EXHIBIT 99.5
OVERLAND DATA, INC.
PRO FORMA FINANCIAL INFORMATION
EXHIBIT 99.5
PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the fiscal year ended June 30, 1999 and the six months ended
December 31, 1999 present the results for Overland Data as if the Acquisition
occurred on July 1, 1998. The Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of December 31, 1999 gives effect to the Acquisition as if it had
occurred on December 31, 1999.
TTI's fiscal year end is January 31, while the Company's year end is June 30. In
the Pro Forma Condensed Consolidated Statement of Operations for the fiscal year
ended June 30, 1999, the results of Tecmar for the twelve months ended April 30,
1999 have been utilized in order to bring Tecmar's results to a period within 93
days of the Company's fiscal year end. In the Pro Forma Condensed Consolidated
Statement of Operations for the six months ended December 31, 1999, the results
of Tecmar for the six months ended October 31, 1999 were utilized. In the
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31,
1999, the balances of Tecmar as of October 31, 1999 were utilized.
The Acquisition included the purchase of assets and operations related to
Tecmar Technologies, Inc., a wholly-owned subsidiary of Tecmar Technologies
International, Inc. The consolidated financial statements of the parent
included other businesses unrelated to those acquired by Overland. As a
result, the Pro Forma Financial Information presented here was developed by
combining the reported results of Overland with those of the Tecmar parent
and removing the results of the unrelated businesses. Appropriate adjustments
are also made to account for matters including the amortization of negative
goodwill associated with the purchase, interest on the cash portion of the
purchase price and effective tax rate adjustments.
The Company will account for the Acquisition under the purchase method of
accounting. The total consideration paid will be allocated to the assets
acquired and liabilities assumed based on their estimated fair values. At this
time, the estimated fair value of the assets acquired exceed the total
consideration paid and such excess has been allocated to first reduce the value
of non-current assets to zero and then to negative goodwill. These allocations
are preliminary as the Company is still in the process of evaluating the fair
value of the assets acquired. The Pro Forma Information does not give effect to
any synergies that may be realized as a result of the Acquisition. Additionally,
it does not reflect any nonrecurring costs that may be incurred to exit certain
Tecmar activities which cannot be reasonably estimated at this time.
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The Company's preliminary estimate of values and of the allocation of purchase
price are as follows ($000):
PURCHASE PRICE:
Cash consideration $ 3,239
Acquisition expenses 171
----------
Total 3,410 (a)
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PRELIMINARY ALLOCATION OF PURCHASE PRICE:
Fair value of identifiable tangible assets acquired 4,895
Less fair value of liabilities assumed (402)
----------
Total 4,493 (b)
----------
EXCESS OF FAIR VALUE OF ASSETS ACQUIRED AND
LIABILITIES ASSUMED OVER PURCHASE PRICE (a) - (b) (1,083)
Allocation of excess to reduce non-current
assets to zero value 628
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NEGATIVE GOODWILL RESIDUAL $ (455)
==========
This Pro Forma Financial Information is presented for illustrative purposes
only. It is not necessarily indicative of the results of the combined operations
or financial position which actually would have been reported had the
Acquisition occurred as of July 1, 1998 or as of December 31, 1999, nor is it
necessarily indicative of Overland's future financial results of operations.
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OVERLAND DATA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Tecmar Remove
Overland 12 mo Unrelated
FYE 6/99 4/99 Operations Adjustments Pro Forma
--------------------------------------------------------- --------------
Sales, net........................... $ 92,227 $ 29,468 $ (7,010) $ 114,685
Cost of goods sold................... 64,336 25,138 (5,581) 83,893
--------------------------------------------------------- --------------
Gross profit......................... 27,891 4,330 (1,429) 30,792
--------------------------------------------------------- --------------
Expenses:
Sales and marketing............. 11,825 6,894 (1,509) 17,210
Research and development........ 5,373 2,696 (249) 7,820
General and administrative...... 5,079 3,655 (1,119) $ (64) (a) 7,551
Restructuring costs............. - 12,533 (12,430) 103
--------------------------------------------------------- --------------
Total expenses............. 22,277 25,778 (15,307) (64) 32,684
--------------------------------------------------------- --------------
Operating income (loss).............. 5,614 (21,448) 13,878 64 (1,892)
Interest, net........................ 810 151 (348) (96) (b) 517
Other income (expense), net.......... 157 (47) 107 217
--------------------------------------------------------- --------------
Pretax income (loss)................. 6,581 (21,344) 13,637 (33) (1,159)
Income taxes......................... 2,599 - - (3,057) (c) (458)
--------------------------------------------------------- --------------
Net income (loss).................... $ 3,982 $ (21,344) $ 13,637 $ 3,024 $ (701)
========================================================= ==============
Net income (loss) per share:
Basic $ 0.39 $ (0.07)
============= ==============
Diluted $ 0.37 $ (0.07)
============= ==============
Shares used in computing EPS
Basic 10,222 10,222
Diluted 10,652 10,652
FOOTNOTES
(a) The decrease in G&A expense accounts for the amortization of the
negative goodwill associated with the Tecmar purchase by Overland over the
currently estimated period of benefit - 36 months.
(b) The decrease in interest income represents a removal of the interest
that would have been earned on the cash portion of the purchase price of
the Tecmar assets.
