<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER: 1-14234
Caribiner International, Inc.
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3466655
---------- ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The registrant had 9,644,091 shares of Common Stock (par value $0.01 per share)
outstanding as of February 6, 1997.
<PAGE>
INDEX
-----
PART I. Financial Information
Item 1. Financial Statements (Unaudited)
Review Report of Independent Accountants.................. 2
Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1996.................. 3
Consolidated Statements of Operations for
the three months ended December 31, 1995 and 1996......... 4
Consolidated Statements of Cash Flows for
the three months ended December 31, 1995 and 1996......... 5
Consolidated Statement of Changes in Stockholders' Equity
for the three months ended December 31, 1996.............. 6
Notes to Consolidated Financial Statements................ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............11
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K..........................15
SIGNATURES..................................................................17
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Letter of Independent Accountants
Stockholders and Board of Directors
Caribiner International, Inc.
We have reviewed the accompanying consolidated balance sheet of Caribiner
International, Inc. as of December 31, 1996, and the related consolidated
statements of operations for the three months ended December 31, 1995 and 1996,
the consolidated statement of changes in stockholders' equity (deficit) for the
three months ended December 31, 1996 and the consolidated statements of cash
flows for the three months ended December 31, 1995 and 1996. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements in order for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Caribiner International, Inc. as of
September 30, 1996, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the year then ended, not
presented herein, and in our report dated December 6, 1996, except for Note 15
as to which the date is December 20, 1996, we expressed an unqualified opinion
on those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of September 30, 1996,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/ Ernst & Young LLP
New York, New York
February 3, 1997
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Caribiner International, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1996 1996
------ (Note 1) (unaudited)
--------------------- --------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 8,431,777 $ 6,950,443
Trade accounts receivable - net of allowance for doubtful accounts of
$304,860 36,201,774 38,807,972
Deferred charges 8,989,410 9,598,014
Prepaid expenses and other current assets 3,394,951 3,989,683
--------------------- --------------------
Total Current Assets 57,017,912 59,346,112
Property and equipment - net 21,180,982 20,734,887
Goodwill - net 46,681,520 52,439,305
Other intangibles - net 1,041,280 991,132
Other assets 399,696 390,310
--------------------- --------------------
TOTAL ASSETS $ 126,321,390 $ 133,901,746
===================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Bank line of credit $ 6,000,000 $ --
Current portion of long-term debt 648,696 641,801
Trade accounts payable 7,529,536 7,820,068
Accrued expenses and other current liabilities 12,698,716 12,816,708
Accrued production costs 11,355,416 8,967,551
Deferred income 13,334,965 15,835,457
--------------------- --------------------
Total Current Liabilities 51,567,329 46,081,585
Long-term debt 16,189,922 24,152,960
Deferred income 5,007,183 6,179,303
Other liabilities 89,573 1,836,810
--------------------- --------------------
TOTAL LIABILITIES 72,854,007 78,250,658
Stockholders' Equity:
Preferred stock, $.01 par value:
2,000,000 shares authorized, none issued and outstanding at September 30 and
December 31, 1996, respectively --- ---
Common stock, $0.01 par value:
40,000,000 voting shares authorized, 9,598,159 and 9,614,151 shares issued
and outstanding at September 30 and December 31, 1996, respectively 95,982 96,142
Additional paid-in capital 60,032,954 60,795,252
Translation adjustment 85,723 770,444
Accumulated deficit (6,747,276) (6,010,750)
--------------------- --------------------
TOTAL STOCKHOLDERS' EQUITY 53,467,383 55,651,088
--------------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 126,321,390 $ 133,901,746
==================== ====================
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE>
Caribiner International, Inc.
