Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MACOM Technology Solutions Holdings, Inc. | d84143d8k.htm |
| EX-99.1 - EX-99.1 - MACOM Technology Solutions Holdings, Inc. | d84143dex991.htm |
Exhibit 99.2
M/A-COM Technology Solutions Holdings, Inc.
Introduction to the Pro Forma Condensed Combined Consolidated Financial Statements
(Unaudited)
On August 17, 2015, M/A-COM Technology Solutions Holdings, Inc. (the “Company”) completed its previously announced divestiture of its automotive module business (the “Auto Business”) pursuant to the Stock Purchase Agreement (the “Purchase Agreement”) among the Company, Autoliv ASP Inc. (“Autoliv”), M/A-COM Technology Solutions Inc., a wholly-owned subsidiary of the Company (“MACOM Solutions”), and RoadScape Automotive, Inc., formerly known as M/A-COM Auto Solutions Inc., a wholly-owned subsidiary of MACOM Solutions (“RoadScape”). Pursuant to the Purchase Agreement, the Company sold all of the issued and outstanding shares of capital stock of RoadScape to Autoliv for $100 million in cash, subject to customary working capital and other adjustments, plus up to an additional $30 million in cash in the form of an earn-out payment based on the achievement of certain revenue- and customer order-based targets through September 30, 2019.
The accompanying unaudited pro forma consolidated statement of operations and comprehensive income (loss) for nine months ended July 3, 2015, and the years ended October 3, 2014, September 27, 2013, and September 28, 2012 give effect to the disposition of certain assets and liabilities of the automotive business of the Company as if the sale had been consummated at the beginning of each period presented. The accompanying unaudited pro forma condensed consolidated balance sheet as of July 3, 2015 gives effect to the disposition of certain assets and liabilities of the Company as if it had been consummated as of July 3, 2015.
The historical financial information on which the pro forma financial statements are based is included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 12, 2015 and the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 9, 2014. The pro forma consolidated financial statements and the notes thereto should be read in conjunction with these historical consolidated financial statements.
The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are subject to a number of assumptions that may not be indicative of the results of operations that would have occurred had the disposition been completed at the dates indicated or what the results will be for any future periods. The unaudited pro forma consolidated statements of operations and comprehensive income (loss) do not include transaction costs or the gain that the Company expects to recognize on the sale of certain assets and liabilities. The pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analysis are performed, and have been made solely for the purpose of providing unaudited pro forma condensed financial statements. Differences between these preliminary estimates and the final divestiture accounting may occur and these differences could have a material effect on the accompanying unaudited pro forma condensed financial statements and the Company’s future financial position and results of operations.
M/A-COM Technology Solutions Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of July 3, 2015
(in thousands)
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma as Adjusted |
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| ASSETS |
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| Current assets |
||||||||||||||
| Cash and cash equivalents |
$ | 80,687 | $ | 79,692 | (A) | $ | 160,379 | |||||||
| Accounts receivable, net |
89,714 | (12,646 | ) | (C) | 77,068 | |||||||||
| Inventories |
84,373 | (2,216 | ) | (C) | 82,157 | |||||||||
| Prepaid expenses and other |
18,423 | — | 18,423 | |||||||||||
| Deferred income taxes |
35,957 | — | 35,957 | |||||||||||
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| Total current assets |
309,154 | 64,830 | 373,984 | |||||||||||
| Property, plant and equipment, net |
80,167 | (141 | ) | (C) | 80,026 | |||||||||
| Goodwill |
98,799 | — | 98,799 | |||||||||||
| Intangible assets, net |
252,496 | — | 252,496 | |||||||||||
| Deferred income taxes |
