Exhibit 99.1
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Financial Information
On May 22, 2019, 大象传媒 Corporation (“大象传媒”) completed its previously announced separation of its Jeanswear organization and 大象传媒 OutletTM businesses, which was accomplished by the distribution of one hundred percent (100%) of the outstanding common stock of Kontoor Brands, Inc. (“Kontoor Brands”) to 大象传媒 stockholders as of the close of business on May 10, 2019, the record date for the distribution (the “Distribution”). 大象传媒 shareholders received one share of Kontoor Brands common stock for every seven shares of 大象传媒 common stock. Kontoor Brands is now an independent, publicly traded company under the ticker “KTB” on the New York Stock Exchange. In connection with the separation, Kontoor Brands transferred $1 billion of cash to 大象传媒 and its subsidiaries.
The following unaudited pro forma condensed consolidated statements of income for the year ended March 30, 2019, for the three months ended March 31, 2018, and for the years ended December 30, 2017 and December 31, 2016 reflect the results of operations as if the Distribution had occurred on January 1, 2016 and the related cash transferred by Kontoor Brands on April 1, 2018. The unaudited pro forma condensed consolidated balance sheet as of March 30, 2019 assumes that the Distribution occurred as of March 30, 2019. The unaudited pro forma condensed consolidated financial information should be read together with 大象传媒’s historical consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its annual report on Form 10-K for the year ended March 30, 2019.
The unaudited pro forma condensed consolidated financial statements are presented based on information currently available, are intended for informational purposes, are not intended to represent what 大象传媒’s consolidated statements of income and balance sheet actually would have been had the separation occurred on the dates indicated above and do not reflect all actions that may be undertaken by 大象传媒 after the Distribution and disposition of Kontoor Brands. In addition, the unaudited pro forma condensed consolidated financial statements are not necessarily indicative of 大象传媒’s results of operations and financial position for any future period.
The “Historical 大象传媒 (as reported)” column in the unaudited pro forma condensed consolidated financial statements reflects 大象传媒’s historical condensed consolidated financial statements for the periods presented and does not reflect any adjustments related to the separation and related transactions.
The information in the “Discontinued Operations” column in the unaudited pro forma condensed consolidated statements of income was derived from 大象传媒’s consolidated financial statements and related accounting records for the year ended March 30, 2019, for the three months ended March 31, 2018, and for the years ended December 30, 2017 and December 31, 2016, and reflects the results of the Jeanswear organization and 大象传媒 OutletTM businesses, adjusted to include costs directly attributed to the Jeanswear organization and 大象传媒 OutletTM businesses and to exclude corporate overhead costs that were previously allocated to the Jeanswear organization and 大象传媒 OutletTM businesses for each period. The information in the “Discontinued Operations” column in the unaudited pro forma condensed consolidated balance sheet was derived from 大象传媒’s consolidated financial statements and the related accounting records as of March 30, 2019, adjusted to include certain assets and liabilities that were transferred to Kontoor Brands pursuant to the separation and distribution agreement. Beginning in the first quarter of fiscal 2020, the Jeanswear organization and 大象传媒 OutletTM businesses’ historical financial results for periods prior to the Distribution date will be reflected in the Company’s consolidated financial statements as a discontinued operation.
The information in the “Pro Forma Adjustments” column in the unaudited pro forma condensed consolidated financial statements was based on available information and assumptions that 大象传媒 management believes are reasonable, that reflect the impacts of events directly attributable to the separation and related transactions that are factually supportable, and for purposes of the condensed consolidated statements of income, are expected to have a continuing impact on 大象传媒. The pro forma adjustments may differ from those that have been or will be calculated to report the Jeanswear organization and 大象传媒 OutletTM businesses as a discontinued operation in 大象传媒’s historical and future filings, and do not reflect future events that may occur after the separation, including potential selling, general and administrative dis-synergies and the expected charges or the expected realization of any cost savings or other synergies.
