<PAGE>
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 12, 1996
Caribiner International, Inc.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-14234 13-3466655
- --------------------------------- -------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
16 West 61st Street, New York, NY 10023
- --------------------------------- ------------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (212) 541-5300
--------------
-------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
The Current Report on Form 8-K of Caribiner International, Inc. (the "Company"),
initially filed with the Securities and Exchange Commission (the "Commission")
on September 27, 1996, is hereby amended by this Form 8-K/A as follows:
Item 7 is hereby amended in its entirety to read as follows:
Item 7. Financial Statements and Exhibits
---------------------------------
The following financial statements and pro forma financial information are filed
in this report.
(a) Financial Statements of the Business Acquired
Audited Financial Statements of Total Audio Visual Services (a division of
-----------------------------------------------------------
General Electric Capital Computer Leasing Corporation)
(1) Report of Independent Auditors
(2) Balance Sheet as of December 31, 1995
(3) Statement of Operations and Divisional Equity for the Year Ended
December 31, 1995
(4) Statement of Cash Flows for the Year Ended December 31, 1995
(5) Notes to Audited Financial Statements
Unaudited Interim Financial Statements of Total Audio Visual Services (a
---------------------------------------------------------------------
division of General Electric Capital Computer Leasing Corporation)
(1) Balance Sheet as of June 30, 1996
(2) Statements of Operations and Divisional Equity for the Six Months Ended
June 30, 1995 and 1996
(3) Statements of Cash Flows for the Six Months Ended June 30, 1995 and
1996
(4) Note to Unaudited Financial Statements
(b) Unaudited pro forma financial information:
Unaudited Pro Forma Consolidated Financial Statements of Caribiner
------------------------------------------------------------------
International, Inc.
-------------------
(1) Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 1996
(2) Unaudited Pro Forma Consolidated Statement of Operations for the Nine
Months Ended June 30, 1996
(3) Unaudited Pro Forma Consolidated Statement of Operations for the Year
Ended September 30, 1995
-1-
<PAGE>
(4) Notes to Unaudited Pro Forma Consolidated Financial Statements
(c) Exhibits:
2.1 Agreement of Purchase and Sale of Assets, dated September 12,
1996, by and between the Company and General Electric Capital Computer
Leasing Corporation (schedules omitted (other than Schedules 2(c),
2(c)(i) and 6(bb)) -- the Company agrees to furnish a copy of any
schedule to the Commission upon request).
99.1 Press release, dated September 12, 1996
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, Caribiner International, Inc. has caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: November 26, 1996 CARIBINER INTERNATIONAL, INC.
By: /s/ Arthur F. Dignam
---------------------------------------
Name: Arthur F. Dignam
Title: Executive Vice President,
Chief Financial and Administrative
Officer
-3-
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE SHAREHOLDER OF GENERAL ELECTRIC
CAPITAL COMPUTER LEASING
CORPORATION
We have audited the accompanying balance sheet of Total Audio Visual Services (a
division of General Electric Capital Computer Leasing Corporation) as of
December 31, 1995, and the related statements of operations and divisional
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Total Audio Visual Services as
of December 31, 1995, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Atlanta, Georgia
November 15, 1996
-4-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 995,514
Accounts receivable, less allowance
for doubtful accounts of $123,000 7,644,557
Resale inventory 345,566
Prepaid expenses and other assets 399,935
Deferred tax asset 170,800
-----------
Total current assets 9,556,372
Property and equipment, net 10,600,031
Goodwill, net of accumulated
amortization of $376,864 3,781,769
Purchased software 176,130
-----------
Total assets $24,114,302
===========
LIABILITIES AND DIVISIONAL EQUITY
Current liabilities:
Accounts payable $ 737,323
Sales tax payable 376,015
Accrued payroll 497,160
Vacation accrual 396,304
Other liabilities 506,415
-----------
Total current liabilities 2,513,217
Deferred tax liability 820,689
Due to GECCLC 19,764,975
Divisional equity 1,015,421
-----------
Total liabilities and divisional equity $24,114,302
===========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
STATEMENT OF OPERATIONS AND DIVISIONAL EQUITY
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Total revenue $45,923,658
Cost of equipment sales 2,757,492
Payroll and related expenses 15,603,445
Rental expense 2,320,224
Commission expense 7,104,104
Other operating expenses 6,269,230
Depreciation and amortization expense 2,609,470
General and administrative expenses 6,914,737
-----------
Total operating expenses 43,578,702
-----------
Operating income 2,344,956
