Allied Motion Technologies Inc. (NASDAQ: AMOT) On October 18,
2013, Allied Motion completed the acquisition of Globe Motors and filed
a Form 8-K announcing the acquisition within four business days of the
completion of the acquisition, as required by the SEC. On November 12,
2013 Allied Motion issued a Press Release to disclose unaudited pro
forma financial information with respect to Allied Motion’s acquisition
of Globe Motors, Inc. from Safran USA, Inc. The pro forma financial
information was released at that time to provide the readers with an
overview of the past performance of the combined entity for the year
ended December 31, 2012 and the nine months ended September 30, 2013.
Also within the Press Release, the readers were reminded that the
unaudited pro forma financial information reported at that time was
preliminary and subject to change pending the completion of the audits
by Allied Motion’s outside audit firm of the Globe Motors results for
both periods, as required by SEC regulations.
On January 3, 2014, Allied Motion filed an amendment to the Form 8-K to
include audited financial statements for Globe Motors for the year ended
December 31, 2012 and the nine month period ended September 30, 2013, as
well as certain unaudited pro forma Allied Motion and Globe Motors
combined consolidated financial statements. The pro forma financials
were based on Globe Motors’ audited report for each period presented
while Allied Motion’s results for the year ended December 31, 2012 were
audited and its interim results for the nine months ended September 30,
2013 were unaudited as filed with Allied’s most recent quarterly report
on Form 10-Q. As a result of the audit of Globe Motors, Allied Motion is
updating the previously disclosed summary pro forma information to (i)
revise the revenue of Globe Motors (ii) revise certain expenses,
including interest expense, depreciation expense and provision for
income tax for Globe Motors (iii) correct the pro forma adjustment for
certain litigation-related expenses of Globe Motors and (iv) revise
corporate allocations.
“The completion of the outside audit of Globe Motors and the reporting
of the pro forma financial results of the combined entity within the
amended Form 8-K, confirms that the Globe Motors acquisition is
accretive to Allied Motion,” commented Dick Warzala, CEO and President
of Allied Motion. “At this point we can report that the integration
process is moving forward as planned and we continue to be excited about
the opportunity to leverage the combined resources of the two
organizations to facilitate the execution of our Strategy and enhance
the continued long term growth and development of our Company.”
Set forth below are certain pro forma financial metrics that assume that
the acquisition of Globe Motors took place on January 1, 2012, the
beginning of the earliest period presented. The unaudited pro forma
information may not be indicative of the results that actually would
have occurred if the acquisition had occurred on the dates indicated or
which may be obtained in the future. The transaction will be accounted
for using the acquisition method of accounting which requires, among
other things, the assets acquired and liabilities assumed, to be
recognized at their fair values as of the acquisition date and the
allocation of the purchase price used to prepare the unaudited pro forma
information is subject to change. The Globe assets and liabilities have
been measured at their estimated fair values at the date of acquisition.
Differences between these estimates of fair value and the final
acquisition accounting may occur, and those differences could have a
material impact on the unaudited pro forma financial information
presented below. In addition, the acquisition of Globe Motors is subject
to a post-closing purchase price adjustment to reflect, among other
things, the working capital and cash on hand of Globe Motors at the time
of closing. The post-closing purchase price adjustment, if any, is
expected to be completed during the first quarter of 2014 and is not
reflected in the pro forma information set forth below.
The charts below summarize the unaudited pro forma calculation of
Revenue, Net Income, Net Income per share, EBITDA and Adjusted EBITDA
giving effect to the acquisition as compared to the historical results
for Allied Motion for the 9 months ended September 30, 2013 and year
ended December 31, 2012 is as follows (in thousands):
|
|
Allied Motion Unaudited
|
|
(1) Allied Motion & Globe Motors
|
|
|
|
|
Financial Results
|
|
Pro Forma
|
|
|
|
|
Nine Months
|
|
Nine Months
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
Increase (decrease)
|
|
|
2013
|
|
2013
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
75,371
|
|
$
|
164,631
|
|
$
|
89,260
|
|
118
|
%
|
Net income
|
|
$
|
2,612
|
|
$
|
5,461
|
|
$
|
2,849
|
|
109
|
%
|
Net income per share
|
|
$
|
0.30
|
|
$
|
0.61
|
|
$
|
0.31
|
|
103
|
%
|
EBITDA
|
|
$
|
5,083
|
|
$
|
19,659
|
|
$
|
14,576
|
|
287
|
%
|
Adjusted EBITDA
|
|
$
|
7,226
|
|
$
|
20,874
|
|
$
|
13,648
|
|
189
|
%
|
|
|
(1)
|
|
The summary pro forma information is based on audited results for
Globe Motors and unaudited results for Allied Motion together with
appropriate unaudited pro forma adjustments.