Consolidated Statements of Operations
For the Three Months Ended
(unaudited)
<TABLE>
<CAPTION>
December 31,
1995 1996
------------------- ---------------------
<S> <C> <C>
Service revenue $ 20,407,367 $ 42,730,514
Rental revenue -- 9,927,990
-------------------- ---------------------
Total revenue 20,407,367 52,658,504
Cost of service revenue 13,340,579 29,061,553
Cost of rental revenue -- 5,766,487
-------------------- ---------------------
Total cost of revenue 13,340,579 34,828,040
-------------------- ---------------------
Gross profit 7,066,788 17,830,464
Operating expenses:
Selling, general and administrative expenses 6,548,994 14,355,831
Depreciation and amortization 604,136 1,704,259
-------------------- ---------------------
Total operating expenses 7,153,130 16,060,090
-------------------- ---------------------
Operating income (loss) (86,342) 1,770,374
Interest expense with related parties 681,784 --
Other interest expense, net 412,290 542,830
-------------------- ---------------------
Income (loss) before taxes (1,180,416) 1,227,544
Provision (benefit) for taxes (282,728) 491,018
-------------------- ---------------------
Net income (loss) $ (897,688) $ 736,526
==================== =====================
Earnings (loss) per common share $ (0.07) $ 0.08
=================== =====================
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE>
Caribiner International, Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended
(unaudited)
<TABLE>
<CAPTION>
December 31,
1995 1996
--------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (897,688) $ 736,526
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 604,136 2,147,958
Non-cash compensation 93,000 --
Change in assets and liabilities:
Decrease (increase) in trade accounts receivable 2,971,423 (2,368,971)
Decrease (increase) in deferred charges 2,144 (84,837)
(Increase) in prepaid expenses and
other current assets (763,316) (893,075)
(Increase) in other assets (12,907) (48,109)
(Decrease) in trade accounts payable (2,392,114) (69,322)
Increase in deferred income 4,563,665 2,796,812
(Decrease) in accrued expenses and
other liabilities (2,158,584) (1,412,265)
Increase in accrued interest payable 681,784 --
-------------- --------------
Net cash provided by operating activities 2,691,543 804,717
-------------- --------------
Cash flow used in investing activities:
Purchase of property and equipment (600,998) (1,228,650)
Acquisition of intangibles and businesses, net of
cash acquired (129,988) (3,446,609)
-------------- --------------
Net cash used in investing activities (730,986) (4,675,259)
-------------- --------------
Cash flow provided by financing activities:
Repayments of long-term debt (25,918) (15,043,857)
Net proceeds (repayments) of bank line of credit 3,240,000 (6,000,000)
Proceeds from long-term debt -- 23,000,000
Net proceeds from issuance of common stock 174,167 --
Repurchase of common stock (176,904) --
-------------- --------------
Net cash provided by financing activities 3,211,345 1,956,143
-------------- --------------
Translation effect on cash and cash equivalents -- 433,065
Net increase (decrease) in cash 5,171,902 (1,481,334)
Cash, beginning of period 212,612 8,431,777
-------------- --------------
Cash, end of period $ 5,384,514 $ 6,950,443
============== ==============
Supplemental disclosure of cash flow information:
Interest paid $ 56,920 $ 344,998
============== ==============
Income taxes paid $ 86,153 $ 1,631,634
============== ==============
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE>
Caribiner International, Inc.
Consolidated Statement of Changes in Stockholders' Equity
For the Three Months Ended December 31, 1996
(unaudited)
<TABLE>
<CAPTION>
Common Stock Total
------------------------ Additional Accumulated Translation Stockholders'
Shares Amount Paid in Capital Deficit Adjustment Equity
---------- --------- ----------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1996 9,598,159 $95,982 $60,032,954 $(6,747,276) $85,723 $53,467,383
Issuance of common stock under
non-employee directors' stock plan 497 5 12,495 -- -- 12,500
Issuance of common stock upon
acquisition of Rome Network, Inc. 15,495 155 749,803 -- -- 749,958
Translation adjustment 684,721 684,721
Net income -- -- -- 736,526 -- 736,526
--------- ------- ----------- ----------- ----------- -----------
Balance at December 31, 1996 9,614,151 $96,142 $60,795,252 $(6,010,750) $770,444 $55,651,088
========= ======= =========== =========== =========== ===========
</TABLE>
See accompanying notes to the unaudited consolidated financial statements
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<PAGE>
Caribiner International, Inc.
Notes To Consolidated Financial Statements
------------------------------------------
(Unaudited)
1. Interim Financial Information
The accompanying unaudited consolidated financial statements of Caribiner
International, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
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, the consolidated financial
statements contain all adjustments, consisting of normal recurring
adjustments, considered necessary to present fairly the consolidated
financial position, results of operations and cash flows of the Company. The
results of operations for the three months ended December 31, 1996 are not
necessarily indicative of the results of operations that may be expected for
any other interim period or for the fiscal year ending September 30, 1997.