Other expense
Interest expense, net 1,200,000
Other expense 211,770
-----------
Income before provision for income taxes 933,186
Provision for income taxes 428,003
-----------
Net income 505,183
Divisional equity, beginning of year 510,238
-----------
Divisional equity, end of year $ 1,015,421
===========
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C>
Net income $ 505,183
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense 2,609,470
Deferred tax expense 428,003
Changes in operating assets and liabilities:
Increase in accounts receivable, net (330,418)
Decrease in resale inventory 153,579
Increase in prepaid expenses and
other assets (199,326)
Decrease in accounts payable (309,365)
Increase in sales tax payable 206,576
Increase in accrued payroll 4,378
Increase in vacation accrual 19,149
Decrease in other liabilities (270,358)
-----------
Net cash provided by operating activities 2,816,871
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of software (161,130)
Purchases of property and equipment (5,719,623)
-----------
Net cash used in investing activities (5,880,753)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from GECCLC 3,825,272
-----------
Net cash provided by financing activities 3,825,272
Net increase in cash 761,390
Cash at beginning of year 234,124
-----------
Cash at end of year $ 995,514
===========
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE>
1. DESCRIPTION OF BUSINESS
Total Audio Visual Services ("TAVS" or the "Company") is a division of General
Electric Capital Computer Leasing Corporation ("GECCLC"), which is an indirect
wholly-owned subsidiary of General Electric Company ("GE"). TAVS is a provider
of audio visual equipment rentals and staging services to companies, as well as
hotel audio visual outsourcing services in the United States. TAVS enters into
short-term rentals of equipment on a daily, weekly and monthly basis. TAVS also
sells equipment to customers.
GECCLC acquired TAVS in September 1994 for a purchase price of approximately
$15,000,000. The acquisition was accounted for under the purchase method of
accounting. The excess of the purchase price over the fair value of net assets
of the business acquired was recorded as goodwill and is being amortized
straight-line over 15 years.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
The Company recognizes revenue at the end of the rental period for rental and
service agreements. Sales of equipment are recognized in the period sold.
ACCOUNTS RECEIVABLE
The December 31, 1995 accounts receivable balance includes unbilled revenue of
approximately $750,000.
RESALE INVENTORIES
Inventories are valued at the lower of cost or market using the first-in, first-
out method.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost, net of accumulated depreciation and
amortization. Depreciation is computed on the straight-line method over the
estimated useful lives of related assets. The estimated useful lives of the
assets are five years. Leasehold improvements are amortized on the straight-
line method over the shorter of the lease term or the estimated life.
ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF
In March 1995, the FASB issued Statement of Financial Accounting Standards No.
121 ("SFAS No. 121"), Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are
-8-
<PAGE>
expected to be disposed of. The Company plans to adopt SFAS No. 121 in 1996;
however, they do not believe the adoption will have a significant impact on the
Company.
GOODWILL
Goodwill represents the excess of the purchase price over the fair value of
businesses acquired and is amortized over a 15 year period using the straight-
line method. Amortization expense for 1995 totaled approximately $278,000.
ADVERTISING
Advertising costs are expensed as incurred and totaled $34,000 for 1995.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash and accounts
receivable. The Company maintains cash with various financial institutions.
The Company performs periodic evaluations of the relative credit standing of
those financial institutions to minimize credit risk. Concentrations of credit
risk with respect to trade accounts receivable are limited due to the large
number of entities comprising the Company's customer base. The Company performs
periodic evaluations of its customers' financial condition and generally does
not require collateral. At December 31, 1995, accounts receivable from hotel
and convention centers approximated $4,359,000.
The carrying amounts reported in the balance sheet for cash, accounts receivable
and accounts payable approximate their fair values.
STATEMENT OF CASH FLOWS
Taxes and interest paid in 1995 were settled through the "Due to GECCLC" account
and thus no cash was remitted by the Company for these items.
3. RELATED PARTY TRANSACTIONS
The amount payable to GECCLC represents a net amount due to various entities of
GECCLC for services provided or expenses paid by GECCLC on behalf of the Company
offset by cash remitted to GECCLC. GECCLC charged interest to TAVS based upon
their monthly budgeted net investment in TAVS using an interest rate of
approximately 7.25%.
