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EX-99.2 - EX-99.2 - Altra Industrial Motion Corp.aimc-ex992_8.htm
EX-99.1 - EX-99.1 - Altra Industrial Motion Corp.aimc-ex991_9.htm
EX-23.1 - EX-23.1 - Altra Industrial Motion Corp.aimc-ex231_77.htm
8-K/A - 8-K/A STROMAG PROFORMA FINACIAL STATEMENTS - Altra Industrial Motion Corp.aimc-8ka_20161230.htm

Exhibit 99.3

ALTRA INDUSTRIAL MOTION CORP.

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial statements are presented to illustrate the estimated effects of the acquisition of the Stromag Business of GKN Plc. (the “Stromag Acquisition”), and related financing, on our results of operations.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016 assumes that the Stromag Acquisition and related financing, as applicable, took place on January 1, 2016, the beginning of our 2016 fiscal year. The information presented in the unaudited pro forma condensed combined statement of operations is not necessarily indicative of our results of operations that would have occurred if the Stromag Acquisition and related financing had been completed as of the dates indicated, nor should it be construed as being a representation of our future results of operations.

 

The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. These adjustments are more fully described in the notes to the unaudited pro forma condensed combined financial information below.

 

The Stromag Acquisition has been accounted for under the purchase method of accounting. As such, the cost to acquire Stromag has been allocated to the respective assets acquired and liabilities assumed based on their estimated fair values at the closing of the acquisition in our consolidated financial statements for the year ended December 31, 2016. As of December 31, 2016, the allocation of price for the Stromag Acquisition is preliminary. The fair value of all the acquired identifiable assets and liabilities summarized below is provisional pending finalization of the Company’s acquisition accounting. Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. The Company believes that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize fair value

.


1

 


Unaudited Pro Forma Condensed Combined Statement of Operations

For the Fiscal Year Ended December 31, 2016

(in thousands)

 

 

 

Altra

 

 

Stromag

 

 

Adjustment

 

 

Combined Pro Forma

 

Net sales

 

$

708,906

 

 

$

142,632

 

 

$

-

 

 

$

851,538

 

Cost of sales

 

 

486,774

 

 

 

91,398

 

 

 

117

 

(1)

 

578,289

 

Gross profit

 

 

222,132

 

 

 

51,234

 

 

 

(117

)

 

 

273,249

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

140,492

 

 

 

37,223

 

 

 

(3,802

)

(2)

 

173,913

 

Research and development expenses

 

 

17,677

 

 

 

6,704

 

 

 

-

 

 

 

24,381

 

Impairment of intangible assets

 

 

6,568

 

 

 

-

 

 

 

-

 

 

 

6,568

 

Restructuring costs

 

 

9,849

 

 

 

-

 

 

 

-

 

 

 

9,849

 

 

 

 

174,586

 

 

 

43,927

 

 

 

(3,802

)

 

 

214,711

 

Income from operations

 

 

47,546

 

 

 

7,307

 

 

 

3,686

 

 

 

58,539

 

Other non-operating income and expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

11,679

 

 

 

804

 

 

 

1,514

 

(3)

 

13,997

 

Loss on extinguishment of debt

 

 

1,989

 

 

 

-

 

 

 

-

 

 

 

1,989

 

Other non-operating expense (income), net

 

 

(7

)

 

 

-

 

 

 

-

 

 

 

(7

)

 

 

 

13,661

 

 

 

804

 

 

 

1,514

 

 

 

15,979

 

Income before income taxes

 

 

33,885

 

 

 

6,503

 

 

 

2,172

 

 

 

42,560

 

Provision for income taxes

 

 

8,745

 

 

 

2,440

 

 

 

727

 

(4)

 

11,912

 

Net Income attributable to Altra Industrial Motion Corp.

 

$

25,140

 

 

$

4,063

 

 

$

1,445

 

 

$

30,648

 

 

Note: The Stromag Business Condensed Combined Statement of Operations was translated using the 2016 Euro to US Dollar average exchange rate of $1.106. The Stromag Business financial information has been extracted from the underlying books and records of that business for the period ended December 30, 2016, the acquisition date. There were no material US GAAP adjustments identified in order to create the Combined Pro Forma for the year ended December 31, 2016.

Notes to the Unaudited Pro Forma Condensed Combined Statement of Operations

(in thousands)

 

 

 

 

 

 

 

(1)

Adjustment to record additional expense to reflect depreciation expense resulting from the adjustment to the fair market value of property, plant and equipment in connection with the Stromag Acquisition

 

$

117

 

 

 

 

 

 

 

(2)

Adjustments to selling, general and administrative expenses:

 

 

 

 

 

Adjustment to record additional expense to reflect a full year of amortization expense associated with the intangible assets recorded in connection with the Stromag Acquisition

 

$

3,977

 

 

Adjustment to remove historical amortization expense with the Stromag Acquisition

 

 

(7,779

)

 

Total pro forma adjustment

 

$

(3,802

)

 

 

 

 

 

 

(3)

Adjustments to interest expense as follows:

 

 

 

 

 

Adjustment to record additional amortization expense associated with debt issuance costs in connection with the Stromag Acquisition

 

$

183

 

 

Adjustment to record additional interest expense associated with the borrowings under our revolving credit facility in connection with the Stromag Acquisition

 

 

2,135

 

 

Adjustment to remove historical interest expense recorded at Stromag

 

 

(804

)

 

Total pro forma adjustment

 

$

1,514

 

 

 

 

 

 

 

(4)

Adjustment to record tax benefit at 33.4%, which is based on statutory tax rates in the jurisdictions where the above adjustments are contemplated

 

$

727

 

 

2