EXHIBIT 99.1
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information of Cybernet
Internet Services International, Inc. (the "Company") for the year ended
December 31, 2001 gives effect to the sale of Cybernet Italia S.p.A. (the
"Disposition") as if the Disposition had occurred on January 1, 2001 with
respect to the unaudited pro forma consolidated statement of operations, and as
at December 31, 2001 for the Disposition with respect to the unaudited pro forma
consolidated balance sheet. The unaudited pro forma adjustments described in the
notes to the pro forma consolidated balance sheet and statement of operations
have been prepared by management in accordance with Regulation S-X of the
Securities Exchange Act of 1934.
The unaudited pro forma consolidated statement of operations discloses losses
from continuing operations before nonrecurring charges or credits.
The unaudited pro forma consolidated financial information presents management's
best estimate of the effects of the Disposition and is presented for
illustrative purposes only. This information is not indicative of the operating
results and financial position of the Company that would have actually been
obtained had the Disposition been consummated as of the dates and for the
periods presented, or that may be obtained in the future.
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 2001
(in thousands of Euros)
CYBERNET PRO FORMA
HISTORICAL ITALIA S.P.A. ADJUSTMENTS PRO FORMA
ASSETS
Cash and cash equivalents 2,735 (254) 2,481
Restricted cash 2,743 2,743
Short-term investments 149 149
Trade accounts receivable 8,903 (3,036) 5,867
Related party receivables 356 (1,135) 779 -
Other receivables 2,721 (889) 1,832
Restricted investments 10,567 10,567
Prepaid expenses 574 (316) 258
Other current assets 947 (92) 855
--------- --------- --------- ---------
Total current assets 29,695 (5,722) 779 24,752
Property and equipment, net 32,653 (5,430) 115 27,338
Product development
costs, net 806 806
Investments 2,770 2,770
Other assets 6,048 (312) 5,736
--------- --------- --------- ---------
TOTAL ASSETS 71,972 (11,464) 894 61,402
========= ========= ========= =========
LIABILITIES AND
SHAREHOLDERS' DEFICIT
LIABILITIES
Overdrafts and
short-term borrowings 170 (170) -
Trade accounts payable 13,155 (15,120) 8,955 6,990
Other accrued liabilities 11,835 (1,035) 10,800
Current portion capital
lease obligations 1,060 (396) 664
Accrued personnel costs 1,848 (380) 1,468
--------- --------- --------- ---------
Total current liabilities 28,068 (17,101) 8,955 19,922
Long-term debt 164,573 164,573
Capital lease obligations 435 (337) 98
--------- --------- --------- ---------
193,076 (17,438) 8,955 184,593
SHAREHOLDERS' DEFICIT
Common stock 25 25
Additional paid-in capital 127,718 127,718
Accumulated deficit (249,473) 5,974 (8,061) (251,560)
Accumulated other
comprehensive income 626 626
--------- --------- --------- ---------
Total Shareholders' deficit (121,104) 5,974 (8,061) (123,191)
--------- --------- --------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT 71,972 (11,464) 894 61,402
========= ========= ========= =========
See accompanying Notes to Unaudited Pro Forma Consolidated Balance Sheet and
Statement of Operations.
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2001
(in thousands of Euros, except share data)
CYBERNET PRO FORMA
HISTORICAL ITALIA S.P.A. ADJUSTMENTS PRO FORMA
Revenues:
Internet data center
services 10,102 (1,274) 8,828
Connectivity 26,817 (4,612) 22,205
E-business 2,158 (627) 1,531
--------- --------- --------- ---------
Total Revenues 39,077 (6,513) 32,564
Direct cost of services 25,105 (5,701) 19,404
--------- --------- --------- ---------
Gross margin 13,972 (812) 13,160
Operating expenses:
Network operations 7,861 (1,603) 6,258
General and administrative
expenses 18,477 (2,733) 15,744
Sales and marketing
expenses 10,186 (2,460) 7,726
Research and development 365 365
Impairment of assets and
other asset write-offs 37,110 (67) (18,790) 18,253
Depreciation and
amortization 20,156 (1,495) (3,713) 14,948
--------- --------- --------- ---------
Total operating expenses 94,155 (8,358) (22,503) 63,294
--------- --------- --------- ---------
Operating loss (80,183) 7,546 22,503 (50,134)
Interest expense (25,728) 285 (25,443)
Interest income 1,477 188 1,665
Other income 123 123
Foreign currency losses (6,721) (6,721)
--------- --------- --------- ---------
Loss before taxes,
minority interest and
equity earnings (111,032) 8,019 22,503 (80,510)
Income tax expense (27,678) (27,678)
--------- --------- --------- ---------
Loss before equity loss (138,710) 8,019 22,503 (108,188)
Equity in losses of
equity investments (538) (538)
--------- --------- --------- ---------
Loss before extraordinary
items (139,248) 8,019 22,503 (108,726)
========= ========= ========= =========
Basic and diluted loss
per share (5.36) (4.18)
See accompanying Notes to Unaudited Pro Forma Consolidated Balance Sheet and
Statement of Operations.
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AND STATEMENT OF OPERATIONS
(1) Pro Forma Transaction
On April 16, 2002, the Company sold its investment in Cybernet Italia S.p.A.
("Italia") in exchange for $10,000.
(2) Pro Forma Adjustments
The pro forma adjustments include the elimination of the impairment and
amortization charges of the goodwill and intangible assets relating to Italia,
as well as the write off of the intercompany loans upon the disposition of
Italia.
(3) Unusual Events
The Company has incurred significant operating losses since inception, and has
not achieved and does not expect to achieve sufficient revenues to support
future operations without additional financing. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Since inception, the Company has financed its operations primarily through
public and private sales of common stock and public debt, and short-term
borrowings from banks. These financings have funded the Company's operating
losses, which total approximately Euro 249,473,000 for the years from inception
through December 31, 2001. The Company's operations continue to generate
negative operating cash flows; in the year ended December 31, 2001 cash used in
operations totalled approximately Euro 24,259,000. Management believes that
planned cost savings and anticipated improvements in operating results in 2002
will reduce the amount of cash used in operations which, when combined with
available unrestricted cash as of December 31, 2001, and anticipated new
financing sources, will permit the Company to continue to operate. The Company
is currently in the process of identifying alternative financing sources,
negotiating changes to its debt structure and evaluating its strategic options.
However, there are no assurances that these plans can be accomplished or that
they will provide sufficient cash to fund the Company's operations.
During the fourth quarter of fiscal 2001, the Company performed an impairment
assessment of goodwill and identifiable intangible assets recorded in connection
with its various previous acquisitions. The assessment was performed primarily
due to the continued depressed value of the Company's stock price during fiscal
2001, the losses that the Company has incurred since inception, the Company's
significant underperformance relative to projections and the overall decline in
industry growth rates, which indicated that this trend might continue for an
indefinite period. The Company determined that the estimated future
undiscounted cash flows were below the carrying value of the goodwill and
identifiable intangible assets associated with certain previous acquisitions.
As a result, the Company recorded Euro 22,022,000 and Euro 6,395,000 for
impairment charges related to goodwill and other intangible assets,
respectively, in the year ended December 31, 2001 to reduce goodwill and
identifiable intangible assets to zero. The assumptions supporting the
estimated future undiscounted cash flows reflect management's best estimates.