Attached files
| file | filename |
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| 8-K - FORM 8-K - GERBER SCIENTIFIC INC | coburnsaleclose8k.htm |
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements of Gerber Scientific, Inc. (the “Company”) have been prepared to reflect the sale on December 31, 2010 of substantially all of the assets, properties, rights and interests primarily or solely related to the Company’s Ophthalmic Lens Processing segment, Gerber Coburn, as described in Item 2.01 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2011 (the “Asset Sale”).
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended October 31, 2010 and fiscal years ended April 30, 2010, 2009 and 2008 are based on the Company’s historical consolidated statements of operations, and give effect to the Asset Sale as if it had occurred on May 1, 2007. The anticipated non-recurring after tax gain on the Asset Sale is not reflected in the Unaudited Pro Forma Condensed Consolidated Statements of Operations. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of October 31, 2010 is based on the Company’s historical balance sheet as of October 31, 2010, and gives effect to the Asset Sale as if it had occurred on October 31, 2010. The anticipated non-recurring after tax gain on the asset sale is reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet.
The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items, overhead and administrative expense reductions, or changes in operating strategies arising as a result of the Asset Sale. These unaudited pro forma condensed consolidated financial statements reflect the Company’s intention to apply the estimated net proceeds of the Asset Sale to reduce the Company’s outstanding debt. Therefore, the use of proceeds of the Asset Sale is presented as a reduction of outstanding debt on the Unaudited Pro Forma Condensed Consolidated Balance Sheet. Accordingly, the actual effect of the Asset Sale, due to this and other factors, could differ from the pro forma adjustments presented herein. However, the Company’s management believes that the assumptions used and the adjustments made in this presentation are reasonable under the circumstances and given the information available.
These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the Asset Sale been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with (1) the Company’s audited consolidated financial statements and the accompanying notes as of and for the fiscal year ended April 30, 2010, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2010, and (2) the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the six months ended October 31, 2010 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2010.
Gerber Scientific, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
For the six months ended October 31, 2010
|
In thousands, except per share data
|
Historical Gerber
|
Pro Forma Adjustments (a)
|
Pro Forma Gerber
|
||||||||||
|
Revenue:
|
|||||||||||||
|
Product sales
|
$ | 215,308 | $ | (20,449 | ) | $ | 194,859 | ||||||
|
Service sales
|
32,319 | (3,310 | ) | 29,009 | |||||||||
| 247,627 | (23,759 | ) | 223,868 | ||||||||||
|
Cost of Sales:
|
|||||||||||||
|
Cost of products sold
|
151,559 | (13,709 | ) | 137,850 | |||||||||
|
Cost of services sold
|
21,454 | (2,733 | ) | 18,721 | |||||||||
| 173,013 | (16,442 | ) | 156,571 | ||||||||||
|
Gross profit
|
74,614 | (7,317 | ) | 67,297 | |||||||||
|
Selling, general and administrative expenses
|
57,632 | (3,382 | ) | 54,250 | |||||||||
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Research and development
|
8,675 | (1,092 | ) | 7,583 | |||||||||
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Goodwill impairment
|
16,888 | (16,888 | ) | --- | |||||||||
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Restructuring and other expenses
|
2,983 | (400 | ) | 2,583 | |||||||||
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Operating (loss) income
|
(11,564 | ) | 14,445 | 2,881 | |||||||||
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Other income (expense), net
|