The balance sheet at September 30, 1996 has been derived from the Company's
audited financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
2. Summary of Significant Accounting Policies
Revenue Recognition
Service revenue is recorded principally on the completed contract method of
accounting. The recognition of service revenue and cost of service revenue is
deferred until a project is completed which is often within a three- to six-
month time period. For those projects which provide for multiple events, the
contract revenue and costs are apportioned and revenue and profit are
recognized as each event occurs. If a client cancels a project after
production has begun, the client is obligated under contract to pay for
services performed and expenses incurred through the date of cancellation,
and there are no provisions for nonpayment by the client.
The Company recognizes rental revenue over the rental period.
Cost of Revenue
Cost of service revenue is comprised of production costs including salaries
and benefits of production, creative and technical personnel spent on
specific contracts, and other direct costs including contracted services,
equipment rentals and depreciation and costs associated with the production
of audio-visual effects. Such costs are deferred until project completion.
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<PAGE>
Cost of rental revenue is comprised principally of direct labor costs,
commissions and equipment depreciation and rentals.
3. Business Acquisitions
In December, 1996, the Company acquired all of the outstanding common stock
of Rome Network, Inc. ("Rome"), a regional producer of meetings and events
headquartered in San Francisco, for $3.2 million, which consisted of
approximately $2.4 million in cash and the issuance of 15,495 shares of the
Company's common stock having a value of approximately $0.8 million. The cash
component of the purchase price was financed by a drawing on one of the
Company's credit facilities.
In December, 1996, the Company entered into a definitive purchase agreement
to acquire all of the outstanding capital stock of Blumberg Communications
Inc. ("Blumberg"), a provider of audio visual equipment rentals, sales and
related staging services, including hotel audio visual outsourcing services,
in the upper midwest and southern U.S. In January, 1997, the Company
completed such acquisition and paid consideration of $18.0 million (subject
to certain adjustments), which consisted of approximately $16.6 million in
cash and the issuance of 29,940 shares of the Company's common stock having a
value of approximately $1.4 million. In addition, the Company repaid $3.9
million in outstanding indebtedness of Blumberg at closing. The cash
components of the transactions were financed by a drawing on one of the
Company's credit facilities.
Also, in January, 1997, the Company acquired Video Supply Company, Inc. d/b/a
Projexions Video Supply ("Projexions"), a provider of audio visual equipment
rentals and related staging services, in the southeastern U.S. for
approximately $13.6 million in cash and $1.4 million in the repayment of
certain indebtedness. The transactions were financed by a drawing on one of
the Company's credit facilities.
The following unaudited consolidated pro forma results of operations of the
Company for the three months ended December 31, 1995 give effect to the
following transactions as if they occurred on October 1, 1995: (i) the
acquisitions of each of Koors Perry & Associates, Inc., Lighthouse, Ltd. and
SCH International, Ltd., (ii) decreased interest expense and preferred stock
dividends resulting from the repayment of substantially all outstanding bank
borrowings and other long-term indebtedness of the Company from proceeds of
the initial public offering of common stock, which was consummated on March
15, 1996 and (iii) the repayment with the proceeds of such initial public
offering of a portion of bank borrowings that would have been incurred in
connection with the acquisition of the Company's Total Audio Visual Services
division from General Electric Capital Computer Leasing Corporation as if
such acquisition had occurred on October 1, 1995. The pro forma effect of the
acquisition of Rome on the Company's results of operations for the three
months ended December 31, 1995 and 1996 is insignificant.
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<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1995
-----------------
(in thousands, except per share data)
<S> <C>
Revenue $ 50.4
Income before taxes 2.1
Net income 1.3
Pro forma net income per
common share $ 0.13
</TABLE>
The above calculation of pro forma net income per common share assumes that
approximately 9.6 million shares were outstanding during the three months
ended December 31, 1995.
The unaudited pro forma consolidated results of operations do not purport to
be indicative of the actual results of operations that would have occurred
had the acquisitions been made at the beginning of fiscal 1996 or of results
which may occur in the future.
4. Stock Offering
In December, 1996, the Company filed a Registration Statement on Form S-1
(Registration no. 333-18327) with the Securities and Exchange Commission
offering 1,878,200 shares of its Common stock, of which 1,750,000 shares of
Common Stock will be offered by the Company.
5. Earnings (Loss) per Common Share
The weighted average number of shares of common stock outstanding during the
three months ended December 31, 1996 is 9,632,959. The weighted average
number of shares of common stock outstanding during the three months ended
December 31, 1995 is 6,620,003.
