Exhibit 99.2
MACROMEDIA, INC.
Consolidated Statements of Income
Reconciliation of Reported to Restated Consolidated Statements of Operations
(In thousands, except percentages and per share data)
(unaudited)
Year Ended March 31, 2004 | Year Ended March 31, 2003 | Year Ended March 31, 2002 | ||||||||||||||||||||||||||||||||||
Reported | Adjustment | As Restated | Reported | Adjustment | As Restated | Reported | Adjustment | As Restated | ||||||||||||||||||||||||||||
Net revenues | $ | 369,786 | $ | — | $ | 369,786 | $ | 336,913 | $ | — | $ | 336,913 | $ | 326,498 | $ | — | $ | 326,498 | ||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||||||
Cost of net revenues | 30,638 | 20 | 30,658 | 36,065 | 19 | 36,084 | 44,050 | 5 | 44,055 | |||||||||||||||||||||||||||
Amortization and impairment of acquired developed technology | 1,954 | — | 1,954 | 21,770 | — | 21,770 | 11,332 | — | 11,332 | |||||||||||||||||||||||||||
Total cost of revenues | 32,592 | 20 | 32,612 | 57,835 | 19 | 57,854 | 55,382 | 5 | 55,387 | |||||||||||||||||||||||||||
Gross profit | 337,194 | (20 | ) | 337,174 | 279,078 | (19 | ) | 279,059 | 271,116 | (5 | ) | 271,111 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||
Sales and marketing | 155,963 | 383 | 156,346 | 145,297 | 361 | 145,658 | 170,851 | 113 | 170,964 | |||||||||||||||||||||||||||
Research and development | 91,220 | 473 | 91,693 | 92,385 | 446 | 92,831 | 110,118 | 140 | 110,258 | |||||||||||||||||||||||||||
General and administrative | 37,381 | 131 | 37,512 | 36,168 | 124 | 36,292 | 43,693 | 39 | 43,732 | |||||||||||||||||||||||||||
Amortization and impairment of intangible assets | 1,135 | — | 1,135 | 3,207 | — | 3,207 | 103,200 | — | 103,200 | |||||||||||||||||||||||||||
Write-off of acquired in-process technology | 2,010 | — | 2,010 | 357 | — | 357 | — | — | — | |||||||||||||||||||||||||||
Restructuring expenses | — | — | — | — | — | — | 81,820 | — | 81,820 | |||||||||||||||||||||||||||
Total operating expenses | 287,709 | 987 | 288,696 | 277,414 | 931 | 278,345 | 509,682 | 292 | 509,974 | |||||||||||||||||||||||||||
Operating income | 49,485 | (1,007 | ) | 48,478 | 1,664 | (950 | ) | 714 | (238,566 | ) | (297 | ) | (238,863 | ) | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest income, net | 3,698 | — | 3,698 | 4,117 | — | 4,117 | 6,522 | — | 6,522 | |||||||||||||||||||||||||||
Gain (loss) on investments and other, net | 927 | — | 927 | 852 | — | 852 | (6,980 | ) | — | (6,980 | ) | |||||||||||||||||||||||||
Loss on equity affiliate | — | — | — | — | — | — | (36,016 | ) | — | (36,016 | ) | |||||||||||||||||||||||||
Litigation settlements, net | — | — | — | (1,178 | ) | — | (1,178 | ) | (31,402 | ) | — | (31,402 | ) | |||||||||||||||||||||||
Other, net | (1,000 | ) | — | (1,000 | ) | (435 | ) | — | (435 | ) | (122 | ) | — | (122 | ) | |||||||||||||||||||||
Total other income (expense) | 3,625 | — | 3,625 | 3,356 | — | 3,356 | (67,998 | ) | — | (67,998 | ) | |||||||||||||||||||||||||
Income (loss) before income taxes | 53,110 | (1,007 | ) | 52,103 | 5,020 | (950 | ) | 4,070 | (306,564 | ) | (297 | ) | (306,861 | ) | ||||||||||||||||||||||
Provision for income taxes | 11,626 | 3,057 | 14,683 | 3,448 | (317 | ) | 3,131 | 2,266 | (399 | ) | 1,867 | |||||||||||||||||||||||||
Net income (loss) | $ | 41,484 | $ | (4,064 | ) | $ | 37,420 | $ | 1,572 | $ | (633 | ) | $ | 939 | $ | (308,830 | ) | $ | (102 | ) | $ | (308,728 | ) | |||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||||||||||||||
Basic | $ | 0.64 | $ | 0.58 | $ | 0.03 | $ | 0.02 | $ | (5.31 | ) | $ | (5.31 | ) | ||||||||||||||||||||||
Diluted | $ | 0.60 | $ | 0.54 | $ | 0.03 | $ | 0.02 | $ | (5.31 | ) | $ | (5.31 | ) | ||||||||||||||||||||||
Weighted average common shares outstanding used in net income per common share calculation: | ||||||||||||||||||||||||||||||||||||
Basic | 64,380 | 64,380 | 60,170 | 60,170 | 58,190 | 58,190 | ||||||||||||||||||||||||||||||
Diluted | 69,430 | 69,430 | 61,190 | 61,190 | 58,190 | 58,190 |
MACROMEDIA, INC.
