EX-99.3
6
v236998_ex99-3.htm
EXHIBIT 99.3
Exhibit 99.3
The KEYW Holding Corporation
Introduction to Pro Forma Condensed Financial Statements
Effective August 5, 2011, The KEYW Holding Corporation ("KEYW") acquired Flight Landata, Inc. ("FLD") for the purchase price of $30.0 million.
The accompanying unaudited pro forma condensed balance sheet as of December 31, 2010 gives effect to the FLD acquisition as if it occurred on that date. The accompanying unaudited pro forma condensed statement of income for the year ended December 31, 2010, gives effect to the FLD acquisition as if it occurred on January 1, 2010. The pro forma statements were prepared using US generally accepted accounting principles.
The unaudited pro forma condensed financial information is provided for informational purposes only and is not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of each period presented. The unaudited pro forma financial statements should not be construed as being representative of future operating results or the financial position of KEYW and should be read in conjunction with:
•
Accompanying notes to the unaudited pro forma condensed financial statements;
•
KEYW's historical consolidated financial statements and notes included in KEYW's Annual Report on Form 10-K dated December 31, 2010 and filed with the Securities and Exchange Commission on March 29, 2011 pursuant to Rule 424(b)(4); and
•
FLD's audited financial statements and notes for seven months ended August 5, 2011 and the years ended December 31, 2010 and December 31, 2009.
Unaudited Pro Forma Condensed Balance Sheet as of December 31, 2010 (In thousands)
KEYW
FLD
FLD Adj.
2011 Acq's (1)
Pro Forma
Combined
(Audited)
(Audited)
(Unaudited)
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
5,795
$
2,752
$
-
$
-
$
8,547
Receivables, net
30,406
3,522
(2,668
)
(2
)
5,216
36,476
Inventories
5,183
104
-
-
5,287
Prepaid expenses
1,950
917
-
105
2,972
Income tax receivable
55
-
-
-
55
Deferred tax asset, current
1,475
29
-
-
1,504
Total current assets
44,864
7,324
(2,668
)
5,321
54,841
Property and equipment, net
3,306
3,295
-
101
6,702
Goodwill
130,374
-
-
(3
)
23,033
153,407
Other intangibles, net
22,716
94
23,610
(3
)
5,615
52,035
Deferred tax asset
3,772
-
-
-
3,772
Other assets
232
-
-
-
232
TOTAL ASSETS
$
205,264
$
10,713
$
20,942
$
34,070
$
270,989
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
6,292
$
391
$
-
$
166
$
6,849
Accrued expenses
5,847
19
-
-
5,866
Accrued salaries & wages
5,442
246
-
3,984
9,672
Deferred income taxes
578
-
-
-
578
Debt
-
1,069
28,931
(4
)
25,513
(5
)
55,513
Total current liabilities
18,159
1,725
28,931
29,663
78,478
Long-term liabilities:
Non-current deferred tax liability
11,869
765
-
-
12,634
Other non-current liabilities
125
234
-
-
359
TOTAL LIABILITIES
$
30,153
$
2,724
$
28,931
$
29,663
$
91,471
Commitments and contingencies
Stockholders' equity:
Members' equity
-
7,989
(7,989
)
(6
)
-
-
Common stock
26
-
-
-
26
Additional paid-in capital
168,358
-
-
4,407
(7
)
172,765
Retained earnings
6,727
-
-
-
6,727
Total stockholders' equity
175,111
7,989
(7,989
)
4,407
179,518
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
205,264
$
10,713
$
20,942
$
34,070
$
270,989
(1)
KEYW acquired JKA Technologies, Inc. ("JKA") and Forbes Analytic Software, Inc. ("FASI") prior to the FLD acquisition. Neither of these acquisitions, singularly or in the aggregate qualified for disclosure in a Form 8-K under SEC rules. The goodwill and intangible amounts are the actual recorded values.
(2)
This amount represents the excess working capital based on the December 31, 2010 financials as compared with the working capital required in the merger agreement.
(3)
These amounts represent the estimated goodwill and intangibles associated with the FLD acquisition.
(4)
This amount represents the cash paid for the FLD acquisition in 2011 net of $1,069 of debt that was retired in conjunction with the acquisition.