(350 | ) | 448 | 98 | |||||||||
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Interest expense
|
(1,435 | ) | 605 |
(b)
|
(830 | ) | |||||||
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(Loss) Income from continuing operations before income taxes
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(13,349 | ) | 15,498 | 2,149 | |||||||||
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Income tax expense (benefit)
|
1,159 | (485 | ) |
(c)
|
674 | ||||||||
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(Loss) Income from continuing operations
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$ | (14,508 | ) | $ | 15,983 | $ | 1,475 | ||||||
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Basic (loss) earnings per common share from continuing operations
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$ | (0.58 | ) | $ | 0.06 | ||||||||
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Diluted (loss) earnings per common share from continuing operations
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$ | (0.58 | ) | $ | 0.06 | ||||||||
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Weighted Average Common Shares Outstanding:
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|||||||||||||
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Basic
|
25,129 | 25,129 | |||||||||||
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Diluted
|
25,129 | 25,129 | |||||||||||
Gerber Scientific, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
For the fiscal year ended April 30, 2010
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In thousands, except per share data
|
Historical Gerber
|
Pro Forma Adjustments (a)
|
Pro Forma Gerber
|
||||||||||
|
Revenue:
|
|||||||||||||
|
Product sales
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$ | 393,439 | $ | (39,453 | ) |
(d)
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$ | 353,986 | |||||
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Service sales
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64,916 | (6,635 | ) | 58,281 | |||||||||
| 458,355 | (46,088 | ) | 412,267 | ||||||||||
|
Cost of Sales:
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|||||||||||||
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Cost of products sold
|
282,593 | (25,643 | ) | 256,950 | |||||||||
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Cost of services sold
|
39,981 | (4,965 | ) | 35,016 | |||||||||
| 322,574 | (30,608 | ) | 291,966 | ||||||||||
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Gross profit
|
135,781 | (15,480 | ) |
|
120,301 | ||||||||
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Selling, general and administrative expenses
|
107,570 | (7,424 | ) | 100,146 | |||||||||
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Research and development
|
17,349 | (2,419 | ) | 14,930 | |||||||||
|
Restructuring and other expenses
|
3,462 | (235 | ) | 3,227 | |||||||||
|
Operating income
|
7,400 | (5,402 | ) |
|
1,998 | ||||||||
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Other income (expense), net
|
(1,366 | ) | 647 | (719 | ) | ||||||||
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Interest expense
|
(4,160 | ) | 1,303 |
(b)
|
(2,857 | ) | |||||||
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Income (Loss) from continuing operations before income taxes
|
1,874 | (3,452 | ) |
|
(1,578 | ) | |||||||
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Income tax expense (benefit)
|
532 | (1,188 | ) |
(c)
|
(656 | ) | |||||||
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Income (Loss) from continuing operations
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$ | 1,342 | $ | (2,264 | ) | $ | (922 | ) | |||||
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Basic earnings (loss) per common share from continuing operations
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$ | 0.05 | $ | (0.04 | ) | ||||||||
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Diluted earnings (loss) per common share from continuing operations
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$ | 0.05 | $ | (0.04 | ) | ||||||||
