<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): June 13, 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 offices) (Zip Code)
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 June 28, 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 Consolidated Financial Statements of SCH International Limited
(1) Report of Independent Auditors
(2) Consolidated Profit and Loss Accounts for the Years Ended June 30, 1995
and 1994
(3) Consolidated Balance Sheets as of June 30, 1995 and 1994
(4) Consolidated Cash Flows Statements for the Years Ended June 30, 1995
and 1994
(5) Notes to the Accounts
Unaudited Interim Financial Statements of SCH International Limited
(1) Balance Sheets as of March 31, 1996 and 1995
(2) Statements of Operations for the Nine Months Ended March 31, 1996 and
1995
(3) Statements of Cash Flows for the Nine Months Ended March 31, 1996 and
1995
(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 March 31, 1996
(2) Unaudited Pro Forma Consolidated Statement of Operations for the Six
Months Ended March 31, 1996
(3) Unaudited Pro Forma Consolidated Statement of Operations for the Year
Ended September 30, 1995
(4) Notes to Unaudited Pro Forma Consolidated Financial Statements
-1-
<PAGE>
(c) Exhibits:
2.1 Share Sale Agreement, dated June 13, 1996, by and among Berners-Price
and others, Caribiner UK and the Company (schedules omitted -- the
Company agrees to furnish a copy of any schedule to the Commission
upon request).
2.2 Share Sale Agreement, dated July 13, 1996, by and among Caribiner UK,
Berners-Price, Mark Wallace, the Company and others.
99.1 Press release, dated June 13, 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: August 13, 1996 CARIBINER INTERNATIONAL, INC.
By: /s/ Arthur F. Dignam
--------------------
Name: Arthur F. Dignam
Title: Executive Vice President,
Chief Financial and Administrative
Officer
-3-
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for
each financial year which give a true and fair view of the state of
affairs of the company and the group as at the end of the financial year
and of the profit or loss of the group for that period. In preparing
those financial statements, the directors are required to:
o select suitable accounting policies and then apply them consistently;
o make judgements and estimates that are reasonable and prudent;
o state whether applicable accounting standards have been followed;
o prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the group will continue in business.
The directors are responsible for keeping proper accounting records, for
safeguarding the assets of the group and for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
<PAGE>
[Letterhead of Touche Ross]
AUDITORS' REPORT TO THE MEMBERS OF
SCH INTERNATIONAL LIMITED
We have audited the financial statements on pages 6 [sic] to 25 [sic] which
have been prepared under the accounting policies set out on pages 10 [sic]
and 11 [sic].
Respective responsibilities of directors and auditors
As described on page 4 [sic] the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report
our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the
company's and the group's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.
Opinion
In our opinion the financial statements give a true and fair view of the
state of affairs of the company and the group at 30 June 1995 and of the
loss of the group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
/s/ Touche Ross & Co.
Chartered Accountants and
Registered Auditors
18 December 1995
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 30 June 1995
<TABLE>
<CAPTION>
Note 1995 1994
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
TURNOVER:
Continuing operations 21,100,940 23,220,464
Discontinued operations 573,171 1,341,052
----------- -----------
Total turnover 2 21,674,111 24,561,516
Cost of sales (14,368,232) (17,230,772)
----------- -----------
GROSS PROFIT 7,305,879 7,330,744
Distribution costs 812,388 1,280,093
Administration expenses 5,932,191 5,720,852
----------- -----------
(6,744,579) (7,000,945)
----------- -----------
OPERATING PROFIT/(LOSS)
Continuing operations 756,776 400,161
Discontinued operations (195,476) (70,362)
----------- -----------
561,300 329,799
Exceptional items 4 (187,155) -
Income from investment in associate company 29,877 -
----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST
404,022 329,799
Interest receivable and similar income 5 2,277 16,198
Interest payable and similar charges 6 (269,538) (274,520)
Profit on redemption of debt 45,279 -
----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 7 182,040 71,477
Tax on profit on ordinary activities 8 (170,515) (59,527)
----------- -----------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION
11,525 11,950
Minority interest (26,219) (31,858)
----------- -----------
RETAINED LOSS FOR THE YEAR 20 (14,694) (19,908)
=========== ===========
</TABLE>
There are no recognised gains or losses for the current and preceding financial
years other than as stated above.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
CONSOLIDATED BALANCE SHEET
30 June 1995
<TABLE>
<CAPTION>
Note 1994
as restated
1995 (note 31)
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 10 849,974 1,016,217
Investments 11 197,352 102,254
----------- -----------
1,047,326 1,118,471
CURRENT ASSETS
Stocks and work in progress 12 1,031,688 752,618
Debtors 13 3,558,498 3,290,065
Cash at bank and in hand 58,249 285,536
----------- -----------
4,648,435 4,328,219
----------- -----------
CREDITORS: amounts falling due within one year
Bank overdraft 142,913 299,955
Trade creditors 2,929,401 3,140,690
Sundry creditors 14 4,003,729 3,211,371
----------- -----------
7,076,043 6,652,016
----------- -----------
NET CURRENT LIABILITIES (2,427,608) (2,323,797)
----------- -----------
TOTAL ASSETS LESS CURRENT LIABILITIES (1,380,282) (1,205,326)
CREDITORS: amounts falling due after more than one
year 15 (1,394,190) (1,689,583)
PROVISIONS FOR LIABILITIES AND CHARGES 18 (3,844) (2,637)
----------- -----------
(2,778,316) (2,897,546)
=========== ===========
CAPITAL AND RESERVES
Called up share capital 19 310,675 310,675
Share premium account 20 14,025 14,025
Reserves:
Profit and loss account 20 10,143 24,837
Goodwill 20 (3,237,509) (3,297,096)
----------- -----------
EQUITY SHAREHOLDERS' FUNDS (2,902,666) 2,947,559
Equity minority interest 124,350 50,013
----------- -----------
TOTAL CAPITAL EMPLOYED (2,778,316) (2,897,546)
=========== ===========
</TABLE>
These financial statements were approved by the Board of Directors on 18
December 1995.
Signed on behalf of the Board of Directors
/s/ P Berners-Price
P Berners-Price
Director
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
BALANCE SHEET
30 June 1995
<TABLE>
<CAPTION>
Note 1994
as restated
1995 (note 31)
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Investments 11 5,376,475 5,388,010
CURRENT ASSETS
Debtors 13 298,411 441,095
----------- -----------
298,411 441,095
----------- -----------
CREDITORS: amounts falling due within one year
Bank overdraft 47,847 230,515
Trade creditors 1,410 1,410
Sundry creditors 14 5,033,161 4,510,915
----------- -----------
5,082,418 4,742,840
----------- -----------
NET CURRENT LIABILITIES (4,784,007) (4,301,745)
TOTAL ASSETS LESS CURRENT ASSETS
592,468 1,086,265
CREDITORS: amounts falling due after more than
one year 15 (1,394,190) (1,667,920)
----------- -----------
(801,722) (581,655)
=========== ===========
CAPITAL AND RESERVES
Called up share capital 19 310,675 310,675
Share premium account 20 14,025 14,025
Profit and loss account 20 (1,126,422) (906,355)
----------- -----------
EQUITY SHAREHOLDERS' FUNDS (801,722) (581,655)
=========== ===========
</TABLE>
These financial statements were approved by the Board of Directors on 18
December 1995.
