EXHIBIT 99.2
PC Mall, Inc. | |||||||
Unaudited Pro Forma Consolidated Balance Sheet | |||||||
As of December 31, 2004 | |||||||
(in thousands, except share data) | |||||||
|
|
|
|
|
|
|
|
| Company |
| eCOST |
| Pro Forma |
| Company |
| As Reported (A) |
| As Reported (B) |
| Adjustments |
| Pro Forma |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents | $ 15,090 |
| $ (8,790) |
| $ 173 | (F) | $ 6,473 |
Short-term investments | 7,000 |
| (7,000) |
|
|
| - |
Accounts receivable, net of allowance for doubtful accounts | 94,432 |
| (2,039) |
|
|
| 92,393 |
Inventories, net | 80,651 |
| (1,794) |
|
|
| 78,857 |
Prepaid expenses and other current assets | 6,489 |
| (263) |
|
|
| 6,226 |
Due from the Company | - |
| (813) |
| 813 | (H) | - |
Deferred income taxes | 4,087 |
| (883) |
|
|
| 3,204 |
Total current assets | 207,749 |
| (21,582) |
| 986 |
| 187,153 |
|
|
|
|
|
|
|
|
Property and equipment, net | 9,393 |
| (342) |
|
|
| 9,051 |
Goodwill | 1,405 |
| - |
|
|
| 1,405 |
Deferred income taxes | 12,162 |
| (4,467) |
|
|
| 7,695 |
Other assets | 1,210 |
| (123) |
|
|
| 1,087 |
Total assets | $ 231,919 |
| $ (26,514) |
| $ 986 |
| $ 206,391 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable | $ 69,526 |
| $ (585) |
| $ 173 | (F) | $ 69,114 |
Accrued expenses and other current liabilities | 22,632 |
| (2,635) |
|
|
| 19,997 |
Due to eCOST.com | - |
| - |
| 813 | (H) | 813 |
Deferred revenue | 12,276 |
| (2,014) |
|
|
| 10,262 |
Line of credit | 49,027 |
| - |
|
|
| 49,027 |
Notes payable - current portion | 500 |
| - |
|
|
| 500 |
Total current liabilities | 153,961 |
| (5,234) |
| 986 |
| 149,713 |
Notes payable | 2,750 |
| - |
|
|
| 2,750 |
Total liabilities | 156,711 |
| (5,234) |
| 986 |
| 152,463 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Minority interest | 4,297 |
| - |
| (4,297) | (G) | - |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Preferred stock | - |
| - |
|
|
| - |
Common stock | 12 |
| (17) |
| 17 | (I) | 12 |
Additional paid-in capital | 99,172 |
| (33,834) |
| (17) | (I) |
|
|
|
|
|
| 4,297 | (G) |
|
|
|
|
|
| 11,238 | (N) | 80,856 |
Deferred stock-based compensation | (1,333) |
| 1,333 |
|
|
| - |
Treasury stock at cost; 294,200 shares | (1,015) |
| - |
|
|
| (1,015) |
Accumulated other comprehensive income | 198 |
| - |
|
|
| 198 |
Accumulated deficit | (26,123) |
| 11,238 |
| (11,238) | (N) | (26,123) |
Total stockholders' equity | 70,911 |
| (21,280) |
| 4,297 |
| 53,928 |
Total liabilities and stockholders’ equity | $ 231,919 |
| $ (26,514) |
| $ 986 |
| $ 206,391 |
See notes to unaudited pro forma consolidated financial statements.