Loss per common share for the three months ended December 31, 1995 has been
computed on a pro forma basis assuming conversion of the convertible note and
all outstanding shares of preferred stock into common stock (which, in each
case, occurred on March 15, 1996 immediately prior to the Company's initial
public offering) as if such conversions occurred on October 1, 1995. The pro
forma loss per share reflects adjustments to eliminate the interest expense
incurred on the convertible note and to eliminate accrued preferred stock
dividends. Pursuant to the requirements of the Securities and Exchange
Commission, common stock issued under the 1993 Management Stock Plan and
warrants to purchase common stock issued at prices below the initial public
offering price per share during the twelve months immediately preceding the
date of the initial filing of the Company's Registration Statement on Form
S-1 (Registration no. 33-80481) have also been included in the calculation of
common shares, using the treasury stock method, as if they were outstanding
for the three months ended December 31, 1995.
Of the net proceeds from the sale of shares of common stock offered by the
Company in the initial public offering completed in March, 1996,
approximately $25.6 million were used to repay aggregate bank borrowings and
other long-term indebtedness, including accrued interest and preferred stock
dividends. Assuming the issuance and sale of only that number of shares of
common stock which would have generated net
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<PAGE>
proceeds sufficient to repay indebtedness of $25.6 million, and assuming that
such indebtedness had been repaid as of October 1, 1995, supplementary pro
forma net loss per share would have been $0.01 for the three months ended
December 31, 1995. For purposes of this computation, the weighted average
number of shares of common stock outstanding during the three months ended
December 31, 1995 is 8,445,489.
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<PAGE>
Caribiner International, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Three Months Ended December 31, 1996 Compared to
Three Months Ended December 31, 1995
Revenue. Revenue increased $32.3 million, or 158%, from $20.4 million in the
three months ended December 31, 1995 to $52.7 million in the three months ended
December 31, 1996. Through a combination of internal growth and acquisitions
the Company increased its revenues from clients across a broad range of
industries. Approximately 30.7% of the increase represented revenue from the
rental of audio visual equipment through the Company's Total Audio Visual
Services division, which was acquired by the Company in late September, 1996.
Increases in service revenue from clients in the telecommunications and
information technology industries accounted for 20.7% and 11.9%, respectively,
of the total revenue growth. Increases in service revenue from clients in the
food service and lodging industries accounted for an aggregate of 10.2% of the
total growth. The remainder of the increase in revenue was derived from clients
in several other industries.
Gross profit. The total gross profit increased $10.8 million, or 152%, from
$7.1 million in the three months ended December 31, 1995 to $17.8 million in the
three months ended December 31, 1996 as a result of the revenue growth described
above. Gross profit as a percentage of service revenue decreased to 32.0% for
the three months ended December 31, 1996 from 34.6% for the comparable period in
fiscal 1996. Gross profit as a percentage of rental revenue was 41.9%.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased $7.8 million, or 119%, from $6.5 million in
the three months ended December 31, 1995 to $14.3 million in the three months
ended December 31, 1996. Salaries and related costs increased $5.1 million
primarily from increased personnel resulting from acquisitions and to support
the Company's overall growth, as well as normal annual inflationary increases.
Other general and administrative expenses, including rent and related expenses,
telephone, postage and other office supplies, as well as insurance costs,
increased $2.2 million due to acquisitions and to support the revenue growth.
Direct selling expenses, including travel, marketing and other costs related to
obtaining business, increased $0.5 million. Selling, general and administrative
expenses as a percentage of revenue declined from 32.1% in the three months
ended December 31, 1995 to 27.3% in the three months ended December 31, 1996 as
revenue increased more rapidly than such expenses.
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<PAGE>
Depreciation and amortization. Depreciation and amortization expense increased
$1.1 million from $0.6 million in the three months ended December 31, 1995 to
$1.7 million in the three months ended December 31, 1996. The purchase of
computer equipment and property and equipment acquired through acquisitions
resulted in increased depreciation expense of $0.7 million in the three months
ended December 31, 1996. Amortization expense resulting from goodwill from
acquisitions increased $0.4 million.
Interest expense. Interest expense with related parties decreased due to the
repayment and conversion of debt as of March 15, 1996 in connection with the
Company's initial public offering of its common stock, which was completed on
such date. Other interest expense, net, increased $0.1 million due to increased
borrowings incurred in connection with the consummation of acquisitions.
