Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Williams Industrial Services Group Inc. | f8-ka.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
In the third quarter of 2017, the Board of Directors of Global Power Equipment Group, Inc. (the “Company”) approved a plan to exit the Mechanical Solutions segment (“Mechanical Solutions”). On October 11, 2017, the Company and its wholly owned subsidiaries, Braden Holdings, LLC and GPEG C.V. signed, and closed on, a securities purchase agreement to sell its Mechanical Solutions segment to Innova Global Europe B.V., Innova Global Inc. and 1938247 Alberta Ltd.
The following unaudited pro forma condensed consolidated financial statements are presented to show the effects of the sale of Mechanical Solutions, which is a significant disposition, as defined under Regulation S-X Rule 210.11. The unaudited pro forma condensed consolidated balance sheet assumes these dispositions were consummated on September 30, 2017. The unaudited pro forma condensed consolidated statements of operations assume the dispositions were consummated on January 1, 2014.
The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States. Pro forma information is intended to provide information about the continuing impact of a transaction by showing how a specific transaction or group of transactions might have affected historical financial statements. Pro forma financial information illustrates only the isolated and objectively measurable (based on historically determined amounts) effects of a particular transaction, and excludes effects based on judgmental estimates of how historical management practices and operating decisions may or may not have changed as a result of the transaction. Therefore, pro forma information does not include information about the possible or expected impact of current actions taken by management in response to the pro forma transactions, as if management’s actions were carried out in previous reporting periods.
This unaudited pro forma condensed consolidated financial information is presented for illustration purposes only and does not purport to be indicative of the financial position or results of operations that would have occurred had the disposition been consummated on the dates as of, or at the beginning of the period, which, the disposition is being given effect, nor are they necessarily indicative of the Company’s future operating results or financial position.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2017
|
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|
|
|
|
|
Pro Forma Adjustments |
|
|
|
|||
|
|
|
Historical |
|
Mechanical Solutions |
|
Mechanical Solutions |
|
Pro Forma |
||||
|
(in thousands, except share data) |
|
Global Power |
|
(a) |
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Adjustments |
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Global Power |
||||
|
ASSETS |
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|
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|
|
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|
|
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Current assets: |
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|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8,203 |
|
$ |
— |
|
$ |
8,927 |
(b) |
$ |
17,130 |
|
Restricted cash |
|
|
12,070 |
|
|
— |
|
|
— |
|
|
12,070 |
|
Accounts receivable, net of allowance of $1,634 |
|
|
42,081 |
|
|
— |
|
|
— |
|
|
42,081 |
|
Inventories |
|
|
283 |
|
|
— |
|
|
— |
|
|
283 |
|
Costs and estimated earnings in excess of billings |
|
|
18,465 |
|
|
— |
|
|
— |
|
|
18,465 |
|
Other current assets |
|
|
5,945 |
|
|
— |
|
|
— |
|
|
5,945 |
|
Current assets of discontinued operations |
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|
56,088 |
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|
(54,689) |
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|
(928) |
(c) |
|
471 |
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Total current assets |
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|
143,135 |
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|
(54,689) |
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|
7,999 |
|
|
96,445 |
|
Property, plant and equipment, net |
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|
5,707 |
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|
— |
|
|
— |
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|
5,707 |
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Goodwill |
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|
35,400 |
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|
— |
|
|
— |
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|
35,400 |
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Intangible assets, net |
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22,826 |
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— |
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— |
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22,826 |
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Other long-term assets |
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|
600 |