Signed on behalf of the Board of Directors
/s/ P Berners-Price
P Berners-Price
Director
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 June 1995
<TABLE>
<CAPTION>
Note 1995 1994
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
Net cash inflow from operating activities 21 266,726 1,374,556
Return on investments and servicing of finance
Interest received 2,277 16,198
Interest paid (268,264) (351,560)
Interest element of finance lease rental
payments (1,274) (5,432)
Dividends paid - (13,750)
----------- -----------
Net cash outflow from returns on investments
servicing of finance (267,261) (354,544)
Taxation
UK corporation tax paid (42,935) (95,107)
----------- -----------
Tax paid (42,935) (95,107)
Investing activities
Purchase of tangible fixed assets (167,229) (259,278)
Purchase of interest in subsidiary undertaking (10,246) (22,797)
Sale of tangible fixed assets 26,573 9,563
Purchase of fixed asset investment - (37,500)
Sale of fixed asset investment 75,000 -
Sale of interest in subsidiary undertaking 26 (14,868) -
----------- -----------
Net cash outflow from investing activities (90,770) (310,012)
----------- -----------
Net cash (outflow)/inflow before financing (134,240) 614,893
Financing
Purchase of shares by employee share ownership
plan trust (75,904) -
Borrowings under term loan 247,084 (50,000)
Capital element of finance lease rentals 24 (15,906) (37,514)
Loans issued - 2,916
Repayment of loan stock 24 (91,279) (85,730)
----------- -----------
Net cash inflow/(outflow) from financing 63,995 (170,328)
----------- -----------
(Decrease)/ increase in cash and cash
equivalents 22 (70,245) 444,565
=========== ===========
</TABLE>
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
1. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with applicable
accounting standards. The particular accounting policies adopted are
described below:
Convention
The financial statements are prepared under the historical cost convention.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is calculated to write down their cost or valuation to their
estimated residual values by equal annual instalments over the period of
their estimated useful economic lives, which are considered to be:
Short leasehold buildings and improvements Period of lease
Other leased assets Period of lease
Plant and machinery 2-5 years
Motor vehicles 4 years
Fixtures, computer and office equipment 4-8 years
Stocks and work in progress
Stocks and work in progress are stated at the lower of cost and net
realisable value.
Cost of stocks is calculated on a first in first out basis. Work in
progress cost includes all production related overheads and the appropriate
proportion of indirect overhead expenditure.
Deferred taxation
Deferred taxation is provided at the anticipated tax rates on timing
differences arising from the inclusion of items of income and expenditure
in taxation computations in periods different from those in which they are
included in the financial statements to the extent that it is probable that
a liability or asset will crystallise in the future.
Foreign currency translation
All assets and liabilities denominated in foreign currencies are translated
into sterling at the rates ruling at the balance sheet date. Transactions
denominated in foreign currencies are translated at the rates ruling at the
dates of the transactions. All exchange differences are dealt with through
the profit and loss account.
On consolidation, the temporal method is used to translate the foreign
currency balance sheets in view of the control exercised over these
entities. Exchange differences are dealt with through the profit and loss
account.
Basis of consolidation
The group financial statements consolidate the financial statements of the
company and all subsidiaries for the financial year ended 30 June 1995.
Goodwill
Goodwill is written off to reserves when it arises.
Investments
Investments held as fixed assets are stated at cost less provision for
permanent diminution in value.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
1. ACCOUNTING POLICIES (continued)
Leased assets
Assets held under finance leases and the related lease obligation are
recorded in the balance sheet at the fair value of the leased assets at the
inception of the leases. The amounts by which the lease payments exceed the
recorded lease obligation are treated as finance charges which are
amortised over the lease term to give a constant rate of charge on the
remaining balance of the obligation.
Rental costs under operating leases are charged to profit and loss account
in equal annual instalments over the period of the leases.
Pensions
The company's cost is charged to the profit and loss account so as to
spread the cost of pensions as incurred over members' working lives with
the company.
2. ANALYSIS OF TURNOVER
Turnover represents the amounts invoiced to customers in respect of
completed projects and is stated after deduction of trade discounts and
value added tax.
The turnover attributable to each of the group's geographical markets is:
1995 1994
(pound) (pound)
UK 14,080,537 21,098,769
Europe 5,013,743 2,198,860
Other 2,579,831 1,263,887
---------- ----------
21,674,111 24,561,516
========== ==========
The turnover and profit before taxation are entirely attributable to the
group's principal activity.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
3. INFORMATION REGARDING DIRECTORS AND EMPLOYEES
Employees
Average number of persons employed by the group in the year:
1995 1994
No. No.
Production and design staff 71 71
Sales and distribution staff 22 25
Administration staff 25 26
--------- ---------
118 122
========= =========
Staff costs during the year, including directors, in respect of these
employees were:
1995 1994
(pound) (pound)
Wages and salaries 3,488,706 3,200,500
Social security costs 304,830 317,065
Pension costs 67,716 122,795
--------- ---------
3,861,252 3,640,360
========= =========
Directors' emoluments
Management remuneration including
pension contributions 489,676 515,314
Compensation for loss of office -- 60,000
--------- ---------
489,676 575,314
========= =========
Emoluments (excluding pension
contributions) of the Chairman 113,829 70,382
========= =========
Emoluments (excluding pension
contributions) of the highest paid
director 113,829 85,847
========= =========
Emoluments (excluding pension
contributions) of the directors fell Number Number
within the following ranges:
(pound) 0 - (pound) 5,000 1 -
(pound)60,001 - (pound) 65,000 - 2
(pound)65,001 - (pound) 70,000 - 1
(pound)80,001 - (pound) 85,000 - 2
(pound)90,001 - (pound) 95,000 1 -
(pound)110,001 - (pound)115,000 3 -
========= =========
Emoluments of the directors waived during the year amounted to (pound)nil
(1994 - (pound)164,915).