Income (loss) before taxes. Income before taxes increased from a loss of $1.2
million in the three months ended December 31, 1995 to income before taxes of
$1.2 million in the three months ended December 31, 1996 as revenue growth from
internal business and acquired businesses contributed to the improved earnings
of the Company.
Provision (benefit) for taxes. The tax provision (benefit) reflects an
allocation based on the full year anticipated tax provision. The provision for
taxes as a percentage of income before taxes was 24.0% and 40.0% for the three
months ended December 31, 1995 and 1996, respectively. The 1995 tax rate
reflects the utilization of net operating loss carryforwards.
Net income (loss). Net income increased to $0.7 million in the three months
ended December 31, 1996 from a loss of $0.9 million in the three months ended
December 31, 1995. Net income per share for the three months ended December 31,
1996 increased to $0.08 from a pro forma loss per share of $0.07 for the
comparable period in fiscal 1995. The net loss per share for the three months
ended December 31, 1995 was computed on a pro forma basis assuming conversion of
the convertible note and all outstanding shares of preferred stock into common
stock (which, in each case, occurred on March 15, 1996 immediately prior to the
consummation of the Company's initial public offering) as if such conversions
occurred on October 1, 1995. The pro forma loss per share computation reflects
adjustments to eliminate the interest expense incurred on the convertible note
and to eliminate accrued preferred stock dividends.
Liquidity and Capital Resources
On December 4, 1996, the Company entered into a new loan agreement with a
syndicate of banks pursuant to which the Company increased its aggregate
available bank financing from $27 million to $100 million, consisting of a $75
million six year reducing revolving credit facility (the "Reducing Revolver") to
be utilized in connection with the financing of
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acquisitions and a $25 million six year revolving line of credit (the "Revolving
Line" and together with the Reducing Revolver, the "1996 Facilities"). Amounts
outstanding under the Company's former bank facilities were repaid with proceeds
from the 1996 Facilities. The maturity date of each of the 1996 Facilities is
December 31, 2002. Interest on outstanding amounts under the 1996 Facilities is
payable quarterly in arrears and, at the option of the Company, interest accrues
at either (i) LIBOR plus an applicable margin or (ii) an alternate base rate
based on the greatest of (a) the agent bank's prime rate, (b) the three month
secondary certificate of deposit rate and (c) the federal funds rate. The
weighted average interest rate on the outstanding amount under the 1996
Facilities was 6.9% at December 31, 1996. The interest rate will increase by
2.0% if principal or interest is not paid when due (after applicable grace
periods). Pursuant to the terms of the 1996 Facilities, the Company is required
to reduce outstanding amounts under the Revolving Line to less than $5.0 million
for a period of not less than 30 days during every 12-month period commencing on
December 4, 1996. The 1996 Facilities require compliance with certain covenants
including financial performance ratios.
The following table sets forth certain information from the Company's
Consolidated Statement of Cash Flows for the three months ended December 31,
1995 and 1996:
<TABLE>
<CAPTION>
Three Months Ended December 31,
1995 1996
--------------- -------------
<S> <C> <C>
Net cash provided by (used in):
Operating activities $2,691,543 $ 804,717
Investing activities (730,986) (4,675,259)
Financing activities 3,211,345 1,956,143
</TABLE>
For the three months ended December 31, 1996, $0.8 million was provided by
operating activities. The net income adjusted for depreciation and amortization
provided $2.9 million. The net change in working capital used $2.1 million,
with an increase in deferred income, which was more than offset by increases in
accounts receivable, prepaid expenses and other current assets, and a decrease
in accrued expenses and other liabilities. Investing activities required $4.7
million due to acquisition-related expenditures and property and equipment
additions. Financing activities provided $2.0 million in the three months ended
December 31, 1996, of which $23.0 million was provided by drawings under the
Company's Reducing Revolver, offset by repayments on each of the 1996
Facilities.
For the three months ended December 31, 1995, the Company generated $2.7 million
from its operating activities. The net loss adjusted for depreciation and
amortization used $0.2 million. The net change in working capital provided
approximately $2.9 million, with decreases in accounts payable and accrued
liabilities more than offset by increased deferred income and decreased accounts
receivable. Investing activities required $0.7 million primarily due to the
acquisition of computer equipment. Financing activities provided $3.2 million
through the use of the Company's former line of credit.