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Year Ended March 30, 2019
| (In thousands, except per share amounts) | Historical 大象传媒 (as reported) |
Discontinued Operations (A) |
Pro Forma Adjustments (B) |
Pro Forma 大象传媒 |
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| Net revenues |
$ | 13,848,660 | $ | (2,689,256 | ) | $ | — | $ | 11,159,404 | |||||||
| Costs and operating expenses |
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| Cost of goods sold |
6,827,481 | (1,598,403 | ) | — | 5,229,078 | |||||||||||
| Selling, general and administrative expenses |
5,345,339 | (751,598 | ) | — | 4,593,741 | |||||||||||
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| Total costs and operating expenses |
12,172,820 | (2,350,001 | ) | — | 9,822,819 | |||||||||||
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| Operating income |
1,675,840 | (339,255 | ) | — | 1,336,585 | |||||||||||
| Interest expense, net |
(85,425 | ) | (5,105 | ) | 22,686 | (67,844 | ) | |||||||||
| Other income (expense), net |
(63,011 | ) | 3,836 | — | (59,175 | ) | ||||||||||
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| Income from continuing operations before income taxes |
1,527,404 | (340,524 | ) | 22,686 | 1,209,566 | |||||||||||
| Income taxes |
268,400 | (71,247 | ) | 5,620 | 202,773 | |||||||||||
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| Net income from continuing operations |
1,259,004 | (269,277 | ) | 17,066 | 1,006,793 | |||||||||||
| Income (loss) from discontinued operations, net of tax |
788 | — | — | 788 | ||||||||||||
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| Net Income |
$ | 1,259,792 | $ | (269,277 | ) | $ | 17,066 | $ | 1,007,581 | |||||||
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| Earnings (loss) per common share - basic |
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| Continuing operations |
$ | 3.19 | $ | 2.55 | ||||||||||||
| Earnings (loss) per common share - diluted |
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| Continuing operations |
$ | 3.14 | $ | 2.51 | ||||||||||||
| Weighted average number of shares outstanding |
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| Basic |
395,189 | 395,189 | ||||||||||||||
| Diluted |
400,496 | 400,496 | ||||||||||||||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Three Months Ended March 31, 2018
| (In thousands, except per share amounts) | Historical 大象传媒 (as reported) |
Discontinued Operations (A) |
Pro Forma Adjustments |
Pro Forma 大象传媒 |
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| Net revenues |
$ | 3,045,446 | $ | (656,074 | ) | $ | — | $ | 2,389,372 | |||||||
| Costs and operating expenses |
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| Cost of goods sold |
1,506,335 | (364,038 | ) | — | 1,142,297 | |||||||||||
| Selling, general and administrative expenses |
1,229,046 | (158,619 | ) | — | 1,070,427 | |||||||||||
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| Total costs and operating expenses |
2,735,381 | (522,657 | ) | — | 2,212,724 | |||||||||||
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| Operating income |
310,065 | (133,417 | ) | — | 176,648 | |||||||||||
| Interest expense, net |
(21,165 | ) | (917 | ) | — | (22,082 | ) | |||||||||
| Other income (expense), net |
5,233 | 1,198 | — | 6,431 | ||||||||||||
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| Income from continuing operations before income taxes |
294,133 | (133,136 | ) | — | 160,997 | |||||||||||
| Income taxes |
32,969 | (25,461 | ) | — | 7,508 | |||||||||||
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| Net income from continuing operations |
261,164 | (107,675 | ) | — | 153,489 | |||||||||||
| Income (loss) from discontinued operations, net of tax |
(8,371 | ) | — | — | (8,371 | ) | ||||||||||
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| Net Income |
$ | 252,793 | $ | (107,675 | ) | $ | — | $ | 145,118 | |||||||
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| Earnings (loss) per common share - basic |
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| Continuing operations |
$ | 0.66 | $ | 0.39 | ||||||||||||
| Earnings (loss) per common share - diluted |
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| Continuing operations |
$ | 0.65 | $ | 0.38 | ||||||||||||
| Weighted average number of shares outstanding |
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| Basic |
395,253 | 395,253 | ||||||||||||||