On 1 July 1994, one of the directors acquired a 40% interest in Delegate
Management Services Limited for (pound)40, being the nominal value of the
shares. The net asset value of Delegate Management Services Limited at this
date was (pound)54,243.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
4. EXCEPTIONAL ITEMS
1995 1994
(pound) (pound)
Disposal of interest in Delegate
Management Services Limited 33,206 --
Disposal of other fixed asset investment 80,000 --
Goodwill written off on termination of
an operation 73,949 --
------- -------
187,155 --
======= =======
SCH International Limited disposed of a 60% interest in Delegate Management
Services Limited at par value of the shares.
The disposal of the other fixed asset investment relates to an investment
disposal for nil proceeds, previously carried at (pound)80,000 within
current assets.
The goodwill associated with the acquisition of Spectrum Communications
GmbH has been written off following the directors' decision to permanently
cease operations during the year.
The tax credit associated with these items is (pound)29,094.
INTEREST RECEIVABLE AND SIMILAR INCOME
1995 1994
(pound) (pound)
Bank deposit interest 2,277 16,198
======= =======
INTEREST PAYABLE AND SIMILAR CHARGES
1995 1994
(pound) (pound)
Bank loans and overdrafts repayable
within five years 198,916 176,048
Finance lease interest 1,274 5,432
Debenture loans 60,389 68,745
Other interest 8,959 24,295
------- -------
269,538 274,520
======= =======
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
7. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
1995 1994
(pound) (pound)
Profit on ordinary activities before taxation is
stated after charging/(crediting):
Depreciation of owned assets 211,571 297,006
Depreciation of assets held under
finance leases 12,544 16,077
Auditors' remuneration 31,928 28,500
Operating lease rentals 661,793 751,325
Hire of plant and equipment 1,205,236 1,265,617
Directors' emoluments 489,676 575,314
Profit on disposal of fixed assets (7,298) (4,412)
========= =========
Remuneration to auditors for other services amounted to (pound)30,607 (1994
- (pound)6,700).
8. TAX ON PROFIT ON ORDINARY ACTIVITIES
1995 1994
(pound) (pound)
Taxation based on the profit/loss for
the year comprises:
United Kingdom corporation tax at 33%
(1994 - 33%) on taxable profits 152,327 47,301
Under provision for earlier year 6,744 9,589
Deferred taxation 3,844 2,637
Associated company 7,600 -
--------- ---------
170,515 59,527
========= =========
The consolidated tax charge is disproportionately high due to expenditure
on items which are not deductible for tax purposes and unrelieved tax
losses in the overseas subsidiary.
9. PROFIT AND LOSS ACCOUNT OF THE PARENT COMPANY
As permitted by Section 230 of the Companies Act 1985, the profit and loss
account of the parent company is not presented as part of the accounts. The
parent company's loss for the year amounted to (pound)220,067 (1994 -
(pound)235,174).
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
10. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Short
leasehold Assets
buildings Furniture, held
and Plant computer under
improve- and Motor and office finance
ments machinery vehicles equipment leases Total
Group (pound) (pound) (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C> <C>
Cost
At 1 July 1994 591,813 840,770 33,600 1,527,813 96,561 3,090,557
Additions 27,176 2,381 7,800 129,872 -- 167,229
Disposals -- (9,393) (33,600) (135,089) (2,112) (180,194)
------- ------- ------- --------- ------ ---------
At 30 June 1995 618,989 833,758 7,800 1,522,596 94,449 3,077,592
------- ------- ------- --------- ------ ---------
Accumulated depreciation
At 1 July 1994 133,331 775,083 23,324 1,065,913 76,689 2,074,340
Charge for the year 28,356 36,055 4,584 142,576 12,544 224,115
Disposals -- (1,770) (26,446) (41,565) (1,056) (70,837)
------- ------- ------- --------- ------ ---------
At 30 June 1995 161,687 809,368 1,462 1,166,924 88,177 2,227,618
------- ------- ------- --------- ------ ---------
Net book value
At 30 June 1995 457,302 24,390 6,338 355,672 6,272 849,974
======= ======= ======= ========= ====== =========
At 30 June 1994 458,482 65,687 10,276 461,900 19,872 1,016,217
======= ======= ======= ========= ====== =========
</TABLE>
The assets held under finance leases comprise furniture, computer and
office equipment.
The assets of SCH International Limited and its subsidiaries have been
charged in favour of GiroCredit Bank as security for loans outstanding to
SCH International Limited amounting to (pound)1,748,750.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
11. FIXED ASSET INVESTMENTS
<TABLE>
<CAPTION>
Subsidiary Associated Own Other
Group undertakings undertaking shares investments Total
(pound) (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Balance at 1 July 1994 -- -- 27,254 75,000 102,254
Investments made during the year -- 43,974 125,904 80,220 250,098
Disposal in year -- -- -- (155,000) (155,000)
--------- ------ ------- -------- ---------
Balance at 30 June 1995 at cost -- 43,974 153,158 220 197,352
========= ====== ======= ======== =========
Company
Balance at 1 July 1994 5,360,756 -- 27,254 -- 5,388,010
Investments made during the year 10,246 -- 125,904 80,000 216,150
Disposal of investment (27,572) -- -- (80,000) (107,572)
Investment written off during the year (120,113) -- -- -- (120,113)
--------- ------ ------- -------- ---------
Balance at 30 June 1995 at cost 5,223,317 -- 153,158 -- 5,376,475
========= ====== ======= ======== =========
</TABLE>
All investments are in unquoted companies.
The above investments are stated at cost and, in the opinion of the
directors, the value of the investments is not less than the value at which
they are stated.
(pound)
Investment in associated undertaking
Cost
Investment reclassified as associate 520
--------
At 30 June 1995 520
--------
Group's share of post acquisition profits
On reclassification as an associate 21,657
Profits retained for the year 22,277
--------
At 30 June 1995 43,934
--------
Goodwill arising on acquisition
On reclassification as an associate (480)
--------
At 30 June 1995 (480)
--------
Share of net assets
At 30 June 1995 43,974
========
At 30 June 1994 --
========
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
11. FIXED ASSET INVESTMENTS (continued)
SCH International Limited disposed of a 60% interest in Delegate Management
Services Limited on 1 July 1994. The remaining 40% interest has been
incorporated into the consolidated accounts using the equity method.
The company operates an Employee Share Ownership Plan for the purpose of
purchasing shares in SCH International Limited from employees who leave the
group. The intention is to sell shares to new and existing employees in the
future.
Shares held by the trust are disclosed as investment in own shares within
fixed assets as the purchases have been financed by a loan from the
company.
Employees hold options to purchase 83,000 10p ordinary shares in SCH
International Limited at 30 June 1995.
The trust holds a total of 634,710 10p ordinary shares in SCH International
at 30 June 1995 (1994 - 114,750 10p ordinary shares).
