Exhibit (c)(2)
MERISEL, INC.
STATEMENT OF INCOME PROJECTION
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
Net Sales | 71,946 | 69,652 | 58,061 | 59,963 | 59,755 | 61,893 | 63,835 | 65,806 |
Cost of Sales | 41,672 | 41,839 | 37,837 | 35,283 | 36,029 | 37,343 | 38,759 | 40,076 |
Gross Profit | 30,274 | 27,813 | 20,224 | 24,680 | 23,726 | 24,550 | 25,076 | 25,730 |
Selling, general and administrative expenses | 28,810 | 27,957 | 24,280 | 23,917 | 23,845 | 24,282 | 24,732 | 25,262 |
Intangible impairment |
|
| 6,190 |
|
|
|
|
|
Lease abandonment charge | 3,977 | |||||||
Restructuring charge |
|
| 809 | 232 |
|
|
|
|
Insurance proceeds, net | -422 | 150 | ||||||
Other charges |
|
|
| 509 | 594 | 44 | 44 | 44 |
Operating income (loss) | 1,464 | -144 | -14,610 | -128 | -713 | 224 | 300 | 424 |
Interest expense, net | 3,065 | 2,333 | 3,681 | 3,885 | 4,315 | 4,890 | 5,635 | 6,489 |
Income Tax Benefit | -126 | -26 | -160 |
|
|
|
|
|
Net Income (loss) | -1,475 | -2,451 | -18,131 | -4,013 | -5,028 | -4,666 | -5,335 | -6,065 |
Addbacks: |
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|
|
|
|
|
|
|
Interest and extraordinary items | 3,113 | 3,352 | 14,554 | 4,776 | 4,909 | 4,934 | 5,680 | 6,533 |
Depreciation and Amortization | 3,717 | 3,001 | 2,447 | 2,802 | 2,857 | 2,809 | 2,842 | 2,804 |
Stock Compensation Expense | 115 | 24 | ||||||
Adjusted EBITDA | 5,355 | 3,902 | -1,015 | 3,589 | 2,738 | 3,077 | 3,187 | 3,272 |
MERISEL, INC.
BALANCE SHEET PROJECTION
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
Cash and Cash Equivalents | 530 | 1,265 | 975 | 1,264 | 1,318 | 1,219 |
Accounts Receivable | 15,429 | 11,535 | 11,495 | 11,906 | 12,280 | 12,659 |
Inventories | 2,419 | 1,753 | 1,796 | 1,872 | 1,951 | 2,027 |
Prepaid and Other Current Assets | 4,058 | 1,638 | 1,612 | 1,642 | 1,673 | 1,704 |
Total Current Assets | 22,436 | 16,191 | 15,878 | 16,684 | 17,222 | 17,609 |
Property and Equipment, Net | 7,182 | 7,365 | 7,271 | 7,262 | 7,225 | 7,224 |
Restricted Cash | ||||||
Intangible Assets | 2,142 | 1,764 | 1,455 | 1,210 | 965 | 720 |
Other Assets | 771 | 754 | 499 | 244 | 264 | 156 |
Total Assets | 32,531 | 26,074 | 25,103 | 25.400 | 25,676 | 25,709 |
Accounts Payable | 7,719 | 4,951 | 4,990 | 5,157 | 5,333 | 5,497 |
Accrued Liabilities | 7,855 | 3,459 | 3,360 | 3,463 | 3,562 | 3,664 |
Capital lease obligations, current maturities | 425 | 824 | 841 | 988 | 1,000 | 713 |
Revolving Line of Credit | 4,352 | 4,253 | 4,000 | 3,500 | 3,000 | 3,000 |
Total Current Liabilities | 20,351 | 13,487 | 13,191 | 13,108 | 12,895 | 12,874 |
Redeemable Preferred Stock | 15,393 | 18,792 | 22,778 | 27,451 | 32,946 | 38,796 |
Convertible Subordinated Note | 3,590 | 2,912 | 3,219 | 3,555 | 3,891 | 4,233 |
Capital Lease Obligations | 498 | 356 | 372 | 388 | 388 | 388 |
Deferred Occupancy Costs | 2,703 | 2,770 | 2,814 | 2,835 | 2,828 | 2,755 |
Total Liabilities | 42,535 | 38,317 | 42,374 | 47,337 | 52,948 | 59,046 |
Common Stock | 84 | 259 | 259 | 259 | 259 | 259 |
APIC | 285,317 | 286,916 | 286,916 | 286,916 | 286,916 | 286,916 |
Accumulated Deficit | -293,461 | -297,474 | -302,502 | -307,168 | -312,503 | -318,568 |
Treasury Stock | -1,944 | -1,944 | -1,944 | -1,944 | -1,944 | -1,944 |
Total Equity | -10,004 | -12,242 | -17,270 | -21,937 | -27,272 | -33,337 |
Total Liabilities and Equity | 32,531 | 26,074 | 25,103 | 25,400 | 25,676 | 25,709 |
MERISEL, INC.
