Exhibit 99.5
APW Ltd.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed statement of earnings
for the six months ended February 28, 2001 and the unaudited pro forma combined
condensed statement of earnings (loss) for the twelve months ended August 31,
2000 (the "unaudited pro forma financial statements"), illustrate the pro forma
effect of the APW Ltd. acquisition of the Mayville Metal Products Division
("Mayville") of Connell Limited Partnership, assuming the acquisition had been
completed as of September 1, 1999. As reflected in the pro forma information, on
February 16, 2001, APW Ltd. acquired substantially all of the assets and assumed
certain liabilities of Mayville. The purchase price consisted of: 1) $225.0
million in cash (funded by borrowings under APW Ltd.'s revolving credit
facility); 2) a minimum of 754,717 shares of APW Ltd. common stock, valued at
approximately $25.0 million, subject to adjustment depending on Mayville's 2001
calendar year net sales; and 3) assumed liabilities of $17.1 million. This
acquisition was accounted for using the purchase method of accounting.
The unaudited pro forma financial statements have been prepared utilizing
the historical financial statements of APW Ltd. and Mayville, combined and
adjusted to give effect to the transaction (including the related financing) as
described in the notes to this information. The pro forma information should be
read in conjunction with the historical financial statements and related notes
of APW Ltd. and the Mayville financial statements and notes attached as Exhibit
99.4 of this Form 8-K. We have included the unaudited pro forma financial
information as required by the rules and regulations of the SEC and, as such, it
is for analysis purposes only. The unaudited pro forma financial statements do
not purport to be indicative of the results of APW Ltd. in the future or what
the financial position and results of operations would have been had APW Ltd.
completed the transaction on the date indicated above.
APW Ltd.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS
(U.S. Dollars in thousands, except per share data)
APW Ltd.
Historical Pro Forma
APW Ltd. Mayville Combined
Six Months Period From Six Months
Ended February September 1, 2000 Pro Forma Ended February
28, 2001 To February 16, 2001 Adjustments 28, 2001
-------------- -------------------- ----------- --------------
Net sales $ 677,286 $ 79,324 $ - $ 756,610
Cost of product sold 523,166 65,578 642 (a) 589,386
-------------- -------------------- ----------- --------------
Gross profit 154,120 13,746 (642) 167,224
Engineering, selling and administrative expenses 113,265 6,479 (742) (b) 119,002
Amortization of intangible assets 12,441 (186) 2,932 (c) 15,187
Loss on sale of subsidiary 2,667 - - 2,667
-------------- -------------------- ----------- --------------
Operating earnings 25,747 7,453 (2,832) 30,368
Financing costs 13,773 589 7,564 (d) 21,926
Other expense (income) - net 1,058 (13) - 1,045
-------------- -------------------- ----------- --------------
Earnings before income tax 10,916 6,877 (10,396) 7,397
Income tax expense 4,034 3,085 (4,385) (e) 2,734
-------------- -------------------- ----------- --------------
Net earnings $ 6,882 $ 3,792 $ (6,011) $ 4,663
============== ==================== =========== ==============
Basic earnings per share:
Earnings per share $ 0.17 $ 0.12
============== ==============
Weighted average common shares outstanding (000's) 39,343 40,044 (g)
============== ==============
Diluted earnings per share:
Diluted earnings per share $ 0.17 $ 0.11
============== ==============
Weighted average common and potential common
shares outstanding (000's) 41,219 41,920 (g)
============== ==============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
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APW Ltd.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS (LOSS)
(U.S. Dollars in thousands, except per share data)
APW Ltd.