12. STOCKS AND WORK IN PROGRESS
1994
as restated
1995 (note 31)
(pound) (pound)
Raw materials and consumables 10,806 22,319
Work in progress 1,020,882 730,299
--------- -------
1,031,688 752,618
========= =======
13. DEBTORS
<TABLE>
<CAPTION>
1994 1994
as restated as restated
1995 1995 (note 31) (note 31)
(pound) (pound) (pound) (pound)
Group Company Group Company
<S> <C> <C> <C> <C>
Trade debtors 3,199,578 -- 2,891,916 --
Other debtors 43,719 5,410 219,734 85,411
Amounts owed by group companies -- 111,731 -- 266,687
Amounts owed by associated company 100,956 99,235 -- --
Prepayments and accrued income 205,567 6,111 178,415 --
Corporation tax recoverable 8,678 -- -- --
Group relief -- 75,924 -- 88,997
--------- ------- --------- -------
3,558,498 298,411 3,290,065 441,095
========= ======= ========= =======
</TABLE>
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
14. SUNDRY CREDITORS
<TABLE>
<CAPTION>
1994
as restated
1995 1995 (note 31) 1994
(pound) (pound) (pound) (pound)
Group Company Group Company
<S> <C> <C> <C> <C>
Amounts owed to group companies -- 3,703,991 -- 3,612,733
Other creditors 108,048 50,000 196,994 27,199
Corporation tax 149,870 -- 43,645 --
Other taxation and social security 180,787 1,228 25,961 1,228
Obligations under finance leases 6,061 -- 27,783 --
Bank loans 900,000 900,000 749,500 749,500
Unsecured loan stock "B" 246,672 246,672 -- --
Unsecured loan stock "C" -- -- 10,000 10,000
Accruals and deferred income 2,412,291 131,270 2,157,488 110,255
--------- --------- --------- ---------
4,003,729 5,033,161 3,211,371 4,510,915
========= ========= ========= =========
</TABLE>
15. CREDITORS: AMOUNTS FALLING
DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1995 1995 1994 1994
(pound) (pound) (pound) (pound)
Group Company Group Company
<S> <C> <C> <C> <C>
Debenture loans:
Unsecured loan stock "A" 103,870 103,870 103,870 103,870
Unsecured loan stock "B" 441,570 441,570 814,800 814,800
Obligations under finance leases -- -- 18,747 --
Bank loans 848,750 848,750 752,166 749,250
--------- --------- --------- ---------
1,394,190 1,394,190 1,689,583 1,667,920
========= ========= ========= =========
</TABLE>
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
16. BORROWINGS
<TABLE>
<CAPTION>
1995 1995 1994 1994
(pound) (pound) (pound) (pound)
Group Company Group Company
<S> <C> <C> <C> <C>
Analysis of loan repayments:
Bank loans and overdrafts
Within one year or on demand 1,042,913 947,847 1,049,455 980,015
Between one and two years 650,000 650,000 -- --
Between two and five years 198,750 198,750 752,166 749,250
Unsecured loan stock "A"
Over one year 103,870 103,870 103,870 103,870
Unsecured loan stock "B"
Within one year 246,672 246,672 -- --
Over one year 441,570 441,570 814,800 814,800
Unsecured loan stock "C"
Within one year -- -- 10,000 10,000
--------- --------- --------- ---------
2,683,775 2,588,709 2,730,291 2,657,935
========= ========= ========= =========
Due within one year
Bank overdraft 142,913 47,847 299,955 230,515
Unsecured loan stock "B" 246,672 246,672 -- --
Unsecured loan stock "C" -- -- 10,000 10,000
Bank loans 900,000 900,000 749,500 749,500
Due after more than one year
Unsecured loan stock "A" 103,870 103,870 103,870 103,870
Unsecured loan stock "B" 441,570 441,570 814,800 814,800
Bank loans 848,750 848,750 752,166 749,250
--------- --------- --------- ---------
2,683,775 2,588,709 2,730,291 2,657,935
========= ========= ========= =========
</TABLE>
The bank loans are secured by a fixed and floating charge on the assets of
the group.
Loan stock "A" and "B" is repayable at any time at the directors'
discretion and the option of stockholders, subject to agreement with
GiroCredit Bank. Other than the amounts shown above due within one year,
repayment of which has been agreed, the directors understand that no other
repayment of loan stock "A" and "B" will be made before 30 June 1996.
Loan stock "A" bears interest at 15% per annum and is unsecured.
Loan stock "B" bears interest at a rate equivalent to the National
Westminster Bank PLC base rate on amounts outstanding after 1 December 1992
and is unsecured.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
17. OBLIGATIONS UNDER FINANCE LEASES
1995 1994
(pound) (pound)
Amount falling due in the second to
fifth years inclusive -- 18,747
======== ========
18. PROVISIONS FOR LIABILITIES AND CHARGES
Group Company
(pound) (pound)
Deferred taxation
At 1 July 1994 2,637 --
Current year charge 3,844 --
Other movements (2,637) --
-------- --------
At 30 June 1995 3,844 --
======== ========
The amounts of deferred taxation provided in the financial statements are
as follows:
<TABLE>
<CAPTION>
Group Company Group Company
Fully Fully Fully Fully
provided provided provided provided
1995 1995 1994 1994
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Capital allowances in excess of
depreciation 3,844 -- 2,637 --
======= ======= ======= =======
</TABLE>
There was no deferred taxation unprovided in either the current or
preceding financial years.
19. CALLED UP SHARE CAPITAL
1995 1994
(pound) (pound)
Authorised
5,000,000 ordinary shares of 10p each 500,000 500,000
======= =======
Allotted and fully paid
3,106,750 (1994: 3,106,750) ordinary
shares of 10p each 310,675 310,675
======= =======
GiroCredit Bank has rights under a warrant instrument to subscribe for
279,068 ordinary shares of the company at 10.53p per share. The warrant is
exercisable by GiroCredit Bank at any time on or before 31 December 1999.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
20. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
Share Profit and
Share premium Goodwill loss
capital account (pound) account Total
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
THE GROUP
Balance at 1 July 1994 310,675 14,025 (3,297,096) 24,837 (2,947,559)
Loss for the year -- -- -- (14,694) (14,694)
Goodwill relating to permanently ceased
operation -- -- 73,949 -- 73,949
Goodwill written off -- -- (14,362) -- (14,362)
------- ------ ---------- ---------- ----------
Balance at 30 June 1995 310,675 14,025 (3,237,509) 10,143 (2,902,666)
======= ====== ========== ========== ==========
THE COMPANY
Balance at 1 July 1994 310,675 14,025 -- (906,355) (581,655)
Loss for the year -- -- -- (220,067) (220,067)
------- ------ ---------- ---------- ----------
Balance at 30 June 1995 310,675 14,025 -- (1,126,422) (801,722)
======= ====== ========== ========== ==========
</TABLE>
The goodwill relating to the permanently ceased operation has been written
off through the profit and loss account following a permanent diminution in
value of the goodwill (see note 4).
21. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
1995 1994
(pound) (pound)
Operating profit 561,300 329,799
Depreciation charges 224,115 313,083
Profit on sale of tangible fixed assets (7,298) (4,412)
(Increase)/decrease in stocks and work in progress (279,822) 8,823
Increase in debtors (358,115) (1,015,578)
Increase in creditors 111,481 1,742,841
Write down of purchased goodwill in
subsidiary undertaking 15,065 --
-------- ----------
Net cash inflow from operating activities 266,726 1,374,556
======== ==========
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
22. ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS DURING THE YEAR
1995 1994
(pound) (pound)
Balance at 1 July (14,419) (458,984)
Net cash (outflow)/inflow (70,245) 444,565
------- --------
Balance at 30 June (84,664) (14,419)
======= ========
23. ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS AS SHOWN IN THE BALANCE
SHEET
Change in
1995 1994 year
(pound) (pound) (pound)
Cash at bank and in hand 58,249 285,536 (227,287)
Bank overdraft (142,913) (299,955) 157,042
-------- -------- -------
(84,664) (14,419) (70,245)
======== ======== =======
24. ANALYSIS OF CHANGES IN FINANCING DURING THE YEAR
<TABLE>
<CAPTION>
Finance Finance
lease lease
obligations Loan stock obligations Loan stock
1995 1995 1994 1994
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Balance at 1 July 46,530 928,670 84,044 1,014,400
Finance leases surrendered on disposal
of interest in subsidiary undertaking (24,563) -- -- --
Cash outflow from financing (15,906) (91,279) (37,514) (85,730)
Profit on redemption of loan stock -- (45,279) -- --
------- ------- ------- ---------
Balance at 30 June 6,061 792,112 46,530 928,670
======= ======= ======= =========
</TABLE>
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
25. SALE OF INTEREST IN SUBSIDIARY UNDERTAKING
SCH International Limited disposed of 60% of Delegate Management Services
Limited on 1 July 1994.
Net assets of Delegate Management Services Limited comprise at this date:
(pound)
Tangible fixed assets 90,082
Stock 752
Debtors 205,651
Cash at bank and in hand 53,984
Creditors (254,533)
Bank overdraft (39,056)
Provisions for liabilities and charges (2,637)
--------
54,243
========
Net assets disposed of - 60% 32,546
Goodwill previously written off 720
Loss on disposal (33,206)
--------
Cash inflow 60
========
26. ANALYSIS OF THE NET OUTFLOW OF CASH AND CASH EQUIVALENTS IN RESPECT OF THE
SALE OF THE INTEREST IN THE SUBSIDIARY UNDERTAKING
(pound)
Cash received 60
Cash at bank and in hand surrendered (53,984)
Bank overdraft surrendered 39,056
--------
Net cash outflow of cash and cash equivalents in respect of the
sale of the interest in the subsidiary undertaking (14,868)
========
27. FINANCIAL COMMITMENTS
At 30 June 1995 the group was committed to making the following payments
during the next year in respect of operating leases:
Land and
building Other
(pound) (pound)
Leases which expire:
Within one year -- 50,769
Within two to five years -- 96,425
After five years 385,000 --
------- -------
385,000 147,194
======= =======
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
28. CONTINGENT LIABILITIES
The company has entered into a cross guarantee arrangement with the
following group companies:
Spectrum Communications Limited
Spectrum Communications (Birmingham) Limited
Mark Wallace Associates Limited
The overdraft facility of all the above companies subject to the cross
guarantee totalled(pound)150,000 at 30 June 1995.
A loan of (pound)1,748,750 advanced to SCH International Limited is secured
on all the assets of the group. The total facility available is
(pound)1,948,750. The company has given a debenture creating charges over
its entire assets in order to secure the obligations of the company under
the guarantee.
The company is grouped for VAT purposes with certain other group companies.
Consequently the company is contingently liable for the VAT liabilities of
those other companies.
29. PENSION SCHEME
The wholly owned subsidiary, Spectrum Communications Limited, operates
pension and life assurance arrangements for eligible employees.
The defined benefit scheme was discontinued at 31 July 1995, and replaced
by a defined contribution arrangement.
The last formal review of the defined benefit scheme was carried out as at
1 April 1994 by an independent qualified actuary using the projected unit
method. At this date the market value of scheme assets was (pound)540,000
and the actuarial value of these assets was sufficient to cover 107% of the
benefits accrued to members after allowing for expected future increases in
earnings. The main assumptions used for the valuation were an investment
return of 9% per annum and future pensionable salary increases of 8% per
annum. A closing valuation as at 31 July 1995 is being carried out, which
is not expected to disclose any deficit.
The total SSAP 24 pension cost for the group was(pound)67,716 (1994 -
(pound)122,795) of which(pound)2,384 (1994 - (pound)11,851) is included in
creditors.
30. ADDITIONAL INFORMATION ON SUBSIDIARY AND ASSOCIATE COMPANIES
<TABLE>
<CAPTION>
Country of Percentage
incorporation/ of ordinary
registration shares held
<S> <C> <C> <C>
Spectrum Communications Limited England and Wales 100%
Spectrum Communications (Birmingham) Limited England and Wales 100%* Dormant
Mark Wallace Associates Limited England and Wales 80%
Delegate Management Services Limited England and Wales 40%
Spectrum Communications GmbH Germany 100%
Spectrum Communications LLC Dubai 49%*
Spectrum Communications International BVI, Limited British Virgin Islands 100% Dormant
</TABLE>
The subsidiary companies are engaged in the production and stage management
of conferences.
* Held by subsidiary company.
During the year the company acquired a further 15% of the share capital in
Spectrum Communications GmbH.
<PAGE>
[Letterhead of Touche Ross] SCH INTERNATIONAL LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 June 1995
31. PRIOR PERIOD ADJUSTMENTS
The comparatives have been amended to reflect presentation in the current
year as follows:
1994 1994
Statutory Alignment As
accounts adjustments amended
Group (pound) (pound) (pound)
Fixed asset investments 75,000 27,254 102,254
Work in progress 631,128 99,171 730,299
Trade debtors 2,548,468 343,448 2,891,916
Other debtors 246,988 (27,254) 219,734
Cash at bank and in hand 772,660 (487,124) 285,536
Bank overdraft (787,079) 487,124 (299,955)
Accruals and deferred income (1,714,869) (442,619) (2,157,488)
---------- -------- ----------
1,772,296 -- 1,772,296
========== ======== ==========
Company
Fixed asset investments 5,360,756 27,254 5,388,010
Other debtors 112,665 (27,254) 85,411
---------- -------- ----------
5,473,421 -- 5,473,421
========== ======== ==========
The alignment adjustments arose for the following reasons:
Employee share ownership plan (ESOP)
(pound)27,254 invested in the company's own shares has been reclassified
from other debtors to fixed asset investments, in accordance with the
current accounting policy as a result of the Urgent Issues Task Force
Abstract 13 "Accounting for ESOP trusts".