-9-
<PAGE>
GECCLC and several of its divisions provide substantial services to the Company,
including treasury, tax, financial reporting, legal, payroll, marketing, and
information systems. GECCLC charged the Company $180,000 for these services in
1995. These charges are allocated based upon headcount, direct cost or the
number of transactions processed. In addition, certain employees of GECCLC, work
exclusively for the Company. As a result, the payroll and related benefits for
these employees are rebilled to TAVS.
Management believes that the basis used for allocating these services is
reasonable. However, the terms of these transactions may differ from those that
would result from transactions among unrelated parties.
Certain employees are eligible for GE benefits related to health care, pension
and a savings and security plan. GECCLC charges the Company a percentage of
labor costs for these benefits. Payroll expenses in 1995 includes approximately
$2,800,000 of charges for these benefits.
4. PROPERTY AND EQUIPMENT
The components of property and equipment as of December 31, 1995 consists of:
<TABLE>
<CAPTION>
<S> <C>
Equipment leased to others $10,105,581
Furniture and fixtures 1,621,236
Leasehold improvements 1,606,474
Vehicles 153,682
-----------
Total property and equipment 13,486,973
Accumulated depreciation and
amortization (2,886,942)
-----------
$10,600,031
===========
</TABLE>
5. LEASE ARRANGEMENTS
TAVS leases office space for periods up to 5 years under operating lease
agreements. These leases are subject to price escalations for certain costs.
TAVS leases space at hotels for lease periods less than one year which are
cancelable. Total rent expense for all such leases was approximately $644,000
in 1995.
Future minimum lease payments under the noncancelable operating leases at
December 31, 1995, are as follows:
<TABLE>
<CAPTION>
<S> <C>
1996 $ 281,988
1997 256,136
1998 266,948
1999 204,928
2000 101,185
Thereafter -
----------
$1,111,185
==========
</TABLE>
-10-
<PAGE>
6. INCOME TAXES
The tax effects of temporary differences and carryforwards that give rise to
significant portions of deferred tax assets and liabilities consist of the
following:
<TABLE>
<CAPTION>
Deferred tax asset:
<S> <C>
Net operating loss $ 124,862
Accrued expenses 121,600
Allowance for doubtful accounts 49,200
---------
295,662
Deferred tax liability:
Property and equipment (945,551)
---------
Net deferred tax liability $(649,889)
=========
</TABLE>
The provision for income taxes consists of the following components:
<TABLE>
<CAPTION>
<S> <C>
Current $ --
Deferred 428,003
---------
$ 428,003
=========
</TABLE>
The reconciliation of income tax computed at the U.S. federal statutory tax
rates to income tax expense is as follows:
<TABLE>
<CAPTION>
<S> <C>
Tax expense at statutory rate $ 317,283
State income tax net of federal
benefit 55,991
Non-deductible expenses 54,729
---------
$ 428,003
=========
</TABLE>
7. SUBSEQUENT EVENTS
On September 12, 1996, GECCLC signed an Agreement of Purchase and Sale of Assets
to sell certain of the assets of TAVS to Caribiner International, Inc.
("Caribiner") for total consideration of approximately $27 million in cash which
is subject to certain post-closing adjustments. The transaction closed on
September 27, 1996. The December 31, 1995 financial statements do not include
any adjustments as a result of this transaction.
-11-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30,
1996
-----------
ASSETS
Current assets:
<S> <C>
Cash $ 19,084
Accounts receivable, less allowance
for doubtful accounts of $47,000 9,621,605
Resale inventory 231,684
Prepaid expenses and other assets 611,499
-----------
Total current assets 10,483,872
Property and equipment, net 12,210,241
Goodwill, net of accumulated
amortization of $51,864 3,578,519
Purchased software 386,839
-----------
Total assets $26,659,471
===========
LIABILITIES AND DIVISIONAL EQUITY
Current liabilities:
Accounts payable $ 1,054,301
Sales tax payable 420,122
Accrued payroll 155,909
Vacation accrual 455,470
Other liabilities 954,971
-----------
Total current liabilities 3,040,773
Deferred tax liability 1,571,871
Due to GECCLC 19,904,540
Divisional equity 2,142,287
-----------
Total liabilities and divisional equity $26,659,471
===========
</TABLE>
See accompanying note to financial statements.
