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: November 13, 1998
- --------------------------------------------------------------------------------
HAGLER BAILLY, INC.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
DELAWARE
(State or other jurisdiction of incorporation)
54-1759180
(IRS Employer Identification Number)
1530 Wilson Boulevard, Suite 400, Arlington, VA 22209
(Address of principal executive offices)(Zip Code)
703-351-0300
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 14, 1998, Hagler Bailly, Inc. (the "Company") filed a Current
Report on Form 8-K relating to the merger of its wholly-owned subsidiary, PHB
Acquisition Corp. ("Merger Sub"), with and into Putnam Hayes & Bartlett, Inc.
("PHB") pursuant to the Plan and Agreement of Merger dated June 11, 1998 by and
among the Company, Merger Sub and PHB (the "Merger Agreement"). In this Current
Report on Form 8-K, the Company is providing the required financial statements
and pro forma financial information. In addition, the Company is providing
optional pro-forma financial information (under item 5).
ITEM 5. OTHER EVENTS.
The Company is providing certain selected optional unaudited pro-forma
combined financial information with respect to the Company and PHB. These
optional statements display quarterly pro forma statement of operations for the
fiscal year 1997 and the first two quarters of fiscal year 1998. This financial
information should be read in conjunction with the consolidated financial data
and pro forma combined consolidated financial data and notes thereto included in
this Current Report 8-K or incorporated by reference in this filing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND OPTIONAL
PROFORMA INFORMATION.
(A) Financial Statements of Businesses Acquired
1. The audited financial statements of PHB as of December 31,
1997 and 1996 and for the years ended December 31, 1997, 1996
and 1995 have been previously filed with the Securities and
Exchange Commission as part of the Company's definitive proxy
statement filed on July 24, 1998.
2. The following Condensed Consolidated Financial Statements
of PHB are attached:
Condensed Consolidated Balance Sheet as of June 30, 1998 (unaudited)
Condensed Consolidated Statement of Operations for the six months
ended June 30, 1998 and 1997 (unaudited)
Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1998 and 1997 (unaudited)
Notes to the June 30, 1998 Condensed Consolidated Financial
Statements (unaudited)
(B) Pro Forma Financial Information
1. The unaudited Pro Forma Condensed Combined Balance Sheet as of
March 31, 1998 and the unaudited Pro Forma Condensed Combined Statements
of Income for the three months ended March 31, 1998 and 1997
and for the years ended December 31, 1997, 1996 and 1995, have
been previously filed with the Securities and Exchange
Commission as part of the Company's definitive proxy statement
filed July 24, 1998.
2. The following unaudited Pro Forma Condensed Combined Financial Statements
are attached:
Pro Forma Condensed Combined Balance Sheet as of
June 30, 1998 (unaudited)
Pro Forma Condensed Combined Statements of Operations for the
six months ended June 30, 1998 and 1997 (unaudited)
Notes to Pro Forma Condensed Combined Financial Statements (unaudited)
Item 7. (A) Financial Statements of Business Acquired (PHB)
Basis of Presentation
The following Consolidated Financial Statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission ("SEC")
and, in management's opinion, include all adjustments necessary for a fair
statement of results for such interim periods. Certain information and note
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules or regulations; however, the Company believes that
the disclosures made are adequate to make the information presented not
misleading.
The interim results for the six-month periods ended June 30, 1998 and 1997
are not necessarily indicative of results for the full year. It is suggested
that these consolidated financial statements be read in conjunction with
consolidated financial statements and notes of PHB thereto included in the
Company's definitive proxy statement filed July 24, 1998.