Set-off of cash balances against overdraft
In 1994, the group opted not to set off the cash balances against the
overdraft, despite the existence of a right of set-off. This policy has now
been changed, and short term bank borrowings are shown net of cash balances
where a right of set-off exists. The amount set off relating to 1994 was
(pound)487,124.
Deferred income balances
In order to enable comparability, the balances relating to work in
progress, trade debtors and deferred income have been grossed up in
accordance with the group's policy of not netting off amounts in relation
to jobs in progress. The amounts shown in the 1994 accounts were
incorrectly stated and have been adjusted as follows:
(pound)
Increase in work in progress 99,171
Increase in trade debtors 343,448
Increase in accruals and deferred income 442,619
<PAGE>
SCH INTERNATIONAL LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(unaudited)
9 Months Ended 9 Months Ended
31 March 1996 31 March 1995
(pound)`000 (pound)`000
-------------- --------------
TURNOVER 13,678 12,941
Cost of sales (9,669) (8,630)
------- -------
Gross profit 4,009 4,311
------- -------
Distribution costs (515) (537)
Administrative expenses (3,766) (3,931)
------- -------
OPERATING LOSS (272) (157)
------- -------
Income from investment in associate company 37 4
Other income 3 --
Interest payable (181) (176)
Profit on redemption of debt 15 10
Exceptional item 72 (32)
------- -------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (326) (351)
Tax on loss on ordinary activities 85 --
------- -------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (241) (351)
Minority interest (34) (2)
------- -------
RETAINED LOSS FOR THE FINANCIAL PERIOD (275) (353)
Retained profit brought forward 10 25
------- -------
RETAINED LOSS CARRIED FORWARD (265) (328)
======= =======
-4-
<PAGE>
SCH INTERNATIONAL LIMITED
CONSOLIDATED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
31 March 1996 31 March 1995
(pound)`000 (pound)`000 (pound)`000 (pound)`000
--------------------- -------------------- ------------------ --------------------
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 795 822
Investments 95 26
------------- -------------
890 848
CURRENT ASSETS
Stocks and work in progress 2,907 2,971
Debtors 2,936 2,785
Cash at bank and in hand 1,494 585
------------- -------------
7,337 6,341
------------- -------------
CREDITORS: amounts falling
due within one year
Bank overdraft 704 839
Trade creditors 1,409 949
Sundry creditors 8,031 6,952
------------- -------------
10,144 8,740
------------- -------------
NET CURRENT LIABILITIES (2,807) (2,399)
------------- -------------
TOTAL ASSETS LESS CURRENT
LIABILITIES (1,917) (1,551)
CREDITORS: amounts falling due after
more than one year
(1,100) (1,617)
PROVISIONS FOR LIABILITIES AND CHARGES
(4) --
------------- -------------
(3,021) (3,168)
============= =============
CAPITAL AND RESERVES
Called up share capital 311 311
Share premium account 14 14
Reserves:
Profit and loss account (265) (328)
Goodwill (3,238) (3,226)
------------- --------------
EQUITY SHAREHOLDERS'
FUNDS (3,178) (3,229)
Equity minority interest 157 61
------------- --------------
TOTAL CAPITAL EMPLOYED (3,021) (3,168)
============= ==============
</TABLE>
-5-
<PAGE>
SCH INTERNATIONAL LTD.
CONSOLIDATED CASH FLOW STATEMENT
Nine month period ended
31 March 1996
(unaudited)
<TABLE>
<CAPTION>
(pound)`000 (pound)`000
----------------- ------------------
<S> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,486
RETURN ON INVESTMENT AND SERVICING OF FINANCE
Interest Received 0
Interest Paid (181)
Share of profit in associated company 37
----
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE (144)
----
TAXATION
UK corporation tax paid (127)
----
TAX PAID (127)
----
INVESTING ACTIVITIES
Purchase of tangible fixed assets
Sale of fixed assets (98)
Purchase of FA Inv
Sale of associated company 150
--
NET CASH OUTFLOW FROM INVESTING ACTIVITIES 52
--
NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING 1,267
-----
FINANCING
Purchase of shares by ESOP (99)
Repayment of loan stock (93)
Repayment of term loan (200)
NET CASH FLOW FROM FINANCING (392)
----
Increase in cash and cash equivalents 875
===
</TABLE>
-6-
<PAGE>
SCH INTERNATIONAL LTD.
NOTES TO CASH FLOW STATEMENT
Nine month period ended
31 March 1996
(unaudited)
Reconciliation of operating profit to net cash
flow from operating activities
1996
(pound)`000
---------------
Operating Loss (275)
Depreciation charges 144
(Increase) in stock and WIP (1,875)
Decrease in Debtors 727
Increase in creditors 2,765
---------------
1,486
===============
Analysis of changes in cash and cash equivalents
during the year.
(pound)`000
---------------
Balance at 1 July 1995 (85)
Net cash (out)/in flow 875
---------------
Balance at 31 March 1996 790
===============
Analysis of balances of cash and cash equivalents
as shown in the Balance Sheet
1996 1995 Change in Year
(pound)`000 (pound)`000 (pound)`000
----------------- ---------------- -----------------
Cash at bank and in hand 1,494 58 1,436
Bank overdraft (704) (143) (561)
------------ -------------- -------------
790 (85) 875
============ ============== =============
-7-
<PAGE>
SCH INTERNATIONAL LTD.
NOTES TO CASH FLOW STATEMENT
Nine month period ended
31 March 1996
(unaudited)
(continued)
Analysis of changes in financing during the year
Loan Stock
1995
(pound)`000
----------------------
Balance at 1 July 1995 792
Cash outflow from Financing 93
Profit on redemption of loan stock 132
----------------------
Balance at 31 March 1996 567
======================
Reconciliation of movement in shareholders' funds
Share Premium
Share Capital Account Goodwill P & L
(pound)`000 (pound)`000 (pound)`000 (pound)`000
-------------- --------------- ----------- -----------
Balance at 1 July 1995 311 14 3,238 10
Profit for period -- -- -- (275)
--------- --------- --------- ---------
Balance at 31 March 1996 311 14 3,238 (265)
========= ========= ========= =========
-8-
<PAGE>
SCH INTERNATIONAL LTD.
