Exhibit 99.1
PART II
ITEM 6. — SELECTED FINANCIAL DATA
The following table sets forth selected historical and other data of the Company and should be read in conjunction with the more detailed consolidated financial statements included elsewhere in this report.
Selected financial data below includes the results of operations, cash flow and balance sheet data of the Company for the years ended December 31, 2008, 2007, 2006 and 2005. We were incorporated on November 18, 2005 (“inception”). Financial data included for the year ended December 31, 2005, includes the minimal activity experienced from inception to December 31, 2005. We completed our IPO on May 16, 2006 and used the proceeds of the IPO and separate private placement transactions, that closed in conjunction with our IPO, and from our third party credit facility, to purchase controlling interests in four of our initial operating subsidiaries. The following table details our acquisitions and dispositions subsequent to our IPO.
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Acquisitions: | | Acquisition Date | | Disposition Date |
Advanced Circuits(1) | | May 16, 2006 | | n/a |
CBS Personnel(1) | | May 16, 2006 | | n/a |
Crosman(1) | | May 16, 2006 | | January 5, 2007 |
Silvue(1) | | May 16, 2006 | | June 25, 2008 |
Anodyne | | August 1, 2006 | | n/a |
Aeroglide | | February 28, 2007 | | June 24, 2008 |
HALO | | February 28, 2007 | | n/a |
American Furniture | | August 31, 2007 | | n/a |
Fox | | January 4, 2008 | | n/a |
Staffmark(2) | | January 21, 2008 | | n/a |
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(1) | | Represent initial operating subsidiaries. |
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(2) | | Staffmark was acquired by our operating segment CBS Personnel. |
The operating results for Crosman are reflected as discontinued operations in 2006 and as such are not included in the data below. The operating results for Aeroglide are reflected as discontinued operations in 2008 and 2007 and as such are not included in the data below. The operating results for Silvue are reflected as discontinued operations in 2008, 2007 and 2006 and as such are not included in the data below. Financial data included below therefore only includes activity in our operating subsidiaries from their respective dates of acquisition.
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| | Year ended December 31, | |
| | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Statements of Operations Data: | | | | | | | | | | | | | | | | |
Net sales | | $ | 1,538,473 | | | $ | 841,791 | | | $ | 395,173 | | | $ | — | |
Cost of sales | | | 1,196,206 | | | | 636,008 | | | | 307,014 | | | | — | |
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Gross profit | | | 342,267 | | | | 205,783 | | | | 88,159 | | | | — | |
Operating expenses: | | | | | | | | | | | | | | | | |
Staffing | | | 102,438 | | | | 56,207 | | | | 34,345 | | | | — | |
Selling, general and administrative | | | 165,768 | | | | 94,426 | | | | 31,605 | | | | 1 | |
Supplemental put expense | | | 6,382 | | | | 7,400 | | | | 22,456 | | | | — | |
Management fees | | | 15,205 | | | | 10,120 | | | | 4,158 | | | | — | |
Amortization expense | | | 24,605 | | | | 12,679 | | | | 5,814 | | | | — | |
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Operating income (loss) | | | 27,869 | | | | 24,951 | | | | (10,219 | ) | | | (1 | ) |
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Income (loss) from continuing operations | | | 3,817 | | | | 10,051 | | | | (27,973 | ) | | | (1 | ) |
Income and gain from discontinued operations | | | 77,970 | | | | 41,314 | | | | 9,831 | | | | — | |
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Net income (loss) | | | 81,787 | | | | 51,365 | | | | (18,142 | ) | | | (1 | ) |
Net income attributable to noncontrolling interest | | | 3,493 | | | | 10,997 | | | | 1,107 | | | | — | |
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Net income (loss) attributable to Holdings(1),(2) | | $ | 78,294 | | | $ | 40,368 | | | $ | (19,249 | ) | | $ | (1 | ) |
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Cash Flow Data: | | | | | | | | | | | | | | | | |
Cash provided by operating activities | | $ | 40,549 | | | $ | 41,772 | | | $ | 20,563 | | | $ | — | |
Cash used in investing activities | | | (22,542 | ) | | | (114,158 | ) | | | (362,286 | ) | | | — | |
Cash (used in) provided by financing activities | | | (39,812 | ) | | | 184,882 | | | | 351,073 | | | | 100 | |
Net (decrease) increase in cash and cash equivalents | | | (21,885 | ) | | | 112,352 | | | | 9,610 | | | | 100 | |
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Basic and fully diluted income (loss) per share attributable to Holdings: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.01 | | | $ | (0.04 | ) | | $ | (2.29 | ) | | $ | — | |
Discontinued operations | | | 2.47 | | | | 1.50 | | | | 0.77 | | | | — | |
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Basic and fully diluted income (loss) per share attributable to Holdings | | $ | 2.48 | | | $ | 1.46 | | | $ | (1.52 | ) | | $ | — | |
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(1) | | Includes gains on the sales of Aeroglide and Silvue in 2008 of $34.0 million and $39.4 million, respectively, and Crosman in 2007 of $36.0 million. |
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(2) | | Includes a charge to net income of $10.0 million for distributions made at the subsidiary (ACI) level in excess of cumulative earnings in 2007. |
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| | 2008 | | 2007 | | 2006(1) | | 2005 |
Balance Sheet Data: | | | | | | | | | | | | | | | | |
Current assets | | $ | 335,201 | | | $ | 299,241 | | | $ | 135,121 | | | $ | 3,408 | |
Total assets | | | 984,336 | | | | 828,002 | | | | 496,382 | | | | 3,408 | |
Current liabilities | | | 139,370 | | | | 106,613 | | | | 155,534 | | | | 3,309 | |
Long-term debt | | | 151,000 | | | | 148,000 | | | | — | | | | — | |
Total liabilities | | | 440,458 | | | | 373,285 | | | | 221,934 | | | | 3,309 | |
Noncontrolling interests | | | 79,431 | | | | 21,867 | | | | 17,734 | | | | 100 | |
Shareholders’ equity (deficit) attributable to Holdings | | | 464,447 | | | | 432,850 | | | | 255,711 | | | | (1 | ) |
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(1) | | Includes a reclassification of $7.2 million of Crosman’s discontinued operations noncontrolling interest to total liabilities. |
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