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
Date of Report (Date of earliest event reported): May 27, 1998
ICON CMT CORP.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-23477 13-3603128
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
1200 Harbor Boulevard, Weehawken, New Jersey 07087
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 601-2000
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
This Amendment No. 1 to the Report on Form 8-K is being filed to provide
the financial statements and financial information required by Item 7.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Provided herein on pages F-1 through F-11 are the financial statements
of Frontier Media Group, Inc., a Pennsylvania corporation ("Frontier").
(b) Pro Forma Financial Information.
Pro Forma financial information relative to Frontier is provided herein
on pages F-12 through F-25.
(c) Exhibits.
Exhibit
No. Description
------- -----------
*2.1 Agreement and Plan of Reorganization, dated as of May 20,
1998, among the Company and each of the stockholders of
Frontier Media Group, Inc.
*4.1 Form of Registration Rights Agreement, dated as of May 27,
1998, among the Company and each of the stockholders of
Frontier Media Group, Inc.
- --------------
* Previously filed.
-2-
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 10, 1998
ICON CMT CORP.
By: /s/ Kenneth J. Hall
-------------------------------
Kenneth J. Hall
Senior Vice President, Chief
Financial Officer
and Treasurer
-3-
<PAGE>
Frontier Media Group, Inc.
Financial Statements
Years ended December 31, 1997 and 1996
Contents
Report of Independent Auditors...........................................F-2
Audited Financial Statements
Balance Sheets...........................................................F-3
Statements of Income.....................................................F-4
Statements of Stockholders' Equity.......................................F-5
Statements of Cash Flows.................................................F-6
Notes to Financial Statements............................................F-7
F-1
<PAGE>
Report of Independent Auditors
The Stockholders
Frontier Media Group, Inc.
We have audited the accompanying balance sheets of Frontier Media Group, Inc. as
of December 31, 1997 and 1996, and the related statements of income,
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Frontier Media Group, Inc. at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
Philadelphia, Pennsylvania /s/ Ernst & Young LLP
February 14, 1998
F-2
<PAGE>
Frontier Media Group, Inc.
Balance Sheets
<TABLE>
<CAPTION>
December 31,
1997 1996
----------------- ------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $397,674 $206,726
Accounts receivable (net of allowance of $5,000
in 1997 and 1996) 960,657 732,031
Unbilled services 138,320 81,334
Prepaid expenses 52,509 -
----------------- ------------------
Total current assets 1,549,160 1,020,091
Property and equipment, at cost:
Furniture and fixtures 14,163 14,163
Equipment 419,054 324,533
Capital leases 130,011 130,011
----------------- ------------------
563,228 468,707
Accumulated depreciation 412,743 233,979
----------------- ------------------
150,485 234,728
Other assets 23,646 9,247
----------------- ------------------
Total assets $1,723,291 $1,264,066
================= ==================
Liabilities and stockholders' equity Current liabilities:
Accounts payable $183,462 $119,223
Accrued expenses 159,783 123,922
Billings in excess of revenues earned 537,056 313,994
Customer deposits 57,470 -
Distributions payable 201,111 104,360
Notes payable - stockholders - 100,000
Current maturities of obligations under capital leases 20,911 27,330
----------------- ------------------
Total current liabilities 1,159,793 788,829
Notes payable - stockholders - -
Obligations under capital leases 1,957 26,016
Deferred rent - 9,422
Deferred compensation 5,152 -
Stockholders' equity:
Common stock, No par value:
Authorized shares - 10,000,000
Issued and outstanding shares - 2,800,000 7,000 7,000
Additional paid-in capital 28,708 28,708
Retained earnings 520,681 404,091
----------------- ------------------
Total stockholders' equity 556,389 439,799
----------------- ------------------
Total liabilities and stockholders' equity $1,723,291 $1,264,066
================= ==================
</TABLE>
See accompanying notes.
F-3
<PAGE>
Frontier Media Group, Inc.