49,851 | — | 49,851 | |||||||||||
| Assets held for sale |
— | — | — | |||||||||||
| Other assets |
16,247 | 17,250 | (B) | 33,497 | ||||||||||
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| Total assets |
$ | 806,714 | $ | 81,939 | $ | 888,653 | ||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Current portion of lease |
$ | 554 | $ | — | $ | 554 | ||||||||
| Current portion of long-term debt |
3,500 | — | 3,500 | |||||||||||
| Accounts payable |
27,594 | (5,442 | ) | (C) | 22,152 | |||||||||
| Accrued liabilities |
32,498 | (660 | ) | (C) | 31,838 | |||||||||
| Deferred revenue |
336 | — | 336 | |||||||||||
| Income taxes payable |
1,172 | 31,959 | (D) | 33,131 | ||||||||||
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| Total current liabilities |
65,654 | 25,857 | 91,511 | |||||||||||
| Lease payable, less current portion |
608 | — | 608 | |||||||||||
| Long-term debt |
340,813 | — | 340,813 | |||||||||||
| Warrant liability |
31,472 | — | 31,472 | |||||||||||
| Deferred income taxes |
— | — | — | |||||||||||
| Other long-term liabilities |
7,365 | — | 7,365 | |||||||||||
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| Total liabilities |
445,912 | 25,857 | 471,769 | |||||||||||
| Stockholders’ equity: |
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| Common stock |
53 | — | 53 | |||||||||||
| Additional paid-in capital |
516,597 | — | 516,597 | |||||||||||
| Treasury stock |
(330 | ) | — | (330 | ) | |||||||||
| Accumulated deficit |
(153,328 | ) | 56,082 | (E) | (97,246 | ) | ||||||||
| Accumulated other comprehensive loss |
(2,190 | ) | (2,190 | ) | ||||||||||
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| Total stockholders’ equity |
360,802 | 56,082 | 416,884 | |||||||||||
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| Total liabilities and stockholders’ equity |
$ | 806,714 | $ | 81,939 | $ | 888,653 | ||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements.
M/A-COM Technology Solutions Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended July 3, 2015
(in thousands, except per share amounts)
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma as Adjusted |
|||||||||||
| Revenue |
370,412 | (62,367 | ) | (F) | 308,045 | |||||||||
| Cost of revenue |
202,420 | (41,004 | ) | (F) | 161,416 | |||||||||
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| Gross profit |
167,992 | (21,363 | ) | 146,629 | ||||||||||
| Operating expenses: |
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| Research and development |
62,146 | (1,960 | ) | (F) | 60,186 | |||||||||
| Selling, general and administrative |
82,254 | (2,187 | ) | (F) | 80,067 | |||||||||
| Restructuring charges |
971 | — | 971 | |||||||||||
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| Total operating expenses |
145,371 | (4,147 | ) | 141,224 | ||||||||||
| Income (loss) from operations |
22,621 | (17,216 | ) | 5,405 | ||||||||||
| Other income (expense): |
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| Warrant liability expense |
(15,671 | ) | — | (15,671 | ) | |||||||||
| Interest expense |
(13,951 | ) | — | (13,951 | ) | |||||||||
| Other income |
2,774 | (4,000 | ) | (F) | (1,226 | ) | ||||||||
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| Total other expense |
(26,848 | ) | (4,000 | ) | (30,848 | ) | ||||||||
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| Loss before income taxes |
(4,227 | ) | (21,216 | ) | (25,443 | ) | ||||||||
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| Income tax provision (benefit) |
1,589 | (7,701 | ) | (F) | (6,112 | ) | ||||||||
| Loss from continuing operations |
$ | (5,816 | ) | $ | (13,515 | ) | $ | (19,331 | ) | |||||
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| Loss from continuing operations - basic |
$ | (0.12 | ) | $ | (0.27 | ) | $ | (0.38 | ) | |||||
| Loss from continuing operations - diluted |
$ | (0.12 | ) | $ | (0.27 | ) | $ | (0.38 | ) | |||||
| Shares used: |
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| Basic |
50,433 | 50,433 | 50,433 | |||||||||||
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| Diluted |
50,433 | 50,433 | 50,433 | |||||||||||
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See accompanying notes to unaudited condensed consolidated financial statements.
