Mastech Digital, Inc. - FORM 8-K - EX-99.2 - August 16, 2013

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EX-99.1 - EX-99.1 - Mastech Digital, Inc.d585841dex991.htm

Exhibit 99.2

MASTECH HOLDINGS, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2013

(Amounts in thousands, except per share data)

(Unaudited)

 

     Pro Forma  
     As Reported     Adjustments     Pro Forma  

Revenues

    $ 55,940      $ 5,805      $ 50,135   

Costs of revenues

      45,601        4,810        40,791   
  

 

 

    

 

 

    

 

 

  

Gross Profit

      10,339        995        9,344   

Selling, general and administrative expenses

      8,136        893        7,243   
  

 

 

    

 

 

    

 

 

  

Income from operations

      2,203        102        2,101   

Interest Income (expense), net

      (54 )      —          (54 ) 

Other income (expense), net

      45        (1 )      46   
  

 

 

    

 

 

    

 

 

  

Income before income taxes

      2,194        101        2,093   

Income tax expense

      830        46        784   
  

 

 

    

 

 

    

 

 

  

Net Income

    $ 1,364      $ 55      $ 1,309   
  

 

 

    

 

 

    

 

 

  

Earnings per share:

       

Basic

    $ 0.41      $ 0.02      $ 0.39   
  

 

 

    

 

 

    

 

 

  

Diluted

    $ 0.40      $ 0.02      $ 0.38   
  

 

 

    

 

 

    

 

 

  

Weighted average common shares outstanding:

       

Basic

      3,343        3,343        3,343   

Diluted

      3,427        3,427        3,427   

MASTECH HOLDINGS, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2012

(Amounts in thousands, except per share data)

(Unaudited)

 

     Pro Forma  
     As Reported     Adjustments      Pro Forma  

Revenues

    $ 49,766      $ 5,245       $ 44,521   

Costs of revenues

      40,477        4,259         36,218   
  

 

 

    

 

 

     

 

 

  

Gross Profit

      9,289        986         8,303   

Selling, general and administrative expenses

      7,922        886         7,036   
  

 

 

    

 

 

     

 

 

  

Income from operations

      1,367        100         1,267   

Interest Income (expense), net

      (33 )      —           (33 ) 

Other income (expense), net

      (23 )      —           (23 ) 
  

 

 

    

 

 

     

 

 

  

Income before income taxes

      1,311        100         1,211   

Income tax expense

      501        43         458   
  

 

 

    

 

 

     

 

 

  

Net Income

    $ 810      $ 57       $ 753   
  

 

 

    

 

 

     

 

 

  

Earnings per share:

        

Basic

    $ 0.24      $ 0.02       $ 0.23   
  

 

 

    

 

 

     

 

 

  

Diluted

    $ 0.24      $ 0.02       $ 0.22   
  

 

 

    

 

 

     

 

 

  

Weighted average common shares outstanding:

        

Basic

      3,320        3,320         3,320   

Diluted

      3,427        3,427         3,427   

MASTECH HOLDINGS, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2012

(Amounts in thousands, except per share data)

(Unaudited)

 

     Pro Forma  
     As Reported     Adjustments      Pro Forma  

Revenues

    $ 101,838      $ 11,068       $ 90,770   

Costs of revenues

      82,629        9,024         73,605   
  

 

 

    

 

 

     

 

 

  

Gross Profit

      19,209        2,044         17,165   

Selling, general and administrative expenses

      15,693        1,899         13,794   
  

 

 

    

 

 

     

 

 

  

Income from operations

      3,516        145         3,371   

Interest Income (expense), net

      (68 )      —           (68 ) 

Other income (expense), net

      36        —           36   
  

 

 

    

 

 

     

 

 

  

Income before income taxes

      3,484        145         3,339   

Income tax expense

      1,345        64         1,281   
  

 

 

    

 

 

     

 

 

  

Net Income

    $ 2,139      $ 81       $ 2,058   
  

 

 

    

 

 

     

 

 

  

Earnings per share:

        

Basic

    $ 0.66      $ 0.02       $ 0.63   
  

 

 

    

 

 

     

 

 

  

Diluted

    $ 0.64      $ 0.02       $ 0.61   
  

 

 

    

 

 

     

 

 

  

Weighted average common shares outstanding:

        

Basic

      3,260        3,260         3,260   

Diluted

      3,361        3,361         3,361   

MASTECH HOLDINGS, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2013

(Amounts in thousands, except share and per share data)

(Unaudited)

 

     Pro Forma  
     As Reported     Adjustments     Pro Forma  
ASSETS       

Current assets:

       

Cash and cash equivalents

    $ 616      $ 1,006      $ 1,622   

Accounts receivable, net

      13,380        —          13,380   

Unbilled receivables

      3,368        —          3,368   

Prepaid and other current assets

      883        (43 )      840   

Deferred income taxes

      141        —          141   
  

 

 

    

 

 

    

 

 

  

Total current assets

      18,388        963        19,351   

Equipment, enterprise software and leasehold improvements, net

      233        (14 )      219   

Intangible assets, net

      18        (18 )      —     

Deferred financing costs, net

      33        —          33   

Non-current deposits

      210        —          210   

Goodwill

      405        (405 )      —     

Deferred income taxes

      152        —          152   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 19,439      $ 526      $ 19,965   
  

 

 

    

 

 

    

 

 

  
LIABILITIES AND SHAREHOLDERS’ EQUITY       

Current liabilities:

       

Short-term borrowings

    $ 3,479      $ —        $ 3,479   

Accounts payable

      2,571        228        2,799   

Accrued payroll and related costs

      4,557        (144 )      4,413   

Other accrued liabilities

      363        —          363   

Deferred revenues

      91        —          91   
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      11,061        84        11,145   
  

 

 

    

 

 

    

 

 

  

Total liabilities

      11,061        84        11,145   

Commitments and contingent liabilities

      —          —          —     

Shareholders’ equity:

       

Preferred Stock, no par value; 20,000,000 shares authorized; none outstanding

      —          —          —     

Common Stock, par value $.01; 100,000,000 shares authorized; and 3,931,912 shares issued as of June 30, 2013

      39        —          39   

Additional paid-in capital

      11,237        —          11,237   

Retained earnings

      283        442        725   

Accumulated other comprehensive (loss), net of tax

      (50 )      —          (50 ) 

Treasury Stock, at cost; 586,367 shares as of June 30, 2013

      (3,131 )      —          (3,131 ) 
  

 

 

    

 

 

    

 

 

  

Total shareholders’ equity

      8,378        442        8,820   
  

 

 

    

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 19,439      $ 526      $ 19,965   
  

 

 

    

 

 

    

 

 

  

MASTECH HOLDINGS, INC.

EXPLANATORY NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Pro forma Adjustments:

The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2013 and 2012 and the year ended December 31, 2012 includes the following adjustments:

 

  •  

To reflect the removal of the operating results of the Company’s Healthcare Staffing segment as if the Transaction occurred on January 1, 2012.

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2013 includes the following adjustments:

 

  •  

To reflect cash received and the removal of accrued liabilities assumed by the buyer related to the sale of the Company’s Healthcare Staffing segment.

 

  •  

To reflect the disposition of assets sold as of June 30, 2013.

 

  •  

To reflect accounts payable related to transaction closing costs and certain closure expenses of the business sold.

 

  •  

To reflect the gain on the sale, net of income tax expense of $43,000.

Mastech Digital, Inc. Reports