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EXHIBIT 99.2 - PRO FORMA
FINANCIAL INFORMATION
MANHATTAN ASSOCIATES, INC.
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On October 24, 2000, Manhattan Associates, Inc. (the "Company") entered
into an Asset Purchase Agreement (the "Agreement") with Intrepa, L.L.C.
("Intrepa") to acquire substantially all of the assets of Intrepa for a purchase
price of $30 million. The purchase price consists of a cash payment at closing
of $13,000,000, the issuance in January 2001 of $10,000,000 of the Company's
common stock, and the issuance by the Company of a promissory note for
$7,000,000 payable to Intrepa by April 2003. The purchase also includes the
assumption of substantially all of the liabilities of Intrepa, including
immediate payment by the Company of the remaining $2,000,000 of principal and up
to $15,000 interest on a promissory note previously issued by Intrepa.
The following unaudited pro forma combined financial statements give
effect to Manhattan's acquisition of Intrepa's assets accounted for under the
purchase method of accounting. This information is based on preliminary
valuations of the fair market value of assets and liabilities acquired and the
estimated useful lives of intangible assets acquired in the transaction and are
subject to change pending finalization of the valuations.
The accompanying unaudited pro forma combined balance sheet has been
prepared as if the acquisition had been consummated as of September 30, 2000.
The unaudited pro forma combined statements of operations for the nine months
ended September 30, 2000 have been prepared as if the proposed acquisition had
occurred on January 1, 2000.
The unaudited pro forma financial statements are presented for
illustrative purposes only and are not necessarily indicative of the combined
financial position or results of operations of future periods or the results
that actually would have been realized had the acquired assets been operated as
a single entity during the period presented. The pro forma adjustments are based
on management's estimates, available information and various assumptions and may
be revised as additional information becomes available. The unaudited pro forma
combined financial statements as of and for the nine months ended September 30,
2000 should be read in conjunction with the other financial statements and notes
thereto included elsewhere in this current report.
The Company estimates that it will incur approximately $800,000 in
direct expenses in connection with its acquisition of Intrepa. The transaction
costs consist of fees for attorneys, accountants, financial printing costs and
other related expenses. The Company cannot assure you that it will not incur
additional expenses in subsequent quarters to reflect costs associated to
complete the acquisition.
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MANHATTAN AND INTREPA
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(IN THOUSANDS)
PRO FORMA NOTE COMBINED
MANHATTAN INTREPA ADJUSTMENTS REF. MANHATTAN
---------- -------- ----------- ---- ---------
ASSETS
Current assets:
Cash and cash equivalents ............................. $ 59,607 $ 786 $ (15,000) a $ 45,393
Short-term investments ................................ 16,503 -- -- 16,503
Accounts receivable, net .............................. 24,442 2,204 -- 26,646
Deferred income taxes ................................. 2,915 -- 1,102 4,017
Prepaid expenses and other current assets ............. 1,321 123 -- 1,444
---------- -------- ---------- --------
Total current assets ............................. 104,788 3,113 (13,898) 94,003
---------- -------- ---------- --------
Property and equipment, net ........................... 9,431 859 (100) c 10,190
Intangible and other assets, net ...................... 2,668 2,382 28,407 d 33,457
---------- -------- ---------- --------
Total assets ..................................... $ 116,887 $ 6,354 $ 14,409 $137,650
========== ======== ========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities .............. $ 17,986 $ 2,017 $ 800 e $ 20,803
Current portion of note payable and
capital lease obligations ......................... 153 667 (667) i 153
Deferred revenue ...................................... 14,189 2,301 -- 16,490
---------- -------- ---------- --------
Total current liabilities ........................ 32,328 4,985 133 37,446
---------- -------- ---------- --------
Long-term portion of note payable and capital
lease obligations .................................... 664 1,333 5,667 i 7,664
Withheld employee investments .............................. -- 205 -- 205
Shareholders' equity
Preferred stock ....................................... -- -- -- --
Common stock .......................................... 257 -- 2 f 259
Additional paid in capital ............................ 67,105 -- 10,236 f 77,341
Members' equity ....................................... -- 3,512 (3,512) f --
Retained earnings (accumulated deficit) ............... 16,882 (3,681) 1,083 j 15,084
Accumulated other comprehensive loss .................. (131) -- -- (131)
Deferred compensation ................................. (218) -- -- (218)
---------- -------- ---------- --------
Total shareholders' equity ....................... 83,895 (169) 8,609 92,335
---------- -------- ---------- --------
Total liabilities and shareholders' equity ....... $ 116,887 $ 6,354 $ 14,409 $137,650
========== ======== ========== ========
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MANHATTAN AND INTREPA
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA NOTE COMBINED
MANHATTAN INTREPA ADJUSTMENTS REF. MANHATTAN
--------- -------- ----------- ---- ---------
Revenue:
Software license ...................................... $ 17,251 $ 2,023 $ -- $ 19,274
Services .............................................. 57,979 4,818 -- 62,797
Hardware .............................................. 21,445 247 -- 21,692
-------- -------- -------- --------
Total revenue .................................... 96,675 7,088 -- 103,763
-------- -------- -------- --------
Cost of revenue:
Software license ...................................... 1,008 446 679 g 2,133