<PAGE>
<TABLE>
<CAPTION>
Putnam, Hayes & Bartlett, Inc. and Subsidiaries
Consolidated Balance Sheet (unaudited)
June 30,
1998
<S> <C>
-------------------
Assets
Current assets:
Cash and cash equivalents............................................... $ 1,895,556
Accounts receivable, net................................................ 22,561,665
Prepaid expenses........................................................ 1,278,626
-------------------
Total current assets....................................................... 25,735,847
Property and equipment, net ............................................... 2,988,716
Other assets .............................................................. 299,091
-------------------
Total assets............................................................... $ 29,023,654
===================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses................................... $ 2,826,660
Accrued compensation and benefits....................................... 9,338,716
Billings in excess of cost.............................................. 1,932,219
Current portion of long-term debt ...................................... 146,950
Deferred income taxes .................................................. 938,049
-------------------
Total current liabilities.................................................. 15,182,594
Long-term debt, net of current portion .................................... 274,096
Deferred rent.............................................................. 1,151,960
Deferred income taxes...................................................... 1,753,589
Deferred compensation...................................................... 3,650,820
-------------------
Total liabilities.......................................................... 22,013,059
Stockholders' equity :
Common stock, $0.01 par value, 8,000,000 shares authorized,
5,620,000 issued at June 30, 1998................................. 56,200
Additional capital.................................................... 15,918,487
Subscriptions received for common stock............................... (189,600)
Retained deficit...................................................... (8,377,635)
Foreign currency translation.......................................... (27,932)
Less cost of shares held in treasury, 687,500 shares at June 30, 1998. (368,925)
-------------------
Total stockholders' equity................................................. 7,010,595
-------------------
Total liabilities and stockholders' equity................................. $ 29,023,654
===================
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam, Hayes & Bartlett, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
Six Months Ending June 30,
1998 1997
<S> <C> <C>
------------------- -------------------
Revenues:
Consulting revenues....................................... $ 33,094,798 $ 31,764,708
Cost of services.......................................... 21,525,038 24,185,297
------------------- -------------------
Gross profit.............................................. 11,569,760 7,579,411
Merger and related costs.................................. 356,000 -
Selling, general and administrative expenses.............. 5,634,598 6,315,643
Stock and stock option compensation....................... 2,595,200 -
------------------- -------------------
Income from operations.................................... 2,983,962 1,263,768
Other income (expense), net............................ (195,894) (179,305)
------------------- -------------------
Income before income tax expense.......................... 2,788,068 1,084,463
Income tax expense........................................ 2,213,130 (1) 531,924
------------------- -------------------
Net income................................................ $ 574,938 $ 552,539
=================== ===================
Net income per share:
Basic and diluted...................................... $ 0.11 $ 0.13
=================== ===================
Weighted average shares outstanding:
Basic and diluted...................................... 5,189,111 4,374,056
=================== ===================
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam, Hayes & Bartlett, Inc. and Subsidiaries
Consolidated Statements of Cashflows (unaudited)
Six Months Ending June 30,
1998 1997
------------------ -------------------
<S>
Operating activities <C> <C>
Net income ....................................................... $ 574,938 $ 552,539
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization................................ 547,269 379,818
Deferred income taxes........................................ 2,204,271 531,924
Provision for doubtful accounts.............................. 2,338,875 1,331,651
Deferred rent................................................ 43,453 (12,439)
Deferred compensation........................................ 96,162 17,553
Changes in operating assets and liabilities:
Accounts receivable........................................ (6,961,607) (5,323,407)
Prepaid expenses and other assets.......................... (534,343) 38,370
Accounts payable and accrued expenses...................... (31,635) 411,238
Accrued compensation and benefits.......................... 1,047,724 5,175,509
Billings in excess of cost................................. 580,591 512,617
------------------ -------------------
Net cash (used in) provided by operating activities............... (94,302) 3,615,373
------------------ -------------------
Investing activities
Investment in equipment and improvements..................... (974,376) (386,768)
Decrease in deposits......................................... 14,090 28,396
Cash surrender value of life insurance....................... (5,079) -
Amounts received in connection with liquidation of
subsidiary................................................ 487,785 1,108,675
------------------ -------------------
Net cash (used in) provided by investing activities.............. (477,580) 750,303
------------------ -------------------
Financing activities
Bank line of credit.......................................... (1,500,000) (1,400,000)
Purchase of treasury stock.................................. (31,600) -
Payments of long-term debt................................... (10,314) (50,593)
Sale of common stock......................................... 2,705,800 -
Sale of common stock receivable.............................. 276,500 88,500
------------------ -------------------
Net cash provided by (used in) financing activities............... 1,440,386 (1,362,093)
------------------ -------------------
Effect of exchange rate changes on cash........................... (43,157) 19,641
------------------ -------------------
Net increase in cash and cash equivalents......................... 825,347 3,023,224
Cash and cash equivalents, beginning of period.................... 1,070,209 1,107,299
================== ===================
Cash and cash equivalents, end of period.......................... $ 1,895,556 $ 4,130,523
================== ===================
See accompanying notes to financial statements
</TABLE>
<PAGE>
Putnam, Hayes & Bartlett, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
1. Tax Provision
The stock and stock option compensation expense results in a non-cash,
non-tax deductible charge calculating the difference between the fair value of
the Company's stock and the book value of shares issued during the period.