|
|
|
Allied Motion Audited
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|
(2) Allied Motion & Globe Motors
|
|
|
|
|
|
|
Financial Results
|
|
Pro Forma
|
|
|
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
Increase (decrease)
|
|
|
2012
|
|
2012
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
101,968
|
|
$
|
208,447
|
|
$
|
106,479
|
|
104
|
%
|
Net income
|
|
$
|
5,397
|
|
$
|
8,411
|
|
$
|
3,014
|
|
56
|
%
|
Net income per share
|
|
$
|
0.63
|
|
$
|
0.95
|
|
$
|
0.32
|
|
51
|
%
|
EBITDA
|
|
$
|
9,309
|
|
$
|
26,245
|
|
$
|
16,936
|
|
182
|
%
|
Adjusted EBITDA
|
|
$
|
9,918
|
|
$
|
27,263
|
|
$
|
17,345
|
|
175
|
%
|
|
|
(2)
|
|
The summary pro forma information is based on audited results for
both Allied Motion and Globe Motors together with appropriate
unaudited pro forma adjustments.
|
Non-GAAP Measures
EBITDA and Adjusted EBITDA are provided for information purposes only
and are not measures of financial performance under generally accepted
accounting principles. Management believes the presentation of these
financial measures reflecting non-GAAP adjustments provides important
supplemental information in evaluating the operating results of the
Company as distinct from results that include items that are not
indicative of ongoing operating results; in particular, those charges
and credits that are not directly related to operating unit performance,
and that are not a helpful measure of the performance of our underlying
business particularly in light of their unpredictable nature. This
non-GAAP disclosure has limitations as an analytical tool, should not be
viewed as a substitute for net income determined in accordance with
GAAP, and should not be considered in isolation or as a substitute for
analysis of the Company’s results as reported under GAAP, nor is it
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. In addition, this supplemental
presentation should not be construed as an inference that the Company’s
future results will be unaffected by similar adjustments to net income
determined in accordance with GAAP.
The Company believes EBITDA is often a useful measure of a Company’s
operating performance and is a significant basis used by the Company’s
management to measure the operating performance of the Company’s
business because EBITDA excludes charges for depreciation, amortization
and interest expense that have resulted from our debt financings, as
well as our provision for income tax expense. EBITDA is frequently used
as one of the bases for comparing businesses in the Company’s industry.
The Company also believes that Adjusted EBITDA provides helpful
information about the operating performance of its business. Adjusted
EBITDA excludes stock compensation expense, as well as certain income or
expenses which are not indicative of the ongoing performance of the
Company. EBITDA and Adjusted EBITDA do not represent and should not be
considered as an alternative to net income, operating income, net cash
provided by operating activities or any other measure for determining
operating performance or liquidity that is calculated in accordance with
generally accepted accounting principles.
The Company’s calculation of EBITDA and Adjusted EBITDA for the nine
months ended September 30, 2013 and year ended December 31, 2012 is as
follows (in thousands):
|
|
Nine Months Ended September 30, 2013
|
|
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied Motion (Unaudited)
|
|
(1)Allied Motion & Globe Motors
Pro Forma
|
|
|
|
Allied Motion
|
|
(2)Allied Motion & Globe Motors Pro Forma
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2,612
|
|
$
|
5,461
|
|
|
|
$
|
5,397
|
|
$
|
8,411
|
Interest expense
|
|
|
30
|
|
|
4,966
|
|
|
|
|
13
|
|
|
6,663
|
Provision for income tax
|
|
|
1,130
|
|
|
2,753
|
|
|
|
|
2,101
|
|
|
3,190
|
Depreciation and amortization
|
|
|
1,311
|
|
|
6,479
|
|
|
|
|
1,798
|
|
|
7,981
|
EBITDA
|
|
|
5,083
|
|
|
19,659
|
|
|
|
|
9,309
|
|
|
26,245
|
Stock compensation expense
|
|
|
674
|
|
|
981
|
|
|
|
|
609
|
|
|
1,018
|
Relocation costs
|
|
|
234
|
|
|
234
|
|
|
|
|
-
|
|
|
-
|
Business development costs
|
|
|
1,235
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
Adjusted EBITDA
|
|
$
|
7,226
|
|
$
|
20,874
|
|
|
|
$
|
9,918
|
|
$
|
27,263
|
|
|
(1)
|
|
The September 30, 2013 pro forma information is based on audited
results for Globe Motors and unaudited results for Allied Motion
together with appropriate unaudited pro forma adjustments.