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Weighted Average Common Shares Outstanding:
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|||||||||||||
|
Basic
|
24,961 | 24,961 | |||||||||||
|
Diluted
|
24,961 | 24,961 | |||||||||||
Gerber Scientific, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
For the fiscal year ended April 30, 2009
|
In thousands, except per share data
|
Historical Gerber
|
Pro Forma Adjustments (a)
|
Pro Forma Gerber
|
|||||||||
|
Revenue:
|
||||||||||||
|
Product sales
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$ | 427,783 | $ | (45,117 | ) | $ | 382,666 | |||||
|
Service sales
|
71,157 | (8,438 | ) | 62,719 | ||||||||
| 498,940 | (53,555 | ) | 445,385 | |||||||||
|
Cost of Sales:
|
||||||||||||
|
Cost of products sold
|
309,631 | (30,469 | ) | 279,162 | ||||||||
|
Cost of services sold
|
44,546 | (6,004 | ) | 38,542 | ||||||||
| 354,177 | (36,473 | ) | 317,704 | |||||||||
|
Gross profit
|
144,763 | (17,082 | ) | 127,681 | ||||||||
|
Selling, general and administrative expenses
|
116,923 | (8,056 | ) | 108,867 | ||||||||
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Research and development
|
19,955 | (2,629 | ) | 17,326 | ||||||||
|
Restructuring and other expenses
|
1,168 | (148 | ) | 1,020 | ||||||||
|
Operating income
|
6,717 | (6,249 | ) | 468 | ||||||||
|
Other income (expense), net
|
(2,804 | ) | 208 | (2,596 | ) | |||||||
|
Interest expense
|
(3,133 | ) | 1,036 |
(b)
|
(2,097 | ) | ||||||
|
Income (Loss) from continuing operations before income taxes
|
780 | (5,005 | ) | (4,225 | ) | |||||||
|
Income tax expense (benefit)
|
(4,021 | ) | (1,647 | ) |
(c)
|
(5,668 | ) | |||||
|
Income from continuing operations
|
4,801 | $ | (3,358 | ) | $ | 1,443 | ||||||
|
Basic earnings per common share from continuing operations
|
$ | 0.20 | $ | 0.06 | ||||||||
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Diluted earnings per common share from continuing operations
|
$ | 0.20 | $ | 0.06 | ||||||||
|
Weighted Average Common Shares Outstanding:
|
||||||||||||
|
Basic
|
24,065 | 24,065 | ||||||||||
|
Diluted
|
24,139 | 24,139 | ||||||||||
Gerber Scientific, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
For the fiscal year ended April 30, 2008
|
In thousands, except per share data
|
Historical Gerber
|
Pro Forma Adjustments
(a)
|
Pro Forma Gerber
|
|||||||||
|
Revenue:
|
||||||||||||
|
Product sales
|
$ | 520,894 | $ | (57,461 | ) | $ | 463,433 | |||||
|
Service sales
|
73,404 | (8,627 | ) | 64,777 | ||||||||
| 594,298 | (66,088 | ) | 528,210 | |||||||||
|
Cost of products sold
|
366,493 | (36,958 | ) | 329,535 | ||||||||
|
Cost of services sold
|
47,877 | (7,205 | ) | 40,672 | ||||||||
| 414,370 | (44,163 | ) | 370,207 | |||||||||
|
Gross profit
|
179,928 | (21,925 | ) | 158,003 | ||||||||
|
Selling, general and administrative expenses
|
129,871 | (9,088 | ) | 120,783 | ||||||||
|
Research and development
|
25,019 | (3,546 | ) | 21,473 | ||||||||
|
Restructuring and other expenses
|
250 | --- | 250 | |||||||||
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Operating income
|
24,788 | (9,291 | ) | 15,497 | ||||||||
|
Other income (expense), net
|
264 | 411 | 675 | |||||||||
|
Interest expense
|
(3,895 | ) | 1,570 |
(b)
|
(2,325 | ) | ||||||
|
Income from continuing operations before income taxes
|
21,157 | (7,310 | ) | 13,847 | ||||||||
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Income tax expense (benefit)
|
6,043 | (2,586 | ) |
(c)
|
3,457 | |||||||
|
Income from continuing operations
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$ | 15,114 | $ | (4,724 | ) | $ | 10,390 | |||||
|
Basic earnings per common share from continuing operations
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$ | 0.64 | $ | 0.44 | ||||||||
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Diluted earnings per common share from continuing operations
|
$ | 0.64 | $ | 0.44 | ||||||||
|
Weighted Average Common Shares Outstanding:
|
||||||||||||
|
Basic
|
23,475 | 23,475 | ||||||||||
|
Diluted
|
23,742 | 23,742 | ||||||||||
Gerber Scientific, Inc.