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|
— |
|
|
— |
|
|
600 |
|
Total assets |
|
$ |
207,668 |
|
$ |
(54,689) |
|
$ |
7,999 |
|
$ |
160,978 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
17,368 |
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$ |
— |
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$ |
— |
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$ |
17,368 |
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Accrued compensation and benefits |
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|
10,093 |
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|
— |
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— |
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|
10,093 |
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Billings in excess of costs and estimated earnings |
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9,746 |
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— |
|
|
— |
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|
9,746 |
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Accrued warranties |
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1,215 |
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|
— |
|
|
— |
|
|
1,215 |
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Current portion of long-term debt |
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|
10,190 |
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— |
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|
(10,190) |
(d) |
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— |
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Other current liabilities |
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18,264 |
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|
— |
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|
— |
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|
18,264 |
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Current liabilities of discontinued operations |
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27,136 |
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(27,136) |
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|
— |
|
|
— |
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Total current liabilities |
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|
94,012 |
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|
(27,136) |
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|
(10,190) |
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|
56,686 |
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Long-term debt |
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|
45,061 |
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|
— |
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|
(23,810) |
(d) |
|
21,251 |
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Deferred tax liabilities |
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|
15,791 |
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— |
|
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(928) |
(c) |
|
14,863 |
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Other long-term liabilities |
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|
2,331 |
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|
— |
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|
— |
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|
2,331 |
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Long-term liabilities of discontinued operations |
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2,985 |
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— |
|
|
— |
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|
2,985 |
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Total liabilities |
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160,180 |
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|
(27,136) |
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|
(34,928) |
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|
98,116 |
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|
|
|
|
|
|
|
|
|
|
|
|
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Total stockholders’ equity |
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47,488 |
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|
(27,553) |
|
|
42,927 |
(e) |
|
62,862 |
|
Total liabilities and stockholders’ equity |
|
$ |
207,668 |
|
$ |
(54,689) |
|
$ |
7,999 |
|
$ |
160,978 |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2017
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|
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Pro Forma Adjustments |
|
|
|
|
|
|
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Historical |
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Mechanical Solutions |
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Pro Forma |
|||
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(in thousands, except per share data) |
|
Global Power |
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(f) |
|
Global Power |
|||
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Revenue |
|
$ |
229,163 |
|
$ |
(50,841) |