-12-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
STATEMENTS OF OPERATIONS AND DIVISIONAL EQUITY
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1995 1996
-----------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Total revenue $24,295,409 $28,493,990
Cost of equipment sales 1,340,577 1,211,391
Payroll and related expenses 7,986,741 8,606,641
Rental 1,192,449 1,511,043
Commission expense 3,960,852 4,872,165
Other operating expenses 3,623,189 3,747,129
Depreciation and amortization expense 1,304,541 1,787,848
General and administrative expenses 3,512,889 4,088,558
----------- -----------
Total operating expenses 22,921,238 25,824,775
----------- -----------
Operating income 1,374,171 2,669,215
Other income (expense):
Interest expense, net (600,000) (699,693)
Other income (expense) (578,345) 79,328
----------- -----------
Income before provision for income taxes 195,826 2,048,850
Provision for income taxes 88,122 921,984
----------- -----------
Net income 107,704 1,126,866
Divisional equity, beginning of year 510,237 1,015,421
----------- -----------
Divisional equity, end of year $ 617,941 $ 2,142,287
=========== ===========
</TABLE>
See accompanying note to financial statements.
-13-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
(A DIVISION OF GENERAL ELECTRIC CAPITAL
COMPUTER LEASING CORPORATION)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1995 1996
------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 107,704 $ 1,126,866
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization expense 1,304,541 1,787,848
Deferred tax expense 88,122 921,982
Changes in operating assets and
liabilities:
Increase in accounts receivable, net (817,588) (1,977,048)
Decrease in resale inventory 296,789 113,882
Decrease (increase) in prepaid
expenses and other assets 59,264 (211,564)
(Decrease) increase in accounts payable (124,813) 316,978
Increase in sales tax payable 189,966 44,107
Increase (decrease) in accrued payroll 4,378 (341,251)
Increase in vacation accrual 76,248 59,166
Increase in other liabilities 1,005,954 448,556
----------- -----------
Net cash provided by operating activities 2,190,565 2,289,522
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of software (73,000) (210,709)
Purchase of property and equipment, net (2,694,304) (3,194,808)
----------- -----------
Net cash used in investing activities (2,767,304) (3,405,517)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds from GECCLC 366,936 139,565
----------- -----------
Net cash provided by financing
activities 366,936 139,565
Net decrease in cash (209,803) (976,430)
Cash at beginning of year 234,124 995,514
----------- -----------
Cash at end of year $ 24,321 $ 19,084
----------- -----------
</TABLE>
See accompanying note to financial statements.
-14-
<PAGE>
TOTAL AUDIO VISUAL SERVICES
NOTE TO UNAUDITED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL INFORMATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles from interim financial
information and should be read in conjunction with Total Audio Visual Services'
audited financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Such
adjustments are of a normal recurring nature. Operating results for the six
months ended June 30, 1996 and 1995 are not necessarily indicative of the
results that may be expected for any other period or for a full fiscal year.
-15-
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information of
Caribiner International, Inc. (the "Company") for the year ended September 30,
1995 and the nine months ended June 30, 1996 gives effect to (i) the Initial
Public Offering of the Company completed in March, 1996 (the "Initial Public
Offering"), (ii) the acquisition of all of the outstanding ordinary shares of
Spectrum Communications Holdings International Limited ("Spectrum"), and (iii)
the acquisition of certain of the assets of Total Audio Visual Services
("TAVS"), an operating division of General Electric Capital Computer Leasing
Corporation ("GECCLC") (together with the acquisition of Spectrum, the
"Acquisitions").
The accompanying unaudited pro forma consolidated financial information contains
all adjustments necessary to present fairly the Company's financial position as
of June 30, 1996, and the results of its operations for the nine months ended
June 30, 1996 and the year ended September 30, 1995, as if, in the case of the
Unaudited Pro Forma Consolidated Balance Sheet, the acquisition of TAVS had
occurred on June 30, 1996, and, in the case of the Unaudited Pro Forma
Consolidated Statements of Operations for the nine months ended June 30, 1996
and the year ended September 30, 1995, the transactions described in the
preceding paragraph had occurred on October 1, 1994.
The unaudited pro forma consolidated financial information is based upon the
historical consolidated financial statements of each of the Company, Spectrum
and TAVS and should be read in conjunction with such financial statements and
the related notes thereto, all of which are included elsewhere in this Form
8-K/A or in the Company's other filings with the Commission.
