<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K (A)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
September 9, 1996 (June 28, 1996)
CSG SYSTEMS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-27512 47-0783182
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number Identification No.)
5251 DTC Parkway, Suite 625, Englewood, Colorado 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 796-2850
1
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CSG SYSTEMS INTERNATIONAL, INC.
FORM 8-K (A)
CSG Systems International, Inc. (the Company) hereby amends Item 7 of its Form
8-K filed on July 10, 1996 to report an event occurring on June 28, 1996 to
include the following:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of businesses acquired
The following financial statements of Bytel Limited are filed with this
report:
Page
----
Auditors' Report 5
Profit and Loss Account for the year ended 30 April 1996 6
Balance Sheet as at 30 April 1996 7
Cash Flow Statement for the year ended 30 April 1996 8
Notes to the Financial Statements for the year
ended 30 April 1996 9-13
(b) Pro forma financial information
The following unaudited pro forma combined financial statements are
filed with this report:
Pro Forma Combined Statement of Operations:
Year ended December 31, 1995 14
Six months ended June 30, 1996 15
Notes to Pro Forma Combined Financial Statements 16
The unaudited pro forma combined statements of operations for the year
ended December 31, 1995, and for the six months ended June 30, 1996,
give effect to the Company's acquisition of 100% of the capital stock
of Bytel Limited (Bytel) as if it occurred on January 1, 1995, using
the purchase method of accounting. The unaudited pro forma combined
financial statements presented herein are shown for illustrative
purposes only and are not necessarily indicative of the future
financial position or future results of operations of the Company, or
of the financial position or results of operations of the Company that
would have actually occurred had the transaction been in effect as of
the date or for the periods presented.
2
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The unaudited pro forma combined financial statements and related notes
should be read in conjunction with the historical financial statements and
related notes of the Company and Bytel.
(c) Exhibits
The exhibits filed as part of the Form 8-K (A) are:
23.01 Consent of Independent Public Accountants
3
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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.
Dated: September 9, 1996
CSG SYSTEMS INTERNATIONAL, INC.
By: /s/ RANDY WIESE
------------------------------
Randy Wiese
Controller
(Principal Accounting Officer)
4
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AUDITORS' REPORT
To the members of Bytel Limited.
We have audited the financial statements on pages 6 to 13 which have been
prepared on the basis of the accounting policies set out on page 9.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described below, 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 which are substantially consistent with U.S. generally
accepted auditing standards. 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 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 the company's affairs as at 30 April 1996 and of its loss for the year then
ended and have been properly prepared in accordance with the Companies Act 1985.
ARTHUR ANDERSEN DATE: 6 September 1996
CHARTERED ACCOUNTANTS AND REGISTERED AUDITORS
1 Surrey Street
London WC2R 2PS
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 of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
. select suitable accounting policies and then apply them consistently;
. make judgements and estimates that are reasonable and prudent;
. state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;
and
. prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets
of the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
5
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BYTEL LIMITED
- -------------
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 1996
<TABLE>
_____________________________________________________________________________________________
<CAPTION>
CONTINUING CONTINUING
OPERATIONS OPERATIONS
NOTES 1996 1995
(POUNDS)'000 (POUNDS)'000
<S> <C> <C> <C>
Turnover 2 5,304 5,407
Cost of sales (5,547) (5,400)
------ ------
GROSS (LOSS)/PROFIT (243) 7
Distribution costs (271) (106)
Administrative expenses (652) (667)
------ ------
OPERATING LOSS 3 (1,166) (766)
Interest received and similar income 4 9 9
------ ------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,157) (757)
Taxation credit 5 - 125
------ ------
LOSS FOR THE YEAR TRANSFERRED FROM RESERVES 12 (1,157) (632)
====== ======
</TABLE>
Bytel Limited has no recognised gains and losses other than the result for the
year.
The historical cost profit is not materially different from that reported above.
