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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
--------------------------------------------------
August 26, 1998
(DATE OF EARLIEST EVENT REPORTED)
IWL COMMUNICATIONS, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Texas 0-22293 76-0043882
------------------ ------------------ ----------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
12000 Aerospace Avenue, Suite 200
Houston, Texas 77034
(Address of Principal Executive Offices)
(281) 482-0289
Registrant's Telephone Number, including area code
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
AMENDMENT NO. 1
The undersigned registrant hereby amends Item 7(b) -- "Financial Statements
and Exhibits -- Pro Forma Financial Information" as set forth below.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
1
<PAGE>
(B) PRO FORMA FINANCIAL INFORMATION
Unaudited pro forma combined financial statements (with notes
thereto) of Holdings, giving effect to the Mergers and the Interest
Exchange under the pooling of interests accounting method, are
incorporated herein by reference to pages 93 through 99 of
Holdings' Registration Statement.
In addition, unaudited pro forma combined financial statements
(with notes thereto) of Holdings as of and for the six months ended
June 30, 1998 are contained herein and set forth below:
CAPROCK COMMUNICATIONS CORP.
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------------------------------- -------------------------------
IWL Telecommunications Partnership Adjustments Combined
---------- ------------------- ------------ ----------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Telecommunications services $ 7,135 $ 32,416 $ 1,196 $ (193) (d) $ 40,554
Network construction services - - 1,355 - 1,355
Projects and other 9,510 - - - 9,510
-------- --------- ---------- ---------- --------
Total revenues 16,645 32,416 2,551 (193) 51,419
Cost of services:
Cost of telecommunication services 10,014 23,910 13 (17) (d) 33,920
Cost of network construction services - - 114 - 114
-------- --------- ---------- ---------- --------
Gross Profit 6,631 8,506 2,424 (176) 17,385
Operating costs and expenses:
Selling, general and administrative 4,590 4,943 204 (176) (d) 9,561
Depreciation and amortization 1,369 484 396 - 2,249
-------- --------- ---------- ---------- --------
Total operating costs and expenses 5,959 5,427 600 (176) 11,810
-------- --------- ---------- ---------- --------
Operating income 672 3,079 1,824 - 5,575
Interest expense, net (351) (159) (409) - (919)
Other income 105 - - - 105
-------- --------- ---------- ---------- --------
Income before income taxes 426 2,920 1,415 - 4,761
Income taxes 209 1,134 545 - 1,888
-------- --------- ---------- ---------- --------
Net income $ 217 $ 1,786 $ 870 $ - $ 2,873
-------- --------- ---------- ---------- --------
-------- --------- ---------- ---------- --------
Earnings per common share:
Basic $ 0.06 $ 0.17 $ - $ - $ 0.10
Diluted $ 0.05 $ 0.17 $ - $ - $ 0.10
Weighted average shares outstanding:
Basic 3,926 10,399 - 14,524 28,849
Diluted 4,225 10,576 - 14,664 29,465
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
2
<PAGE>
CAPROCK COMMUNICATIONS CORP.
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------------------------------- -------------------------------
IWL Telecommunications Partnership Adjustments Combined
---------- ------------------- ------------ ----------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Telecommunications services $ 3,537 $ 20,128 $ 845 $ - $ 24,510
Projects and other 8,215 - - 8,215
Product resales 2,945 - - 2,945
-------- --------- ---------- ---------- --------
Total revenues 14,697 20,128 845 - 35,670
Cost of services:
Cost of telecommunication services 7,705 15,770 8 - 23,483
Cost of product resales 2,346 - - - 2,346
-------- --------- ---------- ---------- --------
Gross Profit 4,646 4,358 837 - 9,841
Operating costs and expenses:
Selling, general and administrative 3,110 3,216 140 - 6,466
Depreciation and amortization 768 303 348 - 1,419
-------- --------- ---------- ---------- --------
Total operating costs and expenses 3,878 3,519 488 - 7,885
-------- --------- ---------- ---------- --------
Operating income 768 839 349 - 1,956
Interest expense, net (300) (168) (370) - (838)
Other income 109 - - - 109
-------- --------- ---------- ---------- --------
Income before income taxes 577 671 (21) - 1,227
Income tax expense 148 242 - (8) (b) 382
-------- --------- ---------- ---------- --------
Net income (loss) $ 429 $ 429 $ (21) $ 8 $ 845
-------- --------- ---------- ---------- --------
-------- --------- ---------- ---------- --------
Earnings per common share:
Basic $ 0.18 $ 0.04 $ - $ - $ 0.03
Diluted $ 0.18 $ 0.04 $ - $ - $ 0.03
Weighted average shares outstanding:
Basic 2,372 10,399 - 14,524 27,295
Diluted 2,435 10,399 - 14,524 27,358
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
3
<PAGE>
CAPROCK COMMUNICATIONS CORP.
