Intricon (IIN) 8-K/A Entry into a Material Definitive Agreement

Exhibit 99.1

Unaudited Pro Forma Financial Information

As used in these unaudited pro forma consolidated condensed financial statements, references to “we”, “us”, “our” or “IntriCon” refer to IntriCon Corporation, together with its consolidated subsidiaries.

On January 27, 2014, IntriCon completed the sale of the security business and certain microphone and receiver businesses of IntriCon Tibbetts Corporation, IntriCon’s wholly owned subsidiary based in Camden, Maine, to Sierra Peaks Corporation, pursuant to an Asset Purchase Agreement entered into on January 27, 2014 among Sierra Peaks Corporation, as the buyer, IntriCon Tibbetts Corporation, as the seller.

Pursuant to the Asset Purchase Agreement, Sierra Peaks Corporation paid $500,000 cash at closing for the assets and assumed certain operating liabilities of the businesses, subject to a working capital adjustment. In addition, the Asset Purchase Agreement provides for earn-out payments of up to a maximum total of $375,000 if certain revenue targets are met.

The unaudited pro forma consolidated condensed balance sheet as of September 30, 2013 included in this report has been prepared by management as if the sale occurred on such date. The unaudited pro forma consolidated condensed statement of operations for the year ended December 31, 2012 included in this report has been prepared as if the sale had occurred as of January 1, 2012.

The preparation of the unaudited pro forma consolidated condensed financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. The pro forma adjustments reflected in the accompanying unaudited pro forma consolidated condensed financial statements reflect estimates and assumptions that IntriCon’s management believes to be reasonable. Actual results may differ from those estimates.

The unaudited pro forma consolidated condensed financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations for future periods or that would have occurred if the sale had occurred as of the beginning of the period presented.

The unaudited pro forma consolidated condensed financial statements, including the related notes, are qualified in their entirety by reference to, and should be read in conjunction with:

· Our historical financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012, and

· Our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2013.

INTRICON CORPORATION
Pro Forma Consolidated Condensed Balance Sheet
(Unaudited)
As of September 30, 2013	As Reported			Pro Forma Adjustments			Pro Forma
ASSETS
Current assets:
Cash	$	196		$	500	(1)	$	696
Restricted cash		564			—			564
Accounts receivable, less allowance for doubtful accounts of $108		5,728			—			5,728
Inventories		9,458			—			9,458
Other current assets		1,565			—			1,565
Current assets of discontinued operations		947			(947	)  (2)		—
Total current assets		18,458			(447	)		18,011
Machinery and equipment		33,627			—			33,627
Less: Accumulated depreciation		28,840			—			28,840
Net machinery and equipment		4,787			—			4,787
Goodwill		9,194			—			9,194
Investment in partnerships		617			—			617
Other assets, net		880						880
Other assets of discontinued operations		312			(312	) (2)		—
Total assets	$	34,248		$	(759	)	$	33,489
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Checks written in excess of cash	$	—		$	—		$	—
Current maturities of long-term debt		8,815			—			8,815
Accounts payable		4,928			—			4,928
Accrued salaries, wages and commissions		1,929			—			1,929
Deferred gain		110			—			110
Other accrued liabilities		2,171			55	(3)		2,226
Liabilities of discontinued operations		285			(285	)  (2)		—
Total current liabilities		18,238			(230	)		18,008
Long-term debt, less current maturities		40			—			40
Other postretirement benefit obligations		570			—			570
Accrued pension liabilities		510			—			510
Deferred gain		193			—			193
Other long-term liabilities		160			—			160
Total liabilities		19,711			(230	)		19,481
Commitments and contingencies
Shareholders’ equity:
Common shares, $1.00 par value per share; 20,000 shares authorized; 5,707 shares issued and outstanding;		5,707			—			5,707
Additional paid-in capital		16,257			—			16,257
Retained deficit		(7,099	)		(504	)  (4)		(7,603	)
Accumulated other comprehensive loss		(328	)		—			(328	)
Total shareholders’ equity		14,537			(504	)		14,033
Total liabilities and shareholders’ equity	$	34,248		$	(734	)	$	33,514

INTRICON CORPORATION
Notes to Pro Forma Financial Information
(Unaudited)
	(1)	Pro forma adjustment reflects total cash proceeds of $500,000 based on a closing date of September 30, 2013.
	(2)	Pro forma adjustments reflect the removal of the assets and liabilities of the securities, certain microphone and receiver business.
	(3)	Pro forma adjustment reflects the estimated one-time employee termination benefits retained by parent Company.
	(4)	Pro forma adjustment reflects the asset impairment and loss on the sale of the securities, certain microphone and receivers businesses.

INTRICON CORPORATION
Pro Forma Consolidated Condensed Statement of Operations
(Unaudited)
As of December 31, 2012	As Reported			Pro Forma Adjustments			Pro Forma
Sales, net	$	63,933		$	(3,978	) (1)	$	59,955
Cost of sales		48,957			(4,301	) (1)		44,656
Gross profit		14,976			323			15,299
Operating expenses:
Sales and marketing		3,324			—			3,324
General and administrative		5,958			(532	) (1)		5,426
Research and development		4,694			(213	) (1)		4,481
Total operating expenses		13,976			(745	)		13,231
Operating income		1,000			1,068			2,068
Interest expense		(755	)		—			(755	)
Equity in loss of partnerships		(116	)		—			(116	)
Gain on sale of investment in partnership		822			—			822
Other expense		(78	)		(18	) (1)		(96	)
Income before income taxes		873			1,050			1,923
Income tax expense		(164	)		—			(164	)
Net income		709			1,050			1,759
Basic income (loss) per share	$	0.13					$	0.31
Diluted income (loss) per share	$	0.12					$	0.30
Average shares outstanding:
Basic		5,669						5,669
Diluted		5,888						5,888

INTRICON CORPORATION
Notes to Pro Forma Financial Information
(Unaudited)
	(1)	Pro forma adjustments reflect the removal of the revenue and expenses of the securities, certain microphone and receiver business.