masi-202509230000937556false00009375562025-09-232025-09-23
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________
FORM 8-K/A
________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 23, 2025
MASIMO CORPORATION
(Exact name of registrant as specified in its charter)
________________________________________________
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| DE | | 001-33642 | | 33-0368882 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
| 52 Discovery | | Irvine, | | CA | | | | | 92618 |
| (Address of Principal Executive Offices) | | | | | (Zip Code) |
| | | | | | (949) | 297-7000 | | | |
Registrant’s telephone number, including area code: |
Not Applicable |
(Former name or former address, if changed since last report) |
| | | | | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| | | | | | | | | | | | | | | | | |
| Securities Registered pursuant to Section 12(b) of the Act: |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.001 par value | | MASI | | The Nasdaq Stock Market LLC |
| | | | | |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
| Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Explanatory Note
On September 23, 2025, Masimo Corporation (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) announcing the completion of the sale of its consumer audio business to Harman International Industries, Incorporated.
This Amendment No. 1 to the Current Report on Form 8-K amends Item 9.01 of the Original Form 8-K to include certain pro forma financial information as an exhibit.
| | | | | |
| Cautionary Statement Concerning Forward-Looking Statements |
This Current Report on Form 8-K and the documents incorporated by reference herein may contain “forward-looking” statements, as defined in federal securities laws including the Private Securities Litigation Reform Act of 1995, which are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements concerning plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions and restructuring, business trends, statements regarding the merger and the expected timetable for completing the merger, are forward-looking statements. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “will,” “may,” “proposes,” “potential,” “could,” “should,” “outlook,” or variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, anticipated growth and trends in businesses, and other characterizations of future events or circumstances are forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report.
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| Item 9.01. | Financial Statements and Exhibits. |
(b) Pro Forma Financial Information.
The following unaudited pro forma financial information of the Company is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
•Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 28, 2025,
•Unaudited Pro Forma Condensed Consolidated Statement of Operations for each of the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022, and
•Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company dated as of June 28, 2025, included in Exhibit 99.1, gives effect to the Disposition Adjustments and Other Transaction Adjustments described therein as if they had occurred or become effective on June 28, 2025. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, which are also included in Exhibit 99.1, give effect to the Disposition Adjustments and Other Transaction Adjustments as if they had occurred or become effective on January 2, 2022, the beginning of the earliest period presented.
(d) Exhibits
The following items are filed as exhibits to the Current Report on Form 8-K.
| | | | | |
Exhibit No. | Description |
| 99.1 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Masimo Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | | | MASIMO CORPORATION |
| | | | | |
| Date: September 29, 2025 | | | | By: | | /s/ MICAH YOUNG |
| | | | | | Micah Young |
| | | | | | Executive Vice President & Chief Financial Officer |
| | | | | | (Principal Financial Officer) |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On May 6, 2025, Masimo Corporation (the “Company” or “Masimo”) entered into a definitive Stock Purchase Agreement (the “Agreement”) with Harman International Industries, Incorporated, a Delaware corporation (“Buyer”), pursuant to which the Company agreed to sell and transfer to Buyer all of the Company’s equity interests in Viper Holdings Corporation, a Delaware corporation (together with its subsidiaries, “Sound United”), which owns and operates the Company’s consumer audio business, for an aggregate purchase price of $350,000,000 in cash, subject to certain adjustments (the “Transaction”). On September 23, 2025 (“the Closing Date”), the Company completed the Transaction.
At the closing of the Transaction, the Company received consideration of approximately $328,000,000 in cash, which is subject to certain post-closing adjustments pursuant to the Agreement. Concurrently the Company also repaid its unsecured term loan (“Term Loan”) obligation in the amount of $270,000,000, plus accrued interest of approximately $1,062,000 as required under the Credit Agreement, with financial institutions party thereto as initial lenders (collectively, the Initial Lenders), Citibank, N.A., as Administrative Agent, Citibank, N.A., JPMorgan Chase Bank, N.A., Bank of the West and BofA Securities, Inc., as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A., Bank of the West and BofA Securities, Inc., as co-syndication agents (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, including all Schedules and Exhibits thereto, the “Credit Facility”). In addition, the Company also entered into certain customary related transaction agreements at the closing with Buyer, including a transition services agreement.
The following unaudited pro forma condensed consolidated financial information is intended to illustrate how the above transactions would affect the historical financial statements of Masimo if the Transaction had been consummated at an earlier time as indicated herein.
