EX-99.2 5 dex992.txt UNAUDITED PROFORMAS EXHIBIT 99.2 INTERCEPT, INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 (in thousands, except per share amounts)

InterCept Historical Pro Forma Pro Forma Consolidated (a) iBill (b) Adjustments Consolidated ---------------- --------- ----------- ------------ REVENUES: Service fee income $114,590 $51,498 $ - $166,088 Data communications management income 7,424 - - 7,424 Equipment and product sales, services, and other 8,758 - - 8,758 ------- ------- ------- -------- Total revenues 130,772 51,498 - 182,270 ------- ------- ------- -------- COSTS OF SERVICES: Cost of service fee income 42,745 24,250 - 66,995 Cost of data communications management income 5,528 - - 5,528 Cost of equipment and product sales, services, and other 6,724 - - 6,724 ------- ------- ------- -------- Total costs of services 54,997 24,250 - 79,247 SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES 42,504 18,382 - 60,886 DEPRECIATION AND AMORTIZATION 11,483 3,566 1,530 (c) 16,579 ------- ------- ------- -------- Total operating expenses 108,984 46,198 1,530 156,712 ------- ------- ------- -------- OPERATING INCOME 21,788 5,300 (1,530) 25,558 INTEREST EXPENSE (540) - (2,828) (d) (3,368) INTEREST AND OTHER INCOME, NET 3,207 1,141 (1,419) (e) 2,929 ------- ------- ------- -------- INCOME BEFORE PROVISION FOR INCOME TAXES, EQUITY IN LOSS OF AFFILIATE, AND MINORITY INTEREST 24,455 6,441 (5,777) 25,119 PROVISION FOR INCOME TAXES 3,144 - 252 (f) 3,396 EQUITY IN LOSS OF AFFILIATE (16,848) - - (16,848) MINORITY INTEREST (19) - - (19) ------- ------- ------- -------- NET INCOME (LOSS) $ 4,444 $ 6,441 $(6,029) $ 4,856 NET INCOME (LOSS) PER COMMON SHARE: Basic shares 15,434 15,434 Diluted shares 16,397 16,397 Basic $0.29 $0.31 ------- -------- Diluted $0.27 $0.30 ------- --------

INTERCEPT, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2001 (in thousands)

InterCept Historical Pro Forma Pro Forma ASSETS Consolidated (a) iBill (b) Adjustments Consolidated ------ ---------------- --------- ----------- ------------ CURRENT ASSETS: Cash and cash equivalents $ 24,917 $27,478 $ - $ 52,395 Restricted cash - 3,000 - 3,000 Short-term investments 50,289 - (33,306) (c) 16,983 Accounts receivable, net 20,271 5,777 - 26,048 Accounts receivable - related parties 7,025 3,234 - 10,259 Deferred tax assets 1,470 - - 1,470 Inventory, prepaid expenses, and other 8,973 619 - 9,592 -------- ------- -------- -------- Total current assets 112,945 40,108 (33,306) 119,747 PROPERTY AND EQUIPMENT, net 28,108 12,114 (8,468) (c) 31,754 INTANGIBLE ASSETS, net 128,204 - 119,783 (c) 247,987 ADVANCES TO NETZEE 10,118 - - 10,118 INVESTMENT IN AFFILIATE 1,462 - - 1,462 OTHER NONCURRENT ASSETS 2,431 340 - 2,771 -------- ------- -------- -------- Total Assets 283,268 $52,562 78,009 413,839 -------- ------- -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Current maturities of long-term debt $ - $ - $ 30,000 (c) $ 30,000 Accounts payable and accrued liabilities 10,143 2,409 2,000 (c) 14,552 Client payouts - 29,962 - 29,962 Deferred payouts - 17,506 - 17,506 Deferred revenue 9,315 - - 9,315 -------- ------- -------- -------- Total current liabilities 19,458 49,877 32,000 101,335 LONG-TERM DEBT, less current maturities 465 - 48,694 (c) 49,159 DEFERRED TAX LIABILITY 2,867 - - 2,867 DEFERRED REVENUE 445 - - 445 -------- ------- -------- -------- Total liabilities 23,235 49,877 80,694 153,806 -------- ------- -------- -------- MINORITY INTEREST 222 - - 222 SHAREHOLDERS' EQUITY: Preferred stock - - - - Common stock 243,293 - - 243,293 Treasury stock - - - - Partners' equity - 2,685 (2,685) (c) - Retained earnings 16,571 - - 16,571 Accumulated other comprehensive loss (53) - - (53) -------- ------- -------- -------- Total shareholders' equity 259,811 2,685 (2,685) 259,811 -------- ------- -------- -------- Total liabilities and shareholders' equity $283,268 $52,562 $ 78,009 $413,839 -------- ------- -------- --------