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Historical Pro Forma
-------------------------------------------------------------- ------------------------
IWL Communications Telecommunications Partnership Adjustments Combined
------------ -------------- ------------------ ------------ ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 359 $ 2 $ 2 $ 378 $ $ 741
Accounts receivable, net 6,952 - 10,284 39 17,275
Due from affiliate 1,250 (1,250) (d) -
Costs and estimated earnings in
excess of billings - - 1,355 1,355
Inventory 1,093 - - - 1,093
Prepaid expenses and other 463 - 1,000 4 1,467
Deferred merger costs 597 - 56 - (653)(c) -
Deferred income taxes 276 - 88 - 364
----------- ------------- ---------- ---------- -------- --------
Total current assets 9,740 2 12,680 1,776 (1,903) 22,295
Property, plant and equipment, net 17,320 - 4,739 11,894 33,953
Other assets 2,668 - 424 54 - 3,146
----------- ------------- ---------- ---------- -------- --------
Total assets $ 29,728 $ 2 $ 17,843 $ 13,724 $ (1,903) $ 59,394
----------- ------------- ---------- ---------- -------- --------
----------- ------------- ---------- ---------- -------- --------
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt $ 10,131 $ - $ 304 $ 8,877 $ $ 19,312
Due to affiliate - - 1,250 (1,250) (d) -
Bank line of credit - - 2,602 - 2,602
Accounts payable and accrued expenses 3,457 - 9,658 1,916 1,750 (c) 16,781
Accrued committment and guarantor fees - - - 431 431
Customer deposits 23 - - - 23
Current installments under capital
lease - - 254 - 254
Income taxes payable 183 - - 375 558
Unearned revenue 9 - 156 162 - 327
----------- ------------- ---------- ---------- -------- --------
Total current liabilities 13,803 - 12,974 13,011 500 40,288
Long-term debt 1,456 - - - 1,456
Deferred income taxes 441 - 530 170 1,141
Obiligations under capital lease - - 265 - - 265
----------- ------------- ---------- ---------- -------- --------
Total liabilities 15,700 - 13,769 13,181 500 43,150
Stockholders' equity
Common stock 40 - 1,458 - (1,209) (a) 289
Additional paid-in capital 9,237 2 - - 1,209 (a) 10,448
Retained earnings 4,744 - 2,970 543 (2,403) (c) 5,854
Translation adjustment 7 - - - - 7
Unearned compensation - - (354) - - (354)
----------- ------------- ---------- ---------- -------- -------
Total stockholders' equity 14,028 2 4,074 543 - 16,244
----------- ------------- ---------- ---------- -------- -------
Total liabilities and stockholders'
equity $ 29,728 $ 2 $ 17,843 $ 13,724 $ (1,903) $ 59,394
----------- ------------- ---------- ---------- -------- -------
----------- ------------- ---------- ---------- -------- -------
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
4
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(a) The Merger Agreement, as amended, was entered into on February 16, 1998, by
IWL, Telecommunications, the Partnership and Holdings and other
subsidiaries created to facilitate the Transaction. Under terms of the
Merger Agreement, at the effective time of the Mergers and the Interest
Exchange, each share of IWL common stock was converted into and became
exchangable for one share of Holdings Common Stock, each share of
Telecommunications common stock was converted into and became exchangable
for 1.789030878 shares of Holdings Common Stock and each one percent (1%)
of the Partnership Interests in the Partnership was exchanged for 63,194.54
shares of Holdings Common Stock. The following table detail issuances in
connection with the Transaction as if the Transaction had occurred on June
30, 1998.
<TABLE>
<CAPTION>
Number of
Common shares Exchange Holdings
outstanding ratio common shares
-------------- ------------ -------------
<S> <C> <C> <C>
Holdings Common Shares to be issued to
the shareholders of Telecommunications 10,398,954 1.789030878 18,604,050
Holdings Common Shares to be issued to
the Partners of the Partnership 6,319,454
Holdings Common Shares to be issued to
the shareholders of IWL 3,986,718 1.0 3,986,718
----------
Total Holdings Common Shares outstanding
after completion of the Transaction 28,910,222
----------
----------
</TABLE>
The number of shares of Holdings Common Stock were determined at the
effective time of the Transaction, based on the number of shares of IWL and
Telecommunications common stock outstanding and the number of Partnership
Interests that were validly tendered to and accepted by Holdings. The
adjustments to the balance sheet as of June 30, 1998 result in the
recapitalization of Holdings.
(b) The net adjustments to tax expense for the Partnership for the Six Months
Ended June 30, 1997 and the Three Months Ended June 30, 1997 included in
the pro forma adjustments were estimated at 38%. These adjustments were
made to reflect the tax expense and the deferred tax assets and liabilities
that would have been recorded if the Partnership had been taxed as a C
Corporation for those periods. Effective January 1, 1998, the Partnership
elected to be taxed as a corporation.
(c) The costs of the transaction have been estimated as approximately $2.4
million, consisting of fees for investment bankers, attorneys, accountants,
financial printing and other related charges. Approximately $653,000 of
the estimated transaction costs have been accrued as of June 30, 1998. The
remaining transaction costs estimated as $1.8 million have been included as
an adjustment to the pro forma condensed combined balance sheet as if the
Transaction occurred on June 30, 1998 and the pro forma combined condensed
statement of operations for all periods presented exclude the effects of
these costs. Such costs will be expensed in August 1998 at the
consummation of the transaction.
(d) To remove the effect of intercompany transactions. The intercompany
transactions consist of the following:
(i) Due to affiliates - $1,250,000 as of June 30, 1998.
(ii) Eliminate intercompany revenue and related cost of sales totaling
approximately $17,000 for the Three Months Ended June 30, 1998.
(iii) Eliminate intercompany fee from Telecommunications for
administrative and management services for the Partnership. Such
fees total approximately $176,000 for the Three Months Ended June
30, 1998 and were immaterial for previous periods.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this amended Current Report on Form 8-K
to be signed on its behalf by the undersigned hereunto duly authorized.
IWL COMMUNICATIONS, INCORPORATED
By: /s/ Ignatius W. Leonards
---------------------------
Ignatius W. Leonards
Chief Executive Officer
Dated: August 31, 1998
6
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