Exhibit 99.2
Pro Forma Financial Information
The following unaudited pro forma consolidated financial statements are based on the historical consolidated financial statements of Radiant and have been adjusted to give pro forma effect to the split-off of Radiant’s enterprise software business. The unaudited pro forma condensed consolidated statements of operations for the periods ended September 30, 2003 and 2002, December 31, 2002, December 31, 2001, and December 31, 2000 give effect to the split-off transaction as if it had occurred as of January 1, 2000. The unaudited pro forma consolidated balance sheet gives effect to the transaction as if it had occurred as of September 30, 2003.
The unaudited pro forma consolidated financial statements have been prepared by Radiant based upon certain assumptions as disclosed in the accompanying footnotes. The unaudited pro forma consolidated financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the financial position or future results of operations of Radiant, or of the financial position or results of operations of Radiant that would have actually occurred had the split-off transaction been in effect as of the date or for the periods presented. In addition, it should be noted that in the future the Company’s financial statements will reflect the disposition of the enterprise software business only from January 31, 2004.
The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements and related notes of Radiant.
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
As of September 30, 2003
| Historical Radiant | Split-off Transaction | Pro Forma Radiant | ||||||||||
| ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 36,706 | $ | (4,000 | )(A) | $ | 32,706 | |||||
Accounts receivable, net of allowance for doubtful accounts | 19,075 | — | 19,075 | |||||||||
Inventories, net | 12,453 | — | 12,453 | |||||||||
Intangible assets, net | 550 | — | 550 | |||||||||
Other short-term assets | 5,414 | — | 5,414 | |||||||||
Total current assets | 74,198 | (4,000 | ) | 70,198 | ||||||||
PROPERTY AND EQUIPMENT, net | 11,940 | — | 11,940 | |||||||||
SOFTWARE DEVELOPMENT COSTS, net | 2,111 | — | 2,111 | |||||||||
GOODWILL, NET | 6,349 | — | 6,349 | |||||||||
INTANGIBLE ASSETS, NET | 225 | — | 225 | |||||||||
TRIYUMF ASSET and OTHER LONG-TERM ASSETS | 48 | — | 48 | |||||||||
| $ | 94,871 | $ | (4,000 | ) | $ | 90,871 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable | $ | 5,648 | — | $ | 5,648 | |||||||
Accrued liabilities | 6,562 | $ | 5,200 | (B) | 11,762 | |||||||
Client deposits and deferred revenue | 11,194 | — | 11,194 | |||||||||
Current portion of capital lease obligation | 515 | — | 515 | |||||||||
Total current liabilities | 23,919 | 5,200 | 29,119 | |||||||||
DEFERRED TAX LIABILITY | 880 | — | 880 | |||||||||
CAPITAL LEASE OBLIGATION, NET OF CURRENT PORTION | 270 | — | 270 | |||||||||
Total liabilities | 25,069 | 5,200 | 30,269 | |||||||||
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: | ||||||||||||
Common stock, $0.00001 par value; 100,000,000 shares authorized, 27,725,559 shares issued and outstanding (Pro forma Radiant: 25,725,559 shares issued and outstanding) | 0 | — | 0 | |||||||||
Additional paid-in capital | 114,166 | (16,300 | )(C) | 97,866 | ||||||||
Accumulated deficit | (44,364 | ) | 7,100 | (D) | (37,264 | ) | ||||||
Total shareholders’ equity | 69,802 | (9,200 | ) | 60,602 | ||||||||
| $ | 94,871 | $ | (4,000 | ) | $ | 90,871 | ||||||
See notes to unaudited pro forma financial statements
Note 1. | Unaudited Pro Forma Balance Sheet: The unaudited pro forma consolidated balance sheet gives effect to the split-off of the enterprise software business of Radiant Systems, as described below, as if these events had occurred as of September 30, 2003. As a result of the split-off, these adjustments reflect the historical balances as of September 30, 2003 for assets sold and liabilities assumed. |
| (A) | Cash contributed by Radiant to BlueCube Software under the terms of the split-off transaction. |
| (B) | The accrued liabilities recorded in the split-off transaction include a $4.0 million payment Radiant has agreed to make on behalf of BlueCube Software and $1.2 million of transaction and professional fees related to the split-off. The transaction and professional fees are related to expenses incurred by Radiant for the transaction, excluding fees incurred on behalf of BlueCube Software. |
| (C) | The equity value is the value of the 2.0 million shares received by Radiant in the split-off transaction based on a closing price of $8.15 on January 30, 2004 in exchange for $4.0 million in cash. |
| (D) | Based on the terms of the transaction outlined in Item 2 of this Form 8-K, including the $4.0 million payment to be made by Radiant on BlueCube Software’s behalf, the $1.2 million of transaction and professional fees, and the $8.15 stock price as of January 30, 2004, Radiant would have recorded a gain of $7.1 million which has been recorded as a reduction in accumulated deficit on the pro forma balance sheet. |
As described in Item 2 of this Form 8-K, on January 31, 2004 Radiant completed the split-off transaction of its enterprise software business. In addition to the specific assets and liabilities previously mentioned, Radiant also contributed approximately $1.3 million of additional assets that were capitalized subsequent to September 30, 2003. On January 31, 2004, Radiant recorded a gain of approximately $5.8 million on this transaction.