Accordingly, this expense results in a significant permanent tax difference that
causes PHB's effective tax rate in 1998 to be substantially higher than the
statutory rates in effect at that time.
<PAGE>
(B) Pro Forma Financial Information
Basis of Presentation
The following unaudited pro forma combined consolidated financial
statements reflect the business combination between Hagler Bailly and PHB
accounted for on a pooling-of-interests basis. These statements are presented as
if the merger occurred on January 1, 1997, and are based on, and should be read
in conjunction with, the respective historical consolidated financial statements
and notes thereto of Hagler Bailly and PHB, which are included in this Current
Report 8-K or incorporated by reference in this filing.
For purposes of the preparation of the unaudited pro forma combined
consolidated balance sheet, no estimate is used for the sum of the merger and
related costs (which is approximately $2.0 million through September 30, 1998),
no estimate is used for the sum of dissenters' rights (which is approximately
$965,000), and no deferred tax benefit relating to these expenses are included.
For the purposes of the preparation of the unaudited pro forma combined
consolidated statement of operations, no estimate is used for subcontract work
between Hagler Bailly and PHB prior to the merger because it was deemed to be
immaterial.
The unaudited pro forma combined consolidated financial statements have
been prepared by the Company's management and are presented for illustrative
purposes only. They are not necessarily indicative of the operating results or
financial position that would have been achieved had the Merger been consummated
as of the beginning of the periods presented, nor are they necessarily
indicative of the future operating results of the Company. The pro forma
combined consolidated financial information does not give effect to any cost
savings that may result from the integration of Hagler Bailly's and PHB's
operations.
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Pro Forma Combined Consolidated Balance Sheet
June 30, 1998
Pro Forma Pro Forma
Assets Hagler Bailly PHB Adjustments Combined
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents.......................$ 5,506,845 $ 1,895,556 $ - $ 7,402,401
Investments..................................... 7,327,614 - - 7,327,614
Accounts receivable, net........................ 39,683,625 22,561,665 - 62,245,290
Note receivable................................. 1,000,000 - - 1,000,000
Prepaid expenses................................ 3,765,808 1,278,626 - 5,044,434
Other current assets............................ 696,240 - - 696,240
------------- ------------- ------------- -------------
Total current assets............................ 57,980,132 25,735,847 - 83,715,979
Property and equipment, net .................... 3,466,431 2,988,716 - 6,455,147
Software development costs, net................. 2,474,319 - - 2,474,319
Intangible assets, net.......................... 9,245,391 - - 9,245,391
Other assets.................................... 1,167,506 299,091 - 1,466,597
------------- ------------- ------------- -------------
Total assets......................................$ 74,333,779 $ 29,023,654 $ - $ 103,357,433
============= ============= ============= =============
Liabilities and stockholders' equity
Current liabilities:
Bank line of credit ............................$ 239,790 $ $ - $ 239,790
Accounts payable and accrued expenses........... 6,175,979 2,826,660 - 9,002,639
Accrued compensation and benefits............... 4,158,829 9,338,716 - 13,497,545
Billings in excess of cost...................... 1,061,812 1,932,219 - 2,994,031
Current portion of long-term debt .............. 208,488 146,950 - 355,438
Deferred income taxes .......................... 887,210 938,049 - 1,825,259
Other current liabilities....................... 98,745 - - 98,745
------------- ------------- ------------- -------------
Total current liabilities....................... 12,830,853 15,182,594 - 28,013,447
Long-term debt, net of current portion ......... - 274,096 - 274,096
Deferred rent................................... - 1,151,960 - 1,151,960
Deferred income taxes........................... - 1,753,589 - 1,753,589
Deferred compensation........................... - 3,650,820 - 3,650,820
------------- ------------- ------------- -------------
