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8-K/A - 8-K/A - Constant Contact, Inc.d400646d8ka.htm
EX-23.1 - EX-23.1 - Constant Contact, Inc.d400646dex231.htm
EX-99.2 - EX-99.2 - Constant Contact, Inc.d400646dex992.htm

Exhibit 99.4

CONSTANT CONTACT, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS

On June 12, 2012, Constant Contact, Inc., a Delaware corporation (“Constant Contact” or the “Company”), SinglePlatform, Corp., a Delaware corporation (“SinglePlatform”), Match Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Constant Contact (“Merger Sub”), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as Stockholder Representative, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, also on June 12, 2012, Merger Sub was merged with and into SinglePlatform, with SinglePlatform continuing as the surviving corporation and a wholly-owned subsidiary of Constant Contact (the “Merger”). The Merger Agreement provided for a cash purchase price of $65 million, which was adjusted to reflect SinglePlatform’s working capital deficit at the acquisition date and other transaction expenses as provided for by the Merger Agreement, such that the cash payment at the time of closing was $63.0 million. The cash purchase price is subject to further adjustment for certain working capital adjustments, which are identified by the Company within 90 days of the acquisition date. The Merger Agreement also provided for an additional amount of up to $30 million in earn-out payments based upon SinglePlatform meeting certain revenue targets over the next two years, to be measured in six-month intervals. The Merger Agreement also contains customary representations, warranties and indemnities of SinglePlatform and Constant Contact.

The unaudited pro forma combined consolidated statements of operations, referred to herein as the “Pro Forma Financial Statements” should be read in conjunction with:

 

   

The accompanying notes to the Pro Forma Financial Statements;

 

   

the separate unaudited historical financial statements of the Company as of and for the three months ended March 31, 2012 included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2012 and filed with the Securities and Exchange Commission (“SEC”) on May 2, 2012;

 

   

the separate historical financial statements of the Company as of and for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed with the SEC on February 28, 2012 and,

 

   

the separate audited historical financial statements of SinglePlatform, Corp. as of and for the year ended December 31, 2011 and the separate unaudited historical financial statements as of and for the three months ended March 31, 2012, which are included in Exhibit 99.2 to the Company’s Amendment No. 1 on Form 8-K/A filed with the SEC on August 23, 2012 and are incorporated by reference.

The Pro Forma Financial Statements for the year ended December 31, 2011 and for the three months ended March 31, 2012 have been adjusted for the operational results of SinglePlatform, Corp. as if the merger had occurred on January 1, 2011.

The Company has not provided a pro forma combined consolidated balance sheet as of March 31, 2012 because the merger of SinglePlatform is reflected in the Company’s unaudited condensed consolidated balance sheet as of June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2012 and filed with the SEC on August 1, 2012.

The Pro Forma Financial Statements are presented for illustrative purposes and do not purport to represent what the results of operations would actually have been if the merger occurred as of the date indicated or what such results would be for any future periods.


CONSTANT CONTACT, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2011

(in thousands, except per share data)

 

     Historical
Constant Contact (1)
     Historical
SinglePlatform (2)
    Proforma
Adjustments
    Proforma
Combined
 

Revenue

   $ 214,420       $ 419        $ 214,839   

Cost of revenue

     61,491         125      $ 413 (A)(B)      62,029   
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     152,929         294        (413     152,810   
  

 

 

    

 

 

   

 

 

   

 

 

 

Operating expenses:

         

Research and development

     29,478         489          29,967   

Marketing and selling

     89,211         1,499        1,127 (B)      91,837   

General and administrative

     24,243         850          25,093   
  

 

 

    

 

 

     

 

 

 

Total operating expenses

     142,932         2,838        1,127        146,897   
  

 

 

    

 

 

   

 

 

   

 

 

 

Operating income (loss)

     9,997         (2,544     (1,540     5,913   

Interest and other income

     262         8        (145 )(C)      125   
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     10,259         (2,536     (1,685     6,038   

Income tax benefit

     13,420         —          1,581 (D)      15,001   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 23,679       $ (2,536   $ (104   $ 21,039   
  

 

 

    

 

 

   

 

 

   

 

 

 

Basic net income per share

   $ 0.80           $ 0.71   
  

 

 

        

 

 

 

Diluted net income per share

   $ 0.77           $ 0.69   
  

 

 

        

 

 

 

Basic weighted average shares outstanding

     29,566             29,566   
  

 

 

        

 

 

 

Diluted weighted average shares outstanding

     30,671             30,671   
  

 

 

        

 

 

 

 

(1) As reported in Constant Contact’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2012.
(2) As reported in SinglePlatform’s audited financial statements for the year ended December 31, 2011 in this Amendment No. 1 to Form 8-K/A in Exhibit 99.2.

See accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Statements.