STATEMENT OF CASH FLOW PROJECTION
2013 | 2014 | 2015 | 2016 | 2017 | |
Net Income | -4,013 | -5,028 | -4,666 | -5,335 | -6,065 |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Stock based compensation | 24 | ||||
Deferred occupancy costs | 67 | 44 | 21 | -7 | -73 |
Amortization of preferred stock discount | 329 | 386 | 454 | 533 | 48 |
Depreciation and amortization | 2,550 | 2,602 | 2,554 | 2,582 | 2,696 |
Preferred stock dividends paid in kind | 3,070 | 3,599 | 4,219 | 4,961 | 5,802 |
Convertible note interest paid in kind | 322 | 307 | 336 | 336 | 342 |
Change in operating assets and liabilities: | |||||
Accounts receivable | 3,895 | 40 | -411 | -374 | -379 |
Inventories | 666 | -43 | -76 | -79 | -75 |
Prepaid and other assets | 2,436 | 281 | 225 | -51 | 77 |
Accounts payable | -2,767 | 39 | 167 | 176 | 164 |
Accrued and other liabilities | -4,396 | -99 | 103 | 100 | 101 |
Net cash provided by operating activities | 2,183 | 2,128 | 2,926 | 2,842 | 2,638 |
Cash flows from investing activities | |||||
Capital expenditures | -2,355 | -2,200 | -2,300 | -2,300 | -2450 |
Total cash used in investing activities | -2,355 | -2,200 | -2,300 | -2,300 | -2450 |
Cash flows from financing activities | |||||
Capital lease payments | -1,030 | -766 | -837 | -988 | -1,287 |
Equipment financed with capital lease | 1,287 | 800 | 1,000 | 1,000 | 1,000 |
Issuance of convertible note | 750 | ||||
Borrowing on (repayment of) revolving credit line | -100 | -252 | -500 | -500 | 0 |
Total cash used in financing activities | 907 | -219 | -337 | -448 | -287 |
Net increase (decrease) in cash and cash equivalents | 735 | -291 | 289 | 54 | -99 |
Cash and cash equivalents, beginning of period | 530 | 1,265 | 975 | 1,264 | 1,318 |
Cash and cash equivalents, end of period | 1,265 | 975 | 1,264 | 1,318 | 1,219 |
MERISEL, INC.
STATEMENT OF INCOME PROJECTION (UPSIDE CASE SCENARIO)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
Net Sales | 71,946 | 69,652 | 58,061 | 59,963 | 60,405 | 63,499 | 66,709 | 70,043 |
Cost of Sales | 41,672 | 41,839 | 37,837 | 35,283 | 35,989 | 37,422 | 39,017 | 40,597 |
Gross Profit | 30,274 | 27,813 | 20,224 | 24,680 | 24,416 | 26,076 | 27,692 | 29,446 |
Selling, general and administrative expenses | 28,810 | 27,957 | 24,280 | 23,916 | 23,810 | 24,226 | 24,689 | 25,244 |
Intangible impairment |
|
| 6,190 |
|
|
|
|
|
Lease abandonment charge | 3,977 | |||||||
Restructuring charge |
|
| 809 | 232 |
|
|
|
|
Insurance proceeds, net | -422 | 150 | ||||||
Other charges |
|
|
| 509 | 594 | 44 | 44 | 44 |
Operating income (loss) | 1,464 | -144 | -14,610 | -127 | 12 | 1,806 | 2,959 | 4,157 |
Interest expense, net | 3,065 | 2,333 | 3,681 | 3,885 | 4,315 | 4,890 | 5,635 | 6,489 |
Income Tax Benefit | -126 | -26 | -160 |
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|
|
|
|
Net Income (loss) | -1,475 | -2,451 | -18,131 | -4,013 | -4,303 | -3,084 | -2,677 | -2,332 |
Addbacks: | ||||||||
Interest and extraordinary items | 3,113 | 3,352 | 14,554 | 4,800 | 4,909 | 4,934 | 5,680 | 6,533 |
Depreciation and Amortization | 3,717 | 3,001 | 2,447 | 2,802 | 2,857 | 2,809 | 2,842 | 2,804 |
Stock Compensation Expense | 115 | 24 | ||||||
Adjusted EBITDA | 5,355 | 3,902 | -1,015 | 3,613 | 3,463 | 4,660 | 5,845 | 7,006 |
MERISEL, INC.
