Attached files
| file | filename |
|---|---|
| 8-K/A - AMENDMENT TO FORM 8-K DATED JUNE 12, 2013 - INTRICON CORP | intricon140323_8ka.htm |
| EX-2.1 - ASSET PURCHASE AGREEMENT - INTRICON CORP | intricon140323_ex2-1.htm |
| EX-99.2 - PRESS RELEASE DATED JANUARY 28, 2014 - INTRICON CORP | intricon140323_ex99-2.htm |
Exhibit 99.1
Unaudited Pro Forma Financial Information
As used in these unaudited pro forma consolidated condensed financial statements, references to “we”, “us”, “our” or “IntriCon” refer to IntriCon Corporation, together with its consolidated subsidiaries.
On January 27, 2014, IntriCon completed the sale of the security business and certain microphone and receiver businesses of IntriCon Tibbetts Corporation, IntriCon’s wholly owned subsidiary based in Camden, Maine, to Sierra Peaks Corporation, pursuant to an Asset Purchase Agreement entered into on January 27, 2014 among Sierra Peaks Corporation, as the buyer, IntriCon Tibbetts Corporation, as the seller.
Pursuant to the Asset Purchase Agreement, Sierra Peaks Corporation paid $500,000 cash at closing for the assets and assumed certain operating liabilities of the businesses, subject to a working capital adjustment. In addition, the Asset Purchase Agreement provides for earn-out payments of up to a maximum total of $375,000 if certain revenue targets are met.
The unaudited pro forma consolidated condensed balance sheet as of September 30, 2013 included in this report has been prepared by management as if the sale occurred on such date. The unaudited pro forma consolidated condensed statement of operations for the year ended December 31, 2012 included in this report has been prepared as if the sale had occurred as of January 1, 2012.
The preparation of the unaudited pro forma consolidated condensed financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. The pro forma adjustments reflected in the accompanying unaudited pro forma consolidated condensed financial statements reflect estimates and assumptions that IntriCon’s management believes to be reasonable. Actual results may differ from those estimates.
The unaudited pro forma consolidated condensed financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations for future periods or that would have occurred if the sale had occurred as of the beginning of the period presented.
The unaudited pro forma consolidated condensed financial statements, including the related notes, are qualified in their entirety by reference to, and should be read in conjunction with:
| · | Our historical financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012, and |
| · | Our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2013. |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTRICON CORPORATION |
||||||||||
|
Pro Forma Consolidated Condensed Balance Sheet |
||||||||||
|
(Unaudited) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2013 |
|
As Reported |
|
Pro Forma |
|
Pro Forma |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
196 |
|
$ |
500 |
(1) |
$ |
696 |
|
|
Restricted cash |
|
|
564 |
|
|
— |
|
|
564 |
|
|
Accounts receivable, less allowance for doubtful accounts of $108 |
|
|
5,728 |
|
|
— |
|
|
5,728 |
|
|
Inventories |
|
|
9,458 |
|
|
— |
|
|
9,458 |
|
|
Other current assets |
|
|
1,565 |
|
|
— |
|
|
1,565 |
|
|
Current assets of discontinued operations |
|
|
947 |
|
|
(947 |
) (2) |
|
— |
|
|
Total current assets |
|
|
18,458 |
|
|
(447 |
) |
|
18,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery and equipment |
|
|
33,627 |
|
|
— |
|
|
33,627 |
|
|
Less: Accumulated depreciation |
|
|
28,840 |
|
|
— |
|
|
28,840 |
|
|
Net machinery and equipment |
|
|
4,787 |
|
|
— |
|
|
4,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
9,194 |
|
|
— |
|
|
9,194 |
|
|
Investment in partnerships |
|
|
617 |
|
|
— |
|
|
617 |
|
|
Other assets, net |
|
|
880 |
|
|
|
|
|
880 |
|
|
Other assets of discontinued operations |
|
|
312 |
|
|
(312 |
) (2) |
|
— |
|
|
Total assets |
|
$ |
34,248 |
|
$ |
(759 |
) |
$ |
