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| 8-K - 8-K - VONAGE HOLDINGS CORP | a8-kbrazildisposition.htm |
EXHIBIT 99.1
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
The following unaudited pro forma consolidated statements of income of Vonage Holdings Corp. (the "Company") give effect to the disposition of its Brazil Joint Venture, which was shut sown on March 31, 2015. The Company estimates that it incurred approximately $500,000 in cash charges in the first quarter of 2015 related to contract terminations and severance-related expenses.
The historical financial information of the Company set forth below has been derived from the unaudited consolidated statements of income of the Company included in the Company's Quarterly Reports on Form 10-Q for the quarters ended September 30, 2013, March 31, 2014, June 30, 2014, and September 30, 2014 and the historical audited consolidated statements of income of the Company included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and December 31, 2014.
The unaudited pro forma consolidated statements of income were prepared as if the disposition had occurred on July1, 2013 as the Brazil Joint Venture began operations in the third quarter of 2013. Pro forma consolidated statements of income for the five most recently completed quarters and the two most recently completed fiscal years are presented because the treatment of the Brazil Joint Venture has not yet been reflected as discontinued operations in the Company's historical information. The Brazil Joint Venture’s assets and net assets were immaterial at December 31, 2014, and accordingly the pro-forma balance sheet has been excluded.
The unaudited pro forma consolidated statements of income have been prepared by the Company's management for illustrative purposes only and is not necessarily indicative of the results of operations that actually would have been realized had the Company disposed of the Brazil Joint Venture during the specified periods. The pro forma adjustments are based upon assumptions that the Company's 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 consolidated statements of income. 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 years ended December 31, 2013 and December 31, 2014, and Quarterly Reports on Form 10-Q for the three months ended September 30, 2013, March 31, 2014, June 30, 2014, and September 30, 2014 filed with the Securities and Exchange Commission.
2
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2014
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 868,953 | $ | 99 | $ | 868,854 | |||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $19,330, $0, and $19,330, respectively) | 232,053 | 670 | 231,383 | ||||||||
Cost of goods sold | 36,815 | 315 | 36,500 | ||||||||
Selling, general and administrative | 274,750 | 3,857 | 270,893 | ||||||||
Marketing | 226,121 | 3,628 | 222,493 | ||||||||
Depreciation and amortization | 51,407 | 1,893 | 49,514 | ||||||||
821,146 | 10,363 | 810,783 | |||||||||
Income from operations | 47,807 | (10,264 | ) | 58,071 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 212 | 5 | 207 | ||||||||
Interest expense | (6,823 | ) | (6,823 | ) | |||||||
Other expense, net | 11 | 11 | |||||||||
(6,600 | ) | 5 | (6,605 | ) | |||||||
Income before income tax expense | 41,207 | (10,259 | ) | 51,466 | |||||||
Income tax expense | (21,760 | ) | (1 | ) | (21,759 | ) | |||||
Net income | $ | 19,447 | $ | (10,260 | ) | $ | 29,707 | ||||
Plus: Net loss attributable to noncontrolling interest | 819 | 819 | — | ||||||||
Net income attributable to Vonage | $ | 20,266 | $ | (9,441 | ) | $ | 29,707 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.10 | $ | 0.14 | |||||||
Diluted | $ | 0.09 | $ | 0.14 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 209,822 | 209,822 | |||||||||
Diluted | 219,419 | 219,419 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
3
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 214,737 | $ | 27 | $ | 214,710 | |||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $4,704, $0, and $4,704, respectively) | 56,807 | 332 | 56,475 | ||||||||
Cost of goods sold | 9,205 | 9,205 | |||||||||
Selling, general and administrative | 66,437 | 951 | 65,486 | ||||||||
Marketing | 58,305 | 1,639 | 56,666 | ||||||||
Depreciation and amortization | 12,346 | 71 | 12,275 | ||||||||
203,100 | 2,993 | 200,107 | |||||||||
Income from operations | 11,637 | (2,966 | ) | 14,603 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 37 | 37 | |||||||||
Interest expense | (1,680 | ) | (1,680 | ) | |||||||
Other income (expense), net | (2 | ) | (2 | ) | |||||||
(1,645 | ) | — | (1,645 | ) | |||||||
Income before income tax expense | 9,992 | (2,966 | ) | 12,958 | |||||||
Income tax expense | (5,627 | ) | 4 | (5,631 | ) | ||||||
Net income | $ | 4,365 | $ | (2,962 | ) | $ | 7,327 | ||||
Plus: Net loss attributable to noncontrolling interest | 191 | 191 | — | ||||||||
Net income attributable to Vonage | $ | 4,556 | $ | (2,771 | ) | $ | 7,327 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.02 | $ | 0.04 | |||||||
Diluted | $ | 0.02 | $ | 0.03 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 208,580 | 208,580 | |||||||||
Diluted | 217,176 | 217,176 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
4
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2014
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 218,882 | $ | 4 | $ | 218,878 | |||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $5,098, $0, and $5,098, respectively) | 59,059 | 117 | 58,942 | ||||||||