6
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BYTEL LIMITED
- -------------
BALANCE SHEET
AS AT 30 APRIL 1996
<TABLE>
____________________________________________________________________________________________________________
<CAPTION>
NOTES 1996 1995
(POUNDS)'000 (POUNDS)'000 (POUNDS)'000 (POUNDS)'000
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible assets 7 1,087 1,157
Tangible assets 6 115 92
------------ -----------
1,202 1,249
CURRENT ASSETS
Debtors 8 1,270 1,985
Cash 48 53
------------ ------------
1,318 2,038
CREDITORS: amounts falling due
within one year 9 (2,817) (2,427)
------------ ------------
Net current (liabilities)/assets (1,499) (389)
----------- ------------
TOTAL ASSETS LESS CURRENT LIABILITIES (297) 860
CREDITORS: amounts falling due
after more than one year 10 (1,480) (1,480)
----------- ------------
NET (LIABILITIES)/ASSETS (1,777) (620)
=========== ============
CAPITAL AND RESERVES
Called up share capital 11 100 100
Profit and loss account 12 (1,877) (720)
----------- ------------
SHAREHOLDERS' FUNDS (EQUITY INTERESTS) 13 (1,777) (620)
=========== ============
</TABLE>
The financial statements on pages 6 to 13 were approved by the Board on 20 June
1996.
C. MUSGRAVE
Director
7
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BYTEL LIMITED
- -------------
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 1996
<TABLE>
_____________________________________________________________________________________________
<CAPTION>
NOTES 1996 1995
(POUNDS)'000 (POUNDS)'000
<S> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 14 577 300
RETURNS ON INVESTMENT AND SERVICING OF
FINANCE
Interest received 4 9 9
TAXATION
UK corporation tax (paid)/received 125 (1)
INVESTING ACTIVITIES
Purchase of tangible fixed assets (116) (102)
Capitalisation of intangible fixed assets (600) (504)
____________ ____________
DECREASE IN CASH AND CASH EQUIVALENTS (5) (298)
============ ============
</TABLE>
An analysis of the changes in cash and cash equivalents during the year is given
in Note 15.
8
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BYTEL LIMITED
- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 1996
________________________________________________________________________________
1. ACCOUNTING POLICIES
(A) ACCOUNTING CONVENTION
The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.
(B) FIXED ASSETS AND DEPRECIATION
Fixed assets are shown at cost. Depreciation has been provided on the
net cost of fixed assets at rates designed to write them off over their
estimated useful lives on a straight line basis at the rates shown
below:
Plant and machinery 2 to 5 years
Motor vehicles 4 years
(C) RESEARCH AND DEVELOPMENT EXPENDITURE
Research and development expenditure is capitalised up to the point of
first sale after which it is amortised over three years.
(D) DEFERRED TAXATION
Deferred taxation is provided on the liability method on all timing
differences which are expected to reverse in the future, calculated at
the rate at which it is estimated that tax will be payable.
2. TURNOVER
Turnover represents amounts, excluding value added tax, invoiced or
delivered to third parties in the ordinary course of business and arises
solely in the United Kingdom.