Total liabilities................................. 12,830,853 22,013,059 - 34,843,912
Stockholders' equity :
Common stock, $.01 par value, 8,000,000 shares
authorized 5,620,000 issued, 5,172,500
outstanding..................................... - 56,200 (56,200)(1) -
Common stock, $.01 par value,
20,000,000 shares authorized 9,606,579
issued and outstanding as of June 30, 1998,
and 6,548,953 additional shares for the business
combination..................................... 96,066 - 65,490(1) 161,556
Additional capital.............................. 54,889,128 15,918,487 (567,815)(1) 70,239,800
Subscriptions received for common stock......... - (189,600) 189,600(1) -
Retained earnings (deficit)..................... 6,713,696 (8,377,635) - (1,663,939)
Foreign currency translation.................... (195,964) (27,932) - (223,896)
Less cost of shares held in treasury;
687,500 shares as of June 30, 1998............ - (368,925) 368,925(1) -
------------- ------------- ------------- -------------
Total stockholders' equity........................ 61,502,926 7,010,595 - 68,513,521
------------- ------------- ------------- -------------
Total liabilities and stockholders' equity........ $ 74,333,779 $ 29,023,654 $ - $ 103,357,433
============= ============= ============= =============
See accompanying notes to pro forma financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Pro Forma Combined Consolidated Statement of Operations
For the Six Months Ending June 30, 1998
Historical Pro Forma Pro Forma
-----------------------------------------
Hagler Bailly PHB Adjustments Combined
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................. $ 50,043,272 $ 33,094,798 $ $ 83,138,070
Other revenues...................................... 2,454,237 - - 2,454,237
---------------------------------------------------------------------------
Total revenues......................................... 52,497,509 33,094,798 - 85,592,307
Cost of services....................................... 40,156,548 21,525,038 - 61,681,586
---------------------------------------------------------------------------
Gross profit........................................... 12,340,961 11,569,760 - 23,910,721
Merger and related costs............................... 1,362,930 356,000 - 1,718,930
Selling, general and administrative expenses........... 5,758,265 5,634,598 - 11,392,863
Stock and stock option compensation.................... - 2,595,200 - 2,595,200
---------------------------------------------------------------------------
Income from operations................................. 5,219,766 2,983,962 - 8,203,728
Other income (expense), net......................... 117,348 (195,894) - (78,546)
---------------------------------------------------------------------------
Income before income tax expense....................... 5,337,114 2,788,068 - 8,125,182
Income tax expense..................................... 2,081,319 2,213,130 - 4,294,449
---------------------------------------------------------------------------
Net income............................................. $ 3,255,795 $ 574,938 $ - $ 3,830,733
===========================================================================
===========================================================================
Net income per share (2)
Basic .............................................. $ 0.36 $ 0.11 $ - $ 0.25
Diluted............................................. $ 0.33 $ 0.11 $ - $ 0.23
Weighted average shares outstanding:
Basic............................................... 9,028,838 5,189,111 15,598,821
Diluted............................................. 9,844,817 5,189,111 16,414,800
See accompanying notes to pro forma financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Pro Forma Combined Consolidated Statement of Operations
For the Six Months Ending June 30, 1997
Historical Pro Forma Pro Forma
----------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................... $ 45,459,241 $ 31,764,708 $ - $ 77,223,949
Other revenues........................................ 785,521 - - 785,521
---------------------------------------------------------------------------
Total revenues........................................... 46,244,762 31,764,708 - 78,009,470
Cost of services......................................... 35,015,935 24,185,297 - 59,201,232
