EXHIBIT 99.2
Index to Unaudited Pro Forma
Condensed Combined Consolidated Financial Information
Index
Page | ||
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet as of June 30, 2003 | 2 | |
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations for the Year Ended December 31, 2002 | 3 | |
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations for the Six Months Ended June 30, 2003 | 4 | |
Notes to Unaudited Pro Forma Condensed Combined Consolidated Financial Statements | 5 |
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PTEK HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
AS OF JUNE 30, 2003
PTEK Historical | Pro Forma Adjustments | Pro Forma Combined | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 30,453 | $ | (15,356 | )(1) | $ | 15,097 | |||||
Restricted cash, current | 1,250 | 1,250 | ||||||||||
Marketable securities, available for sale | 272 | 272 | ||||||||||
Accounts receivable, net | 56,694 | 3,879 | (2) | 60,573 | ||||||||
Prepaid expenses and other | 5,708 | (600 | )(1) | |||||||||
197 | (2) | 5,305 | ||||||||||
Deferred income taxes, net | 13,614 | 13,614 | ||||||||||
Total current assets | 107,991 | (11,880 | ) | 96,111 | ||||||||
PROPERTY AND EQUIPMENT, NET | 60,499 | 2,240 | (2) | 62,739 | ||||||||
OTHER ASSETS | ||||||||||||
Goodwill | 123,066 | 123,066 | ||||||||||
Intangibles, net | 15,040 | 11,103 | (2) | 26,143 | ||||||||
Deferred income taxes, net | 3,546 | 3,546 | ||||||||||
Notes receivable-employees | 2,086 | 2,086 | ||||||||||
Restricted cash, non-current | 3,438 | 3,438 | ||||||||||
Other assets | 3,227 | 102 | (2) | 3,329 | ||||||||
$ | 318,893 | $ | 1,565 | $ | 320,458 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Accounts payable | $ | 32,613 | 1,269 | (2) | $ | 33,882 | ||||||
Accrued taxes | 8,160 | 8,160 | ||||||||||
Accrued liabilities | 30,723 | 296 | (2) | 31,019 | ||||||||
Current maturities of long-term debt and capital lease obligations | 4,002 | 4,002 | ||||||||||
Accrued restructuring costs | 883 | 883 | ||||||||||
Total current liabilities | 76,381 | 1,565 | 77,946 | |||||||||
LONG-TERM LIABILITIES | ||||||||||||
Convertible subordinated notes | 133,000 | 133,000 | ||||||||||
Long-term debt and capital lease obligations | 1,534 | 1,534 | ||||||||||
Other accrued liabilities | 10,935 | 10,935 | ||||||||||
Total long-term liabilities | 145,469 | 145,469 | ||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Common stock, $0.01 par value; 150,000,000 shares authorized, 53,603,148 shares issued and outstanding at June 30, 2003 | 536 | 536 | ||||||||||
Unrealized gain on marketable securities, available for sale | 74 | 74 | ||||||||||
Additional paid-in capital | 581,966 | 581,966 | ||||||||||
Unearned restricted stock compensation | (1,256 | ) | (1,256 | ) | ||||||||
Note receivable, shareholder | (5,193 | ) | (5,193 | ) | ||||||||
Cumulative translation adjustment | (2,065 | ) | (2,065 | ) | ||||||||
Accumulated deficit | (477,019 | ) | (477,019 | ) | ||||||||
Total shareholders’ equity | 97,043 | 97,043 | ||||||||||
$ | 318,893 | $ | 1,565 | $ | 320,458 | |||||||
See notes to the unaudited pro forma condensed combined consolidated financial statements.