3. OPERATING (LOSS)/PROFIT
<TABLE>
<CAPTION>
1996 1995
is stated after charging: (POUNDS)'000 (POUNDS)'000
<S> <C> <C>
Depreciation: owned assets 88 36
Auditors' remuneration - audit work 6 2
Directors' remuneration 83 30
Amortisation of capitalised research and
development expenditure 670 453
Loss/(Profit) on sale of fixed assets 5 8
=========== ===========
4. INTEREST RECEIVABLE 1996 1995
(POUNDS)'000 (POUNDS)'000
Other interest 9 9
=========== ===========
</TABLE>
9
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BYTEL LIMITED
- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 1996 (CONTINUED)
________________________________________________________________________________
<TABLE>
<CAPTION>
5. TAXATION 1996 1995
(POUNDS)'000 (POUNDS)'000
<S> <C> <C>
The taxation credit/(charge) comprises:
Consortium relief - prior year - 125
------------ ------------
- 125
============ ============
6. TANGIBLE FIXED ASSETS PLANT
EQUIPMENT
AND MOTOR
VEHICLES
(Pounds)'000
COST
At 1 May 1995 147
Additions 116
Disposals (7)
------------
AT 30 APRIL 1996 256
============
DEPRECIATION
At 1 May 1995 55
Charge for period 88
Disposals (2)
------------
AT 30 APRIL 1996 141
============
NET BOOK VALUE
AT 30 APRIL 1996 115
============
At 30 April 1995 92
============
7. INTANGIBLE FIXED ASSETS -
RESEARCH AND DEVELOPMENT EXPENDITURE (Pounds)'000
Balance at 1 May 1995 1,157
Expenditure during the period capitalised 600
Amortisation (670)
------------
BALANCE AT 30 APRIL 1996 1,087
============
</TABLE>
10
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BYTEL LIMITED
- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 1996 (CONTINUED)
________________________________________________________________________________
<TABLE>
<CAPTION>
8. DEBTORS 1996 1995
(POUNDS)'000 (POUNDS)'000
<S> <C> <C>
Trade debtors 1,270 1,860
Consortium relief receivable - 125
------------ ------------
1,270 1,985
============ ============
9. CREDITORS: Amounts falling during within one year 1996 1995
(POUNDS)'000 (POUNDS)'000
Trade creditors 68 216
Amounts owed to joint venture investors 2,413 1,359
Other taxes and social security costs 40 49
Accruals and deferred income 296 803
------------ ------------
2,817 2,427
============ ============
10. CREDITORS: Amounts falling due after 1996 1995
more than one year (POUNDS)'000 (POUNDS)'000
Amounts owed to joint venture investors 1,480 1,480
============ ============
</TABLE>
This represents a loan, which is interest free until July 1996, made from
the shareholders repayable on 31 July 2002.
<TABLE>
<CAPTION>
11. SHARE CAPITAL
AUTHORISED ALLOTTED, CALLED UP
AND FULLY PAID
1996 1995 1996 1995
NUMBER NUMBER (POUNDS) (POUNDS)
<S> <C> <C> <C> <C>
`A' Ordinary shares of (Pounds)1 each 500,000 500,000 50,000 50,000
`B' Ordinary shares of (Pounds)1 each 500,000 500,000 50,000 50,000
--------- --------- ------- -------
1,000,000 1,000,000 100,000 100,000
========= ========= ======= =======
</TABLE>
Each class of shares has equal rights with regard to equity participation,
voting rights, share of profit and appointment of directors.
11
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BYTEL LIMITED
- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 1996 (CONTINUED)
________________________________________________________________________________
<TABLE>
<CAPTION>
12. RESERVES PROFIT AND
LOSS ACCOUNT
(POUNDS)'000
<S> <C> <C>
At 1 May 1995 (720)
Loss for year (1,157)
------------
AT 30 APRIL 1996 (1,877)
============
13. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
1996 1995
(POUNDS)'000 (POUNDS)'000
Loss for the financial year (1,157) (632)
Other recognised gains and losses
relating to the year - -
------------ ------------
Net reduction in shareholders' funds (1,157) (632)
Opening shareholders' funds (620) 12
------------ ------------
CLOSING SHAREHOLDERS' FUNDS (1,777) (620)
============ ============
14. RECONCILIATION OF OPERATING PROFIT TO NET CASH
INFLOW FROM OPERATING COMPANIES
1996 1995
(POUNDS)'000 (POUNDS)'000
Operating loss (1,166) (766)
Depreciation 88 36
Decrease in debtors 590 380
Increase in creditors 390 197
Amortisation of intangible fixed assets 670 453
Loss on sale of fixed assets 5 -
------------ ------------
Net cash inflow from operating activities 577 300
============ ============
15. ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS
DURING THE YEAR
(Pounds)'000
Balance at 1 May 1995 53
Net cash outflow (5)
------------
BALANCE AT 30 APRIL 1996 48
============
</TABLE>
12