The unaudited pro forma condensed consolidated financial information is derived, in part, from, and should be read in conjunction with, Masimo’s historical consolidated financial statements and footnotes thereto, as presented in its Quarterly Report on Form 10-Q for the six months ended June 28, 2025, and its Annual Report on Form 10-K for the year ended December 28, 2024.
The unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X. Masimo’s accounting and financial reporting in these unaudited pro forma condensed consolidated financial information is based on available information using certain assumptions that the Company believes are reasonable. As a result, the actual results reported by the Company in periods following the sale may differ materially from this unaudited pro forma condensed consolidated financial information.
The unaudited pro forma condensed consolidated balance sheet as of June 28, 2025, is prepared with the assumption that, as of June 28, 2025, the Transaction had been consummated without customary adjustment or indemnity claim and that the Company had repaid its unsecured Term Loan obligation in the amount of $270,000,000 plus accrued interest of approximately $1,062,000, as required under its Credit Facility.
The unaudited pro forma condensed consolidated statement of operations for the years ended December 31, 2022, December 30, 2023 and December 28, 2024 reflect the sale of Sound United for all periods presented. In addition, the unaudited pro forma condensed consolidated statement of operations for the year ended December 28, 2024 reflect Other Transaction Adjustments (as described below) that are incremental to the sale and discontinued operations presentation of Sound United. The Other Transaction Adjustments in the unaudited pro forma condensed consolidated statement of operations are reflected as if the transaction occurred on December 31, 2023.
The Company has not included an unaudited pro forma condensed consolidated statement of operations for the six months ended June 28, 2025, as the planned disposition was already reflected as discontinued operations within the financial statements in its Quarterly Report on Form 10-Q for the period. However, the assumed repayment of the Term Loan would result in a reduction to interest expense of approximately $6.3 million for the six months ended June 28, 2025, and an increase in other expense of approximately $1.1 million for the amortization of the outstanding debt issuance costs and a net increase of income tax expense of approximately $1.3 million.
The transaction accounting adjustments to reflect the sale of Sound United in the unaudited pro forma condensed consolidated financial statements include:
•Disposition Adjustments
• The separation and transfer of the operations, assets, and liabilities of Sound United included in the Company’s historical financial results to Buyer; and
•Adjustments to reflect the receipt of consideration in the Transaction.
•Other Transaction Adjustments
•The use of proceeds received from the Transaction to repay the Term Loan and accrued interest as required under provisions of the Credit Facility;
•A reduction in interest expense and increase to other expense as a result of the assumed repayment of the outstanding balance of the Term Loan at December 31, 2023; and
•Related income tax expense of the above.
The unaudited pro forma condensed consolidated financial information does not purport to be indicative of the results of operations, the financial position or the loss on the Transaction which would have actually resulted if the above transactions contemplated had been consummated on the dates indicated, or which may result in the future.
The Company prepared the unaudited pro forma condensed consolidated financial information based upon assumptions deemed appropriate by management. An explanation of certain assumptions is set forth under the notes to the unaudited pro forma condensed consolidated financial information. The pro forma adjustments may differ from those that have been or will be calculated to report the Transaction as a discontinued operations in our historical and future filings, and do not reflect neither events as of the Closing Date nor future events that may occur after the Closing Date.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the notes thereto.