|
|
|
(2)
|
|
The December 31, 2012 pro forma information is based on audited
results for both Allied Motion and Globe Motors together with
appropriate unaudited pro forma adjustments.
|
Pro Forma Comparisons
The charts below provide a summary comparison of the unaudited pro forma
financials presented in the November 12, 2013 Press Release and the
January 3, 2014 Press Release.
|
|
Nine Months Ended September 30, 2013
|
|
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Nov. 12, 2013
|
|
Pro Forma Jan. 3, 2014
|
|
|
|
Pro Forma Nov. 12, 2013
|
|
Pro Forma Jan. 3, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
164,400
|
|
$
|
164,631
|
|
|
|
$
|
208,447
|
|
$
|
208,447
|
Net Income
|
|
|
6,626
|
|
|
5,461
|
|
|
|
|
8,641
|
|
|
8,411
|
Net Income per Share
|
|
|
0.73
|
|
|
0.61
|
|
|
|
|
0.97
|
|
|
0.95
|
EBITDA
|
|
|
21,439
|
|
|
19,659
|
|
|
|
|
25,537
|
|
|
26,245
|
Adjusted EBITDA
|
|
|
22,654
|
|
|
20,874
|
|
|
|
|
26,555
|
|
|
27,263
|
Comparing the unaudited pro forma results from November 12, 2013 Press
Release to the January 3, 2014 Press Release for the nine months ended
September 30, 2013, the decrease in Adjusted EBITDA as shown on the
January 3, 2014 Press Release was primarily the result of a correction
to the amount of accrued legal expenses added back on the unaudited pro
forma financials used in the November 12, 2013 Press Release. The legal
expenses were one-time expenses for potential litigation that was not
assumed by Allied Motion in the purchase transaction.
Headquartered in Amherst, NY, Allied Motion designs, manufactures and
sells motion control products into applications that serve many industry
sectors. Allied Motion is a leading supplier of precision and specialty
motion control components and systems to a broad spectrum of customers
throughout the world. Globe Motors designs, manufactures, and
distributes precision, quality grade subfractional horsepower motors and
motorized devices throughout the world and for a wide variety of
applications including automotive, medical, commercial, industrial and
aerospace.
The statements in this press release that relate to the integration of
the Globe Motors acquisition and the future execution of the Company’s
strategy are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties including
international, national and local general business and economic
conditions in the Company’s motion markets, introduction of new
technologies, products and competitors, the ability to protect the
Company’s intellectual property, the ability of the Company to sustain,
manage or forecast its growth and product acceptance, success of new
corporation strategies and implementation of defined critical issues
designed for growth and improvement in profits, the continued success of
the Company’s customers to allow the Company to realize revenues from
its order backlog and to support the Company’s expected delivery
schedules, the continued viability of the Company’s customers and their
ability to adapt to changing technology and product demand, the ability
of the Company to meet the technical specifications of its customers,
the continued availability of parts and components, increased
competition and changes in competitor responses to the Company’s
products and services, changes in government regulations, availability
of financing, the ability of the Company’s lenders and financial
institutions to provide additional funds if needed for operations or for
making future acquisitions or the ability of the Company to obtain
alternate financing if present sources of financing are terminated, the
ability to attract and retain qualified personnel who can design new
applications and products for the motion industry, the ability of the
Company to identify and consummate favorable acquisitions to support
growth and new technology, and the ability of the Company to control
costs for the purpose of improving profitability. Actual results, events
and performance may differ materially. Readers are cautioned not to
place undue reliance on these forward-looking statements as a prediction
of actual results. The Company has no obligation or intent to release
publicly any revisions to any forward looking statements, whether as a
result of new information, future events, or otherwise.
Copyright Business Wire 2014