Historical Pro Forma
APW Ltd. Mayville Combined
Twelve Months Twelve Months Twelve Months
Ended August 31, Ended August 31, Pro Forma Ended August 31,
2000 2000 Adjustments 2000
---------------- ---------------- ----------- ----------------
Net sales $ 1,239,542 $ 153,082 $ - $ 1,392,624
Cost of product sold 916,294 126,115 1,285 (a) 1,043,694
---------------- ---------------- ----------- ----------------
Gross profit 323,248 26,967 (1,285) 348,930
Engineering, selling and administrative expenses 201,611 12,922 (1,616) (b) 212,917
Amortization of intangible assets 23,918 - 5,864 (c) 29,782
Corporate reorganization expenses 6,541 - - 6,541
---------------- ---------------- ----------- ----------------
Operating earnings 91,178 14,045 (5,533) 99,690
Financing costs 52,657 1,392 16,064 (d) 70,113
Other expense (income) - net 4,967 (87) - 4,880
---------------- ---------------- ----------- ----------------
Earnings before income tax 33,554 12,740 (21,597) 24,697
Income tax expense 54,093 6,012 (9,732) (f) 50,373
---------------- ---------------- ----------- ----------------
Net earnings (loss) before extraordinary item $ (20,539) $ 6,728 $ (11,865) $ (25,676)
================ ================ =========== ================
Basic and diluted loss per share before
extraordinary item:
Loss per share before extraordinary item $ (0.53) $ (0.64)
================ ================
Weighted average common and potential common
shares outstanding (000's) 39,077 39,832 (g)
================ ================
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
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APW Ltd.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(U.S. Dollars in thousands, except per share data)
Note 1 - Periods Combined
- -------------------------
APW Ltd.'s fiscal year ended August 31, 2000 and Mayville's fiscal year
ended December 31, 2000; as such, we have adjusted the Mayville periods to
conform to APW Ltd.'s historical fiscal period ends. The Mayville historical
information for the period of September 1, 2000 to February 16, 2001 has been
updated from the pro forma information included in the Company's previous
filings. APW Ltd.'s consolidated statement of loss for the twelve months ended
August 31, 2000 has been combined with Mayville's statement of earnings for the
twelve months ended August 31, 2000. Likewise, APW Ltd.'s consolidated statement
of earnings for the six months ended February 28, 2001 has been combined with
Mayville's statement of earnings for the period September 1, 2000 through
February 16, 2001, the date of the acquisition.
Note 2 - Pro Forma Adjustments
- ------------------------------
The following pro forma adjustments are incorporated in the pro forma
combined condensed statements of earnings (loss) for the six months ended
February 28, 2001 and for the twelve months ended August 31, 2000 as a result of
the Mayville acquisition. APW Ltd. has not yet completed a final valuation of
the tangible and identifiable intangible assets and liabilities acquired
relative to the Mayville acquisition. As such, the following adjustments are
based on preliminary estimates; actual financial statement impacts will be based
on final valuations.
(a) Incremental depreciation expense related to the step-up of buildings
and machine equipment related to manufacturing, over average lives of
25 years and 8 years, respectively.
(b) Includes the net impact of 1) the incremental depreciation expense
related to the step-up of buildings and equipment, over average lives
of 25 years and 8 years, respectively; and 2) the removal of the
management fee charged to Mayville from Connell Limited Partnership
during the periods presented.
(c) Incremental amortization of goodwill and other identifiable acquired
intangibles over periods not exceeding 40 years.
(d) Incremental interest expense on acquisition debt of $225,000 at a
weighted average rate of 7.75%. A 1/8% change in the weighted average
interest rate would have impacted net interest expense by
approximately $140 for the six months ended February 28, 2001 and by
approximately $281 for the twelve months ended August 31, 2000.
(e) Decrease in income tax expense by applying APW Ltd.'s effective tax
rate of 36.9% for the six months ended February 28, 2001 to the
earnings of Mayville, less the effect of pro forma adjustments in (a)
through (d) above.
(f) Decrease in income tax expense by applying APW Ltd.'s effective tax
rate of 42.0% for the twelve months ended August 31, 2000 to the
earnings of Mayville less the effect of pro forma adjustments of (a)
through (d) above. This 42.0% rate excludes the $40,000 income tax
provision APW Ltd. recorded as a result of reorganizing as a Bermuda
company during the year ended August 31, 2000.
(g) Increase from historical weighted average shares reflects the
additional minimum of 754,717 shares issued in the transaction as if
such shares were outstanding from September 1, 1999. In conjunction
with the acquisition, APW Ltd. issued 1,509,434 shares of common
stock, of which 754,717 are contingently returnable or issuable. Such
contingently returnable shares are not included in the calculation of
purchase price or in the calculation of earnings (loss) per share.
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