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$ |
178,322 |
|
Cost of revenue |
|
|
219,479 |
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|
(41,580) |
|
|
177,899 |
|
Gross profit |
|
|
9,684 |
|
|
(9,261) |
|
|
423 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
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|
5,379 |
|
|
(2,507) |
|
|
2,872 |
|
General and administrative expenses |
|
|
37,404 |
|
|
(5,474) |
|
|
31,930 |
|
Depreciation and amortization expense(1) |
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|
3,723 |
|
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(441) |
|
|
3,282 |
|
Total operating expenses |
|
|
46,506 |
|
|
(8,422) |
|
|
38,084 |
|
Operating income (loss) |
|
|
(36,822) |
|
|
(839) |
|
|
(37,661) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
7,353 |
|
|
230 |
|
|
7,583 |
|
Foreign currency (gain) loss |
|
|
957 |
|
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(957) |
|
|
— |
|
Gain on sale of business and net assets held for sale |
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(239) |
|
|
— |
|
|
(239) |
|
Other (income) expense, net |
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|
(9) |
|
|
— |
|
|
(9) |
|
Total other (income) expenses, net |
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8,062 |
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|
(727) |
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|
7,335 |
|
Loss before income tax |
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(44,884) |
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(112) |
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(44,996) |
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Income tax expense (benefit) |
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(692) |
|
|
(532) |
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|
(1,224) |
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Net loss |
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$ |
(44,192) |
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$ |
420 |
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$ |
(43,772) |
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|
|
|
|
|
|
|
|
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Basic loss per share from continuing operations |
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$ |
(2.51) |
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|
|
|
$ |
(2.49) |
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Diluted loss per share from continuing operations |
|
$ |
(2.51) |
|
|
|
|
$ |
(2.49) |
|
Weighted average common shares outstanding (basic and diluted) |
|
|
17,577,358 |
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|
|
|
|
17,577,358 |
|
(1) |
Excludes historical and pro forma depreciation and amortization expense for the nine months ended September 30, 2017 of $1.0 million and $0.6 million, respectively, included in cost of revenue. |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2016
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|
|
|
|
|
Pro Forma Adjustments |
|
|
|
|
|
|
|
Historical |
|
Mechanical Solutions |
|
Pro Forma |
|||
|
(in thousands, except per share data) |
|
Global Power |
|
(f) |
|
Global Power |
|||
|
Revenue |
|
$ |
418,588 |
|
$ |
(112,022) |
|
$ |
306,566 |
|
Cost of revenue |
|
|
369,599 |
|
|
(96,515) |
|
|
273,084 |
|
Gross profit |
|
|
48,989 |
|
|
(15,507) |
|
|
33,482 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
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|
9,544 |
|
|
(3,658) |
|
|
5,886 |
|
General and administrative expenses |
|
|
55,337 |
|
|
(7,584) |
|
|
47,753 |
|
Depreciation and amortization expense(1) |
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|
7,154 |
|
|
(1,228) |
|
|
5,926 |
|
Total operating expenses |
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|
72,035 |
|
|
(12,470) |
|
|
59,565 |
|
Operating income (loss) |
|
|
(23,046) |
|
|
(3,037) |
|
|
(26,083) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
8,398 |
|
|
(80) |
|
|
8,318 |
|
Foreign currency (gain) loss |
|
|
(217) |
|
|
217 |
|
|
— |
|
Loss on sale of business and net assets held for sale |
|
|
8,812 |
|
|
(557) |
|
|
8,255 |
|
Loss on sale-leaseback, net |
|
|
1,857 |
|
|
181 |
|
|
2,038 |
|
Other (income) expense, net |
|
|
15 |
|
|
(358) |
|
|
(343) |
|
Total other (income) expenses, net |
|
|
18,865 |
|
|
(597) |
|
|
18,268 |
|
Loss before income tax |
|
|
(41,911) |
|
|
(2,440) |
|
|
(44,351) |
|
Income tax expense (benefit) |
|
|
1,702 |
|
|
(691) |
|
|
1,011 |
|
Net loss |
|
$ |
(43,613) |
|
$ |
(1,749) |
|
$ |
(45,362) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share from continuing operations |
|
$ |
(2.51) |
|
|
|
|
$ |
(2.61) |
|
Diluted loss per share from continuing operations |
|
$ |
(2.51) |
|
|
|
|
$ |
(2.61) |
|
Weighted average common shares outstanding (basic and diluted) |
|
|
17,348,286 |
|
|
|
|
|
17,348,286 |
|
(1) |
Excludes historical and pro forma depreciation and amortization expense for the year ended December 31, 2016 of $2.2 million and$1.1 million, respectively, included in cost of revenue. |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2015
