Exhibit 99.1
Material Sciences Corporation and Subsidiaries
Unaudited Pro Forma Financial Information
in (000’s)
On June 20, 2005, Material Sciences Corporation (the “Company”) completed a transaction for the sale of substantially all of the assets (including fixed assets, intellectual property and other assets) of its Electronic Materials and Devices Group (“EMD”) to TouchSensor Technologies, LLC (“TST”) in consideration of the release from current and future contractual commitments to TST and the assumption of certain contractual obligations of EMD. As a result of the transaction, the Company was relieved of the fee obligations under the license agreement with TST in fiscal 2006 of $2,750 as well as approximately $825 of obligations related to certain cost sharing agreements between the Company and TST projected for the 18 months ending in November 2006. As a result of the transaction, EMD was recorded as a discontinued operation beginning in the second quarter of fiscal 2006.
The following unaudited pro forma financial information presents the Company’s Unaudited Pro Forma Condensed Consolidated Statements of Income (Loss) for the three months ended May 31, 2005 and the fiscal year ended February 28, 2005 and the Company’s Unaudited Condensed Consolidated Balance Sheet as of May 31, 2005. The unaudited pro forma condensed consolidated financial statements reclassify the results of operations and the assets and liabilities of EMD to discontinued operations. The unaudited condensed consolidated financial information has been prepared giving effect to the transaction as if it had occurred as of March 1, 2004 for the Unaudited Pro Forma Condensed Consolidated Statements of Income (Loss) and as of May 31, 2005 for the Pro Forma Condensed Consolidated Balance Sheet as of May 31, 2005.
The unaudited pro forma financial information is presented for information purposes only and is not necessarily indicative of the results of operations or the financial position that would have been obtained had the transaction actually occurred as of the dates assumed, nor is it indicative of future results of operations or financial position. The unaudited pro forma financial information should
be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto in its Annual Report on Form 10-K/A for the fiscal year ended February 28, 2005 filed with the Securities and Exchange Commission on January 9, 2006 and the unaudited condensed consolidated financial statements and related notes thereto in its Quarterly Report on Form 10-Q/A for the
interim period ended May 31, 2005 filed with the Securities and Exchange Commission on January 9, 2006.
Unaudited Pro Forma Condensed Consolidated Statement of Income
Material Sciences Corporation and Subsidiaries
For the Three Months Ended May 31, 2005
(In thousands, except per share data) | Historical | Amounts Transferred to Discontinued Operations | Pro Forma | |||||||||
Net Sales | $ | 73,823 | $ | (395 | ) | $ | 73,428 | |||||
Cost of Sales | 58,532 | (178 | ) | 58,354 | ||||||||
Gross Profit | 15,291 | (217 | ) | 15,074 | ||||||||
Selling, General and Administrative Expenses | 10,205 | (1,354 | ) | 8,851 | ||||||||
Restructuring Expenses | 338 | (142 | ) | 196 | ||||||||
Income (Loss) from Operations | 4,748 | (1,279 | ) | 6,027 | ||||||||
Other (Income) and Expense: | ||||||||||||
Interest Expense, Net | 16 | — | 16 | |||||||||
Equity in Results of Joint Ventures | (53 | ) | — | (53 | ) | |||||||
Total Other Income, Net | (37 | ) | — | (37 | ) | |||||||
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes | 4,785 | (1,279 | ) | 6,064 | ||||||||
Provision (Benefit) for Income Taxes | 2,029 | (486 | ) | 2,515 | ||||||||
Income (Loss) from Continuing Operations | 2,756 | (793 | ) | 3,549 | ||||||||
Loss from Discontinued Operations, net of Taxes | (17 | ) | (793 | ) | (810 | ) | ||||||
Net Income | $ | 2,739 | $ | — | $ | 2,739 | ||||||
Basic Income Per Share: | ||||||||||||
Income (Loss) from Continuing Operations | $ | 0.19 | $ | (0.05 | ) | $ | 0.24 | |||||
Loss on Discontinued Operations | — | (0.05 | ) | (0.05 | ) | |||||||
Net Income | $ | 0.19 | $ | — | $ | 0.19 | ||||||
Diluted Income Per Share: | ||||||||||||
Income (Loss) from Continuing Operations | $ | 0.19 | $ | (0.05 | ) | $ | 0.24 | |||||
Loss on Discontinued Operations | — | (0.05 | ) | (0.05 | ) | |||||||
Net Income | $ | 0.19 | $ | — | $ | 0.19 | ||||||
Weighted Average Number of Common Shares Outstanding Used for Basic Net Income (Loss) Per Share | 14,625 | 14,625 | ||||||||||
Dilutive Shares | 49 | 49 | ||||||||||
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares | 14,674 | 14,674 | ||||||||||
Outstanding Common Stock Options Having No Dilutive Effect | 158 | 158 | ||||||||||