(c) The adjustment to income taxes represents the adjustment required to
cause the consolidated effective tax rate to be equal to the rate recorded
by Overland. The Pro Forma consolidated loss would be carried back to a
prior tax year to claim a tax refund.
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OVERLAND DATA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Overland Tecmar
6 Months 6 Months Remove
Ended Ended Unrelated
12/31/99 10/31/99 Operations Adjustments Pro Forma
--------------------------------------------------------- --------------
Sales, net........................... $50,314 $11,565 $ - $ - $ 61,879
Cost of goods sold................... 37,096 9,679 - - 46,775
--------------------------------------------------------- --------------
Gross profit......................... 13,218 1,886 0 0 15,104
--------------------------------------------------------- --------------
Expenses:
Sales and marketing............. 6,376 3,150 - 9,526
Research and development........ 3,245 930 - 4,175
General and administrative...... 2,964 1,955 (552) (32) (a) 4,335
Restructuring costs............. - 419 156 575
--------------------------------------------------------- --------------
Total expenses............. 12,585 6,454 (396) (32) 18,611
--------------------------------------------------------- --------------
Operating income (loss).............. 633 (4,568) 396 32 (3,507)
Interest income (expense), net....... 374 (240) (295) (48) (b) (209)
Other, net........................... 64 12 (12) 64
--------------------------------------------------------- --------------
Pretax income (loss)................. 1,071 (4,796) 89 (16) (3,652)
Income taxes......................... 423 - - (1,866) (c) (1,443)
--------------------------------------------------------- --------------
Net income (loss).................... $ 648 $(4,796) $ 89 $ 1,849 $ (2,210)
========================================================= ==============
Net income (loss) per share:
Basic $ 0.06 $ (0.22)
============= ==============
Diluted $ 0.06 $ (0.21)
============= ==============
Shares used in computing EPS
Basic 10,069 10,069
Diluted 10,410 10,410
FOOTNOTES
(a) The decrease in G&A expense accounts for the amortization of the
negative goodwill associated with the Tecmar purchase by Overland over the
currently estimated period of benefit - 36 months.
(b) The decrease in interest income represents a removal of the interest
that would have been earned on the cash portion of the purchase price of
the Tecmar assets.
(c) The adjustment to income taxes represents the adjustment required to
cause the consolidated effective tax rate to be equal to the rate recorded
by Overland. The Pro Forma consolidated loss would be carried back to a
prior tax year to claim a tax refund.
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OVERLAND DATA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(IN THOUSANDS)
OVERLAND TECMAR
DEC. 31, OCT. 31, PRO FORMA COMBINED
1999 1999 ADJUSTMENTS PRO FORMA
-------------- ------------- ----------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 17,992 $ 1,314 $ (5,233) (b) $ 14,073
Accounts receivable, net 16,528 3,166 (3,166) (a) 16,528
Inventories 14,411 6,380 (1,479) (c) 19,312
Other current assets 3,186 400 (361) (d) 3,225
-------------- ------------- ----------------- ---------------
Total current assets 52,117 11,260 (10,239) 53,138
Property and equipment, net 4,172 3,122 (3,122) (e) 4,172
Goodwill, net 3,319 (3,319) (a) -
Other assets 355 402 (402) (a) 355
-------------- ------------- ----------------- ---------------
Total Assets $ 56,644 $ 18,103 $ (17,082) $ 57,665
============== ============= ================= ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt $ 3,045 $ (3,045) (a)
Accounts payable $ 5,845 5,733 (5,733) (a) $ 5,845
Accrued liabilities 4,215 1,670 (1,268) (f) 4,617
-------------- ------------- ----------------- ---------------
Total current liabilities 10,060 10,448 (10,046) 10,462
Other long-term liabilities 1,314 574 45 (g) 1,933
-------------- ------------- ----------------- ---------------
Total liabilities 11,374 11,022 (10,001) 12,395
-------------- ------------- ----------------- ---------------
Shareholders' equity:
Common stock 30,808 3,276 (3,276) (a) 30,808
Additional paid-in capital 39,585 (39,585) (a) -
Retained earnings (accumulated deficit) 14,462 (35,780) 35,780 (a) 14,462
-------------- ------------- ----------------- ---------------
Total Equity 45,270 7,081 (7,081) 45,270
-------------- ------------- ----------------- ---------------
Total Liabilities and Equity $ 56,644 $ 18,103 $ (17,082) $ 57,665
============== ============= ================= ===============
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FOOTNOTES
(a) These adjustments remove the assets of Tecmar that were not purchased by
Overland and the liabilities of Tecmar that were not assumed by Overland.
(b) The adjustment to cash removes the cash of Tecmar that was not purchased by
Overland and accounts for the cash paid by Overland to purchase the Tecmar
assets.
(c) The adjustment to inventory reduces the Tecmar inventories to estimated fair
market value.
(d) The adjustment to other current assets removes the assets not purchased by
Overland and accounts for the prepaid property taxes paid by Overland at the
time of purchase.
(e) In accordance with generally accepted accounting principles, since the fair
market value of the net assets acquired by Overland exceeded the total
consideration paid.
(f) The adjustment to accrued liabilities removes the Tecmar accruals that were
not assumed by Overland and accounts for the assumption of warranty liabilities
and an employee vacation accrual.
(g) The adjustment to other long-term liabilities removes the Tecmar liabilities
that were not assumed by Overland and adds the negative goodwill which resulted
from the purchase accounting and which will be amortized over the estimated
period of benefit (36 months).
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