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EXHIBIT 99.4
PRT GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited pro forma condensed consolidated financial
statements of PRT Group Inc. and Subsidiaries (the "Company") give effect to the
acquisition on July 1, 1997 of all of the issued and outstanding capital stock
of Computer Management Resources, Inc. ("CMR") for cash of $2,864,000, a
$2,000,000 promissory note and 119,181 shares of the Company's Common Stock
valued at $12 per share and the acquisition of substantially all the assets of
Advanced Computer Technologies ("ACT") for approximately $13.1 million in cash
on January 31, 1998. The pro forma information is based on the historical
financial statements of the Company, CMR and ACT giving effect to the
aforementioned acquisitions under the purchase method of accounting and the
assumptions and adjustments in the accompanying notes to the pro forma condensed
consolidated financial statements.
The allocation of the ACT purchase price has not been finally determined.
Accordingly, the accounts reflected in the pro forma condensed consolidated
financial statements may differ from the amounts that would have been determined
if the final purchase price allocation had been known.
The unaudited pro forma condensed consolidated statements of operations
for the year ended December 31, 1997 give effect to the CMR and ACT acquisitions
as if they had occurred as of January 1, 1997. The unaudited pro forma condensed
consolidated balance sheets as of December 31, 1997 gives effect to the
acquisition of ACT as if it had been consummated on December 31, 1997. The
Company's historical balance sheet includes the acquisition of CMR.
The pro forma condensed consolidated financial statements have been
prepared by the Company's management. The pro forma condensed consolidated
financial statements may not be indicative of the results that actually would
have occurred if the acquisitions had been consummated on the dates indicated or
which may be achieved in the future. The unaudited pro forma condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes of ACT included herein and the consolidated
financial statements and notes of PRT Group Inc. included in the Company's
Annual Report on Form 10K for the year ended December 31, 1997.
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PRT GROUP INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Year Ended December 31, 1997
($ In thousands)
Company CMR ACT
Year Ended Six Months Ended Year Ended
Dec 31, 1997 June 30, 1997 Adjustments Proforma Dec 31, 199 Adjustments Proforma
------------------------------------------------------------------------------------------
Revenues 59,816 4,265 64,081 13,751 77,832
Cost of Revenues 40,898 3,185 0 44,083 9,222 53,305
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Gross Profit 18,918 1,080 0 19,998 4,529 24,527
Selling, general and administrative
expenses 19,332 1,350 153 (a) 20,835 4,018 596 (a) 25,449
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Income (loss) from operations (414) (270) (153) (837) 511 (596) (922)
Other income (expenses):
Interest Expense (577) (4) (97)(b) (678) (12) (690)
Interest Income 613 3 0 616 616
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Income (loss) before income taxes (378) (271) (250) (899) 499 (596) (996)
Income tax expense (benefit) 175 (110) (149)(c) (84) 4 (49)(c) (129)
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Net Income (loss) (553) (161) (101) (815) 495 (547) (867)
==========================================================================================
Basic net loss per share (0.04) (0.06)
========== ==========
Weighted Average number
of shares used in
computing basic net
loss per share 14,728,087 14,728,087
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PRT GROUP INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1997
($ In thousands)
Assets Company ACT Adjustments Pro-forma
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Current assets
Cash and equivalents 29,499 109 (13,058) 16,550
Marketable debt securities 14,622 - 14,622
Accounts receivable, net 14,493 2,206 16,699
Deferred income taxes 11 - 11
Prepaid expenses and other current assets 1,604 14 1,618
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Total current assets 60,229 2,329 (13,058) 49,500
Fixed assets, net 8,738 287 9,025
Goodwill, net 6,615 - 11,927 18,542
Other assets 332 15 347
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Total assets 75,914 2,631 (1,131) 77,414
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Current liabilities
Borrowings under line of credit - 324 324
Current portion of long term debt - 34 34
Due to stockholders - 22 22
Accrued compensation 3,479 345 3,824
Accounts payable and other accrued expenses 4,411 356 4,767
Current portion of capital leases obligations 400 - 400
Deferred revenue 753 291 1,044
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Total current liabilities 9,043 1,372 - 10,415
Note payable 2,000 - 2,000
Long-term debt, net of current portion - 128 128
Deferred income taxes 44 - 44
Capital lease obligations, net of current portion 738 - 738
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11,825 1,500 - 13,325
Stockholders' equity
Common stock 18 1 (1) 18
Additional paid in capital 86,324 - - 86,324
Retained earnings (deficit) (21,853) 1,130 (1,130) (21,853)
Treasury stock (400) - - (400)
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Total stockholders' equity 64,089 1,131 (1,131) 64,089
Total liabilities and stockholders' equity 75,914 2,631 (1,131) 77,414
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PRT GROUP INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
For purposes of determining the pro forma effect of the acquisitions on
the Company's pro forma condensed consolidated statements of operations for the
year ended December 31, 1997 and the pro forma condensed consolidated balance
sheet as of December 31, 1997, the following pro forma adjustments have been
made (in thousands):
Year Ended
Dec. 31, 1997
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(a) Increase in amortization from the increase in
goodwill amortized on a straight-line basis
over twenty years:
CMR $ 153
===
ACT $ 596
===
(b) Increase in interest expense from issuance of
$2,000,000 promissory note
CMR $ 97
==
(c) Adjustment of tax provision:
Adjustment to historical tax provision
(benefit) due to adjustments (a) and (b):
CMR $ (149)
=====
ACT $ (49)
====
(d) Cash paid for acquisition $13,058
ACT net assets acquired 1,131
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Goodwill $11,927
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The historical net income per share is based on the weighted average
number of common shares outstanding during the respective periods. The pro forma
net income per share gives effect to the issuance of 119,181 shares of the
Company's Common Stock as of January 1, 1997 in connection with the acquisition
of CMR.