MASIMO CORPORATION
UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 28, 2025
(unaudited, in millions, except par values)
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| As Reported | | Disposition Adjustments | | Notes | | Other Transaction Adjustments | | Notes | | Pro Forma | |
| ASSETS | | | | | | | | | | | | |
| Current assets | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 149.6 | | | $ | 328.0 | | | 2(a) | | $ | (271.1) | | | 2(f) | | $ | 206.5 | | |
| | | | | | | | | | | | |
Trade accounts receivable, net of allowance for credit losses of $4.9 million | 278.0 | | | — | | | | | — | | | | | 278.0 | | |
Related party receivables | 17.4 | | | — | | | | | — | | | | | 17.4 | | |
| | | | | | | | | | | | |
| Inventories | 318.5 | | | — | | | | | — | | | | | 318.5 | | |
| | | | | | | | | | | | |
| Other current assets | 112.5 | | | — | | | | | — | | | | | 112.5 | | |
Other current assets, held-for-sale | 393.8 | | | (393.5) | | | 2(b) | | — | | | | | 0.3 | | |
| Total current assets | 1,269.8 | | | (65.5) | | | | | (271.1) | | | | | 933.2 | | |
| Lease receivable, non-current | 53.2 | | | — | | | | | — | | | | | 53.2 | | |
| Deferred costs and other contract assets | 59.3 | | | — | | | | | — | | | | | 59.3 | | |
| Property and equipment, net | 337.6 | | | — | | | | | — | | | | | 337.6 | | |
| | | | | | | | | | | | |
| Intangibles assets, net | 57.7 | | | — | | | | | — | | | | | 57.7 | | |
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| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Goodwill | 100.9 | | | — | | | | | — | | | | | 100.9 | | |
| Deferred tax assets | 119.3 | | | — | | | | | — | | | | | 119.3 | | |
| Other non-current assets | 43.0 | | | — | | | | | — | | | | | 43.0 | | |
Other non-current assets, held-for-sale | 361.8 | | | (359.9) | | | 2(b) | | — | | | | | 1.9 | | |
| Total assets | $ | 2,402.6 | | | $ | (425.4) | | | | | $ | (271.1) | | | | | $ | 1,706.1 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | |
| Accounts payable | $ | 135.7 | | | $ | — | | | | | $ | — | | | | | $ | 135.7 | | |
| Accrued compensation | 67.7 | | | — | | | | | — | | | | | 67.7 | | |
| Deferred revenue and other contract liabilities, current | 75.4 | | | — | | | | | — | | | | | 75.4 | | |
| Other current liabilities | 120.5 | | | — | | | | | (16.1) | | | 2(f) | | 104.4 | | |
Other current liabilities, held-for-sale | 192.8 | | | (191.7) | | | 2(b) | | — | | | | | 1.1 | | |
| Total current liabilities | 592.1 | | | (191.7) | | | | | (16.1) | | | | | 384.3 | | |
| Long-term debt | 598.7 | | | — | | | | | (255.0) | | | 2(f) | | 343.7 | | |
| | | | | | | | | | | | |
| Deferred tax liabilities | 0.2 | | | — | | | | | — | | | | | 0.2 | | |
| Other non-current liabilities | 76.3 | | | — | | | | | — | | | | | 76.3 | | |
Other non-current liabilities, held-for-sale | 92.5 | | | (92.4) | | | 2(b) | | — | | | | | 0.1 | | |
| Total liabilities | 1,359.8 | | | (284.1) | | | | | (271.1) | | | | | 804.6 | | |
Commitments and contingencies | | | | | | | | | | | | |
| Stockholders’ equity | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Preferred stock, $0.001 par value; 5.0 million shares authorized; 0 shares issued and outstanding | — | | | — | | | | | — | | | | | — | | |
Common stock, $0.001 par value; 100.0 million shares authorized; 54.3 million issued and outstanding | 0.1 | | | — | | | | | — | | | | | 0.1 | | |
Treasury stock, 19.6 million shares | (1,182.9) | | | — | | | | | — | | | | | (1,182.9) | | |
| Additional paid-in capital | 903.1 | | | — | | | | | — | | | | | 903.1 | | |
| Accumulated other comprehensive loss | (49.0) | | | 37.1 | | | 2(c) | | — | | | | | (11.9) | | |
| Retained earnings | 1,371.5 | | | (178.4) | | | 2(d) | | — | | | | | 1,193.1 | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Total stockholders’ equity | 1,042.8 | | | (141.3) | | | | | — | | | | | 901.5 | | |
| Total liabilities and stockholders’ equity | $ | 2,402.6 | | | $ | (425.4) | | | | | $ | (271.1) | | | | | $ | 1,706.1 | | |
| | | | | | | | | | | | |
The accompanying notes are an integral part to the unaudited pro forma condensed consolidated financial information.
