2003 Combined Company Pro Forma Financial Statement for SafeNet and Rainbow Technologies
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Summary
This document presents the pro forma combined financial results for SafeNet, Inc. (SFNT) and Rainbow Technologies, Inc. (RNBO) for the year 2003, including quarterly and annual figures. It details revenues, costs, operating expenses, and net income, both on a pro forma and GAAP basis, reflecting adjustments for acquisition-related expenses, litigation settlements, and tax rates. The report is intended to show the financial impact of the companies' merger, providing stakeholders with a clear view of the combined entity's performance.
EX-2.2 3 w95289exv2w2.htm EXHIBIT 2.2 exv2w2
Exhibit 2.2
2003 Combined Company Pro Forma
| (see notes below) | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Full Year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SFNT (1) | RNBO (2) | Combined | SFNT (1) | RNBO (2) | Combined | SFNT (1) | RNBO (2) | Combined | SFNT (1) | RNBO (2) | Combined | SFNT (1) | RNBO (2) | Combined | ||||||||||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Licenses and royalties | $ | 1,978 | $ | — | $ | 1,978 | $ | 2,593 | $ | — | $ | 2,593 | $ | 3,131 | $ | — | $ | 3,131 | $ | 8,762 | $ | — | $ | 8,762 | $ | 16,464 | $ | — | $ | 16,464 | ||||||||||||||||||||||||||||||
Products | 10,014 | 33,869 | 43,883 | 10,994 | 33,304 | 44,298 | 11,071 | 35,441 | 46,512 | 6,718 | 39,214 | 45,932 | 38,797 | 141,828 | 180,625 | |||||||||||||||||||||||||||||||||||||||||||||
Service and maintenance | 1,571 | — | 1,571 | 2,924 | — | 2,924 | 3,183 | — | 3,183 | 3,255 | — | 3,255 | 10,933 | — | 10,933 | |||||||||||||||||||||||||||||||||||||||||||||
Total revenue | 13,563 | 33,869 | 47,432 | 16,511 | 33,304 | 49,815 | 17,385 | 35,441 | 52,826 | 18,735 | 39,214 | 57,949 | 66,194 | 141,828 | 208,022 | |||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Licenses and royalties | 108 | — | 108 | 16 | — | 16 | 79 | — | 79 | 609 | — | 609 | 812 | — | 812 | |||||||||||||||||||||||||||||||||||||||||||||
Products | 2,940 | 20,577 | 23,517 | 3,599 | 19,782 | 23,381 | 3,553 | 20,833 | 24,386 | 2,027 | 18,193 | 20,220 | 12,119 | 79,385 | 91,504 | |||||||||||||||||||||||||||||||||||||||||||||
Service and maintenance | 320 | — | 320 | 466 | — | 466 | 320 | — | 320 | 161 | — | 161 | 1,267 | — | 1,267 | |||||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | 3,368 | 20,577 | 23,945 | 4,081 | 19,782 | 23,863 | 3,952 | 20,833 | 24,785 | 2,797 | 18,193 | 20,990 | 14,198 | 79,385 | 93,583 | |||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 10,195 | 13,292 | 23,487 | 12,430 | 13,522 | 25,952 | 13,433 | 14,608 | 28,041 | 15,938 | 21,021 | 36,959 | 51,996 | 62,443 | 114,439 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin | 75 | % | 39 | % | 50 | % | 75 | % | 41 | % | 52 | % | 77 | % | 41 | % | 53 | % | 85 | % | 54 | % | 64 | % | 79 | % | 44 | % | 55 | % | ||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | 3,256 | 1,735 | 4,991 | 4,149 | 2,206 | 6,355 | 3,777 | 2,015 | 5,792 | 3,482 | 2,823 | 6,305 | 14,664 | 8,779 | 23,443 | |||||||||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses | 3,066 | 3,819 | 6,885 | 3,813 | 3,897 | 7,710 | 3,956 | 4,467 | 8,423 | 4,094 | 5,822 | 9,916 | 14,929 | 18,005 | 32,934 | |||||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 1,697 | 3,899 | 5,596 | 1,427 | 4,267 | 5,694 | 1,729 | 4,276 | 6,005 | 1,863 | 4,999 | 6,862 | 6,716 | 17,442 | 24,158 | |||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 8,019 | 9,453 | 17,472 | 9,389 | 10,369 | 19,758 | 9,462 | 10,759 | 20,221 | 9,439 | 13,645 | 23,084 | 36,309 | 44,226 | 80,535 | |||||||||||||||||||||||||||||||||||||||||||||
Operating (loss) income | 2,176 | 3,839 | 6,015 | 3,041 | 3,152 | 6,193 | 3,971 | 3,849 | 7,820 | 6,499 | 7,377 | 13,876 | 15,687 | 18,216 | 33,903 | |||||||||||||||||||||||||||||||||||||||||||||
Interest and other income, net | 89 | (244 | ) | (155 | ) | 154 | (235 | ) | (81 | ) | 207 | (808 | ) | (601 | ) | 357 | (798 | ) | (441 | ) | 807 | (2,085 | ) | (1,278 | ) | |||||||||||||||||||||||||||||||||||
(Loss) income from continuing ops before taxes | 2,265 | 3,595 | 5,860 | 3,195 | 2,917 | 6,112 | 4,178 | 3,041 | 7,219 | 6,856 | 6,578 | 13,434 | 16,494 | 16,132 | 32,626 | |||||||||||||||||||||||||||||||||||||||||||||
Income tax provision (@33%) | 747 | 1,186 | 1,934 | 1,054 | 963 | 2,017 | 1,379 | 1,003 | 2,382 | 2,262 | 2,171 | 4,433 | 5,443 | 5,323 | 10,766 | |||||||||||||||||||||||||||||||||||||||||||||
(Loss) income from continuing operations | $ | 1,518 | $ | 2,409 | $ | 3,926 | $ | 2,141 | $ | 1,955 | $ | 4,095 | $ | 2,799 | $ | 2,037 | $ | 4,836 | $ | 4,594 | $ | 4,407 | $ | 9,001 | $ | 11,051 | $ | 10,808 | $ | 21,859 | ||||||||||||||||||||||||||||||
| 11 | % | 7 | % | 8 | % | 13 | % | 6 | % | 8 | % | 16 | % | 6 | % | 9 | % | 25 | % | 11 | % | 16 | % | 17 | % | 8 | % | 11 | % | |||||||||||||||||||||||||||||||
Proforma to GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Write-off of acquired in-process R&D | $ | 7,900 | $ | — | $ | 7,900 | $ | 1,781 | $ | 1,781 | $ | — | $ | — | $ | — | $ | — | $ | 9,681 | $ | — | $ | 9,681 | ||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 1,843 | — | 1,843 | 2,086 | 2,086 | 1,650 | 1,650 | 1,783 | 553 | 2,336 | 7,362 | 553 | 7,915 | |||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | (106 | ) | (647 | ) | (753 | ) | (658 | ) | (983 | ) | (1,641 | ) | (810 | ) | (370 | ) | (1,180 | ) | (2,264 | ) | (1,324 | ) | (3,588 | ) | (3,838 | ) | (3,325 | ) | (7,163 | ) | ||||||||||||||||||||||||||||||
