See accompanying notes.
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
PRO FORMA
AMAZON.COM JUNGLEE ADJUSTMENTS PRO FORMA
---------- --------- ----------- ---------
ASSETS
Current Assets:
Cash ............................................... $ 7,462 $ 4,031 $ -- $ 11,493
Marketable securities .............................. 337,396 -- -- 337,396
Inventories ........................................ 17,035 -- -- 17,035
Prepaid expenses and other ......................... 12,722 936 -- 13,658
--------- --------- --------- ---------
Total current assets ....................... 374,615 4,967 -- 379,582
Fixed assets, net .................................... 15,587 1,002 -- 16,589
Deposits and other ................................... 286 181 -- 467
Goodwill and other purchased intangibles, net ........ 52,398 -- 176,982(c) 229,380
Deferred charges ..................................... 7,622 -- -- 7,622
--------- --------- --------- ---------
Total assets ............................... $ 450,508 $ 6,150 $ 176,982 $ 633,640
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ................................... $ 47,818 $ 465 $ -- $ 48,283
Accrued advertising ................................ 9,971 -- -- 9,971
Other liabilities and accrued expenses ............. 14,197 2,748 4,541(a),(c) 21,486
Current portion of long-term debt .................. 684 200 -- 884
--------- --------- --------- ---------
Total current liabilities .................. 72,670 3,413 4,541 80,624
Long-term portion of debt ............................ 332,225 76 -- 332,301
Long-term portion of capital lease obligation ........ 181 -- -- 181
Stockholders' Equity:
Preferred stock, common stock and additional paid-in
capital ......................................... 117,230 13,369 164,059(a) 294,658
Note receivable from officer ....................... -- (1,249) -- (1,249)
Deferred compensation .............................. (1,301) (277) -- (1,578)
Other gains (losses) ............................... (35) -- -- (35)
Accumulated deficit ................................ (70,462) (9,182) 8,382(b),(c) (71,262)
--------- --------- --------- ---------
Total stockholders' equity ................. 45,432 2,661 172,441 220,534
--------- --------- --------- ---------
Total liabilities and stockholders'
equity ............................. $ 450,508 $ 6,150 $ 176,982 $ 633,640
========= ========= ========= =========
See accompanying notes.
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
PRO FORMA
AMAZON.COM JUNGLEE ADJUSTMENTS PRO FORMA
---------- --------- ----------- ---------
Net sales ....................................... $ 203,405 $ 1,398 $ -- $ 204,803
Cost of sales ................................... 157,856 1,296 -- 159,152
--------- --------- --------- ---------
Gross profit .................................... 45,549 102 -- 45,651
Operating expenses:
Marketing and sales ........................... 47,005 2,510 -- 49,515
Product development ........................... 16,152 1,216 -- 17,368
General and administrative .................... 5,364 691 -- 6,055
Merger and acquisition related costs .......... 5,413 -- 29,217(c) 34,630
--------- --------- --------- ---------
Total operating expenses .................... 73,934 4,417 29,217 107,568
Loss from operations ............................ (28,385) (4,315) (29,217) (61,917)
Interest income ................................. 5,036 98 -- 5,134
Interest expense ................................ (9,599) (23) -- (9,622)
--------- --------- --------- ---------
Net loss ........................................ $ (32,948) $ (4,240) $ (29,217) $ (66,405)
========= ========= ========= =========
Pro forma basic and diluted loss per share ...... $ (0.69) $ (1.35)
========= =========
Shares used in computation of pro forma basic and
diluted loss per share ........................ 47,934 49,347
========= =========
See accompanying notes.
NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The pro forma combined condensed consolidated financial statements reflect the issuance of approximately 1,600,000 shares of Amazon.com common stock, par value $.01 per share ("Amazon.com Common Stock"), and the assumption of all outstanding options and warrants in connection with the acquisition of Junglee. The Junglee Merger was accounted for under the purchase method of accounting in accordance with APB Opinion No. 16. Under the purchase method of accounting, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Estimates of the fair values of the assets and liabilities of Junglee have been combined with the recorded values of the assets and liabilities of Amazon.com in the unaudited pro forma combined condensed consolidated financial statements.
PRO FORMA ADJUSTMENTS
(a) To reflect the issuance of approximately 1,600,000 shares of
Amazon.com Common Stock and the assumption of all outstanding
options and warrants in connection with the Junglee Merger, for
an aggregate purchase price of approximately $180 million,
including approximately $3 million of transaction costs.
(b) To eliminate the historical accumulated deficit of Junglee.
(c) To record the excess of the purchase price over the fair value of
assets and liabilities acquired in connection with the Junglee
Merger. The purchase price allocation is based on management's
estimates of the fair values of the tangible assets, intangible
assets and technology, which has not reached technological
feasibility and therefore, has no alternative future use. The
book value of tangible assets and liabilities acquired are
assumed to approximate fair value. The goodwill and substantially
all other purchased intangible assets will be amortized on a
straight line basis over approximately 3 years.
PRO FORMA NET LOSS PER SHARE
Basic pro forma earnings per share is computed using the weighted average number of Amazon.com common shares outstanding during the period plus shares of Amazon.com Common Stock issued in connection with the Junglee Merger, excluding Amazon.com Common Stock subject to repurchase. Diluted pro forma earnings per share is computed using the weighted average number of common and common equivalent shares outstanding during the period plus shares of Amazon.com Common Stock and common equivalent shares assumed in connection with the Junglee Merger. Common equivalent shares are excluded from the computation if their effect is antidilutive. Amazon.com Common Stock, options and warrants issued in connection with the Junglee Merger are assumed outstanding at the beginning of the period.
CONFORMING AND RECLASSIFICATION ADJUSTMENTS
There were no material adjustments required to conform the accounting policies of Amazon.com and Junglee. Certain amounts have been reclassified to conform to Amazon.com's financial statement presentation. There have been no significant intercompany transactions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized.
AMAZON.COM, INC.
(Registrant)
Dated: October 26, 1998 By: ____________________________
Joy D. Covey
Chief Financial Officer, Vice President of
Finance and Administration and Secretary
EXHIBIT INDEX
Exhibit Number Description
------------- ------------
2.1 Agreement and Plan of Merger dated as of August 3, 1998,
by and among Amazon.com, Inc., AJ Acquisition, Inc. and
Junglee Corp. (incorporated by reference from
Amazon.com, Inc.'s Current Report on Form 8-K dated
August 3, 1998).
99.1 Form of Investor Rights Agreement by and between
Amazon.com, Inc. and the stockholders of Junglee Corp.
named therein (incorporated by reference from
Amazon.com, Inc.'s Current Report on Form 8-K dated
August 3, 1998). |