Cost of goods sold | 9,450 | 9,450 | |||||||||
Selling, general and administrative | 66,895 | 974 | 65,921 | ||||||||
Marketing | 59,003 | 401 | 58,602 | ||||||||
Depreciation and amortization | 12,459 | 14 | 12,445 | ||||||||
206,866 | 1,506 | 205,360 | |||||||||
Income from operations | 12,016 | (1,502 | ) | 13,518 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 31 | 31 | |||||||||
Interest expense | (1,434 | ) | (1,434 | ) | |||||||
Other income (expense), net | 36 | 36 | |||||||||
(1,367 | ) | — | (1,367 | ) | |||||||
Income before income tax expense | 10,649 | (1,502 | ) | 12,151 | |||||||
Income tax expense | (5,266 | ) | (5 | ) | (5,261 | ) | |||||
Net income | $ | 5,383 | $ | (1,507 | ) | $ | 6,890 | ||||
Plus: Net loss attributable to noncontrolling interest | 135 | 135 | — | ||||||||
Net income attributable to Vonage | $ | 5,518 | $ | (1,372 | ) | $ | 6,890 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.03 | $ | 0.03 | |||||||
Diluted | $ | 0.02 | $ | 0.03 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 211,390 | 211,390 | |||||||||
Diluted | 221,002 | 221,002 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
5
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 220,733 | $ | 220,733 | |||||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $5,154, $0 and $5,154, respectively) | 59,442 | 22 | 59,420 | ||||||||
Cost of goods sold | 9,739 | 9,739 | |||||||||
Selling, general and administrative | 71,628 | 938 | 70,690 | ||||||||
Marketing | 57,264 | 307 | 56,957 | ||||||||
Depreciation and amortization | 12,338 | 12 | 12,326 | ||||||||
210,411 | 1,279 | 209,132 | |||||||||
Income from operations | 10,322 | (1,279 | ) | 11,601 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 91 | 91 | |||||||||
Interest expense | (2,077 | ) | (2,077 | ) | |||||||
Other expense, net | (13 | ) | (13 | ) | |||||||
(1,999 | ) | — | (1,999 | ) | |||||||
Income before income tax expense | 8,323 | (1,279 | ) | 9,602 | |||||||
Income tax expense | (4,118 | ) | (4,118 | ) | |||||||
Net income | $ | 4,205 | $ | (1,279 | ) | $ | 5,484 | ||||
Plus: Net loss attributable to noncontrolling interest | 383 | 383 | — | ||||||||
Net income attributable to Vonage | $ | 4,588 | $ | (896 | ) | $ | 5,484 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.02 | $ | 0.03 | |||||||
Diluted | $ | 0.02 | $ | 0.02 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 212,195 | 212,195 | |||||||||
Diluted | 225,187 | 225,187 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
6
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2013
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 829,067 | $ | 829,067 | |||||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $14,892, $0, and $14,892, respectively) | 237,294 | 50 | 237,244 | ||||||||
Cost of goods sold | 37,586 | 37,586 | |||||||||
Selling, general and administrative | 238,720 | 1,564 | 237,156 | ||||||||
Marketing | 227,052 | 227,052 | |||||||||
Depreciation and amortization | 36,066 | 12 | 36,054 | ||||||||
776,718 | 1,626 | 775,092 | |||||||||
Income from operations | 52,349 | (1,626 | ) | 53,975 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 307 | 307 | |||||||||
Interest expense | (6,557 | ) | (6,557 | ) | |||||||
Other expense, net | (104 | ) | (104 | ) | |||||||
(6,354 | ) | — | (6,354 | ) | |||||||
Income before income tax expense | 45,995 | (1,626 | ) | 47,621 | |||||||
Income tax expense | (18,194 | ) | (18,194 | ) | |||||||
Net income | $ | 27,801 | $ | (1,626 | ) | $ | 29,427 | ||||
Plus: Net loss attributable to noncontrolling interest | 488 | 488 | — | ||||||||
Net income attributable to Vonage | $ | 28,289 | $ | (1,138 | ) | $ | 29,427 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.13 | $ | 0.14 | |||||||
Diluted | $ | 0.13 | $ | 0.13 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 211,563 | 211,563 | |||||||||
Diluted | 220,520 | 220,520 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
7
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
(In thousands, except per share amounts)
Pro Forma | |||||||||||
As Reported | Adjustment (1) | Pro Forma | |||||||||
Revenues | $ | 203,984 | $ | 203,984 | |||||||
Operating Expenses: | |||||||||||
Cost of telephony services (excluding depreciation and amortization of $3,522, $0, and $3,522, respectively) | 58,500 | 58,500 | |||||||||
Cost of goods sold | 9,535 | 9,535 | |||||||||
Selling, general and administrative | 59,134 | 739 | 58,395 | ||||||||
Marketing | 59,133 | 59,133 | |||||||||
Depreciation and amortization | 8,459 | 8,459 | |||||||||
194,761 | 739 | 194,022 | |||||||||
Income from operations | 9,223 | (739 | ) | 9,962 | |||||||
Other Income (Expense): | |||||||||||
Interest income | 97 | 97 | |||||||||
Interest expense | (1,509 | ) | (1,509 | ) | |||||||
Other income (expense), net | (15 | ) | (15 | ) | |||||||
(1,427 | ) | — | (1,427 | ) | |||||||
Income before income tax expense | 7,796 | (739 | ) | 8,535 | |||||||
Income tax expense | (3,811 | ) | (3,811 | ) | |||||||
Net income | $ | 3,985 | $ | (739 | ) | $ | 4,724 | ||||
Plus: Net loss attributable to noncontrolling interest | 222 | 222 | — | ||||||||
Net income attributable to Vonage | $ | 4,207 | $ | (517 | ) | $ | 4,724 | ||||
Net income attributable to Vonage per common share: | |||||||||||
Basic | $ | 0.02 | $ | 0.02 | |||||||
Diluted | $ | 0.02 | $ | 0.02 | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 209,589 | 209,589 | |||||||||
Diluted | 217,059 | 217,059 | |||||||||
These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.
(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.
8