Statements of Income
<TABLE>
<CAPTION>
Year ended December 31,
1997 1996
----------------------- -----------------------
<S> <C> <C>
Net contract revenues $5,344,041 $4,596,162
Cost of sales 2,918,229 2,370,646
----------------------- -----------------------
2,425,812 2,225,516
Costs and expenses:
Marketing and selling 1,050,443 680,317
General and administrative 947,116 671,794
----------------------- -----------------------
428,253 873,405
Other income (expense):
Interest income 16,828 18,588
Interest expense (14,019) (17,683)
----------------------- -----------------------
Net income $431,062 $874,310
======================= =======================
Earnings per common share $.15 $.31
======================= =======================
Weighted average common shares outstanding 2,800,000 2,800,000
======================= =======================
</TABLE>
See accompanying notes.
F-4
<PAGE>
Frontier Media Group, Inc.
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Additional Retained
Common Paid-in Earnings Stockholders'
Stock Capital (Deficit) Equity
------------- ------------- -------------- -------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $7,000 $28,708 $(6,743) $28,965
Net income 874,310 874,310
Distributions to stockholders ($.166 per share of
common stock) (463,476) (463,476)
------------- ------------- -------------- -------------------
Balance at December 31, 1996 7,000 28,708 404,091 439,799
Net income 431,062 431,062
Distributions to stockholders ($.112 per share of
common stock) (314,472) (314,472)
------------- ------------- -------------- -------------------
Balance at December 31, 1997 $7,000 $28,708 $520,681 $556,389
============= ============= ============== ===================
</TABLE>
See accompanying notes.
F-5
<PAGE>
Frontier Media Group, Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31,
1997 1996
--------------------- ---------------------
<S> <C> <C>
Operating activities
Net income $ 431,062 $ 874,310
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 178,764 126,406
Changes in assets and liabilities:
Accounts receivable (228,626) (471,521)
Unbilled services (56,986) (19,002)
Prepaid expenses (52,509) -
Other assets (14,399) -
Accounts payable 64,239 (40,765)
Accrued expenses 31,750 57,691
Billings in excess of revenues earned 223,062 112,798
Customer deposits 57,470 (37,127)
Deferred expenses (4,270) 1,127
--------------------- ---------------------
Net cash provided by operating activities 629,557 603,917
Investing activities
Purchase of property and equipment (94,521) (230,532)
Financing activities
Principal payments under capital lease obligations (26,367) (32,613)
Principal payments on notes payables - stockholders (100,000) -
Distributions to stockholders (217,721) (359,116)
--------------------- ---------------------
Net cash used in financing activities (344,088) (391,729)
--------------------- ---------------------
Net increase (decrease) in cash and cash equivalents 190,948 (18,344)
Cash and cash equivalents at beginning of year 206,726 225,070
--------------------- ---------------------
Cash and cash equivalents at end of year $ 397,674 $ 206,726
Supplemental disclosures of cash flow information
Cash paid during the year for interest $ 14,019 $ 17,683
===================== =====================
Capital lease obligations incurred $ - $ 48,870
===================== =====================
</TABLE>
See accompanying notes.
F-6
<PAGE>
Frontier Media Group, Inc.
Notes to Financial Statements
December 31, 1997
1. Business
Frontier Media Group, Inc. is an interactive marketing company that combines
strategic planning, creative development, and technical implementation to help
their clients establish, grow, and nurture relationships with customers,
associates, and business partners worldwide. With a particular expertise in the
pharmaceutical industry, Frontier holds a national leadership position in the
pharmaceutical industry, working with 10 of the top 10 manufacturers. In
addition, Frontier has a growing presence in the financial services industry.
Frontier's deliverables include internet, intranet, extranet, e-commerce,
CD-ROMs, and touchscreen kiosks programs.
2. Accounting Policies
Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents.
Revenue Recognition
Revenue from professional services is principally recognized at the time the
services are performed on a percentage-of-completion basis, as measured by the
percentage of cost incurred to date to estimated total cost for each contract.