Pro Forma Condensed Consolidated Balance Sheet
(Unaudited)
As of October 31, 2010
|
Historical
|
Pro Forma
|
Pro Forma
|
||||||||
|
In thousands
|
Gerber
|
Adjustments
(a)
|
Gerber
|
|||||||
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Assets:
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||||||||||
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Current Assets:
|
||||||||||
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Cash and cash equivalents
|
$
|
10,128
|
$
|
---
|
$
|
10,128
|
||||
|
Accounts receivable, net
|
82,789
|
(9,886
|
)
|
72,903
|
||||||
|
Inventories
|
61,505
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(10,720
|
)
|
50,785
|
||||||
|
Deferred tax assets, net
|
10,498
|
(1,175
|
)
|
9,323
|
||||||
|
Prepaid expenses and other current assets
|
5,611
|
(115
|
)
|
5,496
|
||||||
|
Total Current Assets
|
170,531
|
(21,896
|
)
|
148,635
|
||||||
|
Property, plant and equipment, net
|
32,235
|
(829
|
)
|
31,406
|
||||||
|
Goodwill
|
67,772
|
---
|
67,772
|
|||||||
|
Deferred tax assets, net
|
47,363
|
1,123
|
48,486
|
|||||||
|
Other assets
|
18,894
|
(1,032
|
)
|
17,862
|
||||||
|
Total Assets
|
$
|
336,795
|
$
|
(22,634
|
)
|
$
|
314,161
|
|||
|
Liabilities and Shareholders' Equity:
|
||||||||||
|
Current Liabilities:
|
||||||||||
|
Accounts payable
|
$
|
41,127
|
$
|
(3,778
|
)
|
$
|
37,349
|
|||
|
Accrued compensation and benefits
|
18,483
|
(518
|
)
|
17,965
|
||||||
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Other liabilities
|
24,540
|
(356
|
)
|
(e)
|
24,184
|
|||||
|
Deferred revenue
|
12,589
|
2
|
(f)
|
12,591
|
||||||
|
Total Current Liabilities
|
96,739
|
(4,650
|
)
|
92,089
|
||||||
|
Long-term debt
|
35,000
|
(19,551
|
)
|
(g)
|
15,449
|
|||||
|
Accrued pension benefit liability
|
36,802
|
---
|
36,802
|
|||||||
|
Deferred tax liabilities, net
|
12,761
|
---
|
12,761
|
|||||||
|
Other long-term liabilities
|
7,868
|
1,581
|
(e)
|
9,449
|
||||||
|
Commitments and contingencies
|
||||||||||
|
Shareholders' Equity:
|
||||||||||
|
Preferred stock
|
---
|
---
|
---
|
|||||||
|
Common stock
|
257
|
---
|
257
|
|||||||
|
Paid-in capital
|
83,165
|
---
|
83,165
|
|||||||
|
Retained earnings
|
81,621
|
1,220
|
(h)
|
82,841
|
||||||
|
Treasury stock
|
(10,461
|
)
|
---
|
(10,461
|
)
|
|||||
|
Accumulated other comprehensive loss
|
(6,957
|
)
|
(1,234
|
)
|
(8,191
|
)
|
||||
|
Total Shareholders' Equity
|
147,625
|
(14
|
) |
147,611
|
||||||
|
Total Liabilities and Shareholders' Equity
|
$
|
336,795
|
$
|
(22,634
|
)
|
$
|
314,161
|
|||
Gerber Scientific, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
|
(a)
|
Reflects the elimination of the financial results of operations, assets, liabilities and accumulated other comprehensive income amounts associated with the discontinued operations of Gerber Coburn unit to reflect the disposition transaction as if it had occurred on May 1, 2007.
|
|
(b)
|
Reflects the reduction in interest expense as a result of the Company’s credit facility requirement to use the net proceeds to repay its outstanding debt.
|
|
(c)
|
Reflects the adjustment to the Company’s income tax expense (benefit) resulting from (i) pro forma impact of the asset sold, (ii) pro forma sublease described in (e) below, but excludes any tax expense (benefit) directly attributed to the gain on the asset sale. The Company anticipates future operations will generate sufficient earnings to realize its remaining deferred tax assets.
|
|
(d)
|
Includes license revenue of $1.3 million for the fiscal year ended April 30, 2010, resulting from a patent licensethat benefited Gerber Coburn product sales, gross profit, operating income, and income from continuing operations before income taxes. License revenue is not a predictable, recurring revenue source.
|
|
(e)
|
Includes the net discounted liability of $2.1 million for a contractual lease obligation for a vacant facility that will be subleased by the buyer, of which $0.3 million is a short-term obligation and $1.8 million is a long-term obligation.
|
|
(f)
|
Includes $0.4 million of deferred revenue for the estimated fair value of transition services that the Company will provide free of charge to the Buyer.
|
|
(g)
|
Represents asset sale proceeds of $21.0 million less certain estimated transaction costs of $1.4 million. The Company is required to reduce its outstanding debt by the net proceeds.
|
|
(h)
|
Represents the recognition of a gain, net of tax, which would have been realized upon the disposition of Gerber Coburn had the asset sale closed on October 31, 2010.
|