Exhibit 99.2
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JULY 31, 2007
(Dollars in thousands, except par value)
Motive
Unaudited Unaudited
Unaudited Pro Forma Pro Forma
Historical Adjustments Balance sheet
- ---------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,046 11,950 (a) 16,996
Accounts receivable, less allowance for
doubtful accounts of $1,064 57,142 57,142
Inventories 67,859 (10,250)(a) 57,609
Deferred income taxes 197 197
Prepaid taxes 2,561 2,561
Other current assets 4,186 4,186
Assets held for sale 122,925 122,925
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Total current assets 259,916 1,700 261,616
Property, plant and equipment, net 81,316 (1,700) (a) 79,616
Deferred income taxes 642 642
Intangible and other assets, net 16,593 16,593
Goodwill 59,778 59,778
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TOTAL ASSETS $ 418,245 $ -- $ 418,245
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 39,501 $ 39,501
Accounts payable 42,614 42,614
Book overdrafts 3,495 3,495
Accrued liabilities 13,473 13,473
Other current liabilities 8,836 200 (b) 9,036
Liabilities held for sale 36,212 36,212
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Total current liabilities 144,131 200 144,331
--
Deferred income taxes 9,346 9,346
Long-term debt 123,421 123,421
Other liabilities 31,193 400 (b) 31,593
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Total liabilities 308,091 600 308,691
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C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JULY 31, 2007 (CONTINUED)
(Dollars in thousands, except par value)
Motive
Unaudited Unaudited
Unaudited Pro Forma Pro Forma
Historical Adjustments Balance sheet
- -----------------------------------------------------------------------------------------------------
Minority interest $ 11,846 $ 11,846
Stockholders' equity:
Common stock, $.01 par value, 75,000,000 shares authorized;
29,081,110 shares issued; 25,667,267 shares outstanding. 291 291
Additional paid-in capital 74,776 74,776
Treasury stock, at cost, 3,413,843 shares (47,239) (47,239)
Accumulated other comprehensive loss (14,423) (14,423)
Retained earnings 84,903 (600) (b) 84,303
- -----------------------------------------------------------------------------------------------------
Total stockholders' equity 98,308 (600) 97,708
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 418,245 $ -- $ 418,245
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C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 2007
(Dollars in thousands, except per share data)
Motive Unaudited
Unaudited Unaudited Pro Forma
Historical Pro Forma Statement of
Adjustments Operations
- -------------------------------------------------------------------------------------------------------------------------------
NET SALES $ 183,055 $ (22,722) (g) $ 160,333
COST OF SALES 156,346 (18,808) (g) 137,538
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GROSS PROFIT 26,709 (3,914) 22,795
OPERATING EXPENSES:
Selling, general and administrative expenses 24,304 (6,668) (g) 17,636
Research and development expenses 3,308 (83) (g) 3,225
Gain on sale of Shanghai, China plant (15,162) -- (15,162)
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OPERATING INCOME FROM CONTINUING OPERATIONS 14,259 2,837 17,096
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Interest expense, net 4,322 (11) 4,311
Other income, net (940) (920) (c) (1,860)
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST 10,877 3,768 14,645
Provision (benefit) for income taxes 403 (1,308) (h) (905)
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INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST 10,474 5,076 15,550
Minority interest 4,002 -- 4,002
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NET INCOME FROM CONTINUING OPERATIONS $ 6,472 $ 5,076 $ 11,548
==============================================
Earnings per share:
Basic:
Net Income from continuing operations $ 0.25 $ 0.45
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Diluted:
Net Income from continuing operations $ 0.22 $ 0.33
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Weighted average of common stock outstanding- Basic 25,655,962 25,655,962
Weighted average of common stock outstanding- Diluted 45,777,030 45,777,030
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED JANUARY 31, 2007
(Dollars in thousands, except per share data)
Effect of PED Motive Unaudited
Unaudited Change in Unaudited Unaudited Pro Forma
Historical Accounting Pro Forma Pro Forma Statement of
Principle Adjustments Adjustments Operations
- -----------------------------------------------------------------------------------------------------------------------------------
NET SALES $ 524,580 $(186,749) (e) $ (50,590) (g) $ 287,241
COST OF SALES 443,489 (3,344) (d) (145,919) (e) (44,841) (g) 249,385
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GROSS PROFIT 81,091 3,344 (40,830) (5,749) 37,856
OPERATING EXPENSES:
Selling, general and administrative expenses 68,413 (23,101) (e) (12,084) (g) 33,228
