<PAGE>
Exhibit 99.4
PRO FORMA FINANCIAL STATEMENTS OF SND AND EPRESENCE COMBINED
On May 12, 2000, ePresence, Inc. acquired Strategic Network Designs, Inc.
(SND) in a transaction accounted for as a purchase. SND will be operated as a
wholly-owned subsidiary of ePresence.
The following Unaudited Pro Forma Condensed Combined Statement of
Operations for the Year Ended December 31, 1999, the Unaudited Pro Forma
Condensed Combined Balance Sheet for the Quarter Ended March 31, 2000 and the
Unaudited Pro Forma Condensed Combined Statement of Operations for the Quarter
Ended March 31, 2000 (the "Unaudited Pro Forma Condensed Combined Financial
Statements") reflect consideration of $20.5 million, consisting of $17.5 million
in cash and 221,713 shares of ePresence common stock. In addition, a one-year
earn-out of $10.0 million contingent on performance is not recorded in the
Unaudited Pro Forma Condensed Combined Financial Statements.
The Unaudited Pro Forma Condensed Combined Statement of Operations of
ePresence and SND for the fiscal year ended December 31, 1999 is based on the
historical financial statements of ePresence and SND, after giving effect to the
acquisition of SND under the purchase method of accounting and the assumptions
and adjustments described in the accompanying Notes to the Unaudited Pro Forma
Condensed Combined Financial Statements of ePresence and SND. SND has the same
fiscal periods as ePresence.
The Unaudited Pro Forma Condensed Combined Statement of Operations of
ePresence and SND for the three months ended March 31, 2000 and the Unaudited
Pro Forma Condensed Combined Balance Sheet at March 31, 2000 are based on the
historical financial statements of ePresence and SND, after giving effect to the
acquisition of SND under the purchase method of accounting and the assumptions
and adjustments described in the accompanying Notes to the Unaudited Pro Forma
Condensed Combined Financial Statements of ePresence and SND.
The Unaudited Pro Forma Condensed Combined Financial Statements should be
read in conjunction with the historical financial statements of ePresence and
SND.
The above Unaudited Pro Forma Condensed Combined Statements of Operations
of ePresence and SND are presented as if the combination had taken place on
January 1, 1999. The above Unaudited Pro Forma Condensed Combined Balance Sheet
of ePresence and SND is presented to give effect to the combination as if it
occurred on March 31, 2000. The pro forma information does not purport to be
indicative of the results that would have been reported if the above transaction
had been in effect for the period presented or which may result in the future.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
EPRESENCE, INC. AND STRATEGIC NETWORK DESIGNS, INC.
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ePresence SND Adjustments Total
Company
<S> <C> <C> <C> <C>
Services revenues $ 37,494 $11,680(B) $ 49,174
Switchboard 8,304 8,304
-------- ------- --------
Total revenues 45,798 11,680 57,478
Services cost of sales 24,684 5,506 30,190
-------- ------- --------
Gross profit 21,114 6,174 27,288
Operating expenses
Product development 1,923 1,923
Sales and marketing 22,163 2,951 25,114
Administration 13,768 942 14,710
Amortization of goodwill and intangibles 0 0 $ 2,056 2,056
-------- ------- ------- --------
Total operating expenses 37,854 3,893 2,056 43,803
-------- ------- ------- --------
Income/(loss) from continuing operations (16,740) 2,281 (2,056) (16,515)
Other income/(expense),net 20,673 (8) 20,665
-------- ------- ------- --------
Income from continuing operations before tax 3,933 2,273 (2,056) 4,150
(Benefit from)/provision for income taxes (22,292) 52 (22,240)
-------- ------- ------- --------
Income from continuing operations after tax 26,225 2,221 (2,056) 26,390
Income from discontinued operations 4,925 4,925
Loss from disposal of discontinued operations (3,000) (3,000)
Net income $ 28,150 $ 2,221 $(2,056) $ 28,315
======== ======= ======= ========
Net income per common share:
Basic $1.33 $10.00 $1.32
======== ======= ========
Diluted $1.10 $10.00 $1.10
======== ======= ========
Weighted average number of common shares:
Basic 21,155 222(C) 21,377
======== ======= ========
Diluted 25,449 222(C) 25,671
======== ======= ========
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
EPRESENCE, INC. AND STRATEGIC NETWORK DESIGNS, INC.