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PTEK HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE YEAR ENDED DECEMBER 31, 2002
PTEK Historical | MediaTel Historical | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||
REVENUES | $ | 341,253 | $ | 23,213 | $ | 364,466 | |||||||||
COST OF REVENUES (exclusive of depreciation shown separately below) | 117,663 | 7,438 | 125,101 | ||||||||||||
GROSS MARGIN | 223,590 | 15,775 | 239,365 | ||||||||||||
OPERATING EXPENSES | |||||||||||||||
Selling and marketing | 88,970 | 6,817 | 95,787 | ||||||||||||
General and administrative. | 55,845 | 2,321 | 58,166 | ||||||||||||
Research and development | 7,236 | 1,518 | 8,754 | ||||||||||||
Depreciation | 21,526 | 1,543 | 23,069 | ||||||||||||
Amortization | 10,876 | 2,221 | (3) | 13,097 | |||||||||||
Restructuring costs | 1,834 | 1,834 | |||||||||||||
Asset impairments | 3,202 | 3,202 | |||||||||||||
Equity based compensation | 1,871 | 1,871 | |||||||||||||
Net legal settlements and related expenses | 7,325 | 7,325 | |||||||||||||
Total operating expenses | 198,685 | 12,199 | 2,221 | 213,105 | |||||||||||
OPERATING INCOME (LOSS) | 24,905 | 3,576 | (2,221 | ) | 26,260 | ||||||||||
OTHER (EXPENSE) INCOME | |||||||||||||||
Interest expense | (11,510 | ) | (11,510 | ) | |||||||||||
Interest income | 1,482 | 24 | 1,506 | ||||||||||||
Gain on sale of marketable securities | 930 | 930 | |||||||||||||
Other, net | (8 | ) | (8 | ) | |||||||||||
Total other (expense) income | (9,106 | ) | 24 | (9,082 | ) | ||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 15,799 | 3,600 | (2,221 | ) | 17,178 | ||||||||||
INCOME TAX EXPENSE (BENEFIT) | 1,376 | 1,443 | (193 | )(4) | 2,626 | ||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 14,423 | $ | 2,157 | $ | (2,028 | ) | $ | 14,552 | ||||||
DISCONTINUED OPERATION: | |||||||||||||||
Loss from operations of Voicecom | (16,172 | ) | — | (16,172 | ) | ||||||||||
Income tax benefit | (3,640 | ) | — | (3,640 | ) | ||||||||||
Loss on discontinued operations | (12,532 | ) | — | (12,532 | ) | ||||||||||
NET INCOME | $ | 1,891 | $ | 2,157 | $ | (2,028 | ) | $ | 2,020 | ||||||
BASIC EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | 0.27 | $ | 0.27 | |||||||||||
Discontinued operations | (0.23 | ) | (0.23 | ) | |||||||||||
Net income | $ | 0.04 | $ | 0.04 | |||||||||||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.26 | |||||||||||
Discontinued operations | (0.23 | ) | (0.22 | ) | |||||||||||
Net income | $ | 0.03 | $ | 0.04 | |||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||||||
Basic | 53,550 | 53,550 | |||||||||||||
Diluted | 56,262 | 56,262 | |||||||||||||
See notes to the unaudited pro forma condensed combined consolidated financial statements
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PTEK HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE SIX MONTHS ENDED JUNE 30, 2003
PTEK Historical | MediaTel Historical | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||
REVENUES | $ | 184,071 | $ | 11,865 | $ | 195,936 | |||||||||
COST OF REVENUES (exclusive of depreciation shown separately below) | 63,606 | 3,913 | 67,519 | ||||||||||||
GROSS MARGIN | 120,465 | 7,952 | 128,417 | ||||||||||||
OTHER OPERATING EXPENSES: | |||||||||||||||
Selling and marketing | 51,109 | 3,441 | 54,550 | ||||||||||||
General and administrative | 27,044 | 1,938 | 28,982 | ||||||||||||
Research and development | 4,182 | 822 | 5,004 | ||||||||||||
Depreciation | 11,273 | 641 | 11,914 | ||||||||||||
Amortization | 3,415 | 1,110 | (3) | 4,525 | |||||||||||
Equity based compensation | 1,125 | 1,125 | |||||||||||||
Total operating expenses | 98,148 | 6,842 | 1,110 | 106,100 | |||||||||||
OPERATING INCOME | 22,317 | 1,110 | (1,110 | ) | 22,317 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest, net | (4,821 | ) | (4,821 | ) | |||||||||||
Gain on sale of marketable securities | 501 | 4 | 505 | ||||||||||||
Gain on repurchase of bonds | 1,397 | 1,397 | |||||||||||||
Other, net | 407 | 407 | |||||||||||||
Total other income (expense) | (2,516 | ) | 4 | (2,512 | ) | ||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 19,801 | 1,114 | (1,110 | ) | 19,805 | ||||||||||
INCOME TAX EXPENSE (BENEFIT) | 8,268 | 452 | (463 | )(4) | 8,257 | ||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 11,533 | $ | 662 | $ | (647 | ) | $ | 11,548 | ||||||