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine Months Ended September 30, 2003 | ||||||||||||
| Historical Radiant | Historical Enterprise Operations (A) | Pro Forma Radiant | ||||||||||
REVENUES: | ||||||||||||
System sales | $ | 36,592 | $ | (4,119 | ) | $ | 32,473 | |||||
Client support, maintenance, and other services | 48,504 | (9,370 | ) | 39,134 | ||||||||
Total revenues | 85,096 | (13,489 | ) | 71,607 | ||||||||
COST OF REVENUES: | ||||||||||||
System sales | 22,069 | (3,707 | ) | 18,362 | ||||||||
Impairment of capitalized software and acquired software technology | 17,091 | (16,188 | ) | 903 | ||||||||
Client support, maintenance, and other services | 33,531 | (8,134 | ) | 25,397 | ||||||||
Total cost of revenues | 72,691 | (28,029 | ) | 44,662 | ||||||||
GROSS (LOSS) PROFIT | 12,405 | 14,540 | 26,945 | |||||||||
OPERATING EXPENSES: | ||||||||||||
Product development | 11,508 | (4,199 | ) | 7,309 | ||||||||
Sales and marketing | 12,646 | (2,231 | ) | 10,415 | ||||||||
Depreciation and amortization | 3,252 | (967 | ) | 2,285 | ||||||||
Impairment of TriYumf Asset | 10,589 | (10,589 | ) | — | ||||||||
Impairment of goodwill | 6,172 | — | 6,172 | |||||||||
Lease termination and severance costs | 761 | (561 | ) | 200 | ||||||||
General and administrative | 9,975 | (2,578 | ) | 7,397 | ||||||||
(LOSS) FROM CONTINUING OPERATIONS | (42,498 | ) | 35,665 | (6,833 | ) | |||||||
INTEREST INCOME (EXPENSE), NET | 428 | 48 | 476 | |||||||||
(LOSS) BEFORE INCOME TAXES | (42,070 | ) | 35,713 | (6,357 | ) | |||||||
INCOME TAX PROVISION | 252 | (32 | ) | 220 | ||||||||
NET (LOSS) | $ | (42,322 | ) | $ | 35,745 | $ | (6,577 | ) | ||||
BASIC (LOSS) PER SHARE: | $ | (1.52 | ) | $ | (0.25 | ) | ||||||
DILUTED (LOSS) PER SHARE: | $ | (1.52 | ) | $ | (0.25 | ) | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||
Basic | 27,860 | (2,000 | ) | 25,860 | ||||||||
Diluted | 27,860 | (2,000 | ) | 25,860 | ||||||||
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine Months Ended September 30, 2002 | ||||||||||
| Historical Radiant | Historical Enterprise Operations (A) | Pro Forma | ||||||||
REVENUES: | ||||||||||
System sales | $ | 56,305 | $ | (8,847 | ) | $ | 47,458 | |||
Client support, maintenance, and other services | 48,637 | (12,277 | ) | 36,360 | ||||||
Total revenues | 104,942 | (21,124 | ) | 83,818 | ||||||
COST OF REVENUES: | ||||||||||
System sales | 29,082 | (3,159 | ) | 25,923 | ||||||
Client support, maintenance, and other services | 28,213 | (5,960 | ) | 22,253 | ||||||
Total cost of revenues | 57,295 | (9,119 | ) | 48,176 | ||||||
GROSS PROFIT | 47,647 | (12,005 | ) | 35,642 | ||||||
OPERATING EXPENSES: | ||||||||||
Product development | 11,106 | (3,620 | ) | 7,486 | ||||||
Sales and marketing | 15,749 | (4,933 | ) | 10,816 | ||||||
Depreciation and amortization | 3,835 | (1,117 | ) | 2,718 | ||||||
General and administrative | 9,393 | (2,434 | ) | 6,959 | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 7,564 | 99 | 7,663 | |||||||
INTEREST INCOME, NET | 546 | 49 | 595 | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 8,110 | 148 | 8,258 | |||||||
INCOME TAX PROVISION | 3,501 | 179 | 3,322 | |||||||
INCOME (LOSS) | $ | 4,609 | $ | 327 | $ | 4,936 | ||||
