EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The Acquisition will be accounted for as a purchase business combination by
the Company. The pro forma combined condensed financial statements are based on
the historical financial statements of the Company and CGIT. This exhibit to
the Company's Current Report on Form 8-K/A includes the following unaudited pro
forma combined condensed financial statements: (I) Unaudited Pro Forma Combined
Condensed Balance Sheet of the company and CGIT as of August 31, 1999; (ii)
Unaudited Pro Forma Combined Condensed Statements of Operations of the company
and CGIT for the six months ended August 31, 1999 and the year ended February
28, 1999. (iii) related notes thereto. The unaudited pro forma combined
condensed balance sheet assumes the Acquisition had been consummated on August
31, 1999. The unaudited pro forma combined condensed statements of operations
assume the Acquisition had been consummated on March 1, 1998.
The unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the financial position or results of
operations that would have been reported if the Acquisition had been consummated
as presented in the accompanying unaudited pro forma combined condensed
financial statements, not is it necessarily indicative of the Company's future
financial position or results of operations. The pro forma adjustments and the
assumptions on which they are based are described in the accompanying notes to
unaudited pro forma combined condensed financial statements.
These unaudited pro forma combined condensed financial statements are based
on and should be read in conjunction with the historical consolidated financial
statements and related notes thereto of the Company and the financial statements
and notes thereto of CGIT for the year ended December 31, 1998.
AZTEC MANUFACTURING CO.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
August 31, 1999
(IN THOUSANDS)
Purchase
Accounting
Aztec CGIT Adjustments Pro Forma
Historical Historical (Note 2) Combined
---------------------- ---------- ------------ ----------------
Assets
- ------
Current assets
Cash and cash equivalents $ 412 $ 4 $ - $ 416
Accounts receivable, net of allowance for
doubtful accounts of $511,855 14,521 1,363 15,884
Inventories:
Raw materials 6,829 790 7,619
Work-in process 1,293 311 1,604
Finished goods 1,984 - 1,984
Prepaid expenses and other 211 64 275
Revenue in excess of billings - 2,020 2,020
---------------------- ---------- ------------ ----------------
Total current assets 25,250 4,552 29,802
Long-term investments 200 - 200
Property, plant and equipment, net 22,830 728 775 (c) 24,333
Intangible assets, net 8,678 6,801 (d) 15,479
Other assets 337 365 (365) (c) 337
---------------------- ---------- ------------ ----------------
Total Assets $ 57,295 $5,645 $ 7,211 $ 70,151
====================== ========== ============ ================
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Accounts payable $ 5,228 $ 412 $ - $ 5,621
Other payables - 1,546 1,546
Other accrued liabilities 4,794 287 5,100
Long-term debt due within one year 3,135 - 3,135
---------------------- ---------- ------------ ----------------
Total current liabilities 13,157 2,245 15,402
Long-term debt due after one year 13,719 - 10,611 (a) 24,330
Net deferred income tax liability 493 - 493
Shareholders' equity:
Common stock, $1 par value
Shares authorized - 25,000,000
Shares issued - 6.304,580 6,304 - 6,304
Capital in excess of par value 11,353 - 11,353
Retained earnings 26,715 3,400 (3,400) (b) 26,715
Less common stock held in treasury, at cost
(1,555,636 shares) (14,446) - (14,446)
---------------------- ---------- ------------ ----------------
Total shareholders' equity 29,926 3,400 (3,400) 29,926
---------------------- ---------- ------------ ----------------
Total Liabilities and Shareholders' Equity $57,295.0 $5,645 $ 7,211 $ 70,151
====================== ========== ============ ================
See Accompanying Notes
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AZTEC MANUFACTURING CO.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CGIT
------------------------------------------
Aztec Deduct
Historical Historical Historical Historical
Six Months Eight Months Two Months Six Months Purchase
Ended Ended Ended Ended Accounting
August 31, August 31, February 28, August 31, Adjustments Pro Forma
1999 1999 1999 1999 (Note 3) Combined
------------ ------------ -------------- ----------- ------------ -------------
Net Sales $ 41,657 $ 7,258 $ 1,788 $ 5,470 $ - $ 47,127
Costs and expenses:
Cost of Sales 30,841 4,877 874 4,003 49 (a) 34,893
Selling, general, and administrative 5,347 978 238 740 226 (a) 6,313
Allocation from Parent - 332 81 251 - 251
Interest expense (Income) 675 (76) (15) (61) 302 (b) 916
Other (income) expense, net 28 - - - - 28
Loss on Advances to affiliate 0 0 0 - - -
------------ ------------ -------------- ----------- ------------ -------------
36,891 6,111 1,178 4,933 577 42,401
------------ ------------ -------------- ----------- ------------ -------------
Income before income taxes 4,766 1,147 610 537 (577) 4,726
Income taxes:
Current expense 1,788 430 229 201 (213) (d) 1,776