Spectrum's fiscal year-end (June 30) differed from the Company's fiscal year-end
(September 30). The Unaudited Pro Forma Consolidated Statements of Operations
for the nine months ended June 30, 1996 and the year ended September 30, 1995
include Spectrum's historical results of operations for Spectrum's eight months
ended May 31, 1996 and its year ended June 30, 1995, respectively. The
historical financial information of Spectrum referred to above has been adjusted
to conform to the generally accepted accounting principles of the United States
and has been translated into United States dollars based upon the applicable
exchange rates. The Company's historical results of operations for the nine
months ended June 30, 1996 include the results of operations of Spectrum since
June 1, 1996, its effective date of acquisition.
TAVS' fiscal year-end (December 31) differed from the Company's fiscal year-end
(September 30). The Unaudited Pro Forma Consolidated Statements of Operations
for the nine months ended June 30, 1996 and the year ended September 30, 1995
include TAVS' results of operations for its nine months ended June 30, 1996 and
its year ended December 31, 1995, respectively. As a result of the differing
year ends of the Company and of TAVS, the results of operations of TAVS for the
three months ended December 31, 1995 are included in both periods. Certain
amounts in TAVS' Statement of Operations have been reclassified to conform to
the presentation of the Company's Consolidated Statement of Operations.
-16-
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The pro forma financial information presented does not purport to be indicative
of the financial position or operating results which would have been achieved
had the transactions described above taken place at the dates indicated and are
not necessarily indicative of the Company's financial position or results of
operations for any future date or period.
-17-
<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1996
(all amounts in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma
----------------------------------------------------
TAVS Pro Forma
Caribiner TAVS Adjustments Caribiner
----------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 6,956 $ 19 $ (19)(a) $ 1,356
(5,600)(b)
Trade accounts receivable, net 40,215 9,622 (9,622)(a) 40,215
Deferred charges 8,613 -- -- 8,613
Resale inventory -- 232 -- 232
Prepaid expenses and other
current assets 2,062 610 -- 2,672
----------------------------------------------------
Total Current Assets 57,846 10,483 (15,241) 53,088
Property and equipment-net 9,406 12,210 (1,400)(c) 20,216
Intangible assets-net 31,256 3,579 (3,579)(a) 47,067
15,811 (d)
Purchased software -- 387 387
Other assets 595 -- -- 595
----------------------------------------------------
Total Assets $99,103 $26,659 (4,409) $121,353
====================================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Bank line of credit $ -- $ -- 6,000 (b) $ 6,000
Current portion of long-term
debt 691 -- -- 691
Trade accounts payable 10,340 1,474 (1,474)(a) 10,340
Accrued expenses and other
current liabilities 15,113 1,566 (1,566)(a) 16,363
1,250 (e)
Deferred income 15,965 -- -- 15,965
----------------------------------------------------
Total Current Liabilities 42,109 3,040 4,210 49,359
Long-term debt 1,184 -- 15,000 (b) 16,184
Deferred income 5,605 -- -- 5,605
Deferred tax liability -- 1,572 (1,572)(a) --
Other liabilities 107 -- -- 107
Due to GECCLC -- 19,905 (19,905)(a) --
----------------------------------------------------
TOTAL LIABILITIES 49,005 24,517 (2,267) 71,255
Common stock 96 -- -- 96
Additional paid-in capital 60,582 -- -- 60,582
Accumulated (deficit) earnings (10,580) 2,142 (2,142)(f) (10,580)
----------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 50,098 2,142 (2,142) 50,098
----------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $99,103 $26,659 (4,409) $121,353
====================================================
</TABLE>
-18-
<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended June 30, 1996
(all amounts, except per share data, in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
-----------------------------------------------------------------------
Pro Forma
Caribiner Spectrum TAVS IPO Acquisitions Caribiner
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $99,777 $26,730 $41,158 $ -- $ -- $167,665
Cost of revenue 66,945 20,661 28,632 -- -- 116,238
-----------------------------------------------------------------------
Gross profit 32,832 6,069 12,526 -- -- 51,427
Operating expenses:
Selling, general and
administrative expenses 21,575 4,322 5,885 -- -- 31,782
Non-cash compensation
expense 1,072 -- -- -- -- 1,072
Depreciation and
amortization 2,139 231 2,475 -- 303(i) 5,148
-----------------------------------------------------------------------
Total operating expenses 24,786 4,553 8,360 -- 303 38,002
-----------------------------------------------------------------------
