Attached files
| file | filename |
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| 8-K/A - FORM 8-K/A - CEMTREX INC | v434097_8ka.htm |
| EX-99.1 - EXHIBIT 99.1 - CEMTREX INC | v434097_ex99-1.htm |
EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On December 15, 2015 the Company acquired Advanced Industrial Services, Inc. (“AIS”) and its affiliate subsidiary company based in York Pennsylvania. Advanced Industrial Services Inc. is a broad based industrial services provider that offers one-source expertise and capabilities in plant and equipment erection, relocation, and disassembly. Over the years it has been one of the market leaders in installing high precision equipment in a wide variety of industrial markets like automotive, printing & graphics, industrial automation, packaging, and chemicals among others. In addition, AIS has experience in installing industrial air filtration equipment, similar to the equipment sold by Cemtrex, Inc. through its existing business operations.
The Unaudited Pro Forma Financial Information, prepared by Cemtrex, Inc., gives effect to the Acquisition using the acquisition method of accounting, after giving effect to the pro forma adjustments discussed in the accompanying notes. This financial information has been prepared from, and should be read in conjunction with, the historical consolidated financial statements and notes thereto of Cemtrex and AIS included elsewhere in this report.
The financial periods required to be presented in this Form 8K/A are based on our fiscal periods. Cemtrex and AIS have different fiscal year ends. For the purpose of presenting these pro forma financial statements, we used the financial statements for our fiscal years ended September 30, 2015 and 2014, as filed with the Securities and Exchange Commission (“SEC”) in our Annual Report on Form 10-K. To meet the SEC’s pro forma requirements of combining operating results for AIS for the annual periods that ended within 93 days of the end of our latest annual fiscal period as filed with the SEC, we combined AIS’ transitional period ended December 14, 2015 (presented as a full twelve-month period) and the twelve-month period ended December 31, 2014.
The Pro Forma Combined Balance Sheet gives effect to the Acquisition as if it had occurred on September 30, 2015, combining the historical balance sheet of Cemtrex as of that date with the balance sheet of AIS Group as of December 14, 2015. The Pro Forma Statements of Operations for the AIS’ transitional period ended December 14, 2015 (presented as a full twelve-month period) and the twelve-month period ended December 31, 2014 gives effect to the Acquisition as if it had occurred at the beginning of each respective period.
The Pro Forma Combined Financial Information is unaudited, and is not necessarily indicative of the consolidated results that actually would have occurred if the acquisition had been consummated at the beginning of the periods presented, nor does it purport to present the future financial position and results of operations for future periods.
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PRO-FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2014
| Cemtrex Inc. | Advanced Industrial Services, Inc. | Consolidation Adjustments | Combined Proforma | |||||||||||||
| Revenues | ||||||||||||||||
| Total revenues | $ | 47,653,114 | $ | 21,229,536 | $ | 68,882,650 | ||||||||||
| Cost of revenues | ||||||||||||||||
| Total cost of revenues | 32,057,846 | 14,165,313 | 46,223,159 | |||||||||||||
| Gross profit | 15,595,268 | 7,064,223 | 22,659,491 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 12,582,072 | 5,678,663 | 18,260,735 | |||||||||||||
| Total operating expenses | 12,582,072 | 5,678,663 | 18,260,735 | |||||||||||||
| Operating income/(loss) | 3,013,196 | 1,385,560 | 4,398,756 | |||||||||||||
| Other income (expenses) | ||||||||||||||||
| Interest and financing costs | (436,864 | ) | (527,193 | ) | (208,189 | ) (3) | (1,172,246 | ) | ||||||||
| Interest and other income, net | 153,516 | 435,890 | 589,406 | |||||||||||||