Deffered (benefit) expense - - - - - -
------------ ------------ -------------- ----------- ------------ -------------
1,788 430 229 201 (213) 1,776
------------ ------------ -------------- ----------- ------------ -------------
Net Income $ 2,978 $ 717 $ 381 $ 336 $ (364) $ 2,950
============ ============ ============== =========== ============ =============
Earnings per common share:
Basic $ 0.63 $ 0.62
============ =============
Diluted $ 0.63 $ 0.62
============ =============
Shares used to compute per share data:
Basic 4,741,853
Diluted 4,760,329
See Accompanying Notes
Page 2
AZTEC MANUFACTURING CO.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 28, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CGIT
------------------------------------------------------
Aztec Deduct Add
Historical Historical Histrical
Year Historical Two Months Two Months Historical Purchase
Ended Year Ended Ended Ended Year Ended Accounting
February 28, December 31, February 28, February 28, February 28, Adjustments Pro Forma
1999 1998 1998 1999 1999 (Note 3) Combined
----------- ------------- ----------- --------- -------------- ----------- ---------
Net Sales $ 80,922 $ 12,209 $ 2,606 $ 1,788 $ 11,391 $ - $ 92,313
Costs and expenses:
Cost of Sales 62,525 8,964 1,708 874 8,130 97 (a) 70,752
Selling, general, and administrative 9,710 1,024 193 319 1,150 453 (a) 11,313
Allocation from Parent - 371 - - 371 371
Net (gain) loss on asle of property,
plant and equipment (2) - - - - - (2)
Interest expense (Income) 982 - - (15) (15) 604 (b) 1,571
Other (income) expense, net (93) - - - - - (93)
Loss on Advances to affiliate - 298 - - 298 (298)(c) -
----------- ------------- ----------- --------- -------------- ----------- ---------
73,122 10,657 1,901 1,178 9,934 856 83,912
----------- ------------- ----------- --------- -------------- ----------- ---------
Income before income taxes 7,800 1,552 705 610 1,457 (856) 8,401
Income taxes:
Current expense 3,005 630 264 229 595 (304)(d) 3,296
Deffered (benefit) expense (79) - - - - - (79)
----------- ------------- ----------- --------- -------------- ----------- ---------
2,926 630 264 229 595 (304) 3,217
----------- ------------- ----------- --------- -------------- ----------- ---------
Net Income $ 4,874 $ 922 $ 441 $ 381 $ 862 $ (552) $ 5,184
=========== ============= =========== ========= ============== =========== =========
Earnings per common share:
Basic $ 0.87 $0.92
========== =========
Diluted $ 0.86 $0.92
========== =========
Shares used to compute per share data:
Basic 5,614,019
Diluted 5,650,744
See Accompanying Notes
Page 3
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. GENERAL
The Acquisition will be accounted for as a purchase business combination by
the Company. The accompanying unaudited pro forma combined condensed
financial statements reflect an aggregate purchase price of approximately
$10.6 million, consisting of cash paid to ABB plus costs directly related
to the Acquisition as follows (in thousands):
Cash paid to ABB................................... $10,900
Investment advisor, legal,
accounting and other professional
fees and expenses................................ 140
Tax benefit from Acquisition........................ (429)
-----------
$10,611
For purposes of the accompanying unaudited pro forma combined condensed
balance sheet, the aggregate purchase price has been allocated to the net
assets acquired, with the remainder recorded as excess cost over net assets
acquired on the basis of preliminary estimates of fair values. These
preliminary estimates of fair value were determined by the Company's
management based primarily on information furnished by management of CGIT
and an independent appraiser.
2. UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
The accompanying unaudited pro forma combined condensed balance sheet
assumes the Acquisition was consummated on August 31, 1999 and reflects the
following pro forma adjustments:
(a) To record new debt for purchase of CGIT
(b) Adjust assets to appraised values.
(c) To record excess cost over net assets acquired.
3. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
The accompanying unaudited pro forma combined condensed statements of
operations have been prepared as if the Acquisition was consummated as of
March 1, 1999 and reflect the following adjustments:
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(a) To record additional depreciation due to increase in appraisal of
assets and amortization of goodwill.
(b) To record additional interest expense on debt related to the
Acquisition.
(c) To eliminate loss on advances to affiliate.
(d) To adjust taxes expense for effect of Purchase Accounting
Adjustments (a) through (c).
4. UNAUDITED PRO FORMA COMBINED EARNINGS PER COMMON SHARE DATA
The unaudited pro forma combined primary earnings per common share data is
computed by dividing pro forma combined income by the weighted average
number of common shares and common share equivalents represented by stock
options, if the exercise of such options would have a dilutive effect in
the aggregate.
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