Exhibit 99.2
The InterCept Group, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
As of December 31, 1999
(a) (b)
Historical US Operations Pro Forma Pro Forma
Consolidated SLMsoft.com Adjustments Consolidated
------------ ------------- ----------- ------------
Revenues $ 52,359 $ 32,424 $ (182) (c) $ 84,601
Cost of services 20,452 28,204 (182) (c)
- - (4,646) (d) 43,828
Selling, general and administrative expense 20,992 14,282 35,274
Depreciation and amortization 4,462 3,718 3,145 (e) 11,325
-------- -------- ------- --------
Total operating expense 45,906 46,204 (1,683) 90,427
Operating income 6,453 (13,780) 1,501 (5,826)
Interest and other income, net 39,172 284 - 39,456
-------- -------- ------- --------
Income before provision for income taxes
and minority interest 45,625 (13,496) 1,501 33,630
Provision for income taxes 20,212 - (4,858) (f) 15,354
Equity in loss of affiliate (15,352) - - (15,352)
Minority interest (120) 65 - (55)
-------- -------- ------- --------
Net loss before preferred dividends 9,941 (13,431) 6,359 2,869
Preferred dividends - - -
-------- -------- ------- --------
Net loss attributable to common shareholders $ 9,941 $(13,431) $ 6,359 $ 2,869
======== ======== ======= ========
Pro forma net loss per share $ 0.94 $ 0.25
======== ========
Pro forma weighted average common and
common equivalent shares outstanding 10,564 11,431
Exhibit 99.2
The InterCept Group, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
As of December 31, 2000
(a) (b)
Historical US Operations Pro Forma Pro Forma
Consolidated SLMsoft.com Adjustments Consolidated
------------ ------------- ----------- ------------
Revenues $ 69,639 $ 32,987 $ (148) (c) $102,478
Cost of services 26,952 27,577 (148) (c)
- - (4,646) (d) 49,735
Selling, general and administrative expense 27,017 15,190 - 42,207
Depreciation and amortization 4,403 5,202 3,145 (e) 12,750
-------- -------- ------- --------
Total operating expense 58,372 47,969 (1,649) 104,692
Operating income 11,267 (14,982) 1,501 (2,214)
Interest and other income, net 11,825 70 - 11,895
-------- -------- ------- --------
Income before provision for income taxes
and minority interest 23,092 (14,912) 1,501 9,681
Provision for income taxes 9,216 (5,340) (91) (f) (3,785)
Equity in loss of affiliate (30,710) - - (30,710)
Minority interest (28) - - (28)
-------- -------- ------- --------
Net loss before preferred dividends (16,862) (9,572) 1,592 (24,842)
Preferred dividends - - - -
-------- -------- ------- --------
Net loss attributable to common shareholders $(16,862) $ (9,572) $ 1,592 $(24,842)
======== ======== ======== ========
Pro forma net loss per share $ (1.32) $ (1.85)
======== ========
Pro forma weighted average common and
common equivalent shares outstanding 12,820 13,429
Exhibit 99.2
The InterCept Group, Inc.
Unaudited Pro Forma Condensed Balance Sheet
As of December 31, 2000
(a) (b)
Historical US Operations Pro Forma Pro Forma
Consolidated SLMsoft.com Adjustments Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 8,061 $ 89 $ (8,061) (c) $
(89) (d) -
Short term investments 37,484 - (26,939) (c) 10,545
Accounts receivable, net 9,960 3,194 (3,194) (d) 9,960
Advances to SLM 5,000 - (5,000) (c) 0
Inventory, prepaid expenses and other 4,689 937 5,626
Deferred tax assets - 5,340 (5,340) -
-------- -------- -------- --------
Total current assets 65,194 9,560 (48,623) 26,131
Property and equipment, net 16,883 5,547 - 22,430
Intangible assets, net 24,786 2,379 (2,379) (c)
- - 55,992 80,778
Accounts receivable - affiliate 15,000 8,888 (8,888) (d) 15,000
Investment in affiliate 19,196 - - 19,196
Other assets 1,067 178 - 1,245
-------- -------- -------- --------
Total assets $142,126 $ 26,552 $ (3,898) $164,780
======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 45 $ 3,220 $ (3,220) (d) $ 45
Accounts payable and accrued expenses 3,188 8,263 (8,088) (d) 5,363
- - 2,000 (c) -
Due to SLM Parent - 25,225 (25,225) (d) -
Deferred revenue 5,054 1,490 (423) (d) 6,121
-------- -------- -------- --------
Total current liabilities 8,287 38,198 (34,956) 11,529
Long-term debt, net of current portion 4,513 125 (125) (d) 4,513
Deferred revenue 453 - - 453
Deferred taxes 26,279 - - 26,279
Deferred compensation - - - -
-------- -------- -------- --------
Total liabilities 39,532 38,323 (35,081) 42,774
Minority interest 202 - - 202
Redeemable preferred stock - - - -
Shareholders' equity:
Common stock 109,340 13 19,399 (c) 128,752
Preferred stock - 750 (750) (d) -
Treasury stock - (391) 391 (d) -
Additional Paid in Capital - 10,780 (10,780) (d) -
Retained earnings (6,951) (22,923) 22,923 (d) (6,951)
Unrealized gain on securities 3 - - 3
-------- -------- -------- --------
Total shareholders equity 102,392 (11,771) 31,183 121,804
-------- -------- -------- --------
Total liabilities and shareholders' equity $142,126 $ 26,552 $ (3,898) $164,780
======== ======== ======== ========
A more detailed description of this acquisition may be found under Item 2 of the
Form 8-K InterCept filed on January 19, 2001, and in InterCept's press release
incorporated and filed herein. Effective January 1, 2001, SLMSoft.com, Inc., (a
Kansas Corporation) (the Company) was acquired by The InterCept Group, Inc.