MARCH 31, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
Total
ePresence SND Adjustments Company
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 68,562 $ 424 $(17,500)(A) $ 51,486
Marketable securities 126,732 126,732
Accounts receivable 14,619 3,286 17,905
Other current assets 5,694 105 5,799
-------- ------- -------- --------
Current assets 215,607 3,815 (17,500) 201,922
Net fixed assets 4,711 418 - 5,129
Marketable securities 10,871 - - 10,871
Deferred tax asset 9,102 - - 9,102
Net intangible assets 8,896 - 20,590 29,486
Other noncurrent assets 205 - - 205
-------- ------- -------- --------
Total assets 249,392 4,233 3,090 256,715
======== ======= ======== ========
Accounts payable 4,212 227 4,439
Accrued expenses 15,697 610 16,307
Income taxes payable 6,402 41 6,443
Deferred income 9,153 435 9,588
Notes payable - 109 109
Long-term debt, current 1,112 - 1,112
-------- ------- -------- --------
Current liabilities 36,576 1,422 - 37,998
Long-term liabilities 207 - 207
Deferred income taxes 16,610 - 16,610
-------- ------- -------- --------
Total liabilities 53,393 1,422 54,815
Total equity 195,999 2,811 3,090 201,900
-------- ------- -------- --------
Total liabilities and equity $249,392 $ 4,233 $ 3,090 $256,715
======== ======= ======== ========
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
EPRESENCE, INC. AND STRATEGIC NETWORK DESIGNS, INC.
QUARTER ENDED MARCH 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Total
ePresence SND Adjustments Company
<S> <C> <C> <C> <C>
Services revenues $12,051 $4,792(B) $16,843
Switchboard 3,818 - 3,818
------- ------ -------
Total revenues 15,869 4,792 20,661
Services cost of sales 7,517 2,174 9,691
------- ------ -------
Gross profit 8,352 2,618 10,970
Operating expenses
Product development 613 613
Sales and marketing 12,714 811 13,525
Administration 4,104 176 4,280
Amortization of goodwill and intangibles 236 $ 514 750
------- ------ ----- -------
Total operating expenses 17,667 987 514 19,168
------- ------ ----- -------
Income/(loss) from continuing operations (9,315) 1,631 (514) (8,198)
Other income/(expense), net 48,421 4 48,425
------- ------ ----- -------
Income from continuing operations before tax 39,106 1,635 (514) 40,227
Provision for income taxes 18,778 - - 18,778
------- ------ ----- -------
Net income $20,328 $1,635 $(514) $21,449
======= ====== ===== =======
Net income per common share:
Basic $ 0.88 $ 7.36 $ 0.92
======= ====== =======
Diluted $ 0.73 $ 7.36 $ 0.76
======= ====== =======
Weighted average number of common shares:
Basic 23,218 222(C) 23,440
======= ====== =======
Diluted 27,910 222(C) 28,132
======= ====== =======
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(A) On May 12, 2000, ePresence, Inc. acquired Strategic Network Designs, Inc.
(SND), in a transaction accounted for as a purchase. The total purchase
price of $30.5 million, exluding transaction expenses, included
consideration of $17.5 million in cash, 221,713 shares of Common Stock
valued at $3 million and a one-year earn-out of $10 million contingent on
performance.
The estimated total purchase cost of the SND acquisition, excluding any earn-out
payment, is as follows (in thousands):
Cash $17,500
Value of Shares issued 3,000
-------
$20,500
Estimated expenses of
the transaction 90
-------
$20,590
The purchase price allocation, which is preliminary and is subject to change
based upon the Company's final analysis, is as follows (in thousands):
Purchase price allocation:
Tangible net assets $ 139
Goodwill 20,451
-------
$20,590
Goodwill, which represents the excess of the purchase price of an investment in
an acquired business over the fair value of the underlying net identifiable
assets, is amortized on a straight-line basis over its estimated useful life of
10 years.
(B) For the three-month period ended March 31, 2000 and for the 12-month period
ended December 31, 1999, services revenue includes approximately $950,000
and $578,000, respectively, in SND product sales.
(C) The pro forma basic and dilutive net income per share are based on the
weighted average number of (pro forma) ePresence Common Shares outstanding
during the three-month period ended March 31, 2000 and for the 12-month
period ended December 31, 1999, and the weighted average number of SND
Common Shares issued pursuant to the SND acquisition.
