EX-99.1
2
exhibit991unauditedproform.htm
EXHIBIT 99.1 PRO FORMA
Exhibit
Unaudited Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated financial statements are based on the historical consolidated financial statements of Foundation Building Materials, Inc. (the "Company"), as adjusted to give effect to the November 1, 2018, sale of the Company's mechanical insulation segment ("MI Business"), to SPI, LLC (the "Buyer"). The MI Business sale was a disposition that qualified as discontinued operations under Accounting Standards Codification No. 205, Presentation of Financial Statements. Therefore, the Company's Form 10-Q for the quarterly period ended September 30, 2018, filed on November 1, 2018, reflects the MI Business as discontinued operations in its condensed consolidated balance sheets as of September 30, 2018, and December 31, 2017, and statements of operations for the three and nine months ended September 30, 2018 and 2017, respectively.
The following unaudited pro forma condensed consolidated financial statements are presented to comply with Article 11 of Regulation S-X and follow prescribed U.S. Securities and Exchange Commission regulations. The unaudited pro forma condensed consolidated financial statements do not purport to present what the Company's results would have been had the disposition actually occurred on the dates indicated or to project what the Company's results of operations or financial position would have been for any future period. The prescribed regulations limit pro forma adjustments to those that are directly attributable to the disposition on a factually supported basis. Consequently, the Company was not permitted within the unaudited pro forma condensed consolidated financial statements to allocate to the disposed operations any indirect corporate overhead or costs, such as administrative corporate functions or any other costs that were shared with the retained business of the Company. As a result, such costs are not reflected in the pro forma adjustments and are included in the retained business of the Company.
The unaudited pro forma condensed consolidated financial statements have been prepared for informational purposes and to assist in the analysis of the Company's sale of the MI Business to the Buyer. This information should be read together with the historical consolidated financial statements and related notes of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2017 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.
The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2017 and 2016, give effect to the MI Business sale as if it had occurred on January 1, 2016.
The unaudited pro forma condensed consolidated financial statements are derived from the historical consolidated financial statements of the Company and are based on assumptions that management believes are reasonable in the circumstances.
1
Foundation Building Materials, Inc.
Unaudited Pro Forma Condensed Consolidated Statement Of Operations
Year Ended December 31, 2017
(in thousands, except share and per share amounts)
Historical - As Reported
Adjustments To Reflect MI Business Sale
Pro Forma
Net sales
$
2,060,902
$
270,788
$
1,790,114
Cost of goods sold
1,463,041
195,116
1,267,925
Gross profit
597,861
75,672
522,189
Operating expenses:
Selling, general and administrative
461,564
61,700
399,864
Depreciation and amortization
76,850
5,989
70,861
Total operating expenses
538,414
67,689
470,725
Income from operations
59,447
7,983
51,464
Interest expense
(61,071
)
(60
)
(61,011
)
Other income, net
81,502
14
81,488
Income before income taxes
79,878
7,937
71,941
Income tax benefit
(2,602
)
3,363
(5,965
)
Net income
$
82,480
$
4,574
$
77,906
Earnings per share data:
Earnings per share - basic
$
1.99
$
1.88
Earnings per share - diluted
$
1.99
$
1.88
Weighted average shares outstanding:
Basic
41,486,496
41,486,496
Diluted
41,490,653
41,490,653
2
Foundation Building Materials, Inc.
Unaudited Pro Forma Condensed Consolidated Statement Of Operations
Year Ended December 31, 2016
(in thousands, except share and per share amounts)
Historical - As Reported
Adjustments To Reflect MI Business Sale
Pro Forma
Net sales
$
1,392,509
$
99,013
$
1,293,496
Cost of goods sold
995,704
73,923
921,781
Gross profit
396,805
25,090
371,715
Operating expenses:
Selling, general and administrative
328,847
23,556
305,291
Depreciation and amortization
51,378
1,888
49,490
Total operating expenses
380,225
25,444
354,781
Income from operations
16,580
(354
)
16,934
Interest expense
(52,511
)
(29
)
(52,482
)
Other expense, net
(7,172
)
(16
)
(7,156
)
Loss before income taxes
(43,103
)
(399
)
(42,704
)
Income tax benefit
(14,733
)
10
(14,743
)
Net loss
$
(28,370
)
$
(409
)
$
(27,961
)
Loss per share data:
Loss per share - basic
$
(0.95
)
$
(0.93
)
Loss per share - diluted
$
(0.95
)
$
(0.93
)
Weighted average shares outstanding:
Basic
29,974,239
29,974,239
Diluted
29,974,239
29,974,239