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BYTEL LIMITED
- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 1996 (CONTINUED)
<TABLE>
<CAPTION>
__________________________________________________________________________________________
<S> <C> <C>
16. DIRECTORS 1996 1995
(POUNDS)'000 (POUNDS)'000
(A) EMOLUMENTS
The emoluments of directors of the company
(including pension contributions and
benefits-in-kind) were:- 83 30
============ ============
(B) BANDING
Fees and other emoluments disclosed above
(excluding pension contributions) include
amounts paid to:
The highest paid director 77 28
============ ============
Directors' emoluments (excluding pension
contribution) were in the following ranges:
NUMBER NUMBER
(Pounds)0 - (Pounds)5,000 5 6
(Pounds)25,001 - (Pounds)30,000 - 1
(Pounds)75,001 - (Pounds)80,000 1 -
17. EMPLOYEES
1996 1995
NUMBER NUMBER
(A) EMPLOYEES:
The average weekly number of persons
(including directors) employed by the
company during the year was:
Production 31 22
Administration and selling 5 2
------------ ------------
36 24
============ ============
(B) EMPLOYMENT COSTS: (POUNDS)'000 (POUNDS)'000
Wages and salaries 926 649
Social security costs 94 65
Other pension costs - -
------------ ------------
1,020 714
============ ============
</TABLE>
13
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CSG SYSTEMS INTERNATIONAL, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS - UNAUDITED
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS, AND IN U.S. DOLLARS)
<TABLE>
<CAPTION>
CSG BYTEL PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
Total revenues............................................. $ 96,404 $ 8,871 $ - $ 105,275
Expenses:
Cost of revenues:
Cost of revenues........................................ 46,670 7,091 (920)(a) 52,841
Amortization of acquired software....................... 11,000 - - 11,000
Amortization of client contracts and related
intangibles.......................................... 4,092 - - 4,092
----------- ---------- ------------ -----------
Total cost of revenues................................ 61,762 7,091 (920) 67,933
----------- ---------- ------------ -----------
Operating expenses:
Research and development................................ 14,278 1,540 1,271 (b) 17,089
Selling and marketing................................... 3,770 188 - 3,958
General and administrative:
General and administrative............................ 11,406 1,035 - 12,441
Amortization of noncompete agreement and goodwill..... 5,680 - 617 (c) 6,297
Stock-based employee compensation..................... 841 - - 841
Depreciation............................................ 5,687 125 - 5,812
----------- ---------- ------------ -----------
Total operating expenses.............................. 41,662 2,888 1,888 46,438
----------- ---------- ------------ -----------
Total expenses............................................. 103,424 9,979 968 114,371
----------- ---------- ------------ -----------
Operating loss........................................ (7,020) (1,108) (968) (9,096)
----------- ---------- ------------ -----------
Other income (expense):
Interest expense........................................ (9,070) - - (9,070)
Interest income......................................... 663 - (157)(d) 506
----------- ---------- ------------ -----------
Total other........................................... (8,407) - (157) (8,564)
----------- ---------- ------------ ------------
Loss from continuing operations before income taxes........ (15,427) (1,108) (1,125) (17,660)
----------- ---------- ------------ -----------
Income tax (provision) benefit........................... - - - -
----------- ---------- ------------ -----------
Loss from continuing operations............................ $ (15,427) $ (1,108) $ (1,125) $ (17,660)
=========== ========== ============ ===========
Loss from continuing operations per common and
equivalent share ........................................ $ (0.69) $ (0.79)
=========== ============
Shares used in per share computation....................... 22,494,748 22,494,748
=========== =============
</TABLE>
See notes to pro forma combined financial statements
14
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CSG SYSTEMS INTERNATIONAL, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS, AND IN U.S. DOLLARS)
<TABLE>
<CAPTION>
CSG BYTEL PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Total revenues..................................... $ 30,431 $ 4,239 $ -- $ 34,670