BASIC INCOME PER SHARE: | $ | 0.17 | $ | 0.19 | ||||||
DILUTED INCOME PER SHARE: | $ | 0.16 | $ | 0.18 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||
Basic | 27,674 | (2,000 | ) | 25,674 | ||||||
Diluted | 28,935 | (2,000 | ) | 26,935 | ||||||
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| Year Ended December 31, 2002 | ||||||||||
| Historical Radiant | Historical Enterprise Operations (A) | Pro Forma | ||||||||
REVENUES: | ||||||||||
System sales | $ | 81,432 | $ | (10,889 | ) | $ | 70,543 | |||
Client support, maintenance, and other services | 64,725 | (16,816 | ) | 47,909 | ||||||
Total revenues | 146,157 | (27,705 | ) | 118,452 | ||||||
COST OF REVENUES: | ||||||||||
System sales | 43,348 | (4,510 | ) | 38,838 | ||||||
Client support, maintenance, and other services | 39,000 | (9,525 | ) | 29,475 | ||||||
Total cost of revenues | 82,348 | (14,035 | ) | 68,313 | ||||||
GROSS PROFIT | 63,809 | (13,670 | ) | 50,139 | ||||||
OPERATING EXPENSES: | ||||||||||
Product development | 14,470 | (4,125 | ) | 10,345 | ||||||
Sales and marketing | 21,141 | (6,267 | ) | 14,874 | ||||||
Depreciation and amortization | 4,997 | (1,473 | ) | 3,524 | ||||||
General and administrative | 12,791 | (3,266 | ) | 9,525 | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 10,410 | 1,461 | 11,871 | |||||||
INTEREST INCOME (EXPENSE), NET | 754 | 58 | 812 | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 11,164 | 1,519 | 12,683 | |||||||
INCOME TAX PROVISION | 4,623 | (182 | ) | 4,441 | ||||||
INCOME (LOSS) | $ | 6,541 | $ | 1,701 | $ | 8,242 | ||||
BASIC INCOME PER SHARE: | $ | 0.24 | $ | 0.32 | ||||||
DILUTED INCOME PER SHARE: | $ | 0.23 | $ | 0.31 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||
Basic | 27,753 | (2,000 | ) | 25,753 | ||||||
Diluted | 28,995 | (2,000 | ) | 26,995 | ||||||
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| Year Ended December 31, 2001 | |||||||||||
| Historical Radiant | Historical Enterprise Operations (A) | Pro Forma Radiant | |||||||||
REVENUES: | |||||||||||
System sales | $ | 71,268 | $ | (1,803 | ) | $ | 69,465 | ||||
Client support, maintenance, and other services | 60,711 | (9,159 | ) | 51,552 | |||||||
Total revenues | 131,979 | (10,962 | ) | 121,017 | |||||||
COST OF REVENUES: | |||||||||||
System sales | 38,799 | (2,062 | ) | 36,737 | |||||||
Client support, maintenance, and other services | 38,043 | (3,859 | ) | 34,184 | |||||||
Total cost of revenues | 76,842 | (5,921 | ) | 70,921 | |||||||
GROSS PROFIT | 55,137 | (5,041 | ) | 50,096 | |||||||
OPERATING EXPENSES: | |||||||||||
Product development | 11,234 | (1,745 | ) | 9,489 | |||||||
Sales and marketing | 19,718 | (3,040 | ) | 16,678 | |||||||
Depreciation and amortization | 9,643 | (1,595 | ) | 8,048 | |||||||
Non-recurring charges | 1,244 | (314 | ) | 930 | |||||||
General and administrative | 15,056 | (2,363 | ) | 12,693 | |||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | (1,758 | ) | 4,016 | 2,258 | |||||||
INTEREST INCOME (EXPENSE), NET | 1,513 | 84 | 1,597 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (245 | ) | 4,100 | 3,855 | |||||||
INCOME TAX PROVISION | 183 | — | 183 | ||||||||
NET INCOME (LOSS) | $ | (428 | ) | $ | 4,100 | $ | 3,672 | ||||