---------------------------------------------------------------------------
Gross profit............................................. 11,228,827 7,579,411 - 18,808,238
Merger and related costs................................. - - - -
Selling, general and administrative expenses............. 5,490,660 6,315,643 - 11,806,303
Stock and stock option compensation...................... 64,869 - - 64,869
---------------------------------------------------------------------------
Income from operations................................... 5,673,298 1,263,768 - 6,937,066
Other income (expense), net.............................. (446,804) (179,305) - (626,109)
---------------------------------------------------------------------------
Income before income tax expense......................... 5,226,494 1,084,463 - 6,310,957
Income tax expense....................................... 2,310,560 531,924 - 2,842,484
---------------------------------------------------------------------------
Net income before extraordinary gain..................... $ 2,915,934 $ 552,539 $ - $ 3,468,473
Extraordinary gain, net of income tax expense............ 737,709 - - 737,709
---------------------------------------------------------------------------
Net income............................................... $ 3,653,643 $ 552,539 $ - $ 4,206,182
===========================================================================
Net income per share (2) Basic:
Net income before extraordinary gain................ $ 0.46 $ 0.13 $ - $ 0.29
Extraordinary gain, net of income tax expense....... 0.12 - - 0.06
Net income.......................................... 0.58 0.13 - 0.35
Diluted:
Net income before extraordinary gain................ $ 0.41 $ 0.13 $ - $ 0.27
Extraordinary gain, net of income tax expense....... 0.10 - - 0.06
Net income.......................................... 0.51 0.13 - 0.33
Weighted average shares outstanding:
Basic................................................. 6,342,627 4,374,056 11,880,661
Diluted............................................... 7,138,113 4,374,056 12,676,147
See accompanying notes to pro forma financial statements
</TABLE>
<PAGE>
Hagler Bailly, Inc.
Notes to Pro Forma Financial Statements
1. Unaudited Pro Forma Condensed Consolidated Balance Sheet
Common stock as been adjusted to reflect the exchange rate of the actual
merger (5,172,500 shares of PHB common stock for 6,548,953 shares of Hagler
Bailly common stock, or approximately 1.27). Adjustments to additional
paid-in-capital are limited to that necessary to offset the adjustments to the
par value of common stock.
2. Unaudited Pro Forma Condensed Consolidated Statement of Operations
Pro forma net income per share is computed by dividing pro forma net income
by the sum of Hagler Bailly's historical weighted average shares outstanding and
PHB's historical weighted average shares outstanding after the merger conversion
ratio of approximately 1.27 Hagler Bailly shares for each share of PHB.
<PAGE>
Item 5. Other Events - Optional Pro Forma Combined Consolidated
Statements of Operations
Basis of Presentation
The following unaudited optional pro forma combined consolidated statements
of operations were prepared by management to reflect the business combination
between the Company and PHB accounted for on a pooling-of-interests basis. These
statements are presented as if the merger occurred on January 1, 1997, and are
based on, and should be read in conjunction with, the respective historical
consolidated financial statements and notes thereto of the Company and PHB,
which are included or incorporated by reference in this Current Report 8-K.
For the purposes of the preparation of the unaudited optional pro forma
combined consolidated statements of operations, no estimate is used for
subcontract work between the Company and PHB prior to the merger because it was
deemed to be immaterial.
These pro forma statements have been prepared by the Company's management
and are presented for illustrative purposes only. They are not necessarily
indicative of the operating results or financial position that would have been
achieved had the merger been consummated as of the beginning of the periods
presented, nor are they necessarily indicative of the future operating results
of the Company. The financial information does not give effect to any cost
savings that may result from the integration of the Company's and PHB's
operations.