M/A-COM Technology Solutions Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Fiscal Year Ended October 3, 2014
(in thousands, except per share amounts)
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma as Adjusted |
|||||||||||
| Revenue |
418,662 | (79,473 | ) | (F) | 339,189 | |||||||||
| Cost of revenue |
249,674 | (51,425 | ) | (F) | 198,249 | |||||||||
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| Gross profit |
168,988 | (28,048 | ) | 140,940 | ||||||||||
| Operating expenses: |
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| Research and development |
73,685 | (2,334 | ) | (F) | 71,351 | |||||||||
| Selling, general and administrative |
86,179 | (3,586 | ) | (F) | 82,593 | |||||||||
| Restructuring charges |
14,823 | — | 14,823 | |||||||||||
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| Total operating expenses |
174,687 | (5,920 | ) | 168,767 | ||||||||||
| Loss from operations |
(5,699 | ) | (22,128 | ) | (27,827 | ) | ||||||||
| Other income (expense): |
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| Warrant liability expense |
(3,928 | ) | — | (3,928 | ) | |||||||||
| Interest expense |
(12,362 | ) | — | (12,362 | ) | |||||||||
| Other income |
3,217 | — | 3,217 | |||||||||||
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| Total other expense |
(13,073 | ) | — | (13,073 | ) | |||||||||
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| Loss before income taxes |
(18,772 | ) | (22,128 | ) | (40,900 | ) | ||||||||
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| Income tax benefit |
(8,054 | ) | (8,032 | ) | (F) | (16,086 | ) | |||||||
| Loss from continuing operations |
$ | (10,718 | ) | $ | (14,096 | ) | $ | (24,814 | ) | |||||
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| Loss from continuing operations - basic |
$ | (0.23 | ) | $ | (0.30 | ) | $ | (0.53 | ) | |||||
| Loss from continuing operations - diluted |
$ | (0.23 | ) | $ | (0.30 | ) | $ | (0.53 | ) | |||||
| Shares used: |
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| Basic |
47,009 | 47,009 | 47,009 | |||||||||||
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| Diluted |
47,009 | 47,009 | 47,009 | |||||||||||
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See accompanying notes to unaudited condensed consolidated financial statements.
M/A-COM Technology Solutions Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Fiscal Year Ended September 27, 2013
(in thousands, except per share amounts)
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma as Adjusted |
|||||||||||
| Revenue |
323,071 | (80,368 | ) | (F) | 242,703 | |||||||||
| Cost of revenue |
186,658 | (53,153 | ) | (F) | 133,505 | |||||||||
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| Gross profit |
136,413 | (27,215 | ) | 109,198 | ||||||||||
| Operating expenses: |
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| Research and development |
44,588 | (2,083 | ) | (F) | 42,505 | |||||||||
| Selling, general and administrative |
52,004 | (747 | ) | (F) | 51,257 | |||||||||
| Litigation settlement |
7,250 | — | 7,250 | |||||||||||
| Contingent consideration |
(577 | ) | — | (577 | ) | |||||||||
| Restructuring charges |
1,060 | — | 1,060 | |||||||||||
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| Total operating expenses |
104,325 | (2,830 | ) | 101,495 | ||||||||||
| Income (loss) from operations |
32,088 | (24,385 | ) | 7,703 | ||||||||||
| Other income (expense): |
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| Warrant liability gain |
(4,312 | ) | — | (4,312 | ) | |||||||||
| Interest expense |
(817 | ) | — | (817 | ) | |||||||||
| Other income |
372 | — | 372 | |||||||||||
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| Total other expense |
(4,757 | ) | — | (4,757 | ) | |||||||||
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| Income (loss) before income taxes |
27,331 | (24,385 | ) | 2,946 | ||||||||||
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| Income tax provision (benefit) |
9,135 | (8,852 | ) | (F) | 283 | |||||||||
| Income (loss) from continuing operations |
$ | 18,196 | $ | (15,533 | ) | $ | 2,663 | |||||||
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| Income (loss) from continuing operations - basic |
$ | 0.40 | $ | (0.34 | ) | $ | 0.06 | |||||||
| Income (loss) from continuing operations - diluted |
$ | 0.39 | $ | (0.33 | ) | $ | 0.06 | |||||||
| Shares used: |
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| Basic |
45,916 | 45,916 | 45,916 | |||||||||||
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| Diluted |
47,137 | 47,137 | 47,137 | |||||||||||
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See accompanying notes to unaudited condensed consolidated financial statements.