(5)
This amount represents the aggregate cash paid for the JKA and FASI acquisitions.
(6)
This adjustment removes the equity account of FLD at acquisition.
(7)
This amount represents the equity issued in conjunction with the acquisition of JKA and FASI.
Pro Forma Condensed Statement of Income For the Year Ended December 31, 2010
(In thousands)
KEYW
Pre 2011
ACQs (1)
FORM 10-K
FLD
2011
ACQs (2)
Total
(Audited)
(Unaudited)
(Unaudited)
(Audited)
(Unaudited)
(Unaudited)
Revenue
$
107,988
$
45,163
$
153,151
$
22,321
$
24,651
$
200,123
Cost of Revenues
76,444
31,057
107,501
10,278
15,481
133,260
Gross Profit
31,544
14,106
45,650
12,043
9,170
66,863
Operating Expenses
27,264
14,643
41,907
3,321
6,091
51,319
Intangible Amortization
6,440
-
6,440
-
-
6,440
Operating (Loss) Income
(2,160
)
(537
)
(2,697
)
8,722
3,079
9,104
Non-operating (Income) Expense
(20,880
)
(8
)
(20,888
)
119
19
(20,750
)
Income (Loss) before Taxes
18,720
(529
)
18,191
8,603
3,060
29,854
Tax Expense
7,814
-
7,814
3,439
-
11,253
Net Income (Loss)
$
10,906
$
(529
)
$
10,377
$
5,164
$
3,060
$
18,601
(1)
These figures are the summarized detail from the 2010 Form 10-K Footnote 4 - Acquisitions.
(2)
These figures are the sum of the two acquisitions completed in 2011 that do not meet the criteria, individually or in aggregate, for individual pro forma presentation.

EX - 99 . 3 6 v236998 _ ex99 - 3 . htm EXHIBIT 99 . 3 Exhibit 99 . 3 The KEYW Holding Corporation Introduction to Pro Forma Condensed Financial Statements Effective August 5 , 2011 , The KEYW Holding Corporation ( " KEYW " ) acquired Flight Landata , Inc . ( " FLD " ) for the purchase price of $ 30.0 million . The accompanying unaudited pro forma condensed balance sheet as of December 31 , 2010 gives effect to the FLD acquisition as if it occurred on that date . The accompanying unaudited pro forma condensed statement of income for the year ended December 31 , 2010 , gives effect to the FLD acquisition as if it occurred on January 1 , 2010 . The pro forma statements were prepared using US generally accepted accounting principles . The unaudited pro forma condensed financial information is provided for informational purposes only and is not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of each period presented . The unaudited pro forma financial statements should not be construed as being representative of future operating results or the financial position of KEYW and should be read in conjunction with : • Accompanying notes to the unaudited pro forma condensed financial statements ; • KEYW ' s historical consolidated financial statements and notes included in KEYW 's Annual Report on Form 10 - K dated December 31 , 2010 and filed with the Securities and Exchange Commission on March 29 , 2011 pursuant to Rule 424 ( b ) ( 4 ) ; and • FLD ' s audited financial statements and notes for seven months ended August 5 , 2011 and the years ended December 31 , 2010 and December 31 , 2009 . Unaudited Pro Forma Condensed Balance Sheet as of December 31 , 2010 ( In thousands ) KEYW FLD FLD Adj . 