DISCONTINUED OPERATIONS: | |||||||||||||||
Loss from operations of Voicecom | (132 | ) | (132 | ) | |||||||||||
Income tax benefit | (51 | ) | (51 | ) | |||||||||||
Loss on discontinued operations | (81 | ) | (81 | ) | |||||||||||
NET INCOME (LOSS) | $ | 11,452 | $ | 662 | $ | (647 | ) | $ | 11,467 | ||||||
BASIC EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.22 | |||||||||||
Discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||
Net income | $ | 0.22 | $ | 0.22 | |||||||||||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | 0.21 | $ | 0.21 | |||||||||||
Discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||
Net income | $ | 0.21 | $ | 0.21 | |||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||||||
Basic | 52,591 | 52,591 | |||||||||||||
Diluted | 54,954 | 54,954 | |||||||||||||
See notes to the unaudited pro forma condensed combined financial statements
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PTEK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
CONSOLIDATED FINANCIAL STATEMENTS
Note A. General
The components of the aggregate purchase price for MediaLinq are as follows (in thousands):
Cash paid at closing | $ | 14,853 | |
Cash held in escrow | 503 | ||
Transactions costs | 600 | ||
Total acquisition costs | $ | 15,956 | |
In accordance with SFAS No. 141, “Business Combinations,” the Company has allocated the acquisition costs to the assets and liabilities based upon estimates of fair value as follows (in thousands):
Current assets | $ | 4,076 | ||
Property and equipment | 2,240 | |||
Intangible assets | 11,103 | |||
Long-term assets | 102 | |||
Total assets acquired | 17,521 | |||
Current liabilities | (1,565 | ) | ||
Total liabilities assumed | (1,565 | ) | ||
Net assets acquired | $ | 15,956 | ||
The acquired intangibles have an estimated useful life of five years. The intangible assets that make up this amount are developed technology of approximately $1.8 million and customer lists of approximately $9.3 million.
The historical financial information has been derived from the respective historical financial statements of Ptek and MediaTel. The accompanying unaudited pro forma balance sheet information is presented for illustrative purposes assuming the acquisition has occurred on June 30, 2003. The accompanying unaudited pro forma statement of operations data is presented for illustrative purposes assuming the acquisition had occurred as of January 1, 2002 and is not necessarily indicative of the results of operations that would have actually occurred if the combination had been completed as of that date, or of future results of operations of the combined company.
Note B. Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet
The accompanying unaudited pro forma condensed combined consolidated balance sheet assumes the acquisitions occurred as of June 30, 2003 and reflects the following pro forma adjustments:
(1) | To record the cost of acquisition for MediaTel, including approximately $14.9 million in cash paid at closing, $0.5 million held in escrow and $0.6 million in transaction costs. |
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(2) | To record the allocation of the purchase price for the acquisition to the assets and liabilities acquired (in thousands): |
Current assets | $ | 4,076 | ||
Property and equipment | 2,240 | |||
Intangible asset | 11,103 | |||
Long-term assets | 102 | |||
Total assets acquired | 17,521 | |||
Current liabilities | (1,565 | ) | ||
Total liabilities assumed | (1,565 | ) | ||
Net assets acquired | $ | 15,956 | ||
Note C. Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
The accompanying unaudited pro forma condensed combined consolidated statements of operations have been prepared assuming the acquisition occurred as of January 1, 2002 and reflects the following pro forma adjustments:
(3) | To record the amortization of intangible assets resulting from the allocation of the cost of the acquisition. The acquired intangible assets are being amortized on a straight-line basis over a five-year period. |
(4) | To record the estimated tax effect of pro forma adjustments at PTEK’S effective tax rate of 8.7% for the year ended December 31, 2002 and 41.7% for the six months ended June 30, 2003. |
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