TRANSMATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2001
TPG MAC
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS ADJUSTMENTS PRO FORMA
------------ ----------- ------------ ----------
(1) (2) (3) (4)
Product Sales $24,575,077 $(1,154,459) $(3,724,811) $19,695,807
Service Sales 8,791,524 8,791,524
----------- ----------- ----------- -----------
Net Sales: 33,366,601 (1,154,459) (3,724,811) 28,487,331
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of Products Sold (15) 16,507,036 (401,070) (2,610,366) 13,495,600
Cost of Services Sold 7,196,838 7,196,838
----------- ----------- ----------- -----------
Cost of Products and Services Sold 23,703,874 (401,070) (2,610,366) 20,692,438
Selling and Administrative Expenses 9,021,360 (423,042) (425,853) 8,172,465
Research and Development Costs 594,736 (587,670) 7,066
Interest Expense 913,248 (382,000) (115,401) 415,847
----------- ----------- ----------- -----------
34,233,218 (1,793,782) (3,151,620) 29,287,816
----------- ----------- ----------- -----------
Other Income: Gain on Life Insurance Policy 206,800 0 0 206,800
Loss Before Taxes (659,817) (639,323) 573,191 (593,685)
Provision for Income Taxes
State and Federal (5) 0 0 0 0
----------- ----------- ----------- -----------
Net Loss (659,817) (639,323) 573,191 (593,685)
Net Loss Per Share - Basic and Diluted (0.10) (0.10)
=========== =========== =========== ===========
Shares Used in Calculation - Basic and Diluted 6,088,960 6,088,960
=========== =========== =========== ===========
TRANSMATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MARCH 31, 2001
TPG MAC
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS ADJUSTMENTS PRO FORMA
----------- ------------ ----------- ----------
(6) (7) (8) (9)
Product Sales $58,212,220 $(3,456,493) $(8,802,277) $45,953,450
Service Sales 17,356,318 17,356,318
----------- ----------- ----------- -----------
Net Sales: 75,568,538 (3,456,493) (8,802,277) 63,309,768
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of Products Sold (15) 39,266,567 (1,065,248) (6,222,415) 31,978,904
Cost of Services Sold 13,263,312 13,263,312
----------- ----------- ----------- -----------
Cost of Products and Services Sold 52,529,879 (1,065,248) (6,222,415) 45,242,216
Selling and Administrative Expenses 18,921,126 (1,315,921) (906,977) 16,698,228
Research and Development Costs 1,165,953 (1,165,953) 0
Interest Expense 2,522,838 (970,375) (230,802) 1,321,661
----------- ----------- ----------- -----------
75,139,796 (4,517,497) (7,360,194) 63,262,105
----------- ----------- ----------- -----------
Income Before Taxes 428,742 (1,061,004) 1,442,083 47,663
(Benefit) Provision for Income Taxes
State and Federal (84,400) 344,402 (576,834) (316,832)
----------- ----------- ----------- -----------
Net Income 513,142 (716,602) 865,249 364,495
Net (Loss)/Income Per Share - Basic and Diluted 0.09 0.06
=========== =========== =========== ===========
Shares Used in Calculation - Basic and Diluted 6,029,920 6,029,920
=========== =========== =========== ===========
TRANSMATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2001
Pro Forma Pro Forma
As Reported Adjustments Adjustments Pro Forma
---------------- ------------------- ---------------- -------------
TPG MAC
(10) (11) (12) (13)
ASSETS:
- -------
Current Assets:
Cash $ 682,960 $ - $ - $ 682,960
Accounts Receivable, less allowance for doubtful 9,115,809 (485,047) (626,884) 8,003,878
accounts of $408,819 at September 30, 2001
Inventories 8,284,598 (2,795,972) (638,968) 4,849,658
Income Taxes Receivable 878,165 (630,000) (248,165) 0
Prepaid Expenses and Deferred Charges 998,592 (109,095) (8,672) 880,825
Deferred Tax Assets 411,286 (201,719) (178,071) 31,496
------------ ------------ ------------ ------------
Current Assets 20,371,410 (4,221,833) (1,700,760) 14,448,817
Properties, at cost, less accumulated depreciation 5,314,375 (1,139,414) (58,502) 4,116,459
Goodwill, less accumulated amortization of $5,497,596
at September 30, 2001 19,289,087 (4,536,557) (3,674,242) 11,078,288
Assets of business transferred under contractual
arrangements (14) 8,641,853 8,641,853
Deferred Charges 125,531 125,531
Deferred Tax Assets 425,484 425,484
Other Assets 183,811 183,811
------------ ------------ ------------ ------------
$ 45,284,214 $ (830,467) $ (5,433,504) $ 39,020,243
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
- -------------------------------------
Current Liabilities:
Current Portion of Long-Term Debt $ 3,980,000 $ - $ (1,280,000) $ 2,700,000
Accounts Payable 5,010,269 (274,652) 4,735,617
Income Taxes Payable 281,835 281,835
Accrued Payrolls, Commissions and Other 1,941,943 (251,147) 215,000 1,905,796