2011 Acq 's ( 1 ) Pro Forma Combined ( Audited ) ( Audited ) ( Unaudited ) ( Unaudited ) ( Unaudited ) ASSETS Current assets : Cash and cash equivalents $ 5,795 $ 2,752 $ - $ - $ 8,547 Receivables , net 30,406 3,522 ( 2,668 ) ( 2 ) 5,216 36,476 Inventories 5,183 104 - - 5,287 Prepaid expenses 1,950 917 - 105 2,972 Income tax receivable 55 - - - 55 Deferred tax asset , current 1,475 29 - - 1,504 Total current assets 44,864 7,324 ( 2,668 ) 5,321 54,841 Property and equipment , net 3,306 3,295 - 101 6,702 Goodwill 130,374 - - ( 3 ) 23,033 153,407 Other intangibles , net 22,716 94 23,610 ( 3 ) 5,615 52,035 Deferred tax asset 3,772 - - - 3,772 Other assets 232 - - - 232 TOTAL ASSETS $ 205,264 $ 10,713 $ 20,942 $ 34,070 $ 270,989 LIABILITIES AND SHAREHOLDERS ' EQUITY Current liabilities : Accounts payable $ 6,292 $ 391 $ - $ 166 $ 6,849 Accrued expenses 5,847 19 - - 5,866 Accrued salaries & wages 5,442 246 - 3,984 9,672 Deferred income taxes 578 - - - 578 Debt - 1,069 28,931 ( 4 ) 25,513 ( 5 ) 55,513 Total current liabilities 18,159 1,725 28,931 29,663 78,478 Long - term liabilities : Non - current deferred tax liability 11,869 765 - - 12,634 Other non - current liabilities 125 234 - - 359 TOTAL LIABILITIES $ 30,153 $ 2,724 $ 28,931 $ 29,663 $ 91,471 Commitments and contingencies Stockholders ' equity : Members ' equity - 7,989 ( 7,989 ) ( 6 ) - - Common stock 26 - - - 26 Additional paid - in capital 168,358 - - 4,407 ( 7 ) 172,765 Retained earnings 6,727 - - - 6,727 Total stockholders ' equity 175,111 7,989 ( 7,989 ) 4,407 179,518 TOTAL LIABILITIES AND STOCKHOLDERS ' EQUITY $ 205,264 $ 10,713 $ 20,942 $ 34,070 $ 270,989 ( 1 ) KEYW acquired JKA Technologies , Inc . ( " JKA " ) and Forbes Analytic Software , Inc . ( " FASI " ) prior to the FLD acquisition . Neither of these acquisitions , singularly or in the aggregate qualified for disclosure in a Form 8 - K under SEC rules . The goodwill and intangible amounts are the actual recorded values . ( 2 ) This amount represents the excess working capital based on the December 31 , 2010 financials as compared with the working capital required in the merger agreement . ( 3 ) These amounts represent the estimated goodwill and intangibles associated with the FLD acquisition . ( 4 ) This amount represents the cash paid for the FLD acquisition in 2011 net of $ 1,069 of debt that was retired in conjunction with the acquisition . ( 5 ) This amount represents the aggregate cash paid for the JKA and FASI acquisitions . ( 6 ) This adjustment removes the equity account of FLD at acquisition . ( 7 ) This amount represents the equity issued in conjunction with the acquisition of JKA and FASI . Pro Forma Condensed Statement of Income For the Year Ended December 31 , 2010 ( In thousands ) KEYW Pre 2011 ACQs ( 1 ) FORM 10 - K FLD 2011 ACQs ( 2 ) Total ( Audited ) ( Unaudited ) ( Unaudited ) ( Audited ) ( Unaudited ) ( Unaudited ) Revenue $ 107,988 $ 45,163 $ 153,151 $ 22,321 $ 24,651 $ 200,123 Cost of Revenues 76,444 31,057 107,501 10,278 15,481 133,260 Gross Profit 31,544 14,106 45,650 12,043 9,170 66,863 Operating Expenses 27,264 14,643 41,907 3,321 6,091 51,319 Intangible Amortization 6,440 - 6,440 - - 6,440 Operating ( Loss ) Income ( 2,160 ) ( 537 ) ( 2,697 ) 8,722 3,079 9,104 Non - operating ( Income ) Expense ( 20,880 ) ( 8 ) ( 20,888 ) 119 19 ( 20,750 ) Income ( Loss ) before Taxes 18,720 ( 529 ) 18,191 8,603 3,060 29,854 Tax Expense 7,814 - 7,814 3,439 - 11,253 Net Income ( Loss ) $ 10,906 $ ( 529 ) $ 10,377 $ 5,164 $ 3,060 $ 18,601 ( 1 ) These figures are the summarized detail from the 2010 Form 10 - K Footnote 4 - Acquisitions . ( 2 ) These figures are the sum of the two acquisitions completed in 2011 that do not meet the criteria , individually or in aggregate , for individual pro forma presentation .