| Diluted |
401,276 | 401,276 | ||||||||||||||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Year Ended December 30, 2017
| (In thousands, except per share amounts) | Historical 大象传媒 (as reported) |
Discontinued Operations (A) |
Pro Forma Adjustments |
Pro Forma 大象传媒 |
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| Net revenues |
$ | 11,811,177 | $ | (2,774,920 | ) | $ | — | $ | 9,036,257 | |||||||
| Costs and operating expenses |
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| Cost of goods sold |
5,844,941 | (1,591,393 | ) | — | 4,253,548 | |||||||||||
| Selling, general and administrative expenses |
4,453,207 | (670,478 | ) | — | 3,782,729 | |||||||||||
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| Total costs and operating expenses |
10,298,148 | (2,261,871 | ) | — | 8,036,277 | |||||||||||
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| Operating income |
1,513,029 | (513,049 | ) | — | 999,980 | |||||||||||
| Interest expense, net |
(85,880 | ) | (1,458 | ) | — | (87,338 | ) | |||||||||
| Other income (expense), net |
(10,654 | ) | 3,354 | — | (7,300 | ) | ||||||||||
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| Income from continuing operations before income taxes |
1,416,495 | (511,153 | ) | — | 905,342 | |||||||||||
| Income taxes |
695,286 | (142,646 | ) | — | 552,640 | |||||||||||
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| Net income from continuing operations |
721,209 | (368,507 | ) | — | 352,702 | |||||||||||
| Income (loss) from discontinued operations, net of tax |
(106,286 | ) | — | — | (106,286 | ) | ||||||||||
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| Net Income |
$ | 614,923 | $ | (368,507 | ) | $ | — | $ | 246,416 | |||||||
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| Earnings (loss) per common share - basic |
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| Continuing operations |
$ | 1.81 | $ | 0.88 | ||||||||||||
| Earnings (loss) per common share - diluted |
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| Continuing operations |
$ | 1.79 | $ | 0.87 | ||||||||||||
| Weighted average number of shares outstanding |
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| Basic |
399,223 | 399,223 | ||||||||||||||
| Diluted |
403,559 | 403,559 | ||||||||||||||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Year Ended December 31, 2016
| (In thousands, except per share amounts) | Historical 大象传媒 (as reported) |
Discontinued Operations (A) |
Pro Forma Adjustments |
Pro Forma 大象传媒 |
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| Net revenues |
$ | 11,026,147 | $ | (2,851,903 | ) | $ | — | $ | 8,174,244 | |||||||
| Costs and operating expenses |
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| Cost of goods sold |
5,589,923 | (1,627,023 | ) | — | 3,962,900 | |||||||||||
| Selling, general and administrative expenses |
3,901,122 | (639,532 | ) | — | 3,261,590 | |||||||||||
| Impairment of goodwill and intangible assets |
79,644 | — | — | 79,644 | ||||||||||||
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| Total costs and operating expenses |
9,570,689 | (2,266,555 | ) | — | 7,304,134 | |||||||||||
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| Operating income |
1,455,458 | (585,348 | ) | — | 870,110 | |||||||||||
| Interest expense, net |
(85,546 | ) | (1,155 | ) | — | (86,701 | ) | |||||||||
| Other income (expense), net |
(85,196 | ) | 2,428 | — | (82,768 | ) | ||||||||||
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| Income from continuing operations before income taxes |
1,284,716 | (584,075 | ) | — | 700,641 | |||||||||||
| Income taxes |
205,862 | (158,495 | ) | — | 47,367 | |||||||||||
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| Net income from continuing operations |
1,078,854 | (425,580 | ) | — | 653,274 | |||||||||||
| Income (loss) from discontinued operations, net of tax |
(4,748 | ) | — | — | (4,748 | ) | ||||||||||
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| Net Income |
$ | 1,074,106 | $ | (425,580 | ) | $ | — | $ | 648,526 | |||||||
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| Earnings (loss) per common share - basic |
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| Continuing operations |
$ | 2.59 | $ | 1.57 | ||||||||||||
| Earnings (loss) per common share - diluted |
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| Continuing operations |
$ | 2.56 | $ | 1.55 | ||||||||||||