BASIC INCOME (LOSS) PER SHARE: | $ | (0.02 | ) | $ | 0.14 | ||||||
DILUTED INCOME (LOSS) PER SHARE: | $ | (0.02 | ) | $ | 0.14 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||
Basic | 27,726 | (2,000 | ) | 25,726 | |||||||
Diluted | 27,726 | (2,000 | ) | 25,726 | |||||||
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| Year Ended December 31, 2000 | ||||||||||
| Historical Radiant | Historical Enterprise Operations(A) | Pro Forma Radiant | ||||||||
REVENUES: | ||||||||||
System sales | $ | 79,987 | $ | (3,430 | ) | $ | 76,557 | |||
Client support, maintenance, and other services | 48,057 | (5,613 | ) | 42,444 | ||||||
Total revenues | 128,044 | (9,043 | ) | 119,001 | ||||||
COST OF REVENUES: | ||||||||||
System sales | 39,620 | (1,686 | ) | 37,934 | ||||||
Client support, maintenance, and other services | 37,356 | (3,980 | ) | 33,376 | ||||||
Total cost of revenues | 76,976 | (5,666 | ) | 71,310 | ||||||
GROSS PROFIT | 51,068 | (3,377 | ) | 47,691 | ||||||
OPERATING EXPENSES: | ||||||||||
Product development | 11,030 | (1,776 | ) | 9,254 | ||||||
Sales and marketing | 12,720 | (2,572 | ) | 10,148 | ||||||
Depreciation and amortization | 7,706 | (878 | ) | 6,828 | ||||||
General and administrative | 15,818 | (2,118 | ) | 13,700 | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 3,794 | 3,967 | 7,761 | |||||||
GAIN FROM EARLY EXTINGISHMENT OF DEBT(B) | 2,530 | — | 2,530 | |||||||
INTEREST INCOME, NET | 3,240 | — | 3,240 | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 9,564 | 3,967 | 13,531 | |||||||
INCOME TAX PROVISION | 2,783 | — | 2,783 | |||||||
NET INCOME (LOSS) | $ | 6,781 | $ | 3,967 | $ | 10,748 | ||||
BASIC INCOME PER SHARE | $ | 0.24 | $ | 0.42 | ||||||
DILUTED INCOME PER SHARE | $ | 0.23 | $ | 0.39 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||
Basic | 27,294 | (2,000 | ) | 25,294 | ||||||
Diluted | 29,791 | (2,000 | ) | 27,791 | ||||||
Note 1. | Unaudited Pro Forma Condensed Consolidated Statement of Operations: |
| (A) | The following adjustments to the unaudited pro forma condensed consolidated statement of operations reflect the elimination of historical revenues generated from assets contributed to the enterprise business pursuant to the split-off transaction, as well as historical expenses relating to the operations assumed by the enterprise business as if the transactions were consummated as of January 1, 2000. Any gain or loss related to this transaction is not reflected in the pro forma condensed consolidated statements of operations as it will be recorded on the closing date of the transaction. The 2,000,000 shares transferred to Radiant by Erez Goren as part of the transaction will be retired on the transaction date. |
| (B) | In May 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” which rescinds SFAS No. 4. As a result, gains and losses from extinguishments of debt should be classified as extraordinary items only if they meet the criteria of Accounting Principles Board Opinion No. 30 (“APB 30”). Radiant adopted SFAS No. 145 on January 1, 2003. As a result, the gain on extinguishment of debt for the year ended December 31, 2000 of $2.53 million was reclassified as a component of income before income taxes. |