The following unaudited pro forma information presents a summary of the
Company's consolidated results of operations as if the Ruud Lighting acquisition
occurred at the beginning of the fiscal year ended
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The total revenue for Ruud Lighting included in the pro forma table above was
$235.8 millionand $211.2 millionfor the years ended June 24, 2012and June 26, 2011, respectively. These amounts have been calculated after applying the Company's accounting policies and adjusting the results of Ruud Lighting to give effect to events that are directly attributable to the Ruud Lighting acquisition, including the elimination of sales to Ruud Lighting prior to acquisition, additional depreciation and amortization that would have been charged assuming the fair value adjustments (primarily to property and equipment and intangible assets) had been applied at the beginning of the 2011 fiscal year, together with the consequential tax effects. Excluded from the pro forma net income and the earnings per share amounts for the years ended June 24, 2012and June 26, 2011are one-time transaction costs attributable to the Ruud Lighting acquisition of $3.1 millionand $0.5 million, respectively. These transaction costs were included in Sales, general and administrative expense in the consolidated statements of income. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made at the beginning of the 2011 fiscal year, nor is it indicative of any future results. Ruud Lighting is included in the Lighting Products segment. Acquisition of LED Lighting Fixtures, Inc.On February 29, 2008the Company acquired LED Lighting Fixtures, Inc.(LLF) through a wholly owned subsidiary that merged into Cree, Inc.on June 27, 2010. The Company acquired all of the outstanding share capital of LLF in exchange for total upfront consideration of $80.8 million, consisting of (1) $16.5 millionin cash, (2) approximately 1.9 million shares of the Company's common stock valued at $58.8 million, and (3) the assumption of fully vested LLF employee stock options valued at $4.5 million. The Company incurred transaction costs of approximately $1.0 millionconsisting primarily of professional fees incurred relating to attorneys, accountants and valuation advisors. Under the acquisition terms, additional consideration of up to $26.4 millionwould become payable to the former shareholders of LLF if defined product development targets and key employee retention measures were achieved over the three calendar years following the acquisition. LLF met the conditions necessary for the earn-out payment for the calendar years ended December 31, 2008, 2009 and 2010. As a result, the Company made a cash payment in the amount of $4.4 millionto the former shareholders of LLF in the third quarter of fiscal 2009, a cash payment in the amount of $8.8 millionto the former shareholders of LLF in the third quarter of fiscal 2010, and a final cash payment in the amount of $13.2 millionto the former shareholders of LLF in the third quarter of fiscal 2011. These incremental payments represent additional purchase price and resulted in an increase to goodwill in those fiscal years in which they were made. LLF is included in the Lighting Products segment.