UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2013
(In thousands, except for share and per share data)
| | Historical (1) | | Pro Forma |
| | Cinedigm | | GVE | | Acquisition Adjustment | | Combined |
| Revenues | $ | 88,080 | | | $ | 46,212 | | | $ | — | | | $ | 134,292 | |
| Costs and expenses: | | | | | | | |
| Direct operating (exclusive of depreciation and amortization shown below) | 12,489 | | | 10,515 | | | — | | | 23,004 | |
| Selling, general and administrative | 23,123 | | | 28,654 | | | — | | | 51,777 | |
| Research and development | 144 | | | — | | | — | | | 144 | |
| Provision for doubtful accounts | 490 | | | — | | | — | | | 490 | |
| Restructuring and transition expenses | 340 | | | — | | | — | | | 340 | |
| Merger and acquisition expenses | 1,267 | | | — | | | 2,073 | | (2) | 3,340 | |
| Depreciation and amortization of property and equipment | 36,498 | | | — | | | — | | | 36,498 | |
| Amortization of intangible assets | 1,565 | | | — | | | 4,461 | | (3) | 6,026 | |
| Total operating expenses | 75,916 | | | 39,169 | | | 6,534 | | | 121,619 | |
| Income from operations | 12,164 | | | 7,043 | | | (6,534 | ) | | 12,673 | |
| Interest income | 48 | | | — | | | — | | | 48 | |
| Loss on investment in non-consolidated entity | (3,725 | ) | | — | | | — | | | (3,725 | ) |
| Other income, net | (7,905 | ) | | — | | | — | | | (7,905 | ) |
| Interest expense | (28,314 | ) | | (349 | ) | | (2,847 | ) | (4) | (31,510 | ) |
| Income on investment in non-consolidated entity | 322 | | | — | | — | | | 322 | |
| Other income, net | 653 | | | — | | — | | | 653 | |
| Change in fair value of interest rate derivatives | 1,231 | | | — | | — | | | 1,231 | |
| (Loss) income from continuing operations before benefit from income taxes | (25,526 | ) | | 6,694 | | | (9,381 | ) | | (28,213 | ) |
| Benefit from (provision for) income taxes | 4,944 | | | (2,399 | ) | | 2,399 | | (5) | 4,944 | |
| (Loss) income from continuing operations | (20,582 | ) | | 4,295 | | | (6,982 | ) | | (23,269 | ) |
| Loss from discontinued operations | (484 | ) | | — | | | — | | | (484 | ) |
| Net (loss) income | (21,066 | ) | | 4,295 | | | (6,982 | ) | | (23,753 | ) |
| Preferred stock dividends | (356 | ) | | — | | | — | | | (356 | ) |
| Net (loss) income attributable to common stockholders | $ | (21,422 | ) | | $ | 4,295 | | | $ | (6,982 | ) | | $ | (24,109 | ) |
| Net loss per Class A and Class B common share attributable to common shareholders - basic and diluted: | | | | | | | |
| Loss from continuing operations | $ | (0.44 | ) | | $ | — | | | $ | — | | | $ | (0.40 | ) |
| Loss from discontinued operations | (0.01 | ) | | — | | | — | | | (0.01 | ) |
| | $ | (0.45 | ) | | $ | — | | | $ | — | | | $ | (0.41 | ) |
| Weighted average number of Class A and Class B common shares outstanding: basic and diluted | 47,517,167 | | | — | | | 11,155,569 | | (6) | 58,672,736 | |
| | | | | | | | |
1) Statement of Operations presented for Cinedigm is for the year ended March 31, 2013. Statement of Operations presented for GVE is for the year ended December 31, 2012.
2) Represents advisory fees incurred in connection with the Acquisition.
3) Represents amortization for the preliminary allocation of purchase price to the media library asset assuming a ten-year useful life assuming the asset had been owned by Cinedigm as of April 1, 2012.
4) Represents estimated payment of interest at a blended rate of approximately 5.4% for $45 million in outstanding principal, assuming the principal balance was unchanged during the year ended March 31, 2013.
5) Represents GVE amount written-off in connection with the Acquisition. Income tax impact of GVE on a condensed combined pro forma basis deemed not material.
6) Represents the issuance 9,089,990 shares of Class A common stock in connection with a public offering, 1,398,601 shares to an individual investor and 666,978 shares to the sellers of GVE.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013
(In thousands, except for share and per share data)
| | Historical | | Pro Forma |
| | Cinedigm | | GVE (5) | | Acquisition Adjustment | | Combined |
| Revenues | $ | 39,992 | | | $ | 20,586 | | | $ | — | | | $ | 60,578 | |
| Costs and expenses: | | | | | | | |
| Direct operating (exclusive of depreciation and amortization shown below) | 9,961 | | | 2,419 | | | — | | | 12,380 | |
| Selling, general and administrative | 12,195 | | | 17,377 | | | — | | | 29,572 | |
| Research and development | 47 | | | — | | | — | | | 47 | |
| Provision for doubtful accounts | 194 | | | — | | | — | | | 194 | |
| Depreciation and amortization of property and equipment | 18,650 | | | — | | | — | | | 18,650 | |
| Amortization of intangible assets | 842 | | | — | | | 2,231 | | (1) | 3,073 | |
| Total operating expenses | 41,889 | | | 19,796 | | | 2,231 | | | 63,916 | |
| (Loss) income from operations | (1,897 | ) | | 790 | | | (2,231 | ) | | (3,338 | ) |
| Interest expense, net | (9,445 | ) | | (307 | ) | | (1,424 | ) | | (11,176 | ) |
| Loss on investment in non-consolidated entity | (1,812 | ) | | — | | — | | (1,812 | ) |
| Other income, net | 241 | | | — | | — | | 241 | |
| Change in fair value of interest rate derivatives | 758 | | | — | | — | | 758 | |
| (Loss) income before benefit from income taxes | (12,155 | ) | | 483 | | | (3,655 | ) | | (15,327 | ) |
| Provision for income taxes | — | | | (176 | ) | | 176 | | (3) | — | |
| Net (loss) income | (12,155 | ) | | 307 | | | (3,479 | ) | | (15,327 | ) |
| Preferred stock dividends | (178 | ) | | — | | | — | | | (178 | ) |
| Net (loss) income attributable to common stockholders | $ | (12,333 | ) | | $ | 307 | | | $ | (3,479 | ) | | $ | (15,505 | ) |
| | | | | | | | |
| Net loss per Class A and Class B common share attributable to common shareholders - basic and diluted: | $ | (0.24 | ) | | $ | — | | | $ | — | | | $ | (0.25 | ) |
| Weighted average number of Class A and Class B common shares outstanding: basic and diluted | 50,651,007 | | | — | | | 11,155,569 | | (4) | 61,806,576 | |
1) Represents amortization for the preliminary allocation of purchase price to the media library asset assuming a ten-year useful life assuming the asset had been owned by Cinedigm as of April 1, 2012.
2) Represents estimated payment of interest at a blended rate of approximately 5.4% for $45 million in outstanding principal, assuming the principal balance was unchanged during the six months ended September 30, 2013.
3) Represents GVE amount written-off in connection with the Acquisition. Income tax impact of GVE on a condensed combined pro forma basis deemed not material.
4) Represents the issuance 9,089,990 shares of Class A common stock in connection with a public offering, 1,398,601 shares to an individual investor and 666,978 shares to the sellers of GVE.
5) Prior to the Acquisition, GVE had a fiscal year ended date of December 31, 2012. Accordingly, the condensed combined statement of operations for GVE excludes the three months ended March 31, 2013 and in future periods, will be aligned with Cinedigm’s fiscal year.