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending March 31, 1997
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................. $ 21,102,753 $ 16,021,616 $ - $ 37,124,369
Other revenues...................................... 242,811 - - 242,811
------------------------------------------------------------------------
Total revenues......................................... 21,345,564 16,021,616 - 37,367,180
Cost of services....................................... 16,402,747 12,281,079 - 28,683,826
------------------------------------------------------------------------
Gross profit........................................... 4,942,817 3,740,537 - 8,683,354
Merger and related costs............................... - - - -
Selling, general and administrative expenses........... 2,513,868 3,018,578 - 5,532,446
Stock and stock option compensation.................... 64,869 - - 64,869
------------------------------------------------------------------------
Income from operations................................. 2,364,080 721,959 - 3,086,039
Other expense....................................... (294,318) (46,311) - (340,629)
------------------------------------------------------------------------
Income before income tax expense....................... 2,069,762 675,648 - 2,745,410
Income tax expense..................................... 804,036 320,796 - 1,124,832
------------------------------------------------------------------------
Net income............................................. $ 1,265,726 $ 354,852 $ - $ 1,620,578
========================================================================
Net income per share (1)
Basic............................................... $ 0.21 $ 0.09 $ - $ 0.14
Diluted............................................. $ 0.17 $ 0.09 $ - $ 0.13
Weighted average shares outstanding:
Basic............................................... 6,139,296 4,160,950 11,407,516
Diluted............................................. 7,247,396 4,160,950 12,515,616
See accompanying notes to optional unaudited pro forma condensed consolidated statements of operations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending June 30, 1997
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues.............................. $ 24,356,488 $ 15,743,092 $ $ 40,099,580
Other revenues................................... 542,710 - - 542,710
------------------------------------------------------------------------
Total revenues...................................... 24,899,198 15,743,092 - 40,642,290
Cost of services.................................... 18,613,188 11,904,218 - 30,517,406
------------------------------------------------------------------------
Gross profit........................................ 6,286,010 3,838,874 - 10,124,884
Merger and related costs............................ - - - -
Selling, general and administrative expenses........ 2,976,792 3,297,065 - 6,273,857
Stock and stock option compensation................. - - - -
------------------------------------------------------------------------
Income from operations.............................. 3,309,218 541,809 - 3,851,027
Other expense..................................... (152,486) (132,994) - (285,480)
------------------------------------------------------------------------
Income before income tax expense.................... 3,156,732 408,815 - 3,565,547
Income tax expense.................................. 1,506,524 211,128 - 1,717,652
------------------------------------------------------------------------
Net income before extraordinary gain................ 1,650,208 197,687 - 1,847,895
Extraordinary gain, net of income tax expense....... 737,709 - - 737,709
------------------------------------------------------------------------
Net income.......................................... $ 2,387,917 $ 197,687 $ - $ 2,585,604
========================================================================
Net income per share (1) Basic:
Net income before extraordinary gain........... $ 0.25 $ 0.05 $ - $ 0.15
Extraordinary gain............................. $ 0.11 $ - $ - $ 0.06
Net income..................................... $ 0.36 $ 0.05 $ - $ 0.21
Diluted:
Net income before extraordinary gain........... $ 0.23 $ 0.05 $ - $ 0.14
Extraordinary gain............................. $ 0.10 $ - $ - $ 0.06
Net income..................................... $ 0.33 $ 0.05 $ - $ 0.20
Weighted average shares outstanding:
Basic............................................ 6,550,873 4,365,611 12,078,216
Diluted.......................................... 7,236,602 4,365,611 12,763,945
See accompanying notes to optional unaudited pro forma condensed consolidated statements of operations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending September 30, 1997
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................ $ 26,106,068 $ 16,335,332 $ - $ 42,441,400
Other revenues.................................... 910,954 - - 910,954