Operating income (loss) 8,046 1,516 4,166 -- (303) 13,425
Interest expense with related
parties 1,199 -- -- (1,199)(g) -- --
Interest expense (income),
net 454 221 1,000 (719)(g) 472(j) 1,428
Other expense (income), net -- (303) (586) -- -- (889)
-----------------------------------------------------------------------
Income (loss) before taxes 6,393 1,598 3,752 1,918 (775) 12,886
Income tax (expense) benefit (2,238) (527) (1,548) (671)(h) 25(h) (4,959)
------------------------------------------------------------------------
Net income (loss) $ 4,155 1,071 2,204 1,247 (750) $7,927
=======================================================================
Pro forma net income per
common share $ 0.61 -- -- -- -- $0.83(l)
=====================================================================
Pro forma weighted average
shares outstanding 7,778 -- -- -- -- 9,600
=====================================================================
</TABLE>
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<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
(all amounts, except per share data, in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
------------------------------------------------------------------------
Pro Forma
Caribiner Spectrum TAVS IPO Acquisitions Caribiner
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $81,131 $34,312 $45,924 $ -- $ -- $161,367
Cost of revenue 54,312 22,746 34,054 -- -- 111,112
------------------------------------------------------------------------
Gross profit 26,819 11,566 11,870 -- -- 50,255
Operating expenses:
Selling, general and
administrative expenses 19,306 10,532 6,915 -- -- 36,753
Depreciation and
amortization 2,330 699 2,609 -- 404(i) 6,042
------------------------------------------------------------------------
Total operating expenses 21,636 11,231 9,524 -- 404 42,795
------------------------------------------------------------------------
Operating income 5,183 335 2,346 -- (404) 7,460
Interest expense with related
parties 2,234 -- -- (2,234)(g) -- --
Interest expense, net 1,259 392 1,200 (1,087)(g) (395)(k) 1,369
Other expense, net -- 248 212 -- -- 460
------------------------------------------------------------------------
Income (loss) before taxes 1,690 (305) 934 3,321 (9) 5,631
Income tax (expense) benefit (264) 101 (428) (956)(h) 127(h) (1,420)
------------------------------------------------------------------------
Net income (loss) $ 1,426 (204) 506 2,365 118 $4,211
========================================================================
Pro forma net income per
common share $0.49 -- -- -- -- $0.44(l)
========================================================================
Pro forma weighted average
shares outstanding 6,620 -- -- -- -- 9,597
========================================================================
</TABLE>
-20-
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands)
(a) Adjustment to eliminate certain assets not acquired and liabilities not
assumed in accordance with the Agreement of Purchase and Sale of Assets by
and between the Company and GECCLC.
(b) Reflects the aggregate initial payment of approximately $26,600 paid at
closing for the acquisition of TAVS, and for certain acquisition-related
costs. Such amount was funded with $5,600 of the Company's existing cash and
$6,000 and $15,000 borrowed under the Line of Credit and Term Facility,
respectively.
(c) To adjust the net carrying value of certain fixed assets to fair value.
(d) Adjustment to record goodwill of $15,811 resulting from the acquisition of
TAVS after allocation of the purchase price to the net tangible assets.
(e) Adjustment to accrue for transaction costs which include professional fees,
severance and certain other costs incurred or to be incurred in connection
with the acquisition of TAVS.
(f) Adjustment to eliminate the accumulated equity of TAVS upon acquisition.
(g) Adjustment to decrease interest expense upon repayment of substantially all
of the outstanding debt, including accrued interest, upon consummation of
the Initial Public Offering.
(h) Adjustment to reflect the tax effect of the pro forma adjustments.
(i) Net adjustment to increase depreciation and amortization expense resulting
from the respective Acquisitions based upon the Company's estimated period
of benefit, assuming the Acquisitions had occurred as of October 1, 1994.
(j) Adjustment to increase interest expense for the nine months ended June 30,
1996 resulting from increased borrowings due to working capital
requirements.
(k) Adjustment to decrease interest expense for the year ended September 30,
1995 relating to the repayment of substantially all bank borrowings and
other long-term obligations in connection with certain of the Acquisitions,
as if such amounts were repaid as of October 1, 1994.
(l) Pro forma net income per common share has been calculated using the weighted
average number of shares of common stock outstanding during each of the
periods presented, assuming the Initial Public Offering occurred as of
October 1, 1994.
-21-
