PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The Pro Forma Consolidated Balance Sheet as of August 31, 1998 and the
Pro Forma Consolidated Statement of Operations for the year ended November 30,
1997 and for the nine-month period ended August 31, 1998 are based on the
historical consolidated financial statements of Carey International, Inc. and
subsidiaries (the "Company") and historical combined financial statements of
American Limousine Partners, Inc. The Pro Forma Consolidated Balance Sheet has
been prepared assuming the acquisition of American Limousine Partners, Inc.
occurred on August 31, 1998.
The Pro Forma Consolidated Statement of Operations for the year ended
November 30, 1997 and for the nine-month period ended August 31, 1998 have been
prepared assuming the acquisition of American Limousine Partners, Inc. occurred
on December 1, 1996. For purposes of the Pro Forma Consolidated Statements of
Operations for the year ended November 30, 1997 and the nine-month period ended
August 31, 1998, American Limousine Partners, Inc.'s Combined Statement of
Operations for the year ended December 31, 1997 has been consolidated with the
Consolidated Statement of Operations of the Company for the year ended
November 30, 1997 and American Limousine Partners, Inc.'s Combined Statement of
Operations for the eight-month period ended August 31, 1998 has been combined
with American Limousine Partners, Inc.'s Statement of Operations for the month
ended December 31, 1997 and the Consolidated Statement of Operations of the
Company for the nine-month period ended August 31, 1998. The Pro Forma
Consolidated Statement of Operations also reflects the issuance of an aggregate
of 940,623 shares of Common Stock (net of underwriting discounts) to repay
certain debt incurred in connection with the acquisition of American Limousine
Partners, Inc. These 940,623 shares, based on the Company's secondary public
offering in June of 1998, are assumed to have been issued and the debt repaid at
the beginning of the period presented, and thus interest expense attributable to
such debts have been excluded.
The Pro Forma Consolidated Financial Statements do not purport to
represent what the Company's actual results of operations or financial position
would have been had the acquisitions occurred as of such dates, or to project
the Company's results of operations or financial position for any period or
date, nor does it give effect to any matters other than those described in the
notes thereto. In addition, the allocation of purchase price to the assets and
liabilities of American Limousine Partners, Inc. is preliminary and the final
allocation may differ from the amounts reflected herein. The Pro Forma
Consolidated Financial Statements should be read in conjunction with the other
financial statements and notes thereto previously filed by the Company.
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
August 31, 1998
----------------------------------------------------------------
American
Limousine Acquisition
Company Partners, Inc. Adjustment Pro Forma
------------- ------------- -------------- -------------
Assets
Cash and cash equivalents $ 31,497,934 $ 165,175 $ (165,175)(1) $ 31,497,934
Accounts receivable, net 16,142,947 1,313,540 (214,037)(1) 17,242,450
Notes receivable from contracts, current portion 913,651 913,651
Prepaid expenses and other current assets 1,709,604 472,697 (411,852)(1) 1,770,449
------------- ------------- -------------- -------------
Total current assets 50,264,136 1,951,412 (791,064) 51,424,484
Fixed assets, net 9,095,343 2,555,605 (226,705)(1) 11,424,243
Notes receivable from contracts, excluding current portion 9,349,879 9,349,879
Franchise rights, net 10,656,665 10,656,665
Trade name, trademark and contract rights, net 6,353,220 6,353,220
Goodwill and other intangible assets, net 35,001,603 439,471 (439,471)(1) 53,563,325
18,561,722 (2)
Deferred tax assets 480,379 480,379
Deposits and other current assets 1,465,049 8,841 1,473,890
------------- ------------- -------------- -------------
Total assets $ 122,666,274 $ 4,955,329 $ 17,104,482 $ 144,726,085
============= ============= ============== =============
Liabilities and Stockholders' Equity
Curent portion of notes payable $ 1,020,587 $ 992,875 $ 20,000,000 (2) $22,013,462
Current portion of capital leases 400,948 400,948
Accounts payable and accrued expenses 16,832,139 925,604 (380,038)(1) 17,619,705
242,000 (2)
------------- ------------- -------------- -------------
Total current liabilities 18,253,674 1,918,479 19,861,962 40,034,115
Notes payable, excluding current portion 1,769,689 157,907 1,927,596
Capital leases, excluding current portion 830,393 830,393
Deferred tax and long-term liabilities 264,974 121,463 386,437
Deferred revenue 14,623,264 14,623,264
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; 20,000,000 authorized
shares, 9,448,834 issued and outstanding shares 94,488 54,000 (54,000)(2) 94,488
