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Exhibit 99.4
page 1 of 2
THOMAS GROUP, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(in thousands)
(Unaudited)
ACQUISITION OF INTERLINK
TECHNOLOGIES, INC.
================================================
THOMAS INTERLINK
GROUP, INC. TECHNOLOGIES, INC PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS
Note 1 Note 2 Note 2 PRO FORMA
============================================================
Revenues $ 52,460 $ 4,576 $ - $ 57,036
Cost of sales, exclusive of depreciation 34,131 1,974 116 (b) 36,221
Selling, general and administrative,
exclusive of depreciation 17,581 2,286 - 19,867
Depreciation 1,187 102 (13)(c) 1,276
Capitalized software amortization - 249 38 (d) 287
Goodwill amortization - - 40 (e) 40
------------------------------------------ ---------
52,899 4,611 181 57,691
------------------------------------------ ---------
Operating Income(Loss) (439) (35) (181) (655)
Interest income (expense) 105 - - 105
Net gain on securities sale 479 - - 479
------------------------------------------ ---------
Income before income taxes 145 (35) (181) (71)
Income taxes 99 (14) (72)(f) 13
------------------------------------------ ---------
Net Income $ 46 $ (21) $ (109) $ (84)
========================================== =========
Earnings per comon and common
equivalent share $ 0.01 $ (0.01)
Weighted average shares 6,102,911 6,102,911
The accompanying notes are an integral part of this statement
2
Exhibit 99.4
page 2 of 2
THOMAS GROUP, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(in thousands)
(Unaudited)
ACQUISITION OF INTERLINK
TECHNOLOGIES, INC.
==============================
THOMAS INTERLINK
GROUP, INC. TECHNOLOGIES, INC PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS
Note 1 Note 2 Note 2 PRO FORMA
==============================================================
Revenues $ 31,834 $ 4,233 $ - $ 36,067
Cost of sales, exclusive of depreciation 19,028 2,602 54 (d) 21,684
Selling, general and administrative,
exclusive of depreciation 7,057 912 - 7,969
Depreciation 800 40 4 (e) 844
Capitalized software amortization - 142 3 (f) 145
Goodwill amortization - - 20 (g) 20
------------------------------------------ ----------
26,885 3,696 81 30,662
------------------------------------------ ----------
Operating Income(Loss) 4,949 537 (81) 5,405
Interest income (expense) 204 - - 204
Net gain on securities sale - - - -
------------------------------------------ ----------
Income before income taxes 5,153 537 (81) 5,609
Income taxes 2,061 215 (33)(h) 2,243
------------------------------------------ ----------
Net Income $ 3,092 $ 322 $ (48) $ 3,366
=========================================== ==========
Earnings per comon and common
equivalent share $ 0.50 $ 0.54
Weighted average shares 6,188,131 6,188,131
The accompanying notes are an integral part of this statement
3
THOMAS GROUP, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. HISTORICAL - The historical balances of Thomas Group, Inc. (the
Company) represent the consolidated balance sheet as of June 30, 1995 and the
consolidated results of operations for the year ended December 31, 1994 and the
six months ended June 30, 1995, as reported in the consolidated financial
statements which have been previously filed and are hereby incorporated by
reference.
2. ACQUISITION OF INTERLINK TECHNOLOGIES, INC. - On August 29, 1995, the
Company acquired substantially all of the assets of Interlink Technologies,
Inc. ("Interlink") for approximately $1.5 million in cash. The acquisition was
funded with cash from operations and accounted for under the purchase method of
accounting.
The balance sheet of Interlink was derived from the historical balance sheet as
of June 30, 1995. The combined statement of operations is for the year ended
December 31, 1994 and the six months ended June 30, 1995. The combined
statement of operations data for the year ended December 31, 1994 was derived
as detailed at Exhibit 99.5.
The following pro forma adjustments for the acquisition of Interlink are
reflected in the pro forma consolidated balance sheet as of June 30, 1995 and
the pro forma consolidated statements of operations for the year ended December
31, 1994 and the six months ended June 30, 1995:
Unaudited Pro Forma Consolidated Balance Sheet
(a) To record the $1,500,000 cash paid at closing. The total purchase
price of $1,500,000 has been allocated to the pro forma net assets
acquired of approximately $1,301,000. The estimated fair value of
the net assets at the acquisition date was allocated as follows:
ORG. BOOK NEW BOOK
VALUE ADJ. VALUE
=====================================================
Cash $ 419 $ (419) $ 0
Other current assets 1,824 (1,818) 6
Property, plant and equipment 222 178 400
Other assets 41 0 41
Capitalized software
development costs 853 18 871
Current liabilities (1,613) 1,599 (14)
Deferred Revenue (822) 822 0
Other long-term liabilities (152) 149 (3)
Goodwill 0 199 199
Capital (772) 772 0
-----------------------------------------------------
0 $ 1,500 $ 1,500
=====================================================
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THOMAS GROUP, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Unaudited Pro Forma Consolidated Statements of Operations
(b) Additional compensation to the former owners of Interlink
Technologies, Inc. as technical consultants to the Company.
(c) Additional depreciation resulting from the restated basis of property
and equipment acquired.
(d) Additional amortization resulting from the reduction in the
amortization period of capitalized software acquired from five years
to three years. The Company believes that the three year period
represents a more accurate estimated life of the current software
given the rapidly changing software market.
(e) Amortization of goodwill on a straight line basis over five years.
(f) Reduction of federal income taxes relating to the foregoing
adjustments.