Consolidated Balance Sheets
Reconciliation of Reported to Restated Consolidated Balance Sheets
(In thousands)
(unaudited)
March 31, 2004 | March 31, 2003 | |||||||||||||||||||||||
Reported | Adjustment | As Restated | Reported | Adjustment | As Restated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 92,662 | $ | — | $ | 92,662 | $ | 96,831 | $ | — | $ | 96,831 | ||||||||||||
Short-term investments | 190,029 | — | 190,029 | 118,755 | — | 118,755 | ||||||||||||||||||
Accounts receivable, net | 38,210 | — | 38,210 | 27,610 | — | 27,610 | ||||||||||||||||||
Restricted cash | 16,363 | — | 16,363 | — | — | — | ||||||||||||||||||
Prepaid expenses and other current assets | 15,581 | (2,218 | )(A) | 13,363 | 13,962 | (2,134 | )(A) | 11,828 | ||||||||||||||||
Total current assets | 352,845 | (2,218 | ) | 350,627 | 257,158 | — | 255,029 | |||||||||||||||||
Property and equipment, net | 45,512 | — | 45,512 | 34,856 | — | 34,856 | ||||||||||||||||||
Goodwill, net | 237,839 | 84 | (B) | 237,923 | 201,392 | 416 | (C) | 201,808 | ||||||||||||||||
Purchased and other intangible assets, net | 12,950 | 4,100 | (A) | 17,050 | 4,526 | 4,042 | (A) | 8,568 | ||||||||||||||||
Restricted cash, less current portion | 7,022 | — | 7,022 | 11,412 | — | 11,412 | ||||||||||||||||||
Deferred income taxes, non-current | 16,062 | — | 16,062 | 9,898 | — | 9,898 | ||||||||||||||||||
Other assets | 9,658 | (1,882 | )(A) | 7,776 | 8,181 | (1,908 | )(A) | 6,273 | ||||||||||||||||
Total assets | $ | 681,888 | $ | 84 | $ | 681,972 | $ | 527,423 | $ | 416 | $ | 527,839 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 5,311 | $ | — | $ | 5,311 | $ | 6,714 | $ | — | $ | 6,714 | ||||||||||||
Accrued payroll and related liabilities | 17,634 | 6,126 | (C) | 23,760 | 13,540 | 5,119 | (C) | 18,659 | ||||||||||||||||
Accrued liabilities | 41,151 | — | 41,151 | 26,350 | — | 26,350 | ||||||||||||||||||
Income taxes payable | 11,838 | 2,009 | (B) | 13,847 | 10,294 | (716 | )(B) | 9,578 | ||||||||||||||||
Accrued restructuring | 6,934 | — | 6,934 | 11,024 | — | 11,024 | ||||||||||||||||||
Deferred revenues | 32,215 | — | 32,215 | 29,618 | — | 29,618 | ||||||||||||||||||
Total current liabilities | 115,083 | 8,135 | 123,218 | 97,540 | 4,403 | 101,943 | ||||||||||||||||||
Other liabilities, non-current: | ||||||||||||||||||||||||
Accrued restructuring | 11,657 | — | 11,657 | 20,064 | — | 20,064 | ||||||||||||||||||
Deferred revenues | 5,173 | — | 5,173 | 4,298 | — | 4,298 | ||||||||||||||||||
Other liabilities | 5,024 | — | 5,024 | 5,991 | — | 5,991 | ||||||||||||||||||
Total liabilities | 136,937 | 8,135 | 145,072 | 127,893 | 4,403 | 132,296 | ||||||||||||||||||
Commitment and contingencies | ||||||||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||||||
Preferred stock, par value $0.001 per preferred share: 5,000 shares authorized, no shares issued as of March 31, 2004 and 2003 | — | — | — | — | — | — | ||||||||||||||||||
Common stock, par value $0.001 per common share: 200,000 shares authorized, 70,069 and 62,965 shares issued as of March 31, 2004 and 2003, respectively | 70 | — | 70 | 63 | — | 63 | ||||||||||||||||||
Treasury stock, at cost; 1,818 shares as of March 31, 2004 and 2003 | (33,649 | ) | — | (33,649 | ) | (33,649 | ) | — | (33,649 | ) | ||||||||||||||
Additional paid-in capital | 855,073 | — | 855,073 | 751,134 | — | 751,134 | ||||||||||||||||||
Accumulated other comprehensive income | 408 | — | 408 | 417 | — | 417 | ||||||||||||||||||
Accumulated deficit | (276,951 | ) | (8,051 | ) | (285,002 | ) | (318,435 | ) | (3,987 | ) | (322,422 | ) | ||||||||||||
Total stockholders’ equity | 544,951 | (8,051 | ) | 536,900 | 399,530 | (3,987 | ) | 395,543 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 681,888 | $ | 84 | $ | 681,972 | $ | 527,423 | $ | 416 | $ | 527,839 | ||||||||||||
(A) | Reclassifications to conform to the current presentation. |
(B) | Effect of non-cash restatement to properly record a liability related to income taxes. |
(C) | Effect of non-cash restatement to properly record a liability related to an employee sabbatical leave program and related goodwill adjustment for prior service credit granted to employees assumed in a FY 2001 acquisition. |