Research and development expenses 27,302 (20,773) (e) (297) (g) 6,232
Goodwill impairment 13,947 (13,947) (e) -- (g) --
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OPERATING LOSS FROM CONTINUING OPERATIONS (28,571) 3,344 16,991 6,632 (1,604)
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Interest expense, net 13,437 (2,134) (f) (43) (g) 11,260
Other expense (income), net 1,245 148 (e) (2,025) (c) (632)
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LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST (43,253) 3,344 18,977 8,700 (12,232)
Provision for income taxes 4,094 (2,975) (h) (200) (h) 919
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LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (47,347) 3,344 21,952 8,900 (13,151)
Minority interest (1,273) -- (1,273)
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NET LOSS FROM CONTINUING OPERATIONS $ (46,074) $ 3,344 $ 21,952 $ 8,900 $ (11,878)
======================================================================
Loss per share:
Basic:
Net loss from continuing operations $ (1.80) $ (0.46)
----------- -----------
Diluted:
Net loss from continuing operations $ (1.80) $ (0.46)
----------- -----------
Weighted average of common stock outstanding- Basic 25,590,448 25,590,448
Weighted average of common stock outstanding- Diluted 25,590,448 25,590,448
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED JANUARY 31, 2006
(Dollars in thousands, except per share data)
Effect of PED Motive Unaudited
Unaudited Change in Unaudited Unaudited Pro Forma
Historical Accounting Pro Forma Pro Forma Statement of
Principle Adjustments Adjustments Operations
- ---------------------------------------------------------------------------------------------------------------------------------
NET SALES $ 497,407 $(186,305) (e)$ (47,413) (g) $ 263,689
COST OF SALES 405,754 (3,442) (d) (141,882) (e) (45,104) (g) 215,326
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GROSS PROFIT 91,653 3,442 (44,423) (2,309) 48,363
OPERATING EXPENSES:
Selling, general and administrative expenses 70,557 (26,366) (e) (9,506) (g) 34,685
Research and development expenses 25,128 (18,967) (e) (285) (g) 5,876
Identifiable intangible asset impairment 20,045 (20,045) (e) -- (g) --
Goodwill impairment 13,674 (13,674) (e) -- (g) --
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OPERATING (LOSS) INCOME FROM CONTINUING OPERATIONS (37,751) 3,442 34,629 7,482 7,802
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Interest expense, net 10,487 (645) (f) (37) (g) 9,805
Other (income) expense, net (21) 280 (e) -- (g) 259
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LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES AND MINORITY INTEREST (48,217) 3,442 34,994 7,519 (2,262)
Provision for income taxes 12,362 (363) (d) (3,169) (h) (161) (h) 8,669
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LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (60,579) 3,805 38,163 7,680 (10,931)
Minority interest 83 -- 83
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NET LOSS FROM CONTINUING OPERATIONS $ (60,662) $ 3,805 $ 38,163 $ 7,680 $ (11,014)
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Loss per share:
Basic:
Net loss from continuing operations $ (2.39) $ (0.43)
----------- -----------
Diluted:
Net loss from continuing operations $ (2.39) $ (0.43)
----------- -----------
Weighted average of common stock outstanding- Basic 25,379,717 25,379,717
Weighted average of common stock outstanding- Diluted 25,379,717 25,379,717
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED JANUARY 31, 2005
(Dollars in thousands, except per share data)
Effect of PED Motive Unaudited
Unaudited Change in Unaudited Unaudited Pro Forma
Historical Accounting Pro Forma Pro Forma Statement of
Principle Adjustments Adjustments Operations
- -----------------------------------------------------------------------------------------------------------------------------------
NET SALES $ 414,738 $ (111,546) (e) $ (49,445) (g) $ 253,747
COST OF SALES 341,969 (951) (d) (81,404) (e) (49,180) (g) 210,434
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GROSS PROFIT 72,769 951 (30,142) (265) 43,313
OPERATING EXPENSES:
Selling, general and administrative expenses 53,591 (16,345) (e) (8,821) (g) 28,425
Research and development expenses 18,641 (11,831) (e) (769) (g) 6,041
Identifiable intangible asset impairment 464 (464) (e) -- --
Goodwill impairment 74,233 (74,233) (e) -- --
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OPERATING (LOSS) INCOME FROM CONTINUING OPERATIONS (74,160) 951 72,731 9,325 8,847
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Interest expense, net 5,015 (280) (f) (42) (g) 4,693
Other expense, net 1,612 (647) (e) -- (g) 965
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(LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND MINORITY INTEREST (80,787) 951 73,658 9,367 3,189
(Benefit) provision for income taxes (21,289) 377 (d) 17,778 (h) 3,710 (h) 576
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(LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST (59,498) 574 55,880 5,657 2,613