M/A-COM Technology Solutions Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Fiscal Year Ended September 28, 2012
(in thousands, except per share amounts)
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma as Adjusted |
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| Revenue |
303,336 | (47,792 | ) | (F) | 255,544 | |||||||||
| Cost of revenue |
169,213 | (34,387 | ) | (F) | 134,826 | |||||||||
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| Gross profit |
134,123 | (13,405 | ) | 120,718 | ||||||||||
| Operating expenses: |
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| Research and development |
36,752 | (1,849 | ) | (F) | 34,903 | |||||||||
| Selling, general and administrative |
45,688 | (531 | ) | (F) | 45,157 | |||||||||
| Contingent consideration |
(3,922 | ) | — | (3,922 | ) | |||||||||
| Restructuring charges |
1,862 | — | 1,862 | |||||||||||
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| Total operating expenses |
80,380 | (2,380 | ) | 78,000 | ||||||||||
| Income (loss) from operations |
53,743 | (11,025 | ) | 42,718 | ||||||||||
| Other income (expense): |
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| Warrant liability (expense) gain |
3,175 | — | 3,175 | |||||||||||
| Class B conversion liability expense |
(44,119 | ) | — | (44,119 | ) | |||||||||
| Interest expense |
(695 | ) | — | (695 | ) | |||||||||
| Other income |
185 | — | 185 | |||||||||||
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| Total other expense |
(41,454 | ) | — | (41,454 | ) | |||||||||
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| Income (loss) before income taxes |
12,289 | (11,025 | ) | 1,264 | ||||||||||
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| Income tax provision (benefit) |
15,953 | (4,123 | ) | (F) | 11,830 | |||||||||
| Accretion to redemption value of redeemable preferred stock and participating stock dividends |
(2,616 | ) | — | (2,616 | ) | |||||||||
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| Loss from continuing operations |
$ | (6,280 | ) | $ | (6,902 | ) | $ | (13,182 | ) | |||||
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| Loss from continuing operations - basic |
$ | (0.25 | ) | $ | (0.28 | ) | $ | (0.53 | ) | |||||
| Loss from continuing operations - diluted |
$ | (0.25 | ) | $ | (0.28 | ) | $ | (0.53 | ) | |||||
| Shares used: |
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| Basic |
24,758 | 24,758 | 24,758 | |||||||||||
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| Diluted |
24,758 | 24,758 | 24,758 | |||||||||||
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See accompanying notes to unaudited condensed consolidated financial statements.
M/A-COM Technology Solutions Holdings, Inc.
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
(Amounts in thousands)
1. Basis of Presentation
The preparation of the unaudited pro forma condensed consolidated 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 financial information reflect estimates and assumptions that the Company’s management believes to be reasonable. Actual results may differ from those estimates. Pro forma adjustments related to the unaudited pro forma financial information presented below assume the sale of the certain assets and liabilities of the Company’s automotive business was consummated on the date of the most recent period presented for the consolidated balance and at the beginning of the fiscal year presented for the consolidated statement of operations and comprehensive income (loss). The financial statements include adjustments which give effect to events that are (i) directly attributable to the sale, (ii) expected to have a continuing impact on the Company, and (iii) factually supportable. In addition, the consolidated balance sheet includes adjustments that are nonrecurring, such as transaction costs and the after-tax gain on the transaction.
The historical financial information on which the pro forma financial statements are based is included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 12, 2015 and the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 9, 2014. The pro forma consolidated financial statements and the notes thereto should be read in conjunction with these historical consolidated financial statements.
2. Unaudited Pro Forma Condensed Consolidated Balance Sheet
The unaudited pro forma condensed consolidated balance sheet at July 3, 2015 reflects the following pro forma adjustments:
(A) Reflects the pro forma impact of the receipt of cash proceeds from the sale (net of the indemnification holdback) equal to $82,000 plus $64 related to the working capital adjustment less $2,372 of estimated selling and transaction expenses.
(B) Reflects the receivable for the $18,000 indemnification holdback, less $750 of other assets sold.
(C) Adjustment to reflect the assets and liabilities sold.
(D) Represents the estimated income taxes payable assuming a combined federal/state income tax rate of 36.3%.
(E) Reflects the estimated after-tax impact of the above pro forma items.
3. Unaudited Pro Forma Condensed Consolidated Statements of Operations and Comprehensive Loss
The unaudited pro forma condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended July 3, 2015 and the years ended October 3, 2014, September 27, 2013, and September 28, 2012 reflect the following pro forma adjustments:
(F) Amount eliminates the revenues, cost of goods sold, operating expenses and income taxes related to the automotive business.