MASIMO CORPORATION
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 28, 2024
(unaudited, in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As Reported | | Disposition Adjustments Note 2(e) | | Notes | | Other Transaction Adjustments | | Notes | | Pro Forma |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Revenue: | | | | | | | | | | | |
Revenue - (excluding related party revenue) | $ | 1,980.3 | | | $ | (698.9) | | | | | $ | — | | | | | $ | 1,281.4 | |
Related party revenue | 114.1 | | | — | | | | | — | | | | | 114.1 | |
| Total revenue | 2,094.4 | | | (698.9) | | | | | — | | | | | 1,395.5 | |
| Cost of goods sold | 1,090.0 | | | (488.4) | | | | | — | | | | | 601.6 | |
| Gross profit | 1,004.4 | | | (210.5) | | | | | — | | | | | 793.9 | |
| Operating expenses: | | | | | | | | | | | |
| Selling, general and administrative | 743.8 | | | (192.9) | | | | | — | | | | | 550.9 | |
| Research and development | 222.8 | | | (40.6) | | | | | — | | | | | 182.2 | |
Litigation settlements | 0.5 | | | — | | | | | — | | | | | 0.5 | |
Impairment charges, including intangible assets and goodwill | 304.0 | | | (304.0) | | | | | — | | | | | — | |
| Total operating expenses | 1,271.1 | | | (537.5) | | | | | — | | | | | 733.6 | |
Operating (loss) income | (266.7) | | | 327.0 | | | | | — | | | | | 60.3 | |
| Non-operating loss | (38.6) | | | (2.6) | | | | | 11.6 | | | 2(g) 2(h) | | (29.6) | |
(Loss) income before provision for income taxes | (305.3) | | | 324.4 | | | | | 11.6 | | | | | 30.7 | |
(Benefit) provision for income taxes | (0.4) | | | 1.1 | | | | | 2.8 | | | 2(i) | | 3.5 | |
Net (loss) income | $ | (304.9) | | | $ | 323.3 | | | | | $ | 8.8 | | | | | $ | 27.2 | |
| | | | | | | | | | | |
Net (loss) income per share: | | | | | | | | | | | |
| Basic | $ | (5.72) | | | | | | | | | | | $ | 0.51 | |
Diluted | $ | (5.72) | | | | | | | | | | | $ | 0.50 | |
| | | | | | | | | | | |
| Weighted-average shares used in per share calculations: | | | | | | | | | | | |
| Basic | 53.3 | | | — | | | | | — | | | | | 53.3 | |
| Diluted | 53.3 | | | 1.1 | | | 2(j) | | — | | | | | 54.4 | |
The accompanying notes are an integral part to the unaudited pro forma condensed consolidated financial information.
MASIMO CORPORATION
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 30, 2023
(unaudited, in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| As Reported | | Disposition Adjustments Note 2(e) | | | | | | Pro Forma |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Revenue: | | | | | | | | | |
Revenue - (excluding related party revenue) | $ | 1,954.2 | | | $ | (769.2) | | | | | | | $ | 1,185.0 | |
Related party revenue | 93.9 | | | — | | | | | | | 93.9 | |
| Total revenue | 2,048.1 | | | (769.2) | | | | | | | 1,278.9 | |
| Cost of goods sold | 1,044.6 | | | (532.7) | | | | | | | 511.9 | |
| Gross profit | 1,003.5 | | | (236.5) | | | | | | | 767.0 | |
| Operating expenses: | | | | | | | | | |
| Selling, general and administrative | 664.0 | | | (210.0) | | | | | | | 454.0 | |
| Research and development | 175.2 | | | (44.7) | | | | | | | 130.5 | |
Litigation settlements | 17.8 | | | — | | | | | | | 17.8 | |
Impairment charges, including intangible assets and goodwill | 10.0 | | | (10.0) | | | | | | | — | |
| Total operating expenses | 867.0 | | | (264.7) | | | | | | | 602.3 | |
Operating income | 136.5 | | | 28.2 | | | | | | | 164.7 | |
| Non-operating loss | (48.4) | | | (4.4) | | | | | | | (52.8) | |
Income before provision for income taxes | 88.1 | | | 23.8 | | | | | | | 111.9 | |
Provision for income taxes | 6.6 | | | 1.5 | | | | | | | 8.1 | |
Net income | $ | 81.5 | | | $ | 22.3 | | | | | | | $ | 103.8 | |
| | | | | | | | | |
Net income per share: | | | | | | | | | |
| Basic | $ | 1.54 | | | | | | | | | $ | 1.97 | |
Diluted | $ | 1.51 | | | | | | | | | $ | 1.92 | |
| | | | | | | | | |
| Weighted-average shares used in per share calculations: | | | | | | | | | |
| Basic | 52.8 | | | — | | | | | | | 52.8 | |
| Diluted | 54.1 | | | — | | | | | | | 54.1 | |
The accompanying notes are an integral part to the unaudited pro forma condensed consolidated financial information.