("InterCept"). The consideration exchanged was approximately $40 million and
1,254,000 shares of InterCept common stock valued at approximately $28.0
million. Of the $40 million, $5 million was advanced to the parent company of
SLMSoft.com, Inc. in December 2000, $32.5 million was paid on January 4, 2001,
and $2.5 million will be kept in escrow to satisfy unresolved contingencies
existing at the closing date. Of the 1,254,000 shares, 609,000 were issued to
the parent of SLMSoft.com. Inc. at closing and 258,000 shares will be kept in
escrow to satisfy unresolved contingencies existing at the closing date. The
remaining 386,000 shares represent contingent consideration and are subject to
continuation of the revenue stream associated with certain customers.
The unaudited pro forma financial data have been prepared using the purchase
method of accounting, whereby the total cost of the acquisition is allocated to
tangible and intangible assets acquired and liabilities assumed based upon their
respective fair values at the effective date of the acquisition. For purposes of
the unaudited pro forma financial data, such allocations have been made based
upon currently available information and management's estimates. The final
allocation of the purchase price may differ. The unaudited proforma financial
data does not include the affect of any synergies or operating cost reductions
expected to be associated with the purchase by The Intercept Group, Inc., as
management is not currently able to reasonably estimate any synergies or cost
savings.
The unaudited pro forma balance sheet as of December 31, 2000 reflects the
following adjustments as if they occurred on December 31, 2000:
(a) Represents the historical condensed balance sheets of The InterCept
Group, Inc. ("InterCept" or the "Company") for the year ended December
31, 2000 contained in the Company's Current Report on Form 8-K filed on
January 19, 2001.
(b) Represents the historical balance sheets of SLMSoft.com., a Kansas
Corporation.
(c) The payment of cash and the issuance of common stock and the recording
of intangible assets associated with the purchase of certain assets and
assumption of certain liabilities of the SLMsoft.com, Inc., a Kansas
Corporation. The purchase price included cash of $40.0 million and
1,254,000 shares of The InterCept Group, Inc. common shares valued at
$22.375 per share. The $40.0 million of cash consideration was satisfied
through $8.1 million from cash and cash equivalents, $5.0 million from
the reduction in the advances to SLM-Parent previously advanced in
December 2000, and $26.9 million from the reduction of InterCept's short
term investments. Transaction costs of approximately $2.0 million were
incurred as a result of the purchase. The excess of the purchase price
over net tangible assets acquired totaled $56.0 million and was
allocated to the core processing software, customer relationships,
employees and goodwill and will be amortized over periods ranging from
three to twenty years. In addition to the purchase price indicated above
the agreement includes contingent purchase price related to the
continuation of revenue from certain customers. This additional
consideration will be recorded to goodwill when the contingency is
resolved. Based on the price of $22.375 this contingent consideration
will revert in additional goodwill in the amount of $8.6 million.
(d) Certain assets and liabilities were excluded in the purchase
agreement discussed in a. above.
The unaudited pro forma statements of operations for the years ended December
31, 1999 and 2000 reflect the following adjustments as if they occurred on
January 1, 1999 and are based on the historical statements of operations,
adjusted to reflect the following:
(a) Represents the historical Condensed Statements of Income of The
InterCept Group, Inc. ("InterCept" or the "Company") for the year
ended December 31, 2000 contained in the Company's Current Report on
Form 8-K filed on January 19, 2001.
(b) Represents the historical Condensed Statements of Income of
SLMSoft.com., a Kansas Corporation
(c) The reduction in intercompany amounts due between SLMSoft.com, a
Kansas Corporation and the InterCept Group, Inc.
(d) The reduction in intercompany amounts due between SLMSoft.com, a
Canadian company, and SLMSoft.com, a Kansas Corporation
(e) The additional amortization of the intangible assets recognized upon
the acquisition of SLMSoft.com of $3.1 million for the twelve months
ended December 31, 1999 and 2000.
(f) The tax benefit realized based on the additional losses of
SLMSoft.com for the twelve months ended December 31, 1999 and 2000.