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<PAGE>
Capital expenditures were $0.6 million and $1.2 million during the three months
ended December 31, 1995 and 1996, respectively, with the purchase of additional
personal computers and expanded capabilities for the computer system accounting
for the largest areas of expenditure.
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<PAGE>
PART II
-------
OTHER INFORMATION
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits Required by Item 601 of Regulation S-K:
-----------------------------------------------
2.1 Agreement of Purchase and Sale of Stock, dated
December 19, 1996, by and among Caribiner
International, Inc. (the "Company"), Blumberg
Communications, Inc. and each of the Stockholders
listed on Schedule A thereto (schedules omitted-- the
Company agrees to furnish a copy of any Schedule to
the Commission upon request) (filed as Exhibit 2.1 to
the Company's Current Report on Form 8-K filed with
the Commission on February 12, 1997 and incorporated
herein by reference).
2.2 Agreement of Purchase and Sale of Assets, dated
January 8, 1997, by and among the Company, Video
Supply Company, Inc., Projections/Video Supply
Company and Robert Haney (schedules omitted --the
Company agrees to furnish a copy of any schedule to
the Commission upon request) (filed as Exhibit 2.1 to
the Company's Current Report on Form 8-K filed with
the Commission on January 24, 1997 and incorporated
herein by reference.
3.1 Restated Certificate of Incorporation (filed as
Exhibit 3.1 to the Company's Quarterly Report on Form
10-Q for the three months ended March 31, 1996 and
incorporated herein by reference).
3.2 Second Amended and Restated By-Laws (filed as Exhibit
3.2 (b) to the Company's Registration Statement on
Form S-1 (Registration No. 33-80481) and incorporated
herein by reference.
11.1 Computation of Earnings (Loss) Per Share for the
three months ended December 31, 1995 and 1996
11.2 Computation of Supplementary Pro Forma Net Loss Per
Share for the three months ended December 31, 1995
27.1 Financial Data Schedule
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<PAGE>
(b) Reports on Form 8-K:
-------------------
The Company filed the following reports on Form 8-K during the three
months ended December 31, 1996:
Date of Filing Items Reported Subject of Report
-------------- -------------- -----------------
October 10, 2, 7 Announcing completion of
1996 the acquisition of
substantially all of the
assets of TotalAudio Visual
Services ("TAVS")
November 26, 7 Form 8-K/A containing
1996 financial information in
connection with the
acquisition of TAVS
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARIBINER INTERNATIONAL, INC.
(Registrant)
Date: February 14, 1997 By: /s/ Raymond S. Ingleby
------------------------
Raymond S. Ingleby
Chairman of the Board and
Chief Executive Officer
By: /s/ Arthur F. Dignam
------------------------
Arthur F. Dignam
Executive Vice President and
Chief Financial and Administrative Officer
(Principal Financial Officer and
Chief Accounting Officer)
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<PAGE>
EXHIBIT INDEX
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Page Number
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2.1 Agreement of Purchase and Sale of Stock, dated December 19, 1996, by and
among Caribiner International, Inc. (the "Company"), Blumberg
Communications, Inc. and each of the Stockholders listed on Schedule A
thereto (schedules omitted -- the Company agrees to furnish a copy of any
Schedule to the Commission upon request) (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed with the Commission on February
12, 1997 and incorporated herein by reference).
2.2 Agreement of Purchase and Sale of Assets, dated January 8, 1997, by and
among the Company, Video Supply Company, Inc., Projections/Video Supply
Company and Robert Haney (schedules omitted-- the Company agrees to
furnish a copy of any schedule to the Commission upon request) (filed as
Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the
Commission on January 24, 1997 and incorporated herein by reference).
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the three months ended March
31, 1996 and incorporated herein by reference).
3.2 Second Amended and Restated By-Laws (filed as Exhibit 3.2 (b) to the
Company's Registration Statement on Form S-1 (Registration No. 33-80481)
and incorporated herein by reference).
11.1 Computation of Earnings (Loss) Per Common Share for the three months ended
December 31, 1995 and 1996
11.2 Computation of Supplementary Pro Forma Net Loss Per Common Share for the
three months ended December 31, 1995
27.1 Financial Data Schedule
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<PAGE>
EXHIBIT 11.1
Caribiner International, Inc.