Billings are in accordance with the terms of the applicable contracts which may
not directly relate to the performance of services. The current asset unbilled
services represents revenues recognized in excess of amounts billed. Billings in
excess of revenues earned are reported as a current liability.
Revenues from cost-plus-fee contracts are recognized on the basis of costs
incurred during the period plus the fee earned.
Property and Equipment
Property and equipment is recorded at cost. Depreciation is computed using
accelerated methods over the estimated useful lives of the related assets which
range from three to seven years.
F-7
<PAGE>
Frontier Media Group, Inc.
Notes to Financial Statements (continued)
2. Accounting Policies (continued)
Income Taxes
The stockholders of the Company have elected to be taxed as an S Corporation for
both federal and state income tax purposes. Accordingly, there has been no
provision made for income taxes as the liability for such taxes, if any, is the
responsibility of the individual stockholders. It is the intention of the
Company to distribute sufficient amounts for the stockholders to at least pay
income taxes on their share of allocable taxable income.
Earnings Per Share
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, Earnings Per Share ("SFAS No. 128"), which
replaced the calculation of primary and fully-diluted earnings per share with
basic and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effect of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully-diluted earnings per share. All earnings per share
amounts for all periods have been presented to conform to SFAS No. 128
requirements.
Basic and diluted earnings per share amounts were the same in 1997 and 1996
because there were no dilutive securities outstanding.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The carrying amount of accounts receivable, accounts payable and capital leases
approximate their fair values due to the relatively short maturities of these
instruments.
3. Related Party Transactions
Notes payable - stockholders at December 31, 1996 consisted of notes payable of
$75,000 at 10% and $25,000 at 6% due to the Company's stockholders. The notes
were repaid during 1997. Interest paid on these notes was approximately $6,000
and $9,000 in 1997 and 1996, respectively.
F-8
<PAGE>
Frontier Media Group, Inc.
Notes to Financial Statements (continued)
3. Related Party Transactions (continued)
The Company intends to pay annual tax distributions to stockholders based upon
their proportionate share of taxable income multiplied by the highest effective
tax rate. The Company recorded distributions of $314,472 and $463,476 in 1997
and 1996, respectively.
4. Line of Credit
The Company has a $600,000 line of credit facility expiring on May 30, 1998.
There were no amounts outstanding on the line at December 31, 1997. The line is
limited to 75% of all qualified receivables as defined by the bank. The line is
secured by substantially all assets of the Company and bears interest at the
prime rate, as defined, plus .25%. The commitment fee on the line is .125% on
the unused portion of the facility.
5. Commitments
The Company occupies its corporate headquarters and various office equipment
under operating leases. Rental expense under these agreements amounted to
$100,000 and $92,000 in 1997 and 1996, respectively.
During 1997, the Company entered into a new operating lease for its corporate
headquarters to be occupied in February 1998. These lease payments start at
$10,981 per month and increase 3% per year expiring in February 2004.
The Company is the lessee of $130,011 of equipment under capital leases expiring
during the next three years. The equipment is recorded at the present value of
minimum lease payments and amortized over its estimated productive life.
Accumulated amortization for assets under capital leases is $111,894 and $78,140
for 1997 and 1996, respectively. Amortization of the assets under capital leases
is included in depreciation expense.
F-9
<PAGE>
Frontier Media Group, Inc.
Notes to Financial Statements (continued)
5. Commitments (continued)
Future minimum lease payments by year under capital leases and noncancelable
operating leases are as follows:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
-------------------------------------
<S> <C> <C>
1998 $ 22,900 $ 138,150
1999 1,998 145,083
2000 - 145,917
2001 - 143,645
2002 - 147,953
Thereafter - 165,121
-------------------------------------
Total minimum lease payments 24,898 $ 885,869
===================
Less amount representing interest 2,030
------------------
Present value of net minimum lease payments 22,868
Less current portion of obligations under capital leases 20,911
------------------
Obligations under capital leases, less current maturities $ 1,957
==================
</TABLE>
6. Significant Customers
The Company had contract revenues from 3 major customers, each representing at
least 10% of revenue, totaling 35% of 1997 revenues. The Company had contract
revenues from 5 major customers, each representing at least 10% of revenue,
totaling 61% of 1996 revenues.