Litigation settlement — R | — | — | — | — | 3,632 | 3,632 | — | — | — | — | — | 3,632 | 3,632 | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring — R | — | — | — | — | — | — | (142 | ) | (142 | ) | 4 | 4 | — | (138 | ) | (138 | ) | |||||||||||||||||||||||||||||||||||||||||||
Integration/acquisition costs — R | — | — | — | — | — | — | — | 2,258 | 2,258 | — | 2,258 | 2,258 | ||||||||||||||||||||||||||||||||||||||||||||||||
Integration costs — S | 1,615 | — | 1,615 | 1,374 | 1,374 | 138 | 138 | 807 | 807 | 3,934 | — | 3,934 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proforma effect on net income (loss) | $ | 11,252 | $ | (647 | ) | $ | 10,605 | $ | 4,583 | $ | 2,649 | $ | 7,232 | $ | 978 | $ | (512 | ) | $ | 466 | $ | 326 | $ | 1,491 | $ | 1,817 | $ | 17,139 | $ | 2,980 | $ | 20,119 | ||||||||||||||||||||||||||||
Proforma effect per share | $ | 1.17 | $ | (0.06 | ) | $ | 0.53 | $ | 0.42 | $ | 0.26 | $ | 0.35 | $ | 0.07 | $ | (0.05 | ) | $ | 0.02 | $ | 0.02 | $ | 0.14 | $ | 0.07 | $ | 1.43 | $ | 0.29 | $ | 0.90 | ||||||||||||||||||||||||||||
Gaap income (loss) | $ | (9,735 | ) | $ | 3,056 | $ | (6,679 | ) | $ | (2,442 | ) | $ | (694 | ) | $ | (3,137 | ) | $ | 1,821 | $ | 2,549 | $ | 4,370 | $ | 4,268 | $ | 2,916 | $ | 7,184 | $ | (6,088 | ) | $ | 7,828 | $ | 1,740 | ||||||||||||||||||||||||
Gaap EPS (on diluted shares) | $ | (1.01 | ) | $ | 0.29 | $ | (0.33 | ) | $ | (0.22 | ) | $ | (0.07 | ) | $ | (0.15 | ) | $ | 0.13 | $ | 0.24 | $ | 0.18 | $ | 0.31 | $ | 0.27 | $ | 0.29 | $ | (0.51 | ) | $ | 0.75 | $ | 0.08 | ||||||||||||||||||||||||
Earnings per Share (Pro Forma) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.17 | $ | 0.24 | $ | 0.21 | $ | 0.21 | $ | 0.19 | $ | 0.20 | $ | 0.22 | $ | 0.20 | $ | 0.21 | $ | 0.35 | $ | 0.44 | $ | 0.38 | $ | 0.97 | $ | 1.08 | $ | 1.02 | ||||||||||||||||||||||||||||||
Diluted | $ | 0.16 | $ | 0.23 | $ | 0.20 | $ | 0.20 | $ | 0.19 | $ | 0.20 | $ | 0.21 | $ | 0.20 | $ | 0.20 | $ | 0.33 | $ | 0.41 | $ | 0.36 | $ | 0.92 | $ | 1.04 | $ | 0.98 | ||||||||||||||||||||||||||||||
# of shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 9,083 | 9,896 | 18,979 | 10,232 | 10,034 | 20,266 | 12,769 | 10,026 | 22,795 | 13,281 | 10,129 | 23,410 | 11,350 | 10,022 | 21,372 | |||||||||||||||||||||||||||||||||||||||||||||
Diluted | 9,629 | 10,373 | 20,002 | 10,867 | 10,034 | 20,901 | 13,546 | 10,423 | 23,969 | 13,987 | 10,737 | 24,724 | 12,016 | 10,392 | 22,408 | |||||||||||||||||||||||||||||||||||||||||||||
| (1) | SFNT numbers have been adjusted to reflect the following | |
| – | Excludes acquisition related expenses and assumes a 33% effective tax rate. | |
| – | Reflects adjusted quarterly data from Item 6 of SafeNet’s 2003 Form 10-K, filed on March 10, 2004. |
| (2) | RNBO numbers have been adjusted to reflect the following | |
| – | Excludes the effects of $3.6M litigation settlement, merger related expenses, and assumes a 33% effective tax rate. | |
| – | # of shares based on transaction exchange ratio of .374x. |