Services .............................................. 24,944 1,750 -- 26,694
Hardware .............................................. 17,448 -- -- 17,448
-------- -------- -------- --------
Total cost of revenue ............................ 43,400 2,196 679 46,275
-------- -------- -------- --------
Gross margin ............................................... 53,275 4,892 (679) 57,488
-------- -------- -------- --------
Operating expenses:
Research and development .............................. 10,301 2,270 -- 12,571
In process research and development ................... -- -- 2,900 g 2,900
Sales and marketing ................................... 12,906 3,244 -- 16,150
General and administrative ............................ 11,386 2,513 2,495 g 16,394
-------- -------- -------- --------
Total operating expenses ......................... 34,593 8,027 5,395 48,015
-------- -------- -------- --------
Loss from operations ....................................... 18,682 (3,135) (6,074) 9,473
Other income (expense), net ................................ 1,841 (63) (863) h 915
-------- -------- -------- --------
Income (loss) before income taxes .......................... 20,523 (3,198) (6,937) 10,388
Income tax provision (benefit) ............................. 7,798 -- (3,851) b 3,947
-------- -------- -------- --------
Net income (loss) .......................................... $ 12,725 $ (3,198) $ (3,086) $ 6,441
======== ======== ======== ========
Basic net income per share ................................. $ 0.51 $ 0.26
======== ========
Diluted net income per share ............................... $ 0.42 $ 0.21
======== ========
Weighted average shares outstanding:
Basic shares ............................................... 24,818 174 f 24,992
======== ======== ========
Fully diluted shares ....................................... 30,108 174 f 30,282
======== ======== ========
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MANHATTAN AND INTREPA
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
The unaudited pro forma combined condensed financial information is
based upon the following:
(a) Adjustment to reflect the cash portion of the consideration
paid for the acquisition of $13,000,000 and the repayment of
the note payable of $2,000,000.
(b) Income tax expense adjustment reflects tax benefit equal to
38% of Intrepa's net losses and the pro forma adjustments.
(c) Represents the estimated adjustment of fixed assets to fair
value.
(d) The total purchase price of Intrepa reflects the payment of
$13,000,000 in cash, the issuance of a promissory note for
$7,000,000 and the issuance of 173,913 shares of the Company's
common stock. The purchase price and allocation to the
acquired assets is as follows (in thousands):
Cash ....................................................... $ 13,000
Promissory note ............................................ 7,000
Common stock ............................................... 10,238
Other direct acquisition expenses .......................... 800
--------
Total estimated acquisition cost to be allocated ...... $ 31,038
========
The valuation of the Company's common stock is based on its
weighted average closing price five days prior to the closing
of the acquisition. The number of shares issued was based on
the 20-day closing average prior to October 24, 2000 having a
value of $10,000,000.
The total purchase price of the Intrepa acquisition has been
allocated to acquired assets based on estimates of their fair
value. The purchase price has been assigned to the assets
acquired as follows (in thousands):
Net liabilities assumed .......................... $ (2,646)
Acquired in process research and development ..... 2,900
Acquired developed technology .................... 7,500
Goodwill and other intangibles ................... 23,284
--------
$ 31,038
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The Company is in the process of determining the fair values
of tangible and intangible assets that were acquired. The
amounts above represent the estimated values of the assets
identified, but the actual allocation could differ when
appraisals by a third party are completed. In addition,
subsequent changes to the net liability position from the pro
forma dates presented will have an impact on the goodwill and
related amortization. The intangibles assets are expected to
include the values of an assembled workforce, customer base
and goodwill. The acquired developed technology is expected to
have an estimated life of 5 years and the goodwill and other
intangibles are expected to have estimated lives of 7 years.
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MANHATTAN AND INTREPA
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(e) Amount represents the accrual of estimated direct acquisition
costs related to professional and other fees.
(f) Adjustment reflects the removal of the existing members'
capital and the issuance of 173,913 shares of common stock
with an estimated value of $10,238,000.
(g) Adjustments reflect: (1) the amortization of estimated
acquired developed technology, assuming an estimated life of 5
years, less the amortization of the acquired developed
technology recorded on Intrepa's financial statements; (2) the
non-recurring charge for acquired in process research and
development; and (3) the amortization of goodwill and other
intangibles, assuming an estimated life of 7 years.
(h) Adjustments reflect: (1) a reduction in interest income at a
5% interest rate due to the reduction in cash as a result of
the acquisition; (2) the interest expense on the promissory
note issued to Intrepa as part of the acquisition by
Manhattan; and (3) the elimination of interest expense
associated with the Intrepa promissory note to CIBER.
(i) Adjustment represents the removal of Intrepa's note payable to
CIBER of $2,000,000 and the addition of a promissory note of
$7,000,000 due from the Company as a result of the acquisition
by the Company.
(j) Adjustment eliminate the Intrepa accumulated deficit, less
$2.9 million for the non-recurring charge for acquired in
process research and development.
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