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EX - 99 . 1 2 exhibit991unauditedproform . htm EXHIBIT 99 . 1 PRO FORMA Exhibit Unaudited Pro Forma Condensed Consolidated Financial Statements The following unaudited pro forma condensed consolidated financial statements are based on the historical consolidated financial statements of Foundation Building Materials , Inc . ( the " Company " ) , as adjusted to give effect to the November 1 , 2018 , sale of the Company 's mechanical insulation segment ( " MI Business " ) , to SPI , LLC ( the " Buyer " ) . The MI Business sale was a disposition that qualified as discontinued operations under Accounting Standards Codification No . 205 , Presentation of Financial Statements . Therefore , the Company 's Form 10 - Q for the quarterly period ended September 30 , 2018 , filed on November 1 , 2018 , reflects the MI Business as discontinued operations in its condensed consolidated balance sheets as of September 30 , 2018 , and December 31 , 2017 , and statements of operations for the three and nine months ended September 30 , 2018 and 2017 , respectively . The following unaudited pro forma condensed consolidated financial statements are presented to comply with Article 11 of Regulation S - X and follow prescribed U . S . Securities and Exchange Commission regulations . The unaudited pro forma condensed consolidated financial statements do not purport to present what the Company 's results would have been had the disposition actually occurred on the dates indicated or to project what the Company 's results of operations or financial position would have been for any future period . The prescribed regulations limit pro forma adjustments to those that are directly attributable to the disposition on a factually supported basis . Consequently , the Company was not permitted within the unaudited pro forma condensed consolidated financial statements to allocate to the disposed operations any indirect corporate overhead or costs , such as administrative corporate functions or any other costs that were shared with the retained business of the Company . As a result , such costs are not reflected in the pro forma adjustments and are included in the retained business of the Company . The unaudited pro forma condensed consolidated financial statements have been prepared for informational purposes and to assist in the analysis of the Company 's sale of the MI Business to the Buyer . This information should be read together with the historical consolidated financial statements and related notes of the Company included in its Annual Report on Form 10 - K for the year ended December 31 , 2017 and its Quarterly Report on Form 10 - Q for the quarter ended September 30 , 2018 . The unaudited pro forma condensed consolidated statements of operations for the years ended December 31 , 2017 and 2016 , give effect to the MI Business sale as if it had occurred on January 1 , 2016 . The unaudited pro forma condensed consolidated financial statements are derived from the historical consolidated financial statements of the Company and are based on assumptions that management believes are reasonable in the circumstances . 1 Foundation Building Materials , Inc . Unaudited Pro Forma Condensed Consolidated Statement Of Operations Year Ended December 31 , 2017 ( in thousands , except share and per share amounts ) Historical - As Reported Adjustments To Reflect MI Business Sale Pro Forma Net sales $ 2,060,902 $ 270,788 $ 1,790,114 Cost of goods sold 1,463,041 195,116 1,267,925 Gross profit 597,861 75,672 522,189 Operating expenses : Selling , general and administrative 461,564 61,700 399,864 Depreciation and amortization 76,850 5,989 70,861 Total operating expenses 538,414 67,689 470,725 Income from operations 59,447 7,983 51,464 Interest expense ( 61,071 ) ( 60 ) ( 61,011 ) Other income , net 81,502 14 81,488 Income before income taxes 79,878 7,937 71,941 Income tax benefit ( 2,602 ) 3,363 ( 5,965 ) Net income $ 82,480 $ 4,574 $ 77,906 Earnings per share data : Earnings per share - basic $ 1 . 99 $ 1 . 88 Earnings per share - diluted $ 1 . 99 $ 1 . 88 Weighted average shares outstanding : Basic 41,486,496 41,486,496 Diluted 41,490,653 41,490,653 2 Foundation Building Materials , Inc . Unaudited Pro Forma Condensed Consolidated Statement Of Operations Year Ended December 31 , 2016 ( in thousands , except share and per share amounts ) Historical - As Reported Adjustments To Reflect MI Business Sale Pro Forma Net sales $ 1,392,509 $ 99,013 $ 1,293,496 Cost of goods sold 995,704 73,923 921,781 Gross profit 396,805 25,090 371,715 Operating expenses : Selling , general and administrative 328,847 23,556 305,291 Depreciation and amortization 51,378 1,888 49,490 Total operating expenses 380,225 25,444 354,781 Income from operations 16,580 ( 354 ) 16,934 Interest expense ( 52,511 ) ( 29 ) ( 52,482 ) Other expense , net ( 7,172 ) ( 16 ) ( 7,156 ) Loss before income taxes ( 43,103 ) ( 399 ) ( 42,704 ) Income tax benefit ( 14,733 ) 10 ( 14,743 ) Net loss $ ( 28,370 ) $ ( 409 ) $ ( 27,961 ) Loss per share data : Loss per share - basic $ ( 0 . 95 ) $ ( 0 . 93 ) Loss per share - diluted $ ( 0 . 95 ) $ ( 0 . 93 ) Weighted average shares outstanding : Basic 29,974,239 29,974,239 Diluted 29,974,239 29,974,239 3