Notes to Pro Forma Financial Statements A more detailed description of this acquisition may be found under Item 2 of the Current Report on Form 8-K InterCept filed on April 23, 2002. Effective April 8, 2002 (funded on April 9, 2002), Internet Billing Company, Ltd.,("iBill") was acquired by InterCept, Inc. The consideration exchanged was approximately $112 million, $19.6 million which was placed in escrow to secure iBill's representations and warranties. InterCept is also obligated to pay additional quarterly earnout payments for a period of six quarters ending December 31, 2003, contingent upon whether the acquired business achieves certain financial targets. InterCept has an option to buy out the remaining contingent earnout obligation at any time by paying $8 million per remaining quarter. The unaudited pro forma financial data have been prepared using the purchase method of accounting, whereby the total cost of the acquisition is allocated to tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the effective date of the acquisition. For purposes of the unaudited pro forma financial data, those allocations are based upon currently available information and management's estimates. The final allocation of the purchase price may differ. The unaudited proforma financial data do not purport to represent what the combined results of operations or financial position would actually have been if the acquisition had occurred as described below. The pro forma statements of operations may not be representative of InterCept's future results of operations. The unaudited pro forma consolidated balance sheet as of December 31, 2001 reflects the following adjustments as if they occurred on December 31, 2001: (a) Represents the historical balance sheet of InterCept as of December 31, 2001 contained in its Annual Report on Form 10-K filed with the SEC on April 1, 2002. (b) Represents the historical consolidated balance sheet of iBill and subsidiaries as of December 31, 2001. (c) Reflects the payment of cash, the increase in debt and the recording of intangible assets associated with the purchase of iBill, including the reclassification of $8.5 million of iBill capitalized technology from property and equipment to intangibles. The $112.0 million of cash consideration was satisfied through $48.7 million from InterCept's line of credit with Wachovia Bank, National Association (formerly First Union National Bank), $30.0 million from InterCept's loan from the Peoples' Bank of Winder and $33.3 million from InterCept's short term investments. Transaction costs of approximately $2.0 million were incurred as a result of the purchase. All borrowings under the Wachovia line of credit are due in June 2004 and currently bear interest at 3.11%. The Peoples' Bank loan matures in December 2002, currently bears interest at 4.38%, and is secured by certificates of deposit which will be paid against the loan as they mature. The excess of the purchase price over net tangible assets acquired totaled $119.8 million and was preliminarily allocated to customer relationships, domain names, patents and technology, trade names, and goodwill. Customer relationships, domain names, and patents and technology will be amortized over ten years. Trade names and goodwill, which are indefinite lived assets, will not be amortized but will be tested for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value below its carrying value. In addition to the purchase price indicated above, the agreement includes contingent consideration based on achievement of certain future financial targets. This additional consideration will be recorded to goodwill when the contingency is resolved. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2001 reflects the following adjustments as if they occurred on January 1, 2001 and are based on the historical statement of operations, adjusted to reflect the following: (a) Represents the historical statement of operations of InterCept for the year ended December 31, 2001 contained in its Annual Report on Form 10-K filed with the SEC on April 1, 2002. (b) Represents the historical consolidated statement of operations of iBill and subsidiaries for the year ended December 31, 2001. (c) Reflects the additional amortization of the intangible assets recognized upon the acquisition of iBill of $1.5 million for the twelve months ended December 31, 2001. (d) Reflects interest expense associated with the increased debt of $78.7 million. (e) Reflects the reduction in interest income on InterCept's marketable securities used to finance the acquisition. (f) Reflects the adjustment to the income tax provision for the historical earnings of iBill and the pro forma adjustments assuming a 38% tax rate for the year ended December 31, 2001.