Additional paid-in capital 78,730,451 78,730,451
Retained earnings 8,099,341 2,703,480 (1,077,202)(1) 8,099,341
(1,626,278)(2)
------------- ------------- -------------- -------------
Total stockholders' equity 86,924,280 2,757,480 (2,757,480) 86,924,280
------------- ------------- -------------- -------------
Total liabilities and stockholders' equity $ 122,666,274 $ 4,955,329 $ 17,104,482 $ 144,726,085
============= ============= ============== =============
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended November 30, 1997
-----------------------------------------------------------------------------------
American
Limousine Pro Forma
Company Partners, Inc Adjustment Pro Forma
------------- ------------- ------------- -------------
Revenue, net $ 86,378,313 $ 20,174,517 $ 3,000,000 (4) $ 109,552,830
Cost of revenue 57,890,393 13,623,211 2,026,000 (4) 73,539,604
------------- ------------- ------------- -------------
Gross profit 28,487,920 6,551,306 974,000 36,013,226
Selling, general and administrative
expense 20,111,590 5,831,800 619,000 (3) 25,805,390
(650,000)(4)
(72,000)(4)
(86,000)(4)
(113,000)(4)
(460,000)(4)
624,000 (4)
------------- ------------- ------------- -------------
Operating income 8,376,330 719,506 1,112,000 10,207,836
Other income (expense)
Interest expense (1,141,946) (91,206) 91,206 (5) (1,141,946)
Interest and other income 451,388 328,896 (200,340)(4) 579,944
------------- ------------- ------------- -------------
Income before provision for income taxes 7,685,772 $ 957,196 $ 1,002,866 9,645,834
============= =============
Provision for income taxes 3,162,282 4,051,250 (6)
------------- -------------
Net income $ 4,523,490 $ 5,594,584
============= =============
Net income per common share - basic $1.00 $1.03 (7)
============= =============
Net income per common share - diluted $0.77 $0.82 (7)
============= =============
Weighted average common shares used in
computing net income per common share-
basic 4,506,108 5,446,731 (7)
============= =============
Weighted average common shares used in
computing net income per common share-
diluted 6,137,418 7,078,041 (7)
============= =============
Pro forma net income per common share -
basic $0.81 $0.85 (7)
============= =============
Pro forma net income per common share -
diluted $0.76 $0.81 (7)
============= =============
Pro forma weighted average common shares
outstanding used in computing net income
per common share - basic 5,819,145 6,759,768 (7)
============= =============
Pro forma weighted average common shares
outstanding used in computing net income
per common share - diluted 6,180,773 7,121,396 (7)
============= =============
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the nine-month period ended August 31, 1998
-------------------------------------------------------------------------------------------
American Limousine Partners, Inc
-------------------------------------------
For the For the
eight-month month
period ended ended
August 31, December 31, Pro Forma
Company 1998 1997 Subtotal Adjustment Pro Forma
------------- ----------- --------------- ----------- ------------ ------------
Revenue, net $84,797,598 $14,291,755 $ 1,553,807 $15,845,562 $ - $100,643,160
Cost of revenue 57,160,077 9,955,279 1,072,563 11,027,842 - 68,187,919
------------- ----------- --------------- ----------- ------------ ------------
Gross profit 27,637,521 4,336,476 481,244 4,817,720 - 32,455,241
Selling, general and administrative
expense 19,628,479 3,872,740 526,900 4,399,640 464,000 (3) 23,805,119
(337,000)(4)
(100,000)(4)
(250,000)(4)
------------- ----------- --------------- ----------- ------------ ------------
Operating income 8,009,042 463,736 (45,656) 418,080 223,000 8,650,122
Other income (expense)
Interest expense (328,257) (72,757) (7,850) (80,607) 80,607 (5) (328,257)
Interest and other income 852,121 64,961 199,035 263,996 (200,340)(4) 748,777
(167,000)(5)
------------- ----------- --------------- ---------- ------------ ------------
Income before provision for income
taxes 8,532,906 $ 455,940 $ 145,529 $ 601,469 $ (63,733) 9,070,642
=========== =============== ========== ============
Provision for income taxes 3,541,156 3,764,316(6)
------------ ------------
Net income $ 4,991,750 $ 5,306,326
============ ============
Net income per common share - basic $0.60 $0.59(7)
============ ============
Net income per common share - diluted $0.56 $0.56(7)
============ ============
Weighted average common shares used in
computing net income per common share -
basic 8,362,096 8,989,178(7)
============ ============
Weighted average common shares used in
computing net income per common share -
diluted 8,894,827 9,521,909(7)
============ ============
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1) Pro forma adjustment to give effect to the exclusion of certain assets and
liabilities, primarily cash, fixed assets, and owners' notes, from the
entities and assets acquired.