--------------------------------------------------------------------------
Total revenues........................................ 27,017,022 16,335,332 - 43,352,354
Cost of services...................................... 20,852,476 12,593,503 - 33,445,979
--------------------------------------------------------------------------
Gross profit.......................................... 6,164,546 3,741,829 - 9,906,375
Merger and related costs............................. - - - -
Selling, general and administrative expenses.......... 3,383,911 3,406,684 - 6,790,595
Stock and stock option compensation................... - - - -
--------------------------------------------------------------------------
Income from operations................................ 2,780,635 335,145 - 3,115,780
Other income (expense), net......................... 270,049 (53,016) - 217,033
--------------------------------------------------------------------------
Income before income tax expense...................... 3,050,684 282,129 - 3,332,813
Income tax expense.................................... 991,125 159,060 - 1,150,185
--------------------------------------------------------------------------
Net income before extraordinary gain.................. 2,059,559 123,069 - 2,182,628
Extraordinary gain, net of income tax expense......... 22,943 - - 22,943
--------------------------------------------------------------------------
Net income............................................ $ 2,082,502 $ 123,069 $ - $ 2,205,571
==========================================================================
Net income per share (1) Basic:
Net income before extraordinary gain............. $ 0.23 $ 0.03 $ - $ 0.15
Extraordinary gain............................... $ - $ - $ - $ -
Net income....................................... $ 0.23 $ 0.03 $ - $ 0.15
Diluted:
Net income before extraordinary gain............. $ 0.21 $ 0.03 $ - $ 0.14
Extraordinary gain............................... $ - $ - $ - $ -
Net income....................................... $ 0.21 $ 0.03 $ - $ 0.14
Weighted average shares outstanding:
Basic.............................................. 8,955,524 4,467,167 14,611,448
Diluted............................................ 9,783,690 4,467,167 15,439,614
See accompanying notes to optional unaudited pro forma condensed consolidated statements of operations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending December 31, 1997
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................ $ 24,493,468 $ 14,707,595 $ - $ 39,201,063
Other revenues..................................... 52,497 - - 52,497
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Total revenues........................................ 24,545,965 14,707,595 - 39,253,560
Cost of services...................................... 17,238,231 10,700,212 - 27,938,443
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Gross profit.......................................... 7,307,734 4,007,383 - 11,315,117
Merger and related costs.............................. 1,235,000 - - 1,235,000
Liquidation of subsidiary............................. - 328,070 - 328,070
Selling, general and administrative expenses.......... 3,791,062 4,480,426 - 8,271,488
Stock and stock option compensation................... 15,000 9,884,800 - 9,899,800
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Income (loss) from operations......................... 2,266,672 (10,685,913) - (8,419,241)
Other income (expense), net........................... 50,214 (41,152) - 9,062
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Income (loss) before income tax expense............... 2,316,886 (10,727,065) - (8,410,179)
Income tax expense (benefit).......................... 1,551,690 (85,066) - 1,466,624
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Net income (loss) before extraordinary gain........... 765,196 (10,641,999) - (9,876,803)
Extraordinary gain, net of income tax expense......... 1,574,946 - - 1,574,946
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Net income (loss)..................................... $ 2,340,142 $(10,641,999) $ - $(8,301,857)
==========================================================================
Net income per share (1) Basic:
Net income (loss) before extraordinary gain...... $ 0.08 $ (2.24) $ - $ (0.66)
Extraordinary gain............................... $ 0.17 $ - $ - $ 0.10
Net income (loss)................................ $ 0.26 $ (2.24) $ - $ (0.55)
Diluted:
Net income (loss) before extraordinary gain...... $ 0.08 $ (2.24) $ - $ (0.62)
Extraordinary gain............................... $ 0.16 $ - $ - $ 0.10
Net income (loss)................................ $ 0.24 $ (2.24) $ - $ (0.52)
Weighted average shares outstanding:
Basic.............................................. 9,031,637 4,751,167 15,047,136
Diluted............................................ 9,868,310 4,751,167 15,883,809
See accompanying notes to optional unaudited pro forma condensed consolidated statements of operations.