Minority interest (5) -- (5)
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NET (LOSS) INCOME FROM CONTINUING OPERATIONS $ (59,493) $ 574 $ 55,880 $ 5,657 $ 2,618
===========================================================================
Loss per share:
Basic:
Net loss from continuing operations $ (2.35) $ 0.10
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Diluted:
Net loss from continuing operations $ (2.35) $ 0.10
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Weighted average of common stock outstanding- Basic 25,349,488 25,349,488
Weighted average of common stock outstanding- Diluted 25,349,488 25,483,783
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
1. BASIS OF PRESENTATION
The accompanying unaudited pro formaconsolidated financial statements
give effect to the pro forma adjustments necessary to reflect the disposition of
certain assets within the Motive Power Division as if the disposition was
effective for the periods presented in the pro forma statements of operations
and as of July 31, 2007, in the pro forma consolidated balance sheet. The
Company's historical amounts represent our consolidated balance sheet and
statements of operations derived from our Annual report on Form 10-K for the
years ended January 31, 2007, 2006 and 2005 and quarterly report on Form 10-Q
for the period ended July 31, 2007. While the historical results of operations
of our Motive Power Division include general corporate allocations for certain
functions historically provided by C&D Technologies, Inc. such as accounting,
human resources, information systems and executive administrative costs, for the
purposes of these pro forma financial statements no amounts for these general
corporate expenses have been allocated in the pro forma adjustments and are
included within the results of our continuing operating segments.
Effective February 1, 2007, the Company has begun classifying certain
costs, which were previously classified as cost of sales, as selling, general
and administrative expenses. For comparative purposes, the years ended January
31, 2007, 2006 and 2005, have been revised to classify $7,506, $8,745 and
$6,111, respectively, of such costs as selling, general and administrative
expenses which were previously classified as cost of sales.
On September 7, 2007, the Company changed the method of accounting for its
inventory from the last-in, first-out ("LIFO") to the first-in, first-out
("FIFO") method. In accordance with Statement of Financial Accounting Standards
No. 154, "Accounting Changes and Error Corrections", the Company has
retrospectively applied this change in method of inventory costing to all prior
periods.
On September 7, 2007, the Company filed Form 8-K to reflect the unaudited
pro forma adjustments resulting from the completion of the sale of the Company's
Power Electronics Division on August 31, 2007. These pro forma adjustments, as
previously reported on Form 8-K filed on September 7, 2007, are reflected as
adjustments below in respect of the Pro Forma Consolidated Statements of
Operations for the Years Ended January 31, 2007, 2006 and 2005, respectively.
2. PRO FORMA ADJUSTMENTS
The unaudited pro forma consolidated statements of operations and balance
sheet reflect the effect of the following pro forma adjustments:
a) To reflect cash receipts of $700 at closing and expected additional
proceeds of $2,500 on or prior to January 31, 2008, in connection
with the sale of certain inventory. In addition, reflects the sale
of certain inventory and manufacturing equipment to either Crown or
to third party customers of $8,750.
b) To reflect the increase in servicing of warranty claims pursuant to
agreements for after sales service with Crown.
c) To reflect royalty income at a rate of approximately 3% to 5% based
on future sales pursuant to the asset purchase agreement.
d) To reflect the change in method of accounting for the Company's
inventory.
e) Reduction of revenue and expenses are the result of the disposition
of the Power Electronics division. Indirect expenses, such as
corporate overheads, which previously were allocated to our Power
Electronics Division, are included within the results of our
continuing operating segment.
f) To reflect interest expense associated with the Power Electronics
Division. The Company was required to use a portion of the proceeds
from the sale of the Power Electronics Division to repay a portion
of its outstanding debt. In accordance with EITF No. 87-24,
"Allocation of interest to Discontinued Operations", interest of
debt that is required to be repaid as a result of the disposal
transaction has been allocated to the discontinued operations.
g) Reduction of revenue and expenses are the result of the disposition
of the Motive Power division. Indirect expenses, such as corporate
overheads, which previously were allocated to our Motive Power
Division, are included within the results of our continuing
operating segment.
h) To reflect the income tax expense and/or benefit associated with the
disposition of our Motive Power and Power Electronics Divisions.