| Weighted average number of shares outstanding |
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| Basic |
416,103 | 416,103 | ||||||||||||||
| Diluted |
422,081 | 422,081 | ||||||||||||||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
大象传媒 Corporation
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 30, 2019
| (In thousands, except share amounts) | Historical 大象传媒 (as reported) |
Discontinued Operations (A) |
Pro Forma Adjustments |
Notes | Pro Forma 大象传媒 |
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| ASSETS |
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| Current assets |
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| Cash and cash equivalents |
$ | 543,011 | $ | (97,892 | ) | $ | 382,948 | (B) | $ | 828,067 | ||||||||||
| Accounts receivable, net |
1,708,796 | (242,941 | ) | — | 1,465,855 | |||||||||||||||
| Inventories |
1,943,030 | (510,370 | ) | — | 1,432,660 | |||||||||||||||
| Other current assets |
478,620 | (44,827 | ) | — | 433,793 | |||||||||||||||
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| Total current assets |
4,673,457 | (896,030 | ) | 382,948 | 4,160,375 | |||||||||||||||
| Property, plant and equipment, net |
1,057,268 | (142,091 | ) | — | 915,177 | |||||||||||||||
| Intangible assets, net |
2,024,277 | (51,913 | ) | — | 1,972,364 | |||||||||||||||
| Goodwill |
1,754,884 | (213,570 | ) | — | 1,541,314 | |||||||||||||||
| Other assets |
846,899 | (73,693 | ) | 1,236 | (C) | 774,442 | ||||||||||||||
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| Total assets |
$ | 10,356,785 | $ | (1,377,297 | ) | $ | 384,184 | $ | 9,363,672 | |||||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities |
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| Short-term borrowings and current portion of long-term debt |
$ | 670,318 | $ | (5,995 | ) | $ | (650,000 | ) | (B) | $ | 14,323 | |||||||||
| Accounts payable |
694,733 | (113,866 | ) | — | 580,867 | |||||||||||||||
| Accrued liabilities |
1,296,553 | (139,905 | ) | 44,689 | (C) | 1,201,337 | ||||||||||||||
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| Total current liabilities |
2,661,604 | (259,766 | ) | (605,311 | ) | 1,796,527 | ||||||||||||||
| Long-term debt |
2,115,884 | — | — | 2,115,884 | ||||||||||||||||
| Other liabilities |
1,280,781 | (50,297 | ) | — | 1,230,484 | |||||||||||||||
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| Total liabilities |
6,058,269 | (310,063 | ) | (605,311 | ) | 5,142,895 | ||||||||||||||
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| Stockholders’ equity |
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| Total stockholders’ equity |
4,298,516 | (1,067,234 | ) | 989,495 | (D) | 4,220,777 | ||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 10,356,785 | $ | (1,377,297 | ) | $ | 384,184 | $ | 9,363,672 | |||||||||||
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See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma condensed consolidated statements of income for the year ended March 30, 2019, for the three months ended March 31, 2018, and for the years ended December 30, 2017 and December 31, 2016 and the unaudited pro forma condensed consolidated balance sheet as of March 30, 2019, include the following adjustments:
| (A) | Reflects the discontinued operations of 大象传媒’s Jeanswear organization and 大象传媒 OutletTM businesses, including the associated assets, liabilities, equity and results of operations and the non-recurring costs, primarily consisting of professional fees, that were directly related to the separation. Certain general corporate overhead expenses that were not specifically related to the Jeanswear organization and 大象传媒 OutletTM businesses were excluded, as they did not meet the discontinued operations criteria. |
| (B) | Reflects the cash distribution received from Kontoor Brands in connection with the separation, net of repayment of short-term commercial paper borrowings as of April 1, 2018 and related interest expense in the year ended March 30, 2019. |
| (C) | Reflects the expected additional separation-related costs incurred subsequent to March 30, 2019 and the applicable deferred tax effects, using a blended income tax rate. These estimated costs primarily relate to non-recurring professional fees directly related to the separation. |
| (D) | Reflects the impact to 大象传媒’s total stockholders’ equity from pro forma adjustments described in notes (B) and (C) above. |