</TABLE>
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<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending March 31, 1998
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................ $ 22,327,078 $ 15,603,875 $ $ 37,930,953
Other revenues..................................... 1,315,142 - - 1,315,142
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Total revenues........................................ 23,642,220 15,603,875 - 39,246,095
Cost of services...................................... 18,754,380 10,013,364 - 28,767,744
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Gross profit.......................................... 4,887,840 5,590,511 - 10,478,351
Merger and related costs.............................. 367,258 - - 367,258
Liquidation of subsidiary............................. - - - -
Selling, general and administrative expenses.......... 1,935,430 2,948,477 - 4,883,907
Stock and stock option compensation................... - 2,164,800 - 2,164,800
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Income from operations................................ 2,585,152 477,234 - 3,062,386
Other income (expense), net........................... 34,289 (81,931) - (47,642)
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Income before income tax expense...................... 2,619,441 395,303 - 3,014,744
Income tax expense.................................... 1,021,426 1,052,263 - 2,073,689
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Net income (loss)..................................... $ 1,598,015 $ (656,960) $ - $ 941,055
==========================================================================
Net income (loss) per share (1)
Basic.............................................. $ 0.18 $ (0.13) $ - $ 0.06
Diluted............................................ $ 0.16 $ (0.13) $ - $ 0.06
Weighted average shares outstanding:
Basic.............................................. 9,053,394 5,174,722 15,605,160
Diluted............................................ 9,864,801 5,174,722 16,416,567
See accompanying notes to optional unaudited pro forma condensed consolidated statements of operations.
</TABLE>
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<TABLE>
<CAPTION>
Hagler Bailly, Inc.
Optional Pro Forma Combined Consolidated Statement of Operations
For the Quarter Ending June 30, 1998
Historical Pro Forma Pro Forma
--------------------------------------- Adjustments Combined
Hagler Bailly PHB
<S> <C> <C> <C> <C>
Revenues:
Consulting revenues................................ $ 27,716,194 $ 17,490,923 $ - $ 45,207,117
Other revenues..................................... 1,139,095 - - 1,139,095
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Total revenues........................................ 28,855,289 17,490,923 - 46,346,212
Cost of services...................................... 21,402,167 11,511,674 - 32,913,841
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Gross profit.......................................... 7,453,122 5,979,249 - 13,432,371
Merger and related costs.............................. 995,672 356,000 - 1,351,672
Liquidation of subsidiary............................. - - - -
Selling, general and administrative expenses.......... 3,822,835 2,686,121 - 6,508,956
Stock and stock option compensation................... - 430,400 - 430,400
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Income from operations................................ 2,634,615 2,506,728 - 5,141,343
Other income (expense), net........................... 83,059 (113,963) - (30,904)
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Income before income tax expense...................... 2,717,674 2,392,765 - 5,110,439
Income tax expense.................................... 1,059,893 1,160,867 - 2,220,760
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Net income............................................ $ 1,657,781 $ 1,231,898 $ - $ 2,889,679
==========================================================================
Net income per share (1)
Basic.............................................. $ 0.18 $ 0.24 $ - $ 0.18
Diluted............................................ $ 0.17 $ 0.24 $ - $ 0.17
Weighted average shares outstanding:
Basic.............................................. 9,188,013 5,204,500 15,777,482
Diluted............................................ 10,029,667 5,204,500 16,619,136
See accompanying notes to optional unaudited pro forma condensed consolidated statement of operations.
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Hagler Bailly, Inc.
Notes to Optional Pro Forma Combined Consolidated
Statements of Operations
1. Optional Unaudited Pro Forma Condensed Consolidated Statements of Operation
Pro forma net income per share is computed by dividing pro forma net income
by the sum of the Company's historical weighted average shares outstanding and
PHB's historical weighted average shares outstanding after the merger conversion
ratio of approximately 1.27 Hagler Bailly shares for each share of PHB.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
HAGLER BAILLY, INC.
(Registrant)
Date: November 13, 1998 By: /s/ Glenn J. Dozier
------------------------
Glenn J. Dozier
Chief Financial Officer
