Exhibit 99.3
FIBERSTARS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
The Company completed its acquisition of Crescent Lighting, Ltd. (Crescent) on
November 19, 1998.
The accompanying unaudited pro forma combined condensed balance sheet combines
the historical financial statements of Fiberstars, Inc. (the Company) and the
balance sheet of Crescent as if the acquisition had occurred on September 30,
1998.
The accompanying unaudited pro forma combined condensed statement of operations
for the year ended December 31, 1997 includes the historical consolidated
statement of opeatons of the Company for the year ended December 31, 1997 and
the historical statement of operations of Crescent for the year ended February
28, 1998 as if the acquisition had occurred on January 1, 1997.
The accompanying unaudited pro forma combined consolidated statement of
operations for the nine months ended September 30, 1998 includes the historical
statement of operations of the Company and of Crescent for the nine months ended
September 30, 1998 as if the acquisition had occurred on January 1, 1997.
The unaudited pro forma combined condensed statements of operations give effect
to the acquisition using the purchase method of accounting, and are based upon
allocation of the purchase price and include the adjustments described in the
notes attached thereto.
The unaudited pro forma combined condensed financial statements do not purport
to represent what the Company's results of operations would have been had the
acquisition occurred on the date indicated or for any future period or date. The
pro forma adjustments give effect to available information and assumptions that
the Company believes are reasonable. The unaudited pro forma combined condensed
financial statements shold be read in conjunction with the Company's historical
financial statements and the financial statements of Crescent and the notes
thereto included or incorporated elsewhere herein.
FIBERSTARS, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
FOR SEPTEMBER 30, 1998
(amounts in thousands)
(unaudited)
Crescent Pro Forma Pro Forma
Fiberstars Lighting (8) Adjustments (8) Combined
ASSETS
Current Assets:
Cash and cash equivalents $ 1,376 $ 459 $ (1,853)(1) $ (18)
Short-term investments 4,080 -- -- 4,080
Accounts receivable trade, net 2,708 1,022 (156)(2) 3,573
Notes and other accounts receivable 145 -- -- 145
Inventories 3,385 396 -- 3,781
Prepaid expenses and other assets 392 -- -- 392
Deferred income taxes 597 -- -- 597
-------- -------- -------- --------
Total current assets 12,683 1,877 (2,009) 12,551
Fixed assets, net 912 165 -- 1,077
Goodwill, net 766 -- 2,099(3) 2,865
Investment in joint ventures 20 -- -- 20
Other assets 205 -- -- 205
Deferred income taxes -- -- -- --
-------- -------- -------- --------
Total assets $ 14,586 $ 2,042 $ 90 $ 16,718
======== ======== ======== ========
LIABILITIES
Current liabilities
Accounts payable $ 1,011 $ 580 $ (156)(4) $ 1,434
Accrued expenses 1,895 799 116(5) 2,810
Current portion of long-term debt 8 -- -- 8
-------- -------- -------- --------
Total current liabilities 2,914 1,379 (41) 4,252
Long-term debt, less current portion 14 -- -- 14
-------- -------- -------- --------
Total liabilities 2,928 1,379 (41) 4,266
-------- -------- -------- --------
SHAREHOLDERS' EQUITY
Common stock -- -- -- --
Additional paid-in capital 12,767 -- 794(6) 13,561
Notes receivable from shareholder (75) -- -- (75)
Accumulated deficit (1,034) 663 (663)(7) (1,034)
-------- -------- -------- --------
Total shareholders' equity 11,658 663 131 12,452
-------- -------- -------- --------
Total liabilities and
shareholders' equity $ 14,586 $ 2,042 $ 91 $ 16,718
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
FIBERSTARS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
FOR SEPTEMBER 30, 1998
Note A - Acquisition:
On November 19, 1998, Fiberstars, inc. (the Company) acquired the net
assets of Crescent Lighting, Ltd. (Crescent) for an aggregate of $1,884,597 in
cash and 197,960 shares of the Company's common stock. Crescent is a
manufacturer and distributor of lighting products in Europe. The products are
used primarily for fiber optic lighting.
Note B - Pro Forma Adjustments:
(1) Represents cash payment for acquisition.
(2) Represents elimination of intercompany accounts receivable.
(3) Represents the allocation of goodwill and transaction costs.