| Total other income, net | (283,348 | ) | (91,303 | ) | (582,840 | ) | ||||||||||
| Income/(loss) before income taxes | 2,729,848 | 1,294,257 | 3,815,916 | |||||||||||||
| Income tax benefit/(expense), net | 60,962 | - | 60,962 | |||||||||||||
| Net income/(loss) applicable to common stockholders | $ | 2,668,886 | $ | 1,294,257 | $ | 3,876,878 | ||||||||||
| Income/(loss) per common share | ||||||||||||||||
| - basic | $ | 0.39 | $ | 0.57 | ||||||||||||
| -diluted | $ | 0.39 | $ | 0.57 | ||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| - basic | 6,776,587 | 317,460 | (1) | 6,776,587 | ||||||||||||
| -diluted | 6,776,587 | 317,460 | (1) | 6,776,587 | ||||||||||||
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PRO-FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2015
| Cemtrex Inc. | Advanced Industrial Services, Inc. | Consolidation Adjustments | Combined Proforma | |||||||||||||
| Revenues | ||||||||||||||||
| Total revenues | $ | 56,887,389 | $ | 22,195,519 | $ | 79,082,908 | ||||||||||
| Cost of revenues | ||||||||||||||||
| Total cost of revenues | 40,564,819 | 15,419,170 | 55,983,989 | |||||||||||||
| Gross profit | 16,322,570 | 6,776,349 | 23,098,919 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 13,821,546 | 5,470,466 | 19,292,012 | |||||||||||||
| Total operating expenses | 13,821,546 | 5,470,466 | 19,292,012 | |||||||||||||
| Operating income/(loss) | 2,501,024 | 1,305,883 | 3,806,907 | |||||||||||||
| Other income (expenses) | ||||||||||||||||
| Interest and financing costs | (496,281 | ) | (532,050 | ) | (209,191 | ) (3) | (1,237,522 | ) | ||||||||
| Interest and other income, net | 834,290 | 80,970 | 915,260 | |||||||||||||
| Total other income, net | 338,009 | (451,080 | ) | (322,262 | ) | |||||||||||
| Income/(loss) before income taxes | 2,839,033 | 854,803 | 3,484,645 | |||||||||||||
| Income tax benefit/(expense), net | 917 | - | 917 | |||||||||||||
| Net income/(loss) applicable to common stockholders | $ | 2,838,116 | $ | 854,803 | $ | 3,485,562 | ||||||||||
| Income/(loss) per common share | ||||||||||||||||
| - basic | $ | 0.41 | $ | 0.49 | ||||||||||||
| -diluted | $ | 0.40 | $ | 0.47 | ||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| - basic | 6,843,666 | 317,460 | (1) | 7,161,126 | ||||||||||||
| -diluted | 7,058,562 | 317,460 | (1) | 7,376,022 | ||||||||||||
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PRO-FORMA COMBINED BALANCE SHEET
September 30, 2015
| Cemtrex Inc. | Advanced
Industrial Services, Inc. | Acquisition
Adjustments | Combined
Proforma | |||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets | ||||||||||||||||
| Cash & equivalents | $ | 1,486,737 | $ | 112,587 | - | $ | 1,599,324 | |||||||||
| Short-term investments | - | 608,427 | - | 608,427 | ||||||||||||
| Accounts receivable, net | 4,771,044 | 3,211,997 | - | 7,983,041 | ||||||||||||
| Costs & estimated earrings in excess of billings on uncompleted contracts | - | - | - | - | ||||||||||||
| Inventory -net of allowance for inventory obsolescence | 6,369,516 | 465,877 | - | 6,835,393 | ||||||||||||
| Deferred costs | - | 43,208 | - | 43,208 | ||||||||||||
| Prepaid expenses & other current assets | 893,792 | 551,292 | - | 1,445,084 | ||||||||||||
| Total Current Assets | 13,521,089 | 4,993,388 | - | 18,514,477 | ||||||||||||
| Property & equipment, net | 8,142,523 | 1,661,075 | 4,991,018 | (1,2) | 14,794,616 | |||||||||||
| Goodwill | 845,000 | - | (88,876 | ) (1) | 756,124 | |||||||||||
| Other | 35,630 | 121,000 | - | 156,630 | ||||||||||||
| Total Assets | $ | 22,544,242 | $ | 6,775,463 | $ | 4,902,142 | $ | 34,221,847 | ||||||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||||||
| Current Liabilities | ||||||||||||||||
| Accounts payable | $ | 4,386,578 | $ | 748,311 | - | $ | 5,134,889 | |||||||||
| Accrued expenses | 309,130 | 568,177 | - | 877,307 | ||||||||||||
| Accrued income taxes | 73,746 | 7,150 | - | 80,896 | ||||||||||||
| Billings in excess of costs and estimated earnings | - | 260,330 | - | 260,330 | ||||||||||||