CONSOLIDATED CASH FLOW STATEMENT
Nine month period ended
31 March 1995
(unaudited)
(pound)`000 (pound)`000
---------------------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 255
RETURN ON INVESTMENT AND SERVICING OF FINANCE
Interest Received 2
Interest Paid (201)
Interest element of finance lease rental payments (1)
------------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
(200)
------------
TAXATION
UK corporation tax paid (43)
------------
TAX PAID (43)
------------
INVESTING ACTIVITIES
Purchase of tangible fixed assets (124)
Purchase of interest in subsidiary undertaking (10)
Sale of tangible fixed assets
Purchase of fixed asset investment 75
Sale of interest in subsidiary undertaking (15)
------------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (74)
------------
------------
NET CASH OUTFLOW BEFORE FINANCING (62)
------------
FINANCING
Purchase of shares by ESOPT (76)
Borrowings under term loan (50)
Capital element of finance lease rentals (16)
Repayment of loan stock (36)
NET CASH FLOW FROM FINANCING (178)
------------
DECREASE IN CASH AND CASH EQUIVALENTS (240)
============
-9-
<PAGE>
SCH INTERNATIONAL LTD.
NOTES TO CASH FLOW STATEMENT
Nine month period ended
31 March 1995
(unaudited)
Reconciliation of operating profit to net cash flow from operating activities
1996
(pound)`000
-------------------
Operating Loss (157)
Depreciation charges 168
Profit on sale of fixed assets -
(Increase) in stock and WIP (2,219)
Decrease in Debtors 533
Increase in creditors 1,915
Write down of purchase goodwill 15
------------
255
============
Analysis of changes in cash and
cash equivalents during the year.
(pound)`000
-------------------
Balance at 1 July 1994 (14)
Net cash (out)/in flow (240)
------------
Balance at 31 March 1995 (254)
============
Analysis of balances of cash and cash equivalents as shown in the Balance Sheet
1995 1994 Change in Year
(pound)`000 (pound)`000 (pound)`000
-------------- ---------------- ------------------
Cash at bank and in hand 585 285 300
Bank overdraft (839) (299) (540)
---------- ---------- ----------
(254) (14) (240)
========== ========== ==========
Analysis of changes in Financing during the year
Loan Stock
1995
(pound)`000
-----------------------
Balance at 1 July 1994 919
Cash outflow from Financing (36)
Profit on redemption of loan stock (15)
------------
Balance at 31 March 1995 868
============
-10-
<PAGE>
SCH INTERNATIONAL LTD.
NOTE TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles of the
United Kingdom from interim financial information and should be read in
conjunction with the audited financial information of SCH International Ltd.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles of the United Kingdom 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 nine months ended March 31,
1996 and 1995 are not necessarily indicative of the results that may be expected
for any other period or for a full fiscal year.
-11-
<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information of
Caribiner International, Inc. (the "Company") gives effect to (i) the
acquisition of substantially all of the outstanding ordinary shares of SCH
International Limited ("Spectrum"); (ii) the acquisition of substantially all of
the assets and assumption of certain of the liabilities of Lighthouse, Ltd.
("Lighthouse"); and, (iii) an issuance and sale of only that number of the
Company's shares of common stock as would generate net proceeds sufficient to
repay substantially all indebtedness outstanding at the beginning of each period
presented and to finance the aforementioned acquisitions.
The Company believes that the accompanying unaudited consolidated pro forma
financial information contains all adjustments necessary to fairly present its
financial position as of March 31, 1996, and the results of its operations for
the six months ended March 31, 1996 and the year ended September 30, 1995 as if,
in the case of the Unaudited Pro Forma Consolidated Balance Sheet, the
transactions described above had occurred on March 31, 1996, and, in the case of
the Unaudited Pro Forma Consolidated Statements of Operations for the six months
ended March 31, 1996 and the year ended September 30, 1995, the transactions had
occurred on October 1, 1995 and October 1, 1994, respectively.
The unaudited pro forma consolidated financial information has been included as
required by the rules of the Commission and is provided for comparative purposes
only. The unaudited pro forma consolidated financial information presented
herein is based upon the historical consolidated financial statements of each of
the Company, Lighthouse and Spectrum 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) differs from the Company's fiscal year end
(September 30). The unaudited Pro Forma Consolidated Statements of Operations
for the six months ended March 31, 1996 and the year ended September 30, 1995
include Spectrum's results of operations for Spectrum's six months ended
December 31, 1995 and its year ended June 30, 1995, respectively. The unaudited
Pro Forma Consolidated Balance Sheet at March 31, 1996 includes Spectrum's
historical balance sheet at May 31, 1996, which is not materially different than
its historical balance sheet at March 31, 1996. 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 appropriate exchange rates.
Lighthouse's fiscal year end (December 31) differs from the Company's fiscal
year end (September 30). The unaudited Pro Forma Consolidated Statements of
Operations for the six months ended March 31, 1996 and the year ended September
30, 1995 include Lighthouse's results of operations for Lighthouse's six months
ended March 31, 1996 and its year ended December 31, 1995, respectively. As a
result of the differing year ends of the Company and of Lighthouse, the results
of operations of Lighthouse for the three months ended December 31, 1995 are
included in both periods. The unaudited Pro Forma Consolidated Balance Sheet at
March 31, 1996 includes Lighthouse's historical balance sheet at May 31, 1996,
which is not materially different than the historical balance sheet at March 31,
1996.
-12-
<PAGE>
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
should not be construed as representative of the Company's financial position or
results of operations for any future date or period.
-13-
<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 1996
(all amounts, except per share data, in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------------------------------------------------------------------------
Caribiner Lighthouse Spectrum Caribiner
International, Lighthouse, Spectrum, Pro Forma Pro Forma International,
Inc. Ltd. Ltd. Adjustments Adjustments Inc.
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash $20,395 $ -- $636 ($6,274) (a) ($4,777) (a) $9,980
Trade accounts receivable, net 31,558 1,318 5,317 -- 38,193
Deferred charges 11,514 717 3,067 -- -- 15,298
Prepaid expenses and other current assets 1,610 202 276 (65) (b) -- 2,023
------------------------------------------------------------------------------------------
Total Current Assets 65,077 2,237 9,296 (6,339) (4,777) 65,494
Property and equipment-net 7,566 743 1,229 (250) (c) (155) (c) 9,133
Intangible assets-net 15,978 -- 3,672 6,969 (d) 5,158 (d) 31,777
Other assets 531 84 -- -- -- 615
------------------------------------------------------------------------------------------
Total Assets $89,152 $3,064 $14,197 $380 $226 $107,019
==========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Portion of long-term debt 710 -- -- -- -- 710
Trade accounts payable 4,464 353 4,142 -- -- 8,959
Accrued expenses and other current 11,542 515 5,312 300 (e) 620 (e) 17,836
liabilities (386) (f) (67) (g)
Deferred income 18,092 1,663 3,060 -- -- 22,815
------------------------------------------------------------------------------------------
Total Current Liabilities 34,808 2,531 12,514 (86) 553 50,320
Long-term debt 1,225 273 2,556 (273) (g) (2,556) (g) 1,225
Deferred income 8,339 -- -- -- -- 8,339
Other liabilities 91 -- 1,356 -- -- 1,447
------------------------------------------------------------------------------------------
TOTAL LIABILITIES 44,463 2,804 16,426 (359) (2,003) 61,331
Common stock 95 1 22 (1) (h) (22) (h) 95
Additional paid-in capital 59,583 90 482 (90) (h) (482) (h) 60,582
999 (i)
Accumulated (deficit) earnings (14,989) 169 (2,733) (169) (h) 2,733 (h) (14,989)
------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 44,689 260 (2,229) 739 2,229 45,688
------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $89,152 $3,064 $14,197 $380 $226 $107,019
==========================================================================================
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Balance Sheet.