7. Employee Savings Plan
In 1997, the Company adopted a defined contribution 401(k) employee savings plan
covering all full-time eligible employees, as defined in the Plan. The Company's
matching contribution may vary from year to year. For the year ended December
31, 1997, the Company matched 25% of the first 7.5% contributed by each
participating employee. The employee savings plan cost recognized as expense for
the year ended December 31, 1997 was approximately $9,500.
F-10
<PAGE>
Frontier Media Group, Inc.
Notes to Financial Statements (continued)
8. Deferred Compensation Plan
Effective January 1, 1997, the Company implemented a Performance Incentive Plan
("the Plan") which provides for certain employees of the Company to participate
in the Company's earnings, as defined. Participants will be granted performance
units, at the discretion of the Board of Directors, which will vest 33% per year
beginning in year 3. The payment of benefits to the participants will be 20% per
year upon full vesting. Deferred compensation expense recognized under the Plan
was $5,152 during 1997.
9. Unaudited Event Subsequent to Date of Independent Auditors' Report
On May 27, 1998, the Company was acquired by Icon CMT Corp. in a transaction in
which the Company's stockholders exchanged all of the Company's outstanding
common stock for 728,325 shares of common stock of Icon CMT Corp. The Company is
now a wholly-owned subsidiary of Icon CMT Corp.
F-11
<PAGE>
Icon CMT Corp. and
Frontier Media Group, Inc.
Pro Forma Condensed Financial Statements
Contents
Balance Sheets.............................................................F-13
Statements of Operations...................................................F-16
Statements of Cash Flows...................................................F-20
F-12
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED BALANCE SHEET
As of December 31, 1996
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Adjustments Pro
CMT Corp. Group, Inc. Note (1) Forma
----------- --------- ------------- -------------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 515 $ 207 $ 722
Accounts receivable, net 7,348 732 8,080
Other current assets 1,625 81 1,706
----------- ---------- ------------- -------------
Total current assets 9,488 1,020 - 10,508
Fixed assets, net 3,721 235 3,956
Other assets 83 9 92
----------- ---------- ------------- -------------
Total assets $ 13,292 $ 1,264 - $ 14,556
=========== ========== ============= =============
Liabilities, Mandatorily Redeemable Convertible
Preferred Stock and Stockholders Equity (Deficit):
Current liabilities:
Accounts payable $ 6,689 $ 119 $ 6,808
Other current liabilities 2,505 570 3,075
Short term borrowings 2,194 100 2,294
----------- ---------- ------------- -------------
Total current liabilities 11,388 789 - 12,177
Long term liabilities 155 35 190
----------- ---------- ------------- -------------
Total liabilities 11,543 824 - 12,367
----------- ---------- ------------- -------------
Series A Convertible Preferred Stock 9,881 - 9,881
Stockholders' equity:
Common stock-- Icon CMT Corp. 7 - 1 8
Common stock-- Frontier Media Group - 7 (7) -
Additional paid-in-capital 23 29 6 58
Accretion of mandatorily redeemable preferred stock (89) - (89)
Retained earnings (accumulated deficit) (8,073) 404 (7,669)
----------- ---------- ------------- -------------
Total stockholders' equity (deficit) (8,132) 440 - (7,692)
----------- ---------- ------------- -------------
Liabilities, Mandatorily Redeemable Convertible
Preferred Stock and Stockholders Equity
(Deficit) $ 13,292 $ 1,264 $ - $ 14,556
=========== ========== ============= =============
</TABLE>
(1) The pro forma condensed balance sheet gives effect to the acquisition
by Icon CMT Corp. (the "Company") of all the outstanding capital stock
of Frontier Media Group, Inc. ("Frontier") by combining the respective
balance sheets of the companies at December 31, 1996 on a pooling of
interests basis. As shown above, the capital accounts have been
adjusted to reflect the issuance of 728,325 shares of the Company's
common stock, par value $.001 per share, in exchange for 2,800,000
shares of Frontier, no par value per share, comprising all of
Frontier's outstanding shares of common stock. The excess of the
recorded value of Frontier shares received in exchange over the par
value of the Company's shares issued has been credited to Additional
paid-in-capital.
