Exhibit 99.2
MIMEDX GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet and statements of operations are based on the historical information of MiMedx Group, Inc. (the “Company”), adjusted to reflect the completion of the divestiture of its wholly-owned subsidiary, Stability Biologics, LLC, (“Stability LLC”) as of September 30, 2017. The unaudited pro forma condensed statements of operations are presented for the year ended December 31, 2016 and the six months ended June 30, 2017.
The unaudited pro forma condensed consolidated balance sheet reflects the transaction as if it had occurred on June 30, 2017, while the unaudited pro forma condensed statements of operations give effect to the sale as if it occurred on January 1, 2016. The pro forma adjustments described in the related notes, are based on available information and certain assumptions that the Company’s management believe are reasonable.
The unaudited pro forma condensed consolidated financial statements are provided as required by the disclosure requirements of SEC Regulation S-X and for informational purposes only and are not necessarily indicative of what the actual results of operations or financial position of the Company would have been if the sale had been completed on the dates indicated above, nor are they indicative of future financial results. The unaudited pro forma condensed consolidated financial statements and the related notes should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2017.
MIMEDX GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2017
(in thousands)
|
| | | | | | | | | | | | | |
| | Historical- Pre- Disposition | | Pro Forma Adjustments for the Disposition | | Notes | | Pro Forma As Adjusted for the Disposition |
| ASSETS | | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | $ | 47,533 |
| | $ | — |
| | | | $ | 47,533 |
|
| Accounts receivable, net | 60,738 |
| | (2,661 | ) | | (a) | | 58,077 |
|
| Inventory, net | 15,033 |
| | (4,010 | ) | | (a) | | 11,023 |
|
| Prepaid expenses | 8,218 |
| | (55 | ) | | (a) | | 8,163 |
|
| Other current assets | 1,024 |
| | — |
| | | | 1,024 |
|
| Total current assets | 132,546 |
| | (6,726 | ) | | | | 125,820 |
|
| Property and equipment, net of accumulated depreciation | 14,419 |
| | (1,483 | ) | | (a) | | 12,936 |
|
| Goodwill | 20,203 |
| | (251 | ) | | (a) | | 19,952 |
|
| Intangible assets, net of accumulated amortization | 22,289 |
| | (11,381 | ) | | (a) | | 10,908 |
|
| Deferred tax asset, net | 10,144 |
| | 3,832 |
| | (g) | | 13,976 |
|
| Deferred financing costs and other assets | 264 |
| | 3,110 |
| | (b) | | 3,374 |
|
| Total assets | $ | 199,865 |
| | $ | (12,899 | ) | | | | $ | 186,966 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | $ | 11,504 |
| | $ | (3,419 | ) | | (a) | | $ | 8,085 |
|
| Accrued compensation | 14,719 |
| | (112 | ) | | (a) | | 14,607 |
|
| Accrued expenses | 7,986 |
| | (11 | ) | | (a) | | 7,975 |
|
| Current portion of earn out liability | 17,574 |
| | (17,574 | ) | | (c) | | — |
|
| Income taxes | (822 | ) | | (2,786 | ) | | (g) | | (3,608 | ) |
| Other current liabilities | 550 |
| | (53 | ) | | (a) | | 497 |
|
| Total current liabilities | 51,511 |
| | (23,955 | ) | | | | 27,556 |
|
| Earn out liability |
| |
| | | | — |
|
| Other liabilities | 1,084 |
| | — |
| | | | 1,084 |
|
| Total liabilities | 52,595 |
| | (23,955 | ) | | | | 28,640 |
|
| Commitments and contingencies |
|
| |
|
| | | | |
| Stockholders' equity: | | | | | | | |
| Common stock | 112 |
| | — |
| | | | 112 |
|
| Additional paid-in capital | 161,883 |
| | — |
| | | | 161,883 |
|
| Treasury stock | (966 | ) | | — |
| | | | (966 | ) |
| Accumulated deficit | (13,759 | ) | | 11,056 |
| | (d) | | (2,703 | ) |
| Total stockholders' equity | 147,270 |
| | 11,056 |
| | | | 158,326 |
|
| Total liabilities and stockholders' equity | $ | 199,865 |
| | $ | (12,899 | ) | | | | $ | 186,966 |
|
See notes to condensed consolidated financial statements
MIMEDX GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2017
(in thousands, except share and per share data)
|
| | | | | | | | | | | | | |
| | Historical- Pre- Disposition | | Pro Forma Adjustments for the disposition | | Notes | | Pro Forma As Adjusted for the Disposition |
| | | | | | | | |
| Net sales | $ | 149,019 |