------------ ------------ ------------ ------------
Current Liabilities 10,932,212 (525,799) (783,165) 9,623,248
Long-Term Debt 21,053,307 (10,500,000) (1,605,026) 8,948,281
Deferred Compensation 265,689 265,689
Proceeds from business transferred (14) 10,500,000 10,500,000
Deferred Tax Liabilities 304,668 (304,668) -
------------ ------------ ------------ ------------
32,555,876 (830,467) (2,388,191) 29,337,218
Stockholders' Equity
Common Stock, par value $.50 per share - 3,110,824 3,110,824
Authorized 30,000,000 shares
Capital in Excess of Par Value 3,005,429 3,005,429
Accumulated Other Comprehensive Income (310,275) (310,275)
Retained Earnings 7,375,675 (3,045,313) 4,330,362
------------ ------------ ------------ ------------
13,181,653 0 (3,045,313) 10,136,340
Treasury Stock, at cost, 119,358 shares (453,315) (453,315)
------------ ------------ ------------ ------------
12,728,338 0 (3,045,313) 9,683,025
------------ ------------ ------------ ------------
$ 45,284,214 $ (830,467) $ (5,433,504) $ 39,020,243
============ ============ ============ ============
TRANSMATION, INC. NOTES:
Notes to the unaudited Pro Forma Consolidated Financial information contained
herein.
The accompanying pro forma consolidated financial information for Transmation,
Inc. (the "Company") for the year ended March 31, 2001 and the six months ended
September 30, 2001, is unaudited. This financial information does not contain
the detail or footnote disclosure concerning the accounting policies and other
matters that would be included in full fiscal year financial statements.
INCOME STATEMENT: SIX MONTHS (4/1/01 - 9/30/01)
------------------------------------------------------
(1) Represents the Company's Condensed Consolidated Statement of
Income for the six months of Fiscal 2002 from April 1, 2001
through September 30, 2001. This was derived from the
Consolidated Financial Statements previously presented in the
Company's 2nd quarter report on Form 10-Q.
(2) Refer to Form 8-K filed on January 10, 2002.
(3) Represents the adjustments for the sale of the Measurement and
Control division ("MAC") as they affect the overall Statement of
Income for the six months of Fiscal 2002 from April 1, 2001
through September 30, 2001. Interest expense has been reduced
based on the annualized effect of the total proceeds from the
sale at the borrowing rate from our lending institution.
(4) Represents the Pro Forma Consolidated Statement of Income with
the sale of Transmation Products Group ("TPG") and MAC excluded
for the first six months of Fiscal 2002 from April 1, 2001
through September 30, 2001.
(5) No current provision or benefit has been recorded due to losses
in the current year.
(15) Cost of Products Sold for the TPG business has been adjusted to
reflect the higher purchase price in the post sale inventory
supply agreement. Cost of Products Sold was increased $502,000
and $954,000 for the six-month period ended September 30, 2001
and the year-ended March 31, 2001, respectively.
INCOME STATEMENT: FISCAL YEAR (4/1/00 - 3/31/01)
-------------------------------------------------------
NOTES (6)-(9) Represents the same detail as Notes (1) - (4) with the time
frame being the Fiscal Year 2001 from April 1, 2000 through
March 31, 2001.
(15) Cost of Products Sold for the TPG business has been adjusted to
reflect the higher purchase price in the post sale inventory
supply agreement. Cost of Products Sold was increased $502,000
and $954,000 for the six-month period ended September 30, 2001
and the year-ended March 31, 2001, respectively.
BALANCE SHEET (SEPTEMBER 30, 2001)
------------------------------------
(10) Represents the Company's Condensed Consolidated Balance Sheet as
of September 30, 2001. This was derived from the Consolidated
Financial Statements previously presented in the Company's 2nd
quarter report on Form 10-Q.
(11) Refer to Form 8-K filed on January 10, 2002.
(12) Represents the adjustments for the sale of MAC as they affect
the overall Consolidated Balance Sheet as of September 30, 2001.
The proceeds from the sale have been included as a reduction of
overall Long-Term Debt and the loss on the sale is shown in the
Retained Earnings line. The Company has accrued for a tax
payable of $530,000 for the tax gain on the transaction. The
Company has deferred $215,000 of the sales price for services to
be provided over the next year.
(13) Represents the Pro Forma Consolidated Balance Sheet with the
sale of TPG and MAC excluded as of September 30, 2001.
(14) Due to certain post acquisition commitments SAB Topic SE
precludes the Company from recognizing this transaction as a
sale until the commitments expire. These commitments are
expected to expire in 2006.