Exhibit 99.2
SimpleTech, Inc.
Pro Forma Financial Information
(Unaudited)
Introduction
On February 9, 2007, SimpleTech, Inc. (the “Company”) completed the sale of assets of its Consumer Division to Fabrik, Inc. for approximately $43 million. The following Unaudited Pro Forma Consolidated Statements of Operations have been prepared to illustrate the effect of the sale of assets of the Consumer Division, as a discontinued operation, on the historical financial results of operations of the Company.
The Unaudited Pro Forma Consolidated Statements of Operations for the three months ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006, reflect the sale of assets of the Consumer Division that occurred on February 9, 2007, as if it had occurred as of the beginning of each of the periods presented.
The Unaudited Pro Forma Consolidated Statements of Operations are based upon available information and assumptions that the Company believes are reasonable under the circumstances. The Unaudited Pro Forma Consolidated Statements of Operations have been provided for information purposes and are not necessarily indicative of the financial condition or results of operations that would have been achieved had the sale of assets of the Consumer Division occurred on the date indicated. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the Unaudited Pro Forma Consolidated Statements of Operations. The Unaudited Pro Forma Consolidated Statements of Operations, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2006, June 30, 2006 and September 30, 2006 and the Consolidated Statement of Operations included in the Company’s December 31, 2006 earnings release included in this Form 8-K filing.
The results of the sale of the Consumer Division assets will be accounted for as a discontinued operation in the first quarter of 2007, in accordance with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” when the Company issues its financial statements for the first period that ends after completing the sale of assets of the Consumer Division.
SimpleTech, Inc.
Pro Forma Consolidated Statement of Income
For the Three Months Ended March 31, 2006
(Unaudited)
(in thousands, except per share data)
Historical SimpleTech, Inc. (1) | Sale of Consumer Division Assets (2) | Pro Forma SimpleTech, Inc. | ||||||||
Net revenues | $ | 65,491 | $ | 25,058 | $ | 40,433 | ||||
Cost of revenues | 52,819 | 21,555 | 31,264 | |||||||
Gross profit | 12,672 | 3,503 | 9,169 | |||||||
Operating expenses: | ||||||||||
Sales and marketing | 5,886 | 2,878 | 3,008 | |||||||
General and administrative | 3,643 | 730 | 2,913 | |||||||
Research and development | 2,048 | 28 | 2,020 | |||||||
Total operating expenses | 11,577 | 3,636 | 7,941 | |||||||
Operating income (loss) | 1,095 | (133 | ) | 1,228 | ||||||
Interest income and other | 475 | 475 | ||||||||
Income (loss) before provision for income taxes | 1,570 | (133 | ) | 1,703 | ||||||
Provision (benefit) for income taxes | 529 | (53 | )(3) | 582 | ||||||
Net income (loss) | $ | 1,041 | $ | (80 | ) | $ | 1,121 | |||
Net income per share: | ||||||||||
Basic | $ | 0.02 | $ | 0.02 | ||||||
Diluted | $ | 0.02 | $ | 0.02 | ||||||
Shares used in net income computation: | ||||||||||
Basic | 45,149 | 45,149 | ||||||||
Diluted | 46,207 | 46,207 |
See accompanying notes to the unaudited pro forma consolidated statements of operations.
SimpleTech, Inc.
Pro Forma Consolidated Statement of Income
For the Three Months Ended June 30, 2006
(Unaudited)
(in thousands, except per share data)
Historical SimpleTech, Inc. (1) | Sale of Consumer Division Assets (2) | Pro Forma SimpleTech, Inc. | ||||||||
Net revenues | $ | 79,519 | $ | 32,238 | $ | 47,281 | ||||
Cost of revenues | 59,815 | 28,077 | 31,738 | |||||||
Gross profit | 19,704 | 4,161 | 15,543 | |||||||
Operating expenses: | ||||||||||
Sales and marketing | 7,159 | 3,140 | 4,019 | |||||||
General and administrative | 3,590 | 550 | 3,040 | |||||||
Research and development | 2,217 | 36 | 2,181 | |||||||
Total operating expenses | 12,966 | 3,726 | 9,240 | |||||||
Operating income | 6,738 | 435 | 6,303 | |||||||
Interest income and other | 506 | 506 | ||||||||
Income before provision for income taxes | 7,244 | 435 | 6,809 | |||||||
Provision for income taxes | 2,725 | 175 | (3) | 2,550 | ||||||
Net income | $ | 4,519 | $ | 260 | $ | 4,259 | ||||
Net income per share: | ||||||||||
Basic | $ | 0.10 | $ | 0.09 | ||||||
Diluted | $ | 0.10 | $ | 0.09 | ||||||
Shares used in net income computation: | ||||||||||
Basic | 45,699 | 45,699 | ||||||||
Diluted | 46,379 | 46,379 |
See accompanying notes to the unaudited pro forma consolidated statements of operations.