(2) Pro forma adjustment to give effect to the purchase of Airport Limousine
Partners, Inc. for $20.0 million, as if the acquisition occurred on
August 31, 1998. The adjustment reflects a promissary note issued in the
aggregate amount of $20.0 million, $19 million of which is due on
November 4, 1998 and $1 million of which is due on January 2, 1999. The
allocation of the purchase price to the estimated fair value of the assets
and liabilities assumed will result in the recognition by the Company of
$18.6 million in goodwill. As part of the fair market value allocation, the
Company determined that certain reserves and liabilities were required
as part of the acquisition, primarily for severance pay for certain members
of management and to accrue costs specific to completion of the operating
systems, approximately $242,000.
(3) Pro forma adjustment to give effect to the amortization of goodwill.
(4) Pro forma adjustments for certain nonrecurring expenses and other income
for the period and year ended August 31, 1998 and November 30, 1997,
respectively. Adjustment for (1) excess owners bonuses of $337,000 and
$650,000, respectively; (2) professional fees incurred in connection with
the sale of Airport Limousine Partners, Inc. and the purchase of Hindsdale
of $100,000 and $72,000, respectively; (3) salaries of terminated
individuals of $0 and $86,000, respectively, who are not to be replaced;
(4) cost of settling previous acquisitions expensed by Airport Limousine
Partners, Inc. of $0 and $113,000, respectively; (5) advertising costs
which are to be discontinued or reduced as a result of consolidation with
the Company of $250,000 and $460,000, respectively; and (6) additional
revenue and cost of revenue had the Hindsdale Acquisition occurred at
December 1, 1996; and (7) reduce other income which is nonrecurring in the
amount of $200,340.
(5) Pro forma adjustment's to (1) reduce interest earned on the $20.0 million
of net proceeds from the secondary public offering assumed to be used to
payoff acquisition debt and (2) reduce outstanding debt and related
interest expense of Airport Limousine Partners, Inc. as of the date of the
acquisition through working capital (approximately $1.1 million of debt as
of August 31, 1998).
(6) Pro forma adjustment to reflect the incremental provision for federal and
state income taxes at a consolidated effective tax rate of 41.5%, and 42%
for the nine months ended August 31, 1998, and the year ended November 30,
1997, respectively. The companies acquired were "Subchapter S" prior to the
acquisitions. No material operating loss carry forwards existed at the date
of acquisition.
(7) Net income per common share, for both the "Company" column and the "Pro
forma" column, was computed by dividing the net income for the nine-month
period ended August 31, 1998 and the year ended November 30, 1997 by the
weighted average number of common shares including common share
equivalents. The weighted average number of common shares, under the "Pro
forma" column, gives retroactive effect for the issuance of common stock in
a quantity sufficient to raise the acquisition proceeds to meet the needs
of the promissary note, 627,082 and 940,623, respectively. Net income used
in calculating Pro forma net income per common share has been adjusted for
(i) the elimination of interest expense, net of taxes, resulting from the
conversion of $4,867,546 of subordinated debt into common stock and (ii)
increasing the weighted average common shares outstanding by the number of
common shares resulting from the conversion of such debt, as well as the
partial conversion of the Series A Preferred Stock.