| Short-term note payable to bank | 2,129,711 | 1,484,562 | - | 3,614,273 | ||||||||||||
| Convertible note payable | 1,274,000 | - | - | 1,274,000 | ||||||||||||
| Current portion of long-term liabilities | 654,020 | 453,860 | 1,000,000 | (1) | 2,107,880 | |||||||||||
| Other liabilities | - | - | - | - | ||||||||||||
| Total Current Liabilities | 8,827,185 | 3,522,390 | 1,000,000 | 13,349,575 | ||||||||||||
| Long term- Liabilities | ||||||||||||||||
| Loan payable to bank | 2,383,815 | 569,206 | 4,500,000 | (1) | 7,453,021 | |||||||||||
| Mortgage payable | 4,088,618 | - | - | 4,088,618 | ||||||||||||
| Loan payable to related party | 119,055 | - | - | 119,055 | ||||||||||||
| Notes payable to former shareholder | - | 86,009 | 1,000,000 | (1) | 1,086,009 | |||||||||||
| Total Liabilities | 15,418,673 | 4,177,605 | 6,500,000 | 26,096,278 | ||||||||||||
| Commitments & Contingencies | ||||||||||||||||
| Stockholders' Equity | ||||||||||||||||
| Preferred stock, par value $0.001, 10,000,000 shares authorized, 1,000,000 shares issued and outstanding | 1,000 | - | - | 1,000 | ||||||||||||
| Common stock, par value $0.001, 20,000,000 shares authorized, 7,158,087 shares issued and outstanding pre-acquisition, 7,475,547 post-acquisition | 7,158 | 30,180 | (29,862 | ) (1) | 7,476 | |||||||||||
| Additional paid-in capital | 1,020,444 | 129,072 | 870,610 | (1) | 2,020,126 | |||||||||||
| Retained Earnings | 6,430,855 | 3,039,547 | (3,039,547 | ) (1) | 6,430,855 | |||||||||||
| Accumulated other comprehensive income | (333,888 | ) | - | - | (333,888 | ) | ||||||||||
| Treasury stock | - | (600,941 | ) | 600,941 | (1) | - | ||||||||||
| Total Stockholders' Equity | 7,125,569 | 2,597,858 | (1,597,858 | ) | 8,125,569 | |||||||||||
| Total Liabilities & Stockholders' Equity | $ | 22,544,242 | $ | 6,775,463 | $ | 4,902,142 | $ | 34,221,847 | ||||||||
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NOTES TO PRO-FORMA COMBINED FINANCIAL STATEMENTS (unaudited)
The pro-forma adjustments are preliminary and are based on our estimate of the fair value and useful lives of the assets acquired and have been prepared to illustrate the estimated effect of the acquisition.
In accordance with Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"), the total purchase consideration is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of October 31, 2013 (the acquisition date). The purchase price was allocated based on the information currently available, and may be adjusted after obtaining more information regarding, among other things, asset valuations, liabilities assumed, and revisions of preliminary estimates.
The following notes explain the adjustments made:
| 1. | To reflect the acquisition of ROB Group and the allocation of the purchase price on the basis of the fair values of the assets acquired and the liabilities assumed, the components of the purchase price and allocation to the assets and liabilities are as follows: |
| Cemtrex, Inc. common stock | $ | 1,000,000 | ||
| Loans from bank | 5,000,000 | |||
| Note payable | 1,500,000 | |||
| Total Purchase Price | $ | 7,500,000 |
| Cash | $ | 112,587 | ||
| Short-term investments | 608,427 | |||
| Accounts receivable, net | 3,211,997 | |||
| Prepaid expenses | 551,292 | |||
| Inventory, net | 465,877 | |||
| Deferred costs | 43,208 | |||
| Property, plant, and equipment, net | 6,652,093 | |||
| Goodwill | (88,876 | ) | ||
| Other | 121,000 | |||
| Total Liabilities | (4,177,605 | ) | ||
| Net assets acquired | $ | 7,500,000 |
| 2. | Prior to completion of the purchase, the Company had the fixed assets of AIS evaluated and adjusted the value of those fixed assets to fair market value at the time of purchase. |
| 3. | The loans secured in order to purchase AIS carry variable interest rates based on the 30 day London Interbank Offered Rate (“LIBOR“). These proforma financial statement adjustments are based on the historical LIBOR rates and are not indicative of what these rates may be in the future. |
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