SimpleTech, Inc.
Pro Forma Consolidated Statement of Income
For the Three Months Ended September 30, 2006
(Unaudited)
(in thousands, except per share data)
Historical SimpleTech, Inc. (1) | Sale of Consumer Division Assets (2) | Pro Forma SimpleTech, Inc. | ||||||||
Net revenues | $ | 92,785 | $ | 39,030 | $ | 53,755 | ||||
Cost of revenues | 69,463 | 34,278 | 35,185 | |||||||
Gross profit | 23,322 | 4,752 | 18,570 | |||||||
Operating expenses: | ||||||||||
Sales and marketing | 7,137 | 2,736 | 4,401 | |||||||
General and administrative | 3,049 | 609 | 2,440 | |||||||
Research and development | 2,543 | 38 | 2,505 | |||||||
Total operating expenses | 12,729 | 3,383 | 9,346 | |||||||
Operating income | 10,593 | 1,369 | 9,224 | |||||||
Interest income and other | 397 | 397 | ||||||||
Income before provision for income taxes | 10,990 | 1,369 | 9,621 | |||||||
Provision for income taxes | 4,178 | 553 | (3) | 3,625 | ||||||
Net income | $ | 6,812 | $ | 816 | $ | 5,996 | ||||
Net income per share: | ||||||||||
Basic | $ | 0.15 | $ | 0.13 | ||||||
Diluted | $ | 0.14 | $ | 0.12 | ||||||
Shares used in net income computation: | ||||||||||
Basic | 46,456 | 46,456 | ||||||||
Diluted | 48,489 | 48,489 |
See accompanying notes to the unaudited pro forma consolidated statements of operations.
SimpleTech, Inc.
Pro Forma Consolidated Statement of Income
For the Three Months Ended December 31, 2006
(Unaudited)
(in thousands, except per share data)
Historical SimpleTech, Inc.(1) | Sale of Consumer Division Assets(2) | Pro Forma SimpleTech, Inc. | ||||||||
Net revenues | $ | 114,315 | $ | 40,031 | $ | 74,284 | ||||
Cost of revenues | 86,081 | 36,967 | 49,114 | |||||||
Gross profit | 28,234 | 3,064 | 25,170 | |||||||
Operating expenses: | ||||||||||
Sales and marketing | 7,636 | 2,998 | 4,638 | |||||||
General and administrative | 2,989 | 596 | 2,393 | |||||||
Research and development | 3,403 | 38 | 3,365 | |||||||
Total operating expenses | 14,028 | 3,632 | 10,396 | |||||||
Operating income (loss) | 14,206 | (568 | ) | 14,774 | ||||||
Interest income and other | 350 | 350 | ||||||||
Income (loss) before provision (benefit) for income taxes | 14,556 | (568 | ) | 15,124 | ||||||
Provision (benefit) for income taxes | 5,077 | (237 | ) | 5,314 | ||||||
Net income (loss) | $ | 9,479 | $ | (331 | ) | $ | 9,810 | |||
Net income (loss) per share: | ||||||||||
Basic | $ | 0.20 | $ | 0.20 | ||||||
Diluted | $ | 0.19 | $ | 0.19 | ||||||
Shares used in net income (loss) computation: | ||||||||||
Basic | 47,915 | 47,915 | ||||||||
Diluted | 50,900 | 50,900 |
See accompanying notes to the unaudited pro forma consolidated statements of operations.
SimpleTech, Inc.
Notes to the Pro Forma Consolidated Statements of Operations
(Unaudited)
1) | Represents the Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the three months ended March, 31, 2006, June 30, 2006 and September 30, 2006, and the Consolidated Statement of Operations included in the Company’s December 31, 2006 earnings release. |
2) | Represents adjustments to eliminate the results of operations of the Consumer Division that the Company believes are directly attributable to the sale of Consumer Division assets, factually supportable and will not continue after the sale. |
3) | Represents tax provision allocated to discontinued operations after the allocation to continuing operations. |