PC Mall, Inc. | |||||||
Unaudited Pro Forma Consolidated Statement of Operations | |||||||
For the Year Ended December 31, 2004 | |||||||
(in thousands, except per share data) | |||||||
|
|
|
|
|
|
|
|
| Company as Reported (A) |
| eCOST.com as Reported (B) |
| Pro Forma Adjustments |
| Company Pro Forma |
|
|
|
|
|
|
|
|
Net sales | $ 1,157,253 |
| $ (178,464) |
| $ - |
| $ 978,789 |
Cost of goods sold | 1,011,787 |
| (162,139) |
| 2,394 | (C) | 852,042 |
Gross profit | 145,466 |
| (16,325) |
| (2,394) |
| 126,747 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
Selling, general and administrative expense | 114,941 |
| (18,384) |
| 6,293 | (D) |
|
|
|
|
|
| (2,394) | (C) |
|
|
|
|
|
| 1,506 | (E) |
|
|
|
|
|
| 274 | (J) | 102,236 |
|
|
|
|
|
|
|
|
Non-cash stock-based compensation expense | 1,921 |
|
|
| (1,506) | (E) | 415 |
Total selling, general and administrative expenses | 116,862 |
| (18,384) |
| 4,173 |
| 102,651 |
|
|
|
|
|
|
|
|
Advertising expenses | 25,279 |
| - |
| (6,293) | (D) | 18,986 |
Income from operations | 3,325 |
| 2,059 |
| (274) |
| 5,110 |
|
|
|
|
|
|
|
|
Interest expense (income), net | 1,977 |
| 67 |
| - |
| 2,044 |
Interest expense—PC Mall commercial line of credit | - |
| (1,329) |
| 1,329 | (F) | - |
Interest income—PC Mall commercial line of credit | - |
| 1,329 |
| (1,329) | (F) | - |
Income before income taxes | 1,348 |
| 1,992 |
| (274) |
| 3,066 |
Income tax provision (benefit) | 567 |
| 784 |
| - |
| 1,351 |
Minority interest | 232 |
| - |
| (232) | (G) | - |
Income (loss) from continuing operations | $ 1,013 |
| $ 1,208 |
| $ (506) |
| $ 1,715 |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations |
|
|
|
|
|
|
|
Basic | $ 0.09 |
|
|
|
|
| $ 0.15 |
Diluted | $ 0.08 |
|
|
|
|
| $ 0.14 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
Basic | 11,119 |
|
|
|
|
| 11,119 |
Diluted | 12,145 |
|
|
|
|
| 12,145 |
See notes to unaudited pro forma consolidated financial statements.
PC Mall, Inc. | |||||||
Unaudited Pro Forma Consolidated Statement of Operations | |||||||
For the Year Ended December 31, 2003 | |||||||
(in thousands, except per share data) | |||||||
|
|
|
|
|
|
|
|
| Company as Reported (A) |
| eCOST.com as Reported (B) |
| Pro Forma Adjustments |
| Company Pro Forma |
Net sales | $ 975,586 |
| $ (109,709) |
| $ - |
| $ 865,877 |
Cost of goods sold | 848,791 |
| (99,409) |
| 1,743 | (C) | 751,125 |
Gross profit | 126,795 |
| (10,300) |
| (1,743) |
| 114,752 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
Selling, general and administrative expense | 97,173 |
| (9,885) |
| 3,182 | (D) |
|
|
|
|
|
| (1,743) | (C) |
|
|
|
|
|
| 64 | (J) | 88,791 |
|
|
|
|
|
|
|
|
Non-cash stock-based compensation expense | 294 |
| - |
| - |
| 294 |
Total selling, general and administrative expenses | 97,467 |
| (9,885) |
| 1,503 |
| 89,085 |
|
|
|
|
|
|
|
|
Advertising expenses | 23,305 |
| - |
| (3,182) | (D) | 20,123 |
Income from operations | 6,023 |
| (415) |
| (64) |
| 5,544 |
|
|
|
|
|
|
|
|
Interest expense (income), net | 1,325 |
| (76) |
| 76 | (L) | 1,325 |
Interest expense—PC Mall commercial line of credit | - |
| (1,476) |
| 1,476 | (F) | - |
Interest income—PC Mall commercial line of credit | - |
| 1,476 |
| (1,476) | (F) | - |
Income before income taxes | 4,698 |
| (339) |
| (140) |
| 4,219 |
Income tax provision (benefit) | 1,655 |
| 5,872 |
| (6,041) | (K) | 1,486 |
Income (loss) from continuing operations | $ 3,043 |
| $ (6,211) |
| $ 5,901 |
| $ 2,733 |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations |
|
|
|
|
|
|
|
Basic | $0.29 |
|
|
|
|
| $0.26 |
Diluted | $0.26 |
|
|
|
|
| $0.23 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
Basic | 10,651 |
|
|
|
|
| 10,651 |
Diluted | 11,636 |
|
|
|
|
| 11,636 |
See notes to unaudited pro forma consolidated financial statements.