|
|
|
|
|
|
Pro Forma Adjustments |
|
|
|
|
|
|
|
Historical |
|
Mechanical Solutions |
|
Pro Forma |
|||
|
(in thousands, except per share data) |
|
Global Power |
|
(f) |
|
Global Power |
|||
|
Revenue |
|
$ |
589,003 |
|
$ |
(122,593) |
|
$ |
466,410 |
|
Cost of revenue |
|
|
536,406 |
|
|
(113,853) |
|
|
422,553 |
|
Gross profit |
|
|
52,597 |
|
|
(8,740) |
|
|
43,857 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
|
|
12,130 |
|
|
(5,429) |
|
|
6,701 |
|
General and administrative expenses |
|
|
69,471 |
|
|
(8,922) |
|
|
60,549 |
|
Impairment expenses |
|
|
47,755 |
|
|
(24,445) |
|
|
23,310 |
|
Bargain purchase gain |
|
|
(3,168) |
|
|
— |
|
|
(3,168) |
|
Depreciation and amortization expense(1) |
|
|
8,602 |
|
|
(1,582) |
|
|
7,020 |
|
Total operating expenses |
|
|
134,790 |
|
|
(40,378) |
|
|
94,412 |
|
Operating income (loss) |
|
|
(82,193) |
|
|
31,638 |
|
|
(50,555) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
4,484 |
|
|
(196) |
|
|
4,288 |
|
Foreign currency (gain) loss |
|
|
(1,014) |
|
|
1,525 |
|
|
511 |
|
Other (income) expense, net |
|
|
12 |
|
|
(520) |
|
|
(508) |
|
Total other (income) expenses, net |
|
|
3,482 |
|
|
809 |
|
|
4,291 |
|
Income (loss) before income tax |
|
|
(85,675) |
|
|
30,829 |
|
|
(54,846) |
|
Income tax expense (benefit) |
|
|
(6,946) |
|
|
5,108 |
|
|
(1,838) |
|
Net income (loss) |
|
$ |
(78,729) |
|
$ |
25,721 |
|
$ |
(53,008) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share from continuing operations |
|
$ |
(4.59) |
|
|
|
|
$ |
(3.09) |
|
Diluted loss per share from continuing operations |
|
$ |
(4.59) |
|
|
|
|
$ |
(3.09) |
|
Weighted average common shares outstanding (basic and diluted) |
|
|
17,151,810 |
|
|
|
|
|
17,151,810 |
|
(1) |
Excludes historical and pro forma depreciation and amortization expense for the year ended December 31, 2015 of $2.5 million and $1.1 million, respectively, included in cost of revenue. |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2014
|
|
|
|
|
|
Pro Forma Adjustments |
|
|
|
|
|
|
|
Historical |
|
Mechanical Solutions |
|
Pro Forma |
|||
|
(in thousands, except per share data) |
|
Global Power |
|
(f) |
|
Global Power |
|||
|
Revenue |
|
$ |
539,053 |
|
$ |
(145,910) |
|
$ |
393,143 |
|
Cost of revenue |
|
|
465,719 |
|
|
(122,769) |
|
|
342,950 |
|
Gross profit |
|
|
73,334 |
|
|
(23,141) |
|
|
50,193 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
|
|
10,045 |
|
|
(4,452) |
|
|
5,593 |
|
General and administrative expenses |
|
|
58,747 |
|
|
(11,353) |
|
|
47,394 |
|
Depreciation and amortization expense(1) |
|
|
8,326 |
|
|
(1,544) |
|
|
6,782 |
|
Total operating expenses |
|
|
77,118 |
|
|
(17,349) |
|
|
59,769 |
|
Operating income (loss) |
|
|
(3,784) |
|
|
(5,792) |
|
|
(9,576) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
1,820 |
|
|
10 |
|
|
1,830 |
|
Foreign currency (gain) loss |
|
|
(65) |
|
|
1,028 |
|
|
963 |
|
Other (income) expense, net |
|
|
34 |
|
|
(639) |
|
|
(605) |
|
Total other (income) expenses, net |
|
|
1,789 |
|
|
399 |
|
|
2,188 |
|
Loss before income tax |
|
|
(5,573) |
|
|
(6,191) |
|
|
(11,764) |
|
Income tax expense (benefit) |
|
|
41,661 |
|
|
(2,424) |
|
|
39,237 |
|
Net loss |
|
$ |
(47,234) |
|
$ |
(3,767) |
|
$ |
(51,001) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share from continuing operations |
|
$ |
(2.78) |
|
|
|
|
$ |
(3.00) |
|
Diluted loss per share from continuing operations |
|
$ |
(2.78) |
|
|
|
|
$ |
(3.00) |
|
Weighted average common shares outstanding (basic and diluted) |
|
|
17,005,589 |
|
|
|
|
|
17,005,589 |
|
(1) |
Excludes historical and pro forma depreciation and amortization expense for the year ended December 31, 2014 of $1.6 million and $0.3 million, respectively, included in cost of revenue. |
UNAUDITED NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet
(a) The adjustments represent the elimination of the historical assets, liabilities and equity of Mechanical Solutions.
(b) The adjustment represents the net cash portion, at closing, of the total proceeds from the sale of Mechanical Solutions.
(c) The adjustment represents the reclassification of deferred tax assets of $0.9 million related to certain entities that, for tax purposes, were treated as asset sales. The remaining amount represents the Company’s office building located in Heerlen, Netherlands that was excluded from the securities purchase agreement. As of September 30, 2017, the Heerlen office building was classified as held for sale because it was not sold until March 21, 2018.
(d) The adjustments represent the net cash proceeds used pay down of $34.0 million of the Company’s outstanding debt and related fees, including full repayment of a $10.0 million first-out-loan in October 2017.
(e) The adjustment represents the impact of items (a) – (d) above.
Unaudited Condensed Consolidated Statement of Operations
(f) The adjustments eliminate the historical results of Mechanical Solutions as if the transaction occurred on January 1, 2014. In accordance with accounting principles generally accepted in the United States, the amounts eliminated do not include corporate overhead.