 

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CONSTANT CONTACT, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2012

(in thousands, except per share data)

 

     Historical
Constant Contact (1)
    Historical
SinglePlatform (2)
    Proforma
Adjustments
    Proforma
Combined
 
     (unaudited)     (unaudited)              

Revenue

   $ 59,938      $ 210        $ 60,148   

Cost of revenue

     17,599        35      $ 98 (A)(B)      17,732   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     42,339        175        (98     42,416   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     9,471        275          9,746   

Marketing and selling

     25,718        735        237 (B)      26,690   

General and administrative

     7,564        390        —          7,954   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     42,753        1,400        237        44,390   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (414     (1,225     (335     (1,974

Interest and other income (expense), net

     71        14        (36 )(C)      49   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (343     (1,211     (371     (1,925

Income tax benefit

     561        —          596 (D)      1,157   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 218      $ (1,211   $ 225      $ (768
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income (loss) per share

   $ 0.01          $ (0.03
  

 

 

       

 

 

 

Diluted net income (loss) per share

   $ 0.01          $ (0.03
  

 

 

       

 

 

 

Basic weighted average shares outstanding

     30,171            30,171   
  

 

 

       

 

 

 

Diluted weighted average shares outstanding

     31,118            30,171   
  

 

 

       

 

 

 

 

(1) As reported in Constant Contact’s Quarterly Report on Form 10-Q, as filed with the SEC on August 1, 2012.
(2) As reported in SinglePlatform’s unaudited financial statements for the three months ended March 31, 2012 in this Amendment No. 1 to Form 8-K/A in Exhibit 99.2.

See accompanying Notes to Unaudited Pro Forma Combined Consolidated Financial Statements.

 

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Constant Contact, Inc.

Notes to Unaudited Pro Forma Combined Consolidated Financial Statements

(in thousands)

The following table summarizes the preliminary purchase price for SinglePlatform and the preliminary allocation of the purchase price:

 

Purchase consideration:

  

Total cash paid, net of cash acquired

   $ 62,737   

Cash acquired

     311   

Fair value of contingent consideration

     12,152   
  

 

 

 

Total purchase price consideration

   $ 75,200   
  

 

 

 

Assets acquired and liabilities assumed:

  

Cash

   $ 311   

Accounts receivable

     48   

Prepaid expenses and other current assets

     60   

Property and equipment

     14   

Identifiable intangible assets

     4,760   

Other assets

     91   

Net deferred tax assets

     72   

Goodwill

     71,997   
  

 

 

 

Total assets acquired

     77,353   
  

 

 

 

Accounts payable, accrued expenses and other current liabilities

     (1,543

Deferred revenue

     (610
  

 

 

 

Total liabilities assumed

     (2,153
  

 

 

 

Total allocation of purchase price consideration

   $ 75,200   
  

 

 

 

The preliminary purchase price included cash consideration of $65,000 adjusted for SinglePlatform’s working capital deficit and certain transaction expenses as described in the Merger Agreement such that the preliminary cash payment at the time of closing was $63,048. The cash consideration is subject to further adjustment for certain working capital adjustments, which are identified by the Company within 90 days of the acquisition date. These adjustments, if any, will affect the final amount of the purchase price and the allocation of that purchase price to the working capital accounts. The amounts assigned to SinglePlatform’s tangible and intangible assets and liabilities acquired are based on their respective fair values determined as of the merger date. The excess of the purchase price over the fair value of net assets acquired is recorded as goodwill. In accordance with current accounting standards, the goodwill will not be amortized, but rather will be tested for impairment annually or more frequently if facts and circumstances warrant a review.

Pro forma adjustments reflect only those adjustments which are directly attributable to the Merger, factually supportable and expected to have a continuing impact to the Company. The unaudited pro forma combined consolidated statements of operations reflect the effect of the following pro forma adjustments:

 

  (A) Adjustments to eliminate historical amortization expense related to the historical value of SinglePlatform’s capitalized software as if the merger had occurred on January 1, 2011 of $13 and $9 for the year ended December 31, 2011 and the three months ended March 31, 2012, respectively.

 

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  (B) Adjustments to record amortization of the acquired definite-lived intangible assets over a weighted average life of 3.95 years. The following table reflects the estimated fair value of the acquired identifiable intangible assets and related estimates of useful lives:

 

     Amount      Weighted Average Useful
Life
 
            (in years)  

Developed technology

   $ 850         3   

Customer relationships

     2,630         3.75   

Publisher relationships

     710         5   

Trade name

     570         5   
  

 

 

    

Total identifiable intangible assets

   $ 4,760         3.95   
  

 

 

    

The Company amortizes the intangible assets over the estimated useful lives noted above. For the developed technology and publisher relationship assets, as the pattern of consumption of the economic benefits of the intangible assets cannot be reliably determined, the Company amortizes these acquired intangible assets over their estimated useful lives on a straight-line basis. The Company also amortizes the trade name asset over its estimated useful life on a straight-line basis as the straight-line basis is not materially different than the pattern of consumption of economic benefit basis. Customer relationships are amortized over their useful life based on the pattern of consumption of economic benefit of the asset. Amortization commences once the asset has been placed in service.

 

  (C) Adjustments to record the estimated decrease in interest income earned on the reduced cash, cash equivalents and marketable securities as a result of the $63,048 purchase price paid.

 

  (D) Adjustments to record income tax benefits related to the results of SinglePlatform and the adjustments as described above utilizing the Company’s federal and state statutory rates.

 

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