MASIMO CORPORATION
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2022
(unaudited, in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| As Reported | | Disposition Adjustments Note 2(e) | | | | | | Pro Forma |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Revenue: | | | | | | | | | |
Revenue - (excluding related party revenue) | $ | 1,932.8 | | | $ | (694.9) | | | | | | | $ | 1,237.9 | |
Related party revenue | 103.0 | | | — | | | | | | | 103.0 | |
| Total revenue | 2,035.8 | | | (694.9) | | | | | | | 1,340.9 | |
| Cost of goods sold | 977.0 | | | (504.3) | | | | | | | 472.7 | |
| Gross profit | 1,058.8 | | | (190.6) | | | | | | | 868.2 | |
| Operating expenses: | | | | | | | | | |
| Selling, general and administrative | 657.4 | | | (184.5) | | | | | | | 472.9 | |
| Research and development | 191.4 | | | (39.8) | | | | | | | 151.6 | |
Litigation settlements | — | | | — | | | | | | | — | |
Impairment charges, including intangible assets and goodwill | — | | | — | | | | | | | — | |
| Total operating expenses | 848.8 | | | (224.3) | | | | | | | 624.5 | |
Operating income | 210.0 | | | 33.7 | | | | | | | 243.7 | |
| Non-operating loss | (16.6) | | | (6.9) | | | | | | | (23.5) | |
Income before provision for income taxes | 193.4 | | | 26.8 | | | | | | | 220.2 | |
Benefit for income taxes | 49.9 | | | (9.4) | | | | | | | 40.5 | |
Net income | $ | 143.5 | | | $ | 36.2 | | | | | | | $ | 179.7 | |
| | | | | | | | | |
Net income per share: | | | | | | | | | |
| Basic | $ | 2.68 | | | | | | | | | $ | 3.35 | |
Diluted | $ | 2.60 | | | | | | | | | $ | 3.26 | |
| | | | | | | | | |
| Weighted-average shares used in per share calculations: | | | | | | | | | |
| Basic | 53.6 | | | — | | | | | | | 53.6 | |
| Diluted | 55.2 | | | — | | | | | | | 55.2 | |
The accompanying notes are an integral part to the unaudited pro forma condensed consolidated financial information.
MASIMO CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
1. Basis of Presentation
The unaudited pro forma condensed consolidated financial information is prepared based on Masimo’s historical consolidated financial statements and pursuant to Article 11 of Regulation S-X, adjusted for certain transaction accounting adjustments listed in Note 2 below. Actual adjustments, however, may differ materially from the information presented.
2. Pro Forma Adjustments
The unaudited pro forma condensed consolidated financial information reflects the following adjustments:
Disposition Adjustments:
(a) Recognition of net cash proceeds received as follows:
| | | | | | | | |
| | (in millions) |
Base purchase price | | $ | 350.0 | |
Preliminary purchase price adjustment | | (22.0) | |
Net cash proceeds received from the Transaction | | $ | 328.0 | |
Purchase price adjustment includes items specified in the terms of the Agreement, including certain preliminary estimates.
(b) Derecognition of the associated assets and liabilities held-for-sale, related to Sound United upon disposal as of June 28, 2025, the net asset value of which is approximately $469.3 million. Remaining held-for-sale asset and liability amounts represent balances not related to Sound United.
(c) Derecognition of the currency translation adjustment balance of approximately $37.1 million related to Sound United as a result of the release of foreign currency translation upon disposal as of June 28, 2025.
(d) This represents the net change in retained earnings of the following:
| | | | | | | | |
| | (in millions) |
Net cash proceeds received from the Transaction | | $ | 328.0 | |
Net assets sold | | 469.3 | |
Accumulated other comprehensive loss | | 37.1 | |
| | |
| | |
Loss on sale | | $ | (178.4) | |
The Company currently estimates that there will be no net tax benefit recognized in conjunction with the loss on sale.
For purposes of the unaudited pro forma condensed consolidated balance sheet, the estimated loss recognized in retained earnings as of June 28, 2025 is based on the carrying values of held-for-sale assets and liabilities related to Sound United as of June 28, 2025, rather than as of the Closing Date of the transaction. As a result, the pro forma loss reflected herein may differ from the actual loss on the sale of Sound United as of the Closing Date because of the differences in the carrying value of held-for-sale assets and liabilities at the Closing Date.
(e) Derecognition of the operations related to Sound United.
Other Transaction Adjustments:
(f) Repayment of the remaining obligations of the Term Loan of $270.0 million as of June 28, 2025, and accrued interest of $1.1 million as required under the Credit Facility.
(g) Reduction in interest expense of approximately $13.5 million, as a result of the assumed repayment of the outstanding balance of the Term Loan as if such debt was repaid on December 31, 2023.
(h) Increase in other expense of approximately $1.9 million, due to the immediate amortization of the outstanding debt issuance costs as a result of the assumed repayment of the outstanding balance of the Term Loan as if such debt was repaid on December 31, 2023.
(i) Increase in net income tax expense associated with the transactions described in 2(g) and 2(h). The assumed income tax rate is the Company’s statutory rate for the applicable jurisdiction.
(j) Weighted average diluted shares have been adjusted as the proforma adjustments resulted in a change from a consolidated net loss to a proforma consolidated net income.