-14-
<PAGE>
CARIBINER INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1996
(all amounts, except per share data, in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments (j) Pro Forma
---------------------------------------------------------------------------------------------------
Caribiner Caribiner
International, Lighthouse, Spectrum, International,
Inc. Ltd. Ltd. Financing Lighthouse Spectrum Inc.
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 51,627 $6,234 $14,884 $ -- $ -- $ -- $72,745
Production costs 34,371 3,342 10,524 -- -- -- 48,237
--------------------------------------------------------------------------------------------------
Gross Profit 17,256 2,892 4,360 -- -- -- 24,508
Operating expenses:
Selling, general and
administrative expenses
13,372 1,908 4,183 -- -- -- 19,463
Non-cash compensation
expense 1,072 -- -- -- -- -- 1,072
Depreciation and
amortization 1,322 152 412 -- 139 (k) (95)(k) 1,930
--------------------------------------------------------------------------------------------------
Total operating expenses 15,766 2,060 4,595 -- 139 (95) 22,465
--------------------------------------------------------------------------------------------------
Operating income (loss) 1,490 832 (235) -- (139) 95 2,043
Interest expense with related
parties 1,199 -- -- (1,199) (l) -- -- --
Interest expense (income), other
668 15 199 (719) (l) -- (85)(l) 78
Other expense (income), net -- (31) (81) -- -- (112)
--------------------------------------------------------------------------------------------------
(Loss) income before taxes (377) 848 (353) 1,918 (139) 180 2,077
Income tax (expense) benefit 124 (348) (130) (565) (m) 46 (m) (28)(m) (901)
--------------------------------------------------------------------------------------------------
Net (loss) income ($253) 500 (483) 1,353 (93) 152 $1,176
===================================================================================================
Pro forma net income per common
share $0.05 -- -- -- -- -- $0.14
===================================================================================================
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Statement of Operations.
-15-
<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 (j) Pro Forma
-----------------------------------------------------------------------------------------------------------
Caribiner Caribiner
International, Lighthouse, Spectrum, International,
Inc. Ltd. Ltd. Financing Lighthouse Spectrum Inc.
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue $81,131 $10,396 $34,312 $-- $-- $-- $125,839
Production costs 54,312 6,984 22,746 -- -- -- 84,042
---------------------------------------------------------------------------------------------------------
Gross Profit 26,819 3,412 11,566 -- -- -- 41,797
Operating expenses:
Selling, general and
administrative
expenses 19,306 2,484 10,532 -- -- -- 32,322
Non-cash
compensation
expense -- 378 -- -- -- 378
Depreciation and
amortization 2,330 344 699 -- 279 (k) 9 (k) 3,661
---------------------------------------------------------------------------------------------------------
Total operating expenses 21,636 3,206 11,231 -- 279 9 36,361
---------------------------------------------------------------------------------------------------------
Operating income 5,183 206 335 -- (279) (9) 5,436
Interest expense with
related parties 2,234 -- -- (2,234) (l) -- -- --
Interest expense, other 1,259 25 392 (1,087) (l) -- (427) (l) 162
Other (income)
expense, net -- (42) 248 -- -- -- 206
---------------------------------------------------------------------------------------------------------
Income (loss) before
taxes 1,690 223 (305) 3,321 (279) 418 5,068
Income tax benefit
(expense) (264) (258) 101 39 (m) 92 (m) (141) (m) (431)
---------------------------------------------------------------------------------------------------------
Net income (loss) $1,426 (35) (204) 3,360 (187) 277 $4,637
=========================================================================================================
Pro forma net income
per common share $0.49 -- -- -- -- -- $0.59
=========================================================================================================
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Statement of Operations.
-16-
<PAGE>
CARIBINER INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(a) To reflect the cash paid at closing for (i) the purchase of substantially
all of the assets and the assumption of certain of the liabilities of
Lighthouse, (ii) the acquisition of substantially all of the outstanding
ordinary shares of Spectrum, (iii) the repayment at closing of the
outstanding debt of each of Lighthouse and Spectrum; and, (iv) the payment
of certain transaction-related costs.
(b) To adjust the book value of certain of Lighthouse's equipment held for
resale to reflect its estimated net realizable value.
(c) To adjust the net carrying value of fixed assets to reflect the write-off,
net of salvage value, of certain leasehold improvements and computer and
office equipment not usable post-closing.
(d) To record the goodwill resulting from the respective acquisitions after
allocation of the purchase price to the net tangible assets.
(e) To accrue for transaction costs which include professional fees, severance
and certain other costs incurred or to be incurred in order to consummate
the acquisitions.
(f) To reflect payment of certain employee-related accrued liabilities and
other current liabilities upon closing of the Lighthouse Acquisition.
(g) To reflect repayment at closing of the outstanding debt, including accrued
interest, of each of Lighthouse and Spectrum.
(h) To eliminate the stockholders' equity accounts upon acquisition.
(i) To record additional paid-in capital resulting from the issuance of the
Company's common stock in connection with the acquisition of Lighthouse.
(j) Pro forma adjustments to the Unaudited Pro Forma Consolidated Statements of
Operations give effect to the acquisitions of both Lighthouse and Spectrum,
and the issuance and sale of only that number of shares of the Company's
common stock as would generate net proceeds sufficient to repay
substantially all outstanding indebtedness of the Company, and to finance
the acquisitions, as if such transactions had occurred at the beginning of
each period presented.
(k) To adjust amortization expense related to the goodwill resulting from the
respective acquisitions based upon the Company's estimated period of
benefit.
(l) To decrease interest expense relating to the repayment of all bank
borrowings and other long-term obligations, as if such amounts were repaid
as of the beginning of each period presented.
-17-
<PAGE>
CARIBINER INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(m) To reflect the tax effect of the pro forma adjustments, assuming
utilization of the net operating loss tax benefits.
-18-