BALANCE SHEET PROJECTION (UPSIDE CASE SCENARIO)
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
Cash and Cash Equivalents | 530 | 1,265 | 1,592 | 3,314 | 5,827 | 9,253 |
Accounts Receivable | 15,429 | 11,535 | 11,620 | 12,215 | 12,833 | 13,474 |
Inventories | 2,419 | 1,753 | 1,793 | 1,875 | 1,963 | 2,053 |
Prepaid and Other Current Assets | 4,058 | 1,638 | 1,614 | 1,647 | 1,682 | 1,718 |
Total Current Assets | 22,436 | 16,192 | 16,618 | 19,051 | 22,305 | 26,498 |
Property and Equipment, Net | 7,182 | 7,365 | 7,271 | 7,262 | 7,225 | 7,224 |
Restricted Cash |
| - | - | - | - | - |
Intangible Assets | 2,142 | 1,764 | 1,456 | 1,211 | 966 | 721 |
Other Assets | 771 | 754 | 499 | 244 | 264 | 156 |
Total Assets | 32,531 | 26,075 | 25,844 | 27,767 | 30,760 | 34,598 |
Accounts Payable | 7,719 | 4,951 | 4,994 | 5,187 | 5,397 | 5,609 |
Accrued Liabilities and Deferred Revenue | 7,855 | 3,459 | 3,372 | 3,493 | 3,615 | 3,741 |
Capital lease obligations, current maturities | 425 | 824 | 841 | 988 | 1000 | 713 |
Revolving Line of Credit | 4,352 | 4252 | 4000 | 3500 | 3000 | 3000 |
Total Current Liabilities | 20,351 | 13,487 | 13,207 | 13,167 | 13,012 | 13,064 |
Redeemable Preferred Stock | 15,393 | 18,792 | 22,778 | 27,451 | 32,945 | 38,796 |
Convertible Subordinated Note | 3,590 | 2,912 | 3,218 | 3,555 | 3,891 | 4,233 |
Capital Lease Obligations | 498 | 356 | 372 | 389 | 389 | 389 |
Deferred Occupancy Costs | 2,703 | 2,770 | 2,814 | 2,835 | 2,828 | 2,755 |
Total Liabilities | 42,535 | 38,317 | 42,389 | 47,396 | 53,065 | 59,236 |
Common Stock | 84 | 259 | 259 | 259 | 259 | 259 |
APIC | 285,317 | 286916 | 286916 | 286916 | 286916 | 286916 |
Accumulated Deficit | -293,461 | -297474 | -301777 | -304860 | -307537 | -309869 |
Treasury Stock | -1,944 | -1944 | -1944 | -1944 | -1944 | -1944 |
Total Equity | -10,004 | -12,242 | -16,545 | -19,629 | -22,306 | -24,637 |
Total Liabilities and Equity | 32,531 | 26,075 | 25,844 | 27,767 | 30,760 | 34,598 |
MERISEL, INC.
STATEMENT OF CASH FLOW PROJECTION (UPSIDE CASE SCENARIO)
| 2013 | 2014 | 2015 | 2016 | 2017 |
Net Income | -4,013 | -4,303 | -3,084 | -2,677 | -2,332 |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Stock based compensation | 23.88 | - | - | - | - |
Deferred occupancy costs | 66.84 | 44.07 | 20.84 | (6.72) | (73.46) |
Amortization of preferred stock discount | 328.83 | 386.26 | 453.72 | 532.96 | 48.41 |
Depreciation and amortization | 2,550 | 2,602 | 2,554 | 2,582 | 2,696 |
Preferred stock dividends paid in kind | 3,070 | 3,599 | 4,220 | 4,961 | 5,802 |
Convertible note interest paid in kind | 321.66 | 306.64 | 336.32 | 336.32 | 342.13 |
Change in operating assets and liabilities: |
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|
|
|
|
Accounts receivable | 3,895 | -85 | -595 | -618 | -641 |
Inventories | 665.92 | (40.04) | (81.90) | (88.21) | (89.83) |
Prepaid and other assets | 2,436 | 280 | 222 | -55 | 72 |
Accounts payable | -2,767 | 43 | 193 | 210 | 212 |
Accrued and other liabilities | -4,396 | -87 | 121 | 123 | 126 |
Net cash provided by operating activities | 2,183 | 2,746 | 4,359 | 5,301 | 6,163 |
Cash flows from investing activities | |||||
Capital expenditures | -2,355 | -2,200 | -2,300 | -2,300 | -2,450 |
Total cash used in investing activities | -2,355 | -2,200 | -2,300 | -2,300 | -2,450 |
Cash flows from financing activities |
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|
|
|
|
Capital lease payments | -1,030 | -767 | -837 | -988 | -1,287 |
Equipment financed with capital lease | 1,288 | 800 | 1,000 | 1,000 | 1,000 |
Issuance of convertible note | 750.0 | - | - | - | - |
Borrowing on (repayment of) revolving credit line | (100.0) | (252.5) | (500.0) | (500.0) | - |
Total cash used in financing activities | 907 | -219 | -337 | -488 | -287 |
Net increase (decrease) in cash and cash equivalents | 735 | 327 | 1,722 | 2,513 | 3,426 |
Cash and cash equivalents, beginning of period | 530 | 1,265 | 1,592 | 3,314 | 5,827 |
Cash and cash equivalents, end of period | 1,265 | 1,592 | 3,314 | 5,827 | 9,253 |
