 | ||||||||||
Other income(expense) |
(162 | ) | (40 | ) | (19 | ) (f) | (183 | ) | ||||||||
38 | (g) | |||||||||||||||
Income (loss) before provision of income taxes |
2,498 | (1,259 | ) | (101 | ) | 1,138 | ||||||||||
Provision for income taxes |
832 | (38 | ) (h) | 794 | ||||||||||||
Net income (loss) |
$ | 1,666 | $ | (1,259 | ) | (63 | ) | $ | 344 | |||||||
Net income per share-basic |
$ | 0.09 | $ | 0.02 | ||||||||||||
Net income per share-diluted |
$ | 0.09 | $ | 0.02 | ||||||||||||
Weighted average common shares outstanding-basic |
17,959 | 17,959 | ||||||||||||||
Weighted average common shares outstanding-diluted |
18,079 | 18,079 |
See accompanying notes to unaudited pro forma condensed combined financial statements.
IRIS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED COMBINED CONSOLIDATED PRO FORMA
FINANCIAL INFORMATION (UNAUDITED)
NOTES TO UNAUDITED CONDENSED COMBINED CONSOLIDATED PRO FORMA
FINANCIAL INFORMATION (UNAUDITED)
1. Transaction
On July 28, 2010, we acquired AlliedPath, Inc. (AlliedPath), a molecular diagnostics
company. Pursuant to the terms of a Merger Agreement dated July 26, 2010 we acquired all the issued
and outstanding stock of AlliedPath for an amount in cash equal to $4.7 million less certain
indebtedness existing at the closing, with an additional earn-out of up to $1.3 million subject to
the achievement of specific sales and earnings targets through December 2013. We did not assume any
outstanding options or warrants of AlliedPath in connection with the acquisition.
The allocation of the purchase price to the fair values of the assets acquired and liabilities
assumed as if the transaction had occurred as of June 30, 2010 is presented below (in thousands).
The purchase price allocations and pro forma adjustments below are based on preliminary estimates,
available information and certain assumptions, and maybe revised as additional information becomes
available.
Current assets |
$ | 221 | ||
Fixed assets |
532 | |||
Existing technology |
3,090 | |||
CLIA License |
1,604 | |||
Customer relationships |
6 | |||
Non-compete agreements |
100 | |||
Goodwill |
1,062 | |||
Other assets |
32 | |||
Current liabilities |
(156 | ) | ||
Lease obligations |
(178 | ) | ||
Other liabilities |
(63 | ) | ||
Deferred tax liability, net |
(410 | ) | ||
Total purchase price |
$ | 5,840 | ||
Acquired property and equipment are being depreciated on a straight-line basis with estimated
remaining lives ranging from 1 year to 5 years. Intangible assets except the CLIA license are being
amortized on a straight-line basis with estimated remaining lives ranging from 3 to 15 years
reflecting the expected future value. The CLIA license is considered to have an indefinite life.
The purchase was structured as a stock purchase therefore the value assigned to the existing
technology, CLIA license, customers relationships, non-compete agreements and goodwill is not
deductible for tax purposes.
2. Pro Forma Adjustments
The pro forma adjustments included in the unaudited pro forma condensed combined consolidated
financial statements are as follows:
(a) | To reflect payment of cash portion of purchase price. |
||
(b) | To reflect fair value of the earn out portion of the purchase price |
||
(c) | To eliminate stockholder deficit of AlliedPath |
||
(d) | To record adjustments for fair value of assets and liabilities acquired |
||
(e) | To record amortization of intangible assets acquired |
||
(f) | To record accretion of discount on earnout portion of purchase price |
||
(g) | To eliminate interest expense on notes paid off |
||
(h) | To record income tax effect of pro forma adjustments using companys
effective combined federal and state tax rate |