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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
APRIL 22, 1999
Date of Report (Date of Earliest Event Reported):
BILLING CONCEPTS CORP.
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(Exact name of registrant as specified in its charter)
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DELAWARE 0-28536 74-2781950
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
7411 JOHN SMITH DRIVE, SUITE 200
SAN ANTONIO, TEXAS 78229
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(Address of principal executive offices) (Zip Code)
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(210) 949-7000
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On April 22, 1999, Billing Concepts Corp., a Delaware corporation
(the "Company"), announced that its Board of Directors has approved a plan to
separate its LEC Billing and Systems and Software divisions into two separate
public companies.
The Company's News Release issued on April 22, 1999 announcing
approval by the Board of Directors of the plan to separate the LEC Billing
and Systems and Software divisions is attached hereto as Exhibit 99.1 and
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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Exhibit 99.1 News Release issued by Billing Concepts Corp. on
April 22, 1999 regarding the proposed plan to
separate the LEC Billing and Systems and Software
divisions of the Company (filed herewith)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned hereunto duly authorized.
BILLING CONCEPTS CORP.
(Registrant)
Date: April 28 , 1999 By: /s/ Parris H. Holmes, Jr.
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Parris H. Holmes, Jr.
Chairman of the Board
and Chief Executive Officer
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INDEX TO EXHIBITS
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EXHIBIT NUMBER
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99.1 News Release issued by Billing Concepts Corp. on April
22, 1999 regarding the proposed plan to separate the
LEC Billing and Systems and Software divisions of the
Company (filed herewith)
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EXHIBIT 99.1
[LETTERHEAD]
NEWS RELEASE
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APRIL 22, 1999
BILLING CONCEPTS ANNOUNCES SEPARATION OF BUSINESS DIVISIONS AND REPORTS 2ND
QUARTER EARNINGS IN LINE WITH MARCH 17TH ANNOUNCEMENT
SAN ANTONIO, TX.... BILLING CONCEPTS CORP. (Nasdaq: BILL) today reported
operating revenue for the second quarter ended March 31, 1999 of $45.7
million, compared to revenue of $44.2 million reported for the same period in
1998. Net income for the quarter was $5.9 million, compared to 1998 reported
net income of $7.4 million. Diluted earnings per common share were $0.16
compared to $0.20 per common share for the same period in 1998.
Operating revenue for the LEC Billing division was $34.8 million for the
second quarter ended March 31, 1999, a decline from the $37.8 million
reported for the same period a year ago. The Systems and Software division
reported $10.9 million in revenue, which is 72% greater than revenue of $6.4
million reported for the same period in 1998.
SEPARATION OF BUSINESS DIVISIONS
The Company also announced that its Board of Directors approved a plan to
separate its businesses into two separate public companies. The Systems and
Software division will operate under an undetermined corporate name, and the
LEC Billing division will operate under the name Billing Concepts.
The Board of Directors is of the opinion that the separation will result in
two distinct companies with different missions and different financial,
investment and operating characteristics so that each can pursue business
strategies and objectives appropriate to its specific industry. In addition,
the respective management teams of the LEC Billing and the Systems and
Software divisions will be able to concentrate their attention and financial
resources on their respective business units without regard to the corporate
objectives, policies and capital requirements of the other.
The terms of the various agreements between the proposed two entities have
not been finalized, and the Company continues to evaluate the effects of
taxation and accounting methods as they relate to this transaction. It is
anticipated that prior to September 30, 1999, stockholders of Billing
Concepts Corp. will receive a distribution of one share of the new company
for each share of Billing Concepts Corp. owned on a record date to be
determined by the Board of Directors. The Company anticipates that the
details of the distribution will be reported between June 15 and July 15.
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[LETTERHEAD]
Parris H. Holmes, Jr., Chairman and CEO, stated, "The time is right for the
Systems and Software division to stand alone as a publicly traded company.
Billing Concepts has succeeded in building two distinct businesses that have
their own unique long-term goals and strategies for growth. Separating them
represents a natural progression and will allow each company to better
achieve its full potential, thus enhancing stockholder value."
Mr. Holmes added, "Our LEC Billing division continues to produce consistent
levels of profitability and cash flow. The month of March was our best month
since March of 1998, the month that generated the most call records in the
Company's history. The Systems and Software division continues to add new
business and to build its sales backlog. This increase in revenue is a result
of our time-to-market, complete product offering and experience in the
industries we service. We believe that many opportunities lie ahead for
Billing Concepts."
BILLING CONCEPTS is one of the most experienced providers of comprehensive
billing and customer care solutions to the communications industry. The
Company licenses fast-to-implement and cost-effective convergent billing
software to virtually any size company in the industry. Billing Concepts is
also the largest third-party provider of billing clearinghouse and
information services to the telecommunications industry. Billing Concepts
supports multiple services such as Internet, PCS, cellular, paging, cable,
local service, long distance and Carrier Access Billing (CABS). With over
600 customers throughout North America, the Company offers billing solutions
for service providers including LEC, Competitive Local Exchange Carrier
(CLEC), Independent Local Exchange Carrier (ILEC) and Internet Service
Provider (ISP) companies, from the newest entrants to some of the largest
facilities-based providers in the industry. Headquartered in San Antonio,
Texas, Billing Concepts maintains offices in Corpus Christi, Texas, Glendale,
California and Albany, New York. Visit the Billing Concepts web site:
www.billingconcepts.com.
CERTAIN STATEMENTS CONTAINED HEREIN ARE "FORWARD-LOOKING" STATEMENTS (AS SUCH
TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995).
THESE STATEMENTS INCLUDE THE COMPANY'S ANNOUNCEMENT OF ITS SECOND QUARTER
EARNINGS ESTIMATE, THE SEPARATION OF BUSINESS UNITS AND MR. HOLMES' QUOTE.
BECAUSE SUCH STATEMENTS INCLUDE RISKS AND UNCERTAINTIES, ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. FACTORS THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED IN FILINGS MADE BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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(FINANCIAL TABLES TO FOLLOW)
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[LETTERHEAD]
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QUARTER ENDED MARCH 31,
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1999 1998
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(UNAUDITED)
(In Thousands, Except Per Share Amounts)
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LEC revenues $34,782 $37,813
Systems revenues 10,932 6,354
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Total revenues 45,714 44,167
Cost of revenues 27,406 27,066
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Gross profit 18,308 17,101
Selling, general and administrative 7,391 5,932
Research and development 1,051 307
Advance funding program income (1,005) (2,271)
Advance funding program expense 30 31
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EBITDA 10,841 13,102
Depreciation and amortization 2,264 1,733
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Operating income 8,577 11,369
Other income (expense):
Interest income 1,542 713
Interest expense (17) (62)
Equity in net loss of investee (570) 0
Other (21) 62
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Other income, net 934 713
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Income before income taxes 9,511 12,082
Income tax expense (3,660) (4,651)
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Net income $5,851 $7,431
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Diluted earnings per common share $0.16 $0.20
Weighted average common shares and
common share equivalents outstanding 37,586 37,776
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