| | $ | (3,670 | ) | | (e) | | $ | 145,349 |
|
| Cost of sales | 17,374 |
| | (2,609 | ) | | (e) | | 14,765 |
|
| Gross margin | 131,645 |
| | (1,061 | ) | | | | 130,584 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Research and development expenses | 8,949 |
| | (311 | ) | | (e) | | 8,638 |
|
| Selling, general and administrative expenses | 108,265 |
| | (2,827 | ) | | (e) | | 105,438 |
|
| Amortization of intangible assets | 1,033 |
| | (603 | ) | | (e) | | 430 |
|
| | | | | | | | |
| Operating income | 13,398 |
| | 2,680 |
| | | | 16,078 |
|
| | | | | | | | |
| Other expense, net | | | | | | | |
| Interest expense, net | (294 | ) | | 211 |
| | (f) | | (83 | ) |
| | | | | | | | |
| Income before income tax provision | 13,104 |
| | 2,891 |
| | | | 15,995 |
|
| Income tax (provision) benefit | (708 | ) | | (1,021 | ) | | (g) | | (1,729 | ) |
| | | | | | | | |
| Net income | $ | 12,396 |
| | $ | 1,870 |
| | | | $ | 14,266 |
|
| | | | | | | | |
| Net income per common share - basic | $ | 0.12 |
| | $ | 0.01 |
| | | | $ | 0.13 |
|
| | | | | | | | |
| Net income per common share - diluted | $ | 0.11 |
| | $ | 0.01 |
| | | | $ | 0.12 |
|
| | | | | | | | |
| Weighted average shares outstanding - basic | 106,254,433 |
| | 106,254,433 |
| | | | 106,254,433 |
|
| | | | | | | | |
| Weighted average shares outstanding - diluted | 115,856,317 |
| | 115,856,317 |
| | | | 115,856,317 |
|
See notes to condensed consolidated financial statements
MIMEDX GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2016
(in thousands, except share and per share data)
|
| | | | | | | | | | | | | |
| | Historical- Pre- Disposition | | Pro Forma Adjustments for the disposition | | Notes | | Pro Forma As Adjusted for the Disposition |
| | | | | | | |
| Net sales | $ | 245,015 |
| | $ | (10,022 | ) | | (e) | | $ | 234,993 |
|
| Cost of sales | 32,407 |
| | (8,846 | ) | | (e) | | 23,561 |
|
| Gross margin | 212,608 |
| | (1,176 | ) | | | | 211,432 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Research and development expenses | 12,038 |
| | (492 | ) | | (e) | | 11,546 |
|
| Selling, general and administrative expenses | 179,997 |
| | (7,540 | ) | | (e) | | 172,457 |
|
| Amortization of intangible assets | 2,127 |
| | (1,176 | ) | | (e) | | 951 |
|
| Operating income | 18,446 |
| | 8,032 |
| | | | 26,478 |
|
| | | | | | | | |
| Other expense, net | | | | | | | |
| Interest expense, net | (339 | ) | | 158 |
| | (f) | | (181 | ) |
| | | | | | | | |
| Income before income tax provision | 18,107 |
| | 8,190 |
| | | | 26,297 |
|
| Income tax (provision) benefit | (6,133 | ) | | (2,949 | ) | | (h) | | (9,082 | ) |
| | | | | | | | |
| Net income | $ | 11,974 |
| | $ | 5,241 |
| | | | $ | 17,215 |
|
| | | | | | | | |
| Net income per common share - basic | $ | 0.11 |
| | $ | 0.05 |
| | | | $ | 0.16 |
|
| | | | | | | | |
| Net income per common share - diluted | $ | 0.11 |
| | $ | 0.04 |
| | | | $ | 0.15 |
|
| | | | | | | | |
| Weighted average shares outstanding - basic | 105,928,348 |
| | 105,928,348 |
| | | | 105,928,348 |
|
| | | | | | | | |
| Weighted average shares outstanding - diluted | 112,441,709 |
| | 112,441,709 |
| | | | 112,441,709 |
|
| | | | | | | | |
See notes to condensed consolidated financial statements
MIMEDX GROUP, INC. AND SUBSIDIARIES
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
(a) Represents the pro forma adjustments to eliminate assets and liabilities related to the disposition.
(b) Represents the fair value of the note receivable received at closing.
(c) Represents earn out consideration related to the disposition that was eliminated.
(d) Represents the estimated gain on the disposition.
(e) Represents the elimination of revenue, cost of goods sold, income and expenses related to the disposition.
(f) Represents the net impact of interest income earned on the note receivable and the elimination of interest accretion on the earn out.
(g) The income tax impact has been calculated using a projected annual effective tax rate of 35.3%. Compensation related discrete items have been attributed as applicable.
(h) The income tax impact has been calculated using a combined effective rate of 33.9%. Permanent book/tax differences and deferred tax movement have been specifically attributed where applicable.