Expenses:
Cost of revenues:
Cost of services................................ 14,369 3,267 (531)(a) 17,105
Amortization of acquired software............... 2,751 -- -- 2,751
Amortization of client contracts and related
intangibles.................................... 1,023 -- -- 1,023
---------- ---------- ----------- ---------
Total cost of revenues........................ 18,143 3,267 (531) 20,879
---------- ---------- ----------- ---------
Operating expenses:
Research and development........................ 4,792 1,275 459 (b) 6,526
Selling and marketing........................... 1,570 138 -- 1,708
General and administrative:
General and administrative.................... 3,146 555 -- 3,701
Amortization of noncompete agreements
and goodwill................................. 1,519 -- 299 (c) 1,818
Stock-based employee compensation............. 97 -- -- 97
Depreciation.................................... 1,246 73 -- 1,319
---------- ---------- ----------- ---------
Total operating expenses...................... 12,370 2,041 758 15,169
---------- ---------- ----------- ---------
Total expenses..................................... 30,513 5,308 227 36,048
---------- ---------- ----------- ---------
Operating loss................................ (82) (1,069) (227) (1,378)
---------- ---------- ----------- ---------
Other income (expense):
Interest expense................................ (870) -- -- (870)
Interest income................................. 256 -- (78)(d) 178
---------- ---------- ----------- ---------
Total other................................... (614) -- (78) (692)
---------- ---------- ----------- ---------
Loss from continuing operations before
income taxes...................................... (696) (1,069) (305) (2,070)
---------- ---------- ----------- ---------
Income tax (provision) benefit................... -- -- -- --
---------- ---------- ----------- ---------
Loss from continuing operations.................... $ (696) $ (1,069) $ (305) $ (2,070)
========== ========== =========== =========
Shares used in per share computation............... $ (0.03) $ (0.08)
========== ==========
Shares used in per share computation............... 25,532,945 25,532,945
========== ==========
</TABLE>
See notes to pro forma combined financial statements
15
<PAGE>
CSG Systems International, Inc.
Notes to Pro Forma Combined Financial Statements
Note 1: Bytel operates on a fiscal year ended April 30. Bytel's historical
financial statements included in the unaudited pro forma combined statements of
operations for the year ended December 31, 1995 and for the six months ended
June 30, 1996 include the actual results of operations, without adjustment, for
the periods January 1, 1995 through December 31, 1995 and January 1, 1996
through June 30, 1996, respectively.
Note 2: The Bytel historical financial statements included in the unaudited
pro forma combined statements of operations have been reclassified to conform
with the Company's presentation.
Note 3: The Bytel historical financial statements included in the unaudited
pro forma combined statements of operations have been converted from Bytel's
functional currency of Great Britain pounds to the Company's reporting currency
of U.S. dollars using the conversion rate for each of the individual months
included in both periods presented. The weighted average of the conversion
rates used was approximately 1 Great Britain pound to 1.55 U.S. dollars for both
periods presented.
Note 4: The unaudited pro forma combined statements of operations reflect the
following adjustments:
(a) Adjustment to eliminate amortization of capitalized software
development costs.
(b) Adjustment to reflect capitalized software development costs as
research and development expense when incurred, consistent with
the Company's accounting policy.
(c) Adjustment to reflect amortization of goodwill.
(d) Adjustment to eliminate interest earned on cash used to pay
purchase price.
16
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EXHIBIT 23.01
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report on
Bytel Limited dated 6 September 1996, included in this Form 8-K(A). It should be
noted that we have not audited any financial statements of Bytel Limited
subsequent to 30 April 1996 or performed any audit procedures subsequent to the
date of our report.
Arthur Andersen
CHARTERED ACCOUNTANTS AND REGISTERED AUDITORS
1 Surrey Street
London WC2R 2PS
6 September 1996