33,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Checks written in excess of cash |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Current maturities of long-term debt |
|
|
8,815 |
|
|
— |
|
|
8,815 |
|
|
Accounts payable |
|
|
4,928 |
|
|
— |
|
|
4,928 |
|
|
Accrued salaries, wages and commissions |
|
|
1,929 |
|
|
— |
|
|
1,929 |
|
|
Deferred gain |
|
|
110 |
|
|
— |
|
|
110 |
|
|
Other accrued liabilities |
|
|
2,171 |
|
|
55 |
(3) |
|
2,226 |
|
|
Liabilities of discontinued operations |
|
|
285 |
|
|
(285 |
) (2) |
|
— |
|
|
Total current liabilities |
|
|
18,238 |
|
|
(230 |
) |
|
18,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current maturities |
|
|
40 |
|
|
— |
|
|
40 |
|
|
Other postretirement benefit obligations |
|
|
570 |
|
|
— |
|
|
570 |
|
|
Accrued pension liabilities |
|
|
510 |
|
|
— |
|
|
510 |
|
|
Deferred gain |
|
|
193 |
|
|
— |
|
|
193 |
|
|
Other long-term liabilities |
|
|
160 |
|
|
— |
|
|
160 |
|
|
Total liabilities |
|
|
19,711 |
|
|
(230 |
) |
|
19,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
Common shares, $1.00 par value per share; 20,000 shares authorized; 5,707 shares issued and outstanding; |
|
|
5,707 |
|
|
— |
|
|
5,707 |
|
|
Additional paid-in capital |
|
|
16,257 |
|
|
— |
|
|
16,257 |
|
|
Retained deficit |
|
|
(7,099 |
) |
|
(504 |
) (4) |
|
(7,603 |
) |
|
Accumulated other comprehensive loss |
|
|
(328 |
) |
|
— |
|
|
(328 |
) |
|
Total shareholders’ equity |
|
|
14,537 |
|
|
(504 |
) |
|
14,033 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
34,248 |
|
$ |
(734 |
) |
$ |
33,514 |
|
|
|
|
|
|
INTRICON CORPORATION |
||
|
Notes to Pro Forma Financial Information |
||
|
(Unaudited) |
||
|
|
|
|
|
|
(1) |
Pro forma adjustment reflects total cash proceeds of $500,000 based on a closing date of September 30, 2013. |
|
|
|
|
|
|
(2) |
Pro forma adjustments reflect the removal of the assets and liabilities of the securities, certain microphone and receiver business. |
|
|
|
|
|
|
(3) |
Pro forma adjustment reflects the estimated one-time employee termination benefits retained by parent Company. |
|
|
|
|
|
|
(4) |
Pro forma adjustment reflects the asset impairment and loss on the sale of the securities, certain microphone and receivers businesses. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTRICON CORPORATION |
|||||||||||
|
Pro Forma Consolidated Condensed Statement of Operations |
|||||||||||
|
(Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2012 |
|
As Reported |
|
Pro Forma |
|
Pro Forma |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales, net |
|
$ |
63,933 |
|
$ |
(3,978 |
) (1) |
$ |
59,955 |
|
|
|
Cost of sales |
|
|
48,957 |
|
|
(4,301 |
) (1) |
|
44,656 |
|
|
|
Gross profit |
|
|
14,976 |
|
|
323 |
|
|
15,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,324 |
|
|
— |
|
|
3,324 |
|
|
|
General and administrative |
|
|
5,958 |
|
|
(532 |
) (1) |
|
5,426 |
|
|
|
Research and development |
|
|
4,694 |
|
|
(213 |
) (1) |
|
4,481 |
|
|
|
Total operating expenses |
|
|
13,976 |
|
|
(745 |
) |
|
13,231 |
|
|
|
Operating income |
|
|
1,000 |
|
|
1,068 |
|
|
2,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(755 |
) |
|
— |
|
|
(755 |
) |
|
|
Equity in loss of partnerships |
|
|
(116 |
) |
|
— |
|
|
(116 |
) |
|
|
Gain on sale of investment in partnership |
|
|
822 |
|
|
— |
|
|
822 |
|
|
|
Other expense |
|
|
(78 |
) |
|
(18 |
) (1) |
|
(96 |
) |
|
|
Income before income taxes |
|
|
873 |
|
|
1,050 |
|
|
1,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(164 |
) |
|
— |
|
|
(164 |
) |
|
|
Net income |
|
|
709 |
|
|
1,050 |
|
|
1,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share |
|
$ |
0.13 |
|
|
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share |
|
$ |
0.12 |
|
|
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
5,669 |
|
|
|
|
|
5,669 |
|
|
|
Diluted |
|
|
5,888 |
|
|
|
|
|
5,888 |
|
|
|
|
|
|
|
INTRICON CORPORATION |
||
|
Notes to Pro Forma Financial Information |
||
|
(Unaudited) |
||
|
|
|
|
|
|
(1) |
Pro forma adjustments reflect the removal of the revenue and expenses of the securities, certain microphone and receiver business. |
|
|
|
|