PC Mall, Inc. | |||||||
Unaudited Pro Forma Consolidated Statement of Operations | |||||||
For the Year Ended December 31, 2002 | |||||||
(in thousands, except per share data) | |||||||
|
|
|
|
|
|
|
|
| Company as Reported (A) |
| eCOST.com as Reported (B) |
| Pro Forma Adjustments |
| Company Pro Forma |
Net sales | $ 862,830 |
| $ (89,009) |
| $ - |
| $ 773,821 |
Cost of goods sold | 769,740 |
| (79,429) |
| 1,020 | (C) |
|
|
|
|
|
| (2,821) | (M) | 688,510 |
Gross profit | 93,090 |
| (9,580) |
| 1,801 |
| 85,311 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses | 85,693 |
| (8,945) |
| 86 | (D) |
|
|
|
|
|
| (1,020) | (C) |
|
|
|
|
|
| 2,821 | (M) | 78,635 |
|
|
|
|
|
|
|
|
Advertising, net | 3,059 |
| - |
| (86) | (D) | 2,973 |
Income from operations | 4,338 |
| (635) |
| - |
| 3,703 |
|
|
|
|
|
|
|
|
Interest expense (income), net | 983 |
| (461) |
| 461 | (L) | 983 |
Interest expense—PC Mall commercial line of credit | - |
| (1,097) |
| 1,097 | (F) | - |
Interest income—PC Mall commercial line of credit | - |
| 1,097 |
| (1,097) | (F) | - |
Income before income taxes | 3,355 |
| (174) |
| (461) |
| 2,720 |
Income tax provision (benefit) | (3,594) |
| (27) |
| 27 | (K) | (3,594) |
Income (loss) from continuing operations | $ 6,949 |
| $ (147) |
| $ (488) |
| $ 6,314 |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations |
|
|
|
|
|
|
|
Basic | $0.65 |
|
|
|
|
| $0.59 |
Diluted | $0.62 |
|
|
|
|
| $0.57 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
Basic | 10,654 |
|
|
|
|
| 10,654 |
Diluted | 11,127 |
|
|
|
|
| 11,127 |
See notes to unaudited pro forma consolidated financial statements.
PC Mall, Inc. | |
Notes to Unaudited Pro Forma Consolidated Financial Statements | |
|
|
|
|
(A) | This column represents the historical consolidated results of operations and financial position of PC Mall. |
(B) | This column reflects the removal of the historical results of operations and financial position of eCOST. |
(C) | The adjustment relates to the classification of product fulfillment expenses provided to eCOST by PC Mall classified as cost of sales by eCOST, but incurred as SG&A by PC Mall. |
(D) | The adjustment relates to the classification of advertising costs reported in the eCOST stand-alone operating results to conform with the PC Mall presentation. |
(E) | The adjustment relates to the classification of non-cash stock-based compensation costs reported in the eCOST stand-alone operating results to comform with the PC Mall presentation. |
(F) | The adjustment eliminates the effect of adjustments recorded by eCOST.com to present its financial statements on a stand-alone basis. |
(G) | The adjustment reflects elimination of 19.8% minority interest in eCOST.com. |
(H) | The adjustment reflects reclassification of intercompany receivable and payable. |
(I) | The adjustment reflects $17 reclassification of eCOST.com's common stock to additional paid-in capital. |
(J) | The adjustment reflects the add-back of expenses relating to certain shared services (such as accounting, purchasing, cash management and credit card processing) that are included in both the PC Mall pro forma results and eCOST stand-alone results. |
(K) | The adjustment relates to tax adjustments necessary to properly state the effective income tax rate ona pro forma basis. |
(L) | The adjustment reflects the elimination of intercompany interest recorded in PC Mall's and eCOST's results of operations. |
(M) | The adjustment relates to the classification of vendor consideration reported in the eCOST stand-alone operating results to conform with the PC Mall presentation. |
(N) | This adjustment is to reclassify the special dividend to additional paid-in-capital since PC Mall has an accumulated deficit. |