Computation of Earnings (Loss) Per Common Share
For the Three Months Ended December 31
<TABLE>
<CAPTION>
1995 1996
------------- ----------
<S> <C> <C>
Weighted average common stock outstanding during the period 2,588,689 (a) 9,600,677
Effect of outstanding employee stock options -- 32,282
Conversion of convertible note into shares of preferred stock and the subsequent
conversion of such shares into shares of common stock 2,055,000 --
Conversion of all outstanding shares of preferred stock and preferred stock into shares
of common stock 1,541,250 --
Exercise of warrants 534,505 --
Effect of exercise of warrants computed in accordance with the treasury stock method (99,441) --
--------------- --------------
Total weighted average common stock outstanding during the period 6,620,003 9,632,959
=============== ==============
(Loss) income before taxes $(1,180,416) $1,227,544
Plus: reduction in interest expense from the conversion of the
convertible note 498,709 --
--------------- --------------
(Loss) income before taxes (681,707) 1,227,544
Income tax benefit (expense) 238,597 (491,018)
--------------- --------------
Net income (loss) $(443,110) $736,526
=============== ==============
Earnings (loss) per common share $ (0.07) (b) $ 0.08
=============== ==============
</TABLE>
(a) Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin
No. 83, common stock and common stock equivalents issued at prices below the
assumed initial public offering price per share during the twelve-month period
immediately preceding the initial filing date of the Company's Registration
Statement for its public offering have been included as outstanding for the
period.
(b) Computed on a pro forma basis assuming conversion of the convertible note
and all outstanding shares of preferred stock into common stock (which, in each
case, occurred on March 15, 1996 immediately prior to the initial public
offering) as if such conversion occurred on October 1, 1995. Pro forma loss per
share reflects adjustments to eliminate the interest expense on the convertible
note and to eliminate accrued preferred stock dividends.
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<PAGE>
EXHIBIT 11.2
Caribiner International, Inc.
Computation of Supplementary Pro Forma Net Income Per Common Share
For the Three Months Ended December 31
<TABLE>
<CAPTION>
1995
-----------------------
<S> <C>
Weighted average common stock outstanding during the period (a) 2,588,690
Common stock issued to repay current & long-term indebtedness (b) 1,825,485
Conversion of convertible note into shares of preferred stock and the subsequent
conversion of such shares into shares of common stock 2,055,000
Conversion of all outstanding shares of preferred stock into shares of common stock 1,541,250
Exercise of warrants 534,505
Effect of exercise of warrants computed in accordance with the treasury stock method (99,441)
-----------------------
Total weighted average common stock outstanding during the period 8,445,489
=======================
(Loss) before taxes $ (1,180,416)
Plus: reduction in interest expense from the conversion of the Convertible Note and
repayment of all other indebtedness from proceeds of the initial public offering 1,058,000
-----------------------
Pro forma loss before taxes (122,416)
Pro forma income tax benefit (10,590)
-----------------------
Pro forma net loss $ (111,826)
=======================
Supplementary pro forma net loss per common share $ (0.01)
=======================
</TABLE>
(a) Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin
No. 83, common stock and common stock equivalents issued at prices below the
assumed initial public offering price per share during the twelve-month period
immediately preceding the initial filing date of the Company's Registration
Statement for its public offering have been included as outstanding for all
periods presented prior to the initial public offering.
(b) Supplementary earnings per share reflects the number of shares of common
stock upon consummation of the initial public offering used to repay current and
long-term indebtedness as if such issuance had occurred at the beginning of the
period presented.
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996 AND THE
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 OF
CARIBINER INTERNATIONAL, INC. AS SET FORTH IN THIS FORM 10-Q AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 6,950
<SECURITIES> 0
<RECEIVABLES> 38,809
<ALLOWANCES> 305
<INVENTORY> 0
<CURRENT-ASSETS> 59,346
<PP&E> 32,241
<DEPRECIATION> 11,506
<TOTAL-ASSETS> 133,902
<CURRENT-LIABILITIES> 46,082
<BONDS> 0
0
0
<COMMON> 96
<OTHER-SE> 55,555
<TOTAL-LIABILITY-AND-EQUITY> 133,902
<SALES> 52,659
<TOTAL-REVENUES> 52,659
<CGS> 34,828
<TOTAL-COSTS> 34,828
<OTHER-EXPENSES> 16,060
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 543
<INCOME-PRETAX> 1,228
<INCOME-TAX> 491
<INCOME-CONTINUING> 1,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 737
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0
</TABLE>
