1
EXHIBIT 99.1
The following unaudited pro forma consolidated financial statements have been
prepared to give effect to the sale of the CPG business (the "transaction") as
described above in Item 2, are based on the historical results of Cyrk, Inc. and
reflect the estimates and assumptions set forth in the notes to the statements
provided below, which estimates and assumptions have been made solely for the
purposes of developing this pro forma information. The unaudited pro forma
consolidated financial statements are not necessarily indicative of actual
results that would have occurred had the transaction been consummated as of the
dates indicated or of future financial position or results of operations.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the historical financial statements and related notes thereto
of Cyrk, Inc.
The unaudited pro forma consolidated balance sheet as of September 30, 2000
gives effect to the transaction as if such transaction had occurred on September
30, 2000.
The unaudited pro forma consolidated statement of operations for the year ended
December 31, 1999 gives effect to the transaction as if such transaction had
occurred on January 1,1999.
The unaudited pro forma consolidated statement of operations for the nine months
ended September 30, 2000 gives effect to the transaction as if such transaction
had occurred on January 1, 2000.
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CYRK, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT SEPTEMBER 30, 2000
(UNAUDITED)
(In thousands)
Pro Forma Adjustments
----------------------------
Historical(a) CPG Business(b) Other Pro Forma
------------- --------------- --------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 71,572 $ 1,201 $ 70,371
Accounts receivable 66,864 28,046 38,818
Inventories 45,109 19,397 25,712
Prepaid expenses and other current assets 23,875 3,006 20,869
Net assets held for sale -- -- $ 8,000 (c) 8,000
-------- -------- -------- --------
Total current assets 207,420 51,650 8,000 163,770
Property and equipment, net 15,596 6,325 9,271
Excess of cost over net assets acquired, net 71,484 22,997 48,487
Other assets 25,604 125 25,479
Net assets held for sale -- -- 2,300 (c) 2,300
-------- -------- -------- --------
$320,104 $ 81,097 $ 10,300 $249,307
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 1,607 $ 1,580 $ 27
Accounts payable and accrued expenses 112,959 23,648 89,311
Intercompany payable -- 24,588 $ 24,588 (d) --
-------- -------- -------- --------
Total current liabilities 114,566 49,816 24,588 89,338
Long-term liabilities 6,167 826 5,341
-------- -------- -------- --------
Total liabilities 120,733 50,642 24,588 94,679
-------- -------- -------- --------
Mandatorily redeemable preferred stock 20,803 -- 20,803
Stockholders' equity 178,568 30,455 (14,288)(e)(f) 133,825
-------- -------- -------- --------
$320,104 $ 81,097 $ 10,300 $249,307
======== ======== ======== ========
(a) Represents the unaudited Consolidated Balance Sheet of Cyrk, Inc. as of
September 30, 2000 as reported in the Company's September 30, 2000 Form
10-Q.
(b) To eliminate the assets, liabilities and stockholders' equity included in
the Company's historical September 30, 2000 balance sheet related to the
CPG business along with the elimination of certain other of Cyrk's net
assets associated with this transaction.
(c) To reflect the consideration to be received attributable to the sale of the
CPG business.
(d) To forgive intercompany debt due to Cyrk by CPG business sold.
(e) To eliminate the stockholders' equity of the CPG business.
(f) To reflect the loss on the sale of the CPG business calculated as follows:
Consideration to be received from the buyer $10,300
Less:
Net assets of the CPG business (including
$22,997 of goodwill) 30,455
Forgiveness of intercompany debt due to Cyrk 24,588
----------
Pro forma loss on sale of CPG business ($44,743)
==========
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CYRK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
(In thousands, except per share data)
Pro Forma
Adjustments
---------------
HISTORICAL(a) CPG Business(b) Pro Forma
------------- --------------- ---------
Net sales $ 988,844 $ 130,151 $ 858,693
Cost of sales 815,871 86,051 729,820
Depreciation expense 636 93 543
--------- --------- ---------
Gross profit 172,337 44,007 128,330
Selling, general and administrative expenses 146,643 45,874 100,769
Depreciation expense 4,784 1,626 3,158
Goodwill amortization expense 3,568 1,532 2,036
Nonrecurring charge 1,675 -- 1,675
--------- --------- ---------
Operating income (loss) 15,667 (5,025) 20,692
Interest income (3,232) -- (3,232)
Interest expense 2,115 1,388 727
Other income (2,752) -- (2,752)
--------- --------- ---------
Income (loss) before income taxes 19,536 (6,413) 25,949
Income tax provision 8,400 11,158 (c)
--------- ---------
Net income 11,136 14,791
Preferred stock dividends 142 142
--------- ---------
Net income available to common stockholders $ 10,994 $ 14,649
========= =========
Earnings per common share - basic $ 0.70 $ 0.94
========= =========
Earnings per common share - diluted $ 0.67 $ 0.89
========= =========
Weighted average shares outstanding - basic 15,624 15,624
========= =========
Weighted average shares outstanding - diluted 16,631 16,631
========= =========
(a) Represents the audited Consolidated Statement of Operations of Cyrk, Inc.
for the year ended December 31, 1999 as reported in the Company's December
31, 1999 Form 10-K.
(b) To eliminate the profit and loss of the CPG business for 1999 and certain
other of Cyrk's costs and expenses associated with this transaction, net of
costs that would not have been eliminated due to the sale of the CPG
business.
(c) The pro forma income tax provision assumes a historical tax rate of 43%.
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CYRK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
(In thousands, except per share data)
Pro Forma
Adjustments
---------------
Historical(a) CPG Business(b) Pro Forma
------------- --------------- ---------
Net sales $ 580,338 $ 106,057 $ 474,281
Cost of sales 475,495 71,286 404,209
Depreciation expense 459 49 410
Restructuring charge 1,695 1,695 (c) --
--------- --------- ---------
Gross profit 102,689 33,027 69,662
Selling, general and administrative expenses 112,130 38,773 73,357
Depreciation expense 3,911 1,396 2,515
Goodwill amortization expense 2,670 1,307 1,363
Restructuring and other nonrecurring charges 5,325 2,108 (c) 3,217
--------- --------- ---------
Operating loss (21,347) (10,557) (10,790)
Interest income (3,192) -- (3,192)
Interest expense 974 647 327
Other income (1,245) -- (1,245)
--------- --------- ---------
Loss before income taxes (17,884) (11,204) (6,680)
Income tax benefit (6,259) (2,338)(d)
--------- ---------
Net loss (11,625) (4,342)
Preferred stock dividends 750 750
--------- ---------
Net loss available to common stockholders $ (12,375) $ (5,092)
========= =========
Loss per common share - basic $ (0.78) $ (0.32)
========= =========
Loss per common share - diluted $ (0.78) $ (0.32)
========= ========
Weighted average shares outstanding - basic 15,942 15,942
========= ========
Weighted average shares outstanding - diluted 15,942 15,942
========= ========
(a) Represents the unaudited Consolidated Statement of Operations of Cyrk, Inc.
for the nine months ended September 30, 2000 as reported in the Company's
September 30, 2000 Form 10-Q.
(b) To eliminate the profit and loss of the CPG business for the nine months
ended September 30, 2000 and certain other of Cyrk's costs and
expenses associated with this transaction, net of costs that would not have
been eliminated due to the sale of the CPG business.
(c) To eliminate May 2000 restructuring charges associated with the CPG
business. It is assumed that these charges would not have occurred if the
CPG business was sold effective January 1, 2000.
(d) The pro forma income tax benefit assumes a historical tax rate of 35%.