Unaudited Pro Forma Condensed Consolidated Statement of Income (Loss)
Material Sciences Corporation and Subsidiaries
For the Fiscal Year Ended February 28, 2005
(In thousands, except per share data) | Historical | Amounts Transferred to Discontinued Operations | Pro Forma | |||||||||
Net Sales | $ | 264,853 | $ | (1,530 | ) | $ | 263,323 | |||||
Cost of Sales | 208,902 | (650 | ) | 208,252 | ||||||||
Gross Profit | 55,951 | (880 | ) | 55,071 | ||||||||
Selling, General and Administrative Expenses | 47,277 | (6,445 | ) | 40,832 | ||||||||
Restructuring Expenses | 2,657 | — | 2,657 | |||||||||
Income (Loss) from Operations | 6,017 | (5,565 | ) | 11,582 | ||||||||
Other (Income) and Expense: | ||||||||||||
Interest Expense, Net | 889 | — | 889 | |||||||||
Equity in Results of Joint Ventures | (178 | ) | — | (178 | ) | |||||||
Loss on Early Retirement of Debt | 4,205 | — | 4,205 | |||||||||
Total Other Expense, Net | 4,916 | — | 4,916 | |||||||||
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes | 1,101 | (5,565 | ) | 6,666 | ||||||||
Provision (Benefit) for Income Taxes | 1,270 | (2,187 | ) | 3,457 | ||||||||
Income (Loss) from Continuing Operations | (169 | ) | (3,378 | ) | 3,209 | |||||||
Loss on Discontinued Operations, net of Taxes | (151 | ) | (3,378 | ) | (3,529 | ) | ||||||
Net Income (Loss) | (320 | ) | — | (320 | ) | |||||||
Basic Income Per Share: | ||||||||||||
Income (Loss) from Continuing Operations | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.22 | ||||
Loss on Discontinued Operations | (0.01 | ) | (0.23 | ) | (0.24 | ) | ||||||
Net Income (Loss) | $ | (0.02 | ) | $ | — | $ | (0.02 | ) | ||||
Diluted Income Per Share: | ||||||||||||
Income (Loss) from Continuing Operations | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.22 | ||||
Loss on Discontinued Operations | (0.01 | ) | (0.23 | ) | (0.24 | ) | ||||||
Net Income (Loss) | $ | (0.02 | ) | $ | — | $ | (0.02 | ) | ||||
Weighted Average Number of Common Shares Outstanding Used for Basic Net Income (Loss) Per Share | 14,351 | 14,351 | ||||||||||
Dilutive Shares | — | 64 | ||||||||||
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares | 14,351 | 14,415 | ||||||||||
Outstanding Common Stock Options Having No Dilutive Effect | 22 | 22 | ||||||||||
Unaudited Pro Forma Condensed Consolidated Balance Sheet
Material Sciences Corporation and Subsidiaries
As of May 31, 2005
(In thousands) | Historical | Amounts Transferred to Discontinued Operations | Pro Forma | |||||||||
Assets: | ||||||||||||
Current Assets: | ||||||||||||
Cash and Cash Equivalents | $ | 1,125 | $ | — | $ | 1,125 | ||||||
Receivables, Less Reserves of $5,699 | 37,534 | (307 | ) | 37,227 | ||||||||
Income Taxes Receivable | 134 | — | 134 | |||||||||
Prepaid Expenses | 2,437 | (7 | ) | 2,430 | ||||||||
Inventories | 50,458 | (206 | ) | 50,252 | ||||||||
Current Assets of Discontinued Operations - EMD | — | 1,271 | 1,271 | |||||||||
Deferred Income Taxes | 2,784 | — | 2,784 | |||||||||
Total Current Assets | 94,472 | 751 | 95,223 | |||||||||
Property, Plant and Equipment | 225,370 | (918 | ) | 224,452 | ||||||||
Accumulated Depreciation and Amortization | (152,700 | ) | 298 | (152,402 | ) | |||||||
Net Property, Plant and Equipment | 72,670 | (620 | ) | 72,050 | ||||||||
Other Assets: | ||||||||||||
Investment in Joint Ventures | 1,808 | — | 1,808 | |||||||||
Goodwill | 1,319 | — | 1,319 | |||||||||
Deferred Income Taxes | 1,670 | — | 1,670 | |||||||||
Other | 849 | (131 | ) | 718 | ||||||||
Total Other Assets | 5,646 | (131 | ) | 5,515 | ||||||||
Total Assets | $ | 172,788 | $ | — | $ | 172,788 | ||||||
Liabilities: | ||||||||||||
Current Liabilities: | ||||||||||||
Accounts Payable | $ | 31,948 | $ | (27 | ) | $ | 31,921 | |||||
Accrued Payroll Related Expenses | 5,811 | (128 | ) | 5,683 | ||||||||
Accrued Expenses | 6,046 | (1,187 | ) | 4,859 | ||||||||
Income Taxes Payable | 134 | — | 134 | |||||||||
Current Liabilities of Discontinued Operations - EMD | — | 1,342 | 1,342 | |||||||||
Current Liabilities of Discontinued Operations - Pinole Point Steel | 394 | — | 394 | |||||||||
Total Current Liabilities | 44,333 | — | 44,333 | |||||||||
Long-Term Liabilities: | ||||||||||||
Other | 9,363 | — | 9,363 | |||||||||
Total Long-Term Liabilities | 9,363 | — | 9,363 | |||||||||
Shareowners’ Equity: | ||||||||||||
Common Stock | 377 | — | 377 | |||||||||
Additional Paid-In Capital | 77,541 | — | 77,541 | |||||||||
Treasury Stock at Cost | (46,528 | ) | — | (46,528 | ) | |||||||
Retained Earnings | 85,666 | — | 85,666 | |||||||||
Accumulated Other Comprehensive Income | 2,036 | — | 2,036 | |||||||||
Total Shareowners’ Equity | 119,092 | — | 119,092 | |||||||||
Total Liabilities and Shareowners’ Equity | $ | 172,788 | $ | — | $ | 172,788 | ||||||