(4) Represents the elimination of intercompany accounts payable.
(5) Represents the accrued transaction expenses.
(6) Represents the issuance of Fiberstars common stock.
(7) Represents the elimination of Crescent retained earnings.
(8) Exchange rate used for balance sheet the spot rate effective September
30, 1998, $1.70 = 1.00 GBP.
FIBERSTARS, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(amounts in thousands except per share amounts)
(unaudited)
Crescent Pro Forma Pro Forma
Fiberstars Lighting (7) Adjustments (7) Combined
Net sales $ 17,871 $ 3,957 $ (750)(1) $ 21,078
Cost of Sales 10,047 2,174 (750)(2) 11,471
-------- -------- -------- --------
Gross profit 7,824 1,784 -- 9,608
Operating expenses 6,977 1,222 236(3) 8,435
-------- -------- -------- --------
Operating income 847 562 (236) 1,173
Interest income/(expense) 248 11 (88)(4) 171
Other income/(expense) (14) -- -- (14)
-------- -------- -------- --------
Income before income taxes 1,081 573 (324) 1,330
Provision for income taxes (437) (136) 117(5) (456)
-------- -------- -------- --------
Net income $ 644 $ 437 $ (207) $ 874
======== ======== ======== ========
Net income per share - basic $ 0.19 $ 0.24
======== ========
Shares used in per share
calculation - basic 3,446 198(6) 3,644
======== ======== ========
Net income per share -diluted $ 0.18 $ 0.23
======== ========
Shares used in per share
calculation - diluted 3,597 198(6) 3,795
======== ======== ========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
FIBERSTARS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(1) Represents the elimination of intercompany sales between Crescent and
the Company.
(2) Represents the elimination of intercompany cost of sales between
Crescent and the Company.
(3) Represents the amortization of the goodwill and other intangibles
associated with the purchase of Crescent. The period of amortization is
10 years.
(4) Represents interest income forgone as a result of the reduction in cash
of $2,000,000 for the purchase of Crescent.
(5) Represents tax adjustment to reflect 36% overall income tax rate
applicable to pro forma results.
(6) Represents issuance of common stock as consideration in the Crescent
acquisition.
(7) Exchange rate used for statement of operations is the average rate for
the nine months ending September 30, 1998, $1.64 = 1.00 GBP
FIBERSTARS, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998
(amounts in thousands except per share amounts)
(unaudited)
Crescent Pro Forma Pro Forma
Fiberstars Lighting (7) Adjustments (7) Combined
Net sales $ 16,298 $ 2,846 $ (451)(1) $ 18,693
Cost of Sales 10,188 1,770 (451)(2) 11,507
-------- -------- -------- --------
Gross profit 6,110 1,076 -- 7,186
Operating expenses 5,915 1,191 177(3) 7,283
-------- -------- -------- --------
Operating income 195 (115) (177) (97)
Interest income/(expense) 177 38 (59)(4) 156
Other income/(expense) (20) -- -- (20)
-------- -------- -------- --------
Income before income taxes 352 (77) (235) 40
Provision for income taxes (134) 28 85(5) (22)
-------- -------- -------- --------
Net income $ 218 $ (49) $ (151) $ 18
======== ======== ======== ========
Net income per share - basic $ 0.06 $ 0.00
======== ========
Shares used in per share
calculation - basic 3,557 198(6) 3,755
======== ======== ========
Net income per share - diluted $ 0.06 $ 0.00
======== ========
Shares used in per share
calculation - diluted 3,643 198(6) 3,841
======== ======== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
FIBERSTARS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998
(1) Represents the elimination of intercompany sales between Crescent and
the Company.
(2) Represents the elimination of intercompany cost of sales between
Crescent and the Company.
(3) Represents the amortization of the goodwill and other intangibles
associated with the purchase of Crescent. The period of amortization is
10 years.
(4) Represents interest income forgone as a result of the reduction in cash
of $2,000,000 for the purchase of Crescent.
(5) Represents tax adjustment to reflect 36% overall income tax rate
applicable to pro forma results.
(6) Represents issuance of common stock as consideration in the Crescent
acquisition.
(7) Exchange rate used for statement of operations is the average rate for
the twelve months ending December 31, 1997, $1.66 = 1.00 GBP