F-13
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED BALANCE SHEET
As of December 31, 1997
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Adjustments Pro
CMT Corp. Group, Inc. Note (1) Forma
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 1,011 $ 399 $ 1,410
Accounts receivable, net 9,276 961 10,237
Other current assets 3,414 190 3,604
---------- ---------- ------------- -------------
Total current assets 13,701 1,550 - 15,251
Fixed assets, net 6,525 150 6,675
Other assets 208 23 231
---------- ---------- ------------- -------------
Total assets $ 20,434 $ 1,723 - $ 22,157
========== ========== ============= =============
Liabilities, Mandatorily Redeemable Convertible
Preferred Stock and Stockholders Equity (Deficit):
Current liabilities:
Accounts payable $ 8,941 $ 183 $ 9,124
Other current liabilities 5,217 981 6,198
--------- ---------- ------------- -------------
Total current liabilities 14,158 1,164 - 15,322
Long term liabilities - 2 2
--------- ---------- ------------- -------------
Total liabilities 14,158 1,166 - 15,324
--------- ---------- ------------- -------------
Series B Convertible Preferred Stock 16,628 - 16,628
Series A Convertible Preferred Stock 10,601 - 10,601
Stockholders' equity:
Common stock-- Icon CMT Corp. 7 - 1 8
Common stock-- Frontier Media Group - 7 (7) -
Additional paid-in-capital 498 29 6 533
Accretion of mandatorily redeemable preferred stock (388) - (388)
Retained earnings (accumulated deficit) (21,070) 521 (20,549)
---------- ---------- ------------- -------------
Total stockholders' equity (deficit) (20,953) 557 - (20,396)
--------- ---------- ------------- -------------
Liabilities, Mandatorily Redeemable Convertible
Preferred Stock and Stockholders Equity
(Deficit) $ 20,434 $ 1,723 $ - $ 22,157
========== ========== ============= =============
</TABLE>
(1) The pro forma condensed balance sheet gives effect to the acquisition
by the Company of all of the outstanding capital stock of Frontier by
combining the respective balance sheets of the companies at December
31, 1997 on a pooling of interests basis. As shown above, the capital
accounts have been adjusted to reflect the issuance of 728,325 shares
of the Company's common stock, par value $.001 per share, in exchange
for 2,800,000 shares of Frontier, no par value per share, comprising
all of Frontier's outstanding common stock. The excess of the recorded
value of Frontier shares received in exchange over the par value of
the Company's shares issued has been credited to Additional
paid-in-capital.
F-14
<PAGE>
ICON CMT CORP. AND
PRO FORMA CONDENSED BALANCE SHEET
As of March 31, 1998
(In thousands, except share amounts)
(unaudited)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Adjustments Pro
CMT Corp. Group, Inc. Note (1) Forma
----------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 29,145 $ 105 $ 29,250
Accounts receivable, net 7,310 1,090 8,400
Other current assets 3,480 246 3,726
----------- ----------- -------------- --------------
Total current assets 39,935 1,441 - 41,376
Fixed assets, net 8,247 339 8,586
Other assets 303 23 326
----------- ----------- -------------- --------------
Total assets $ 48,485 $ 1,803 - $ 50,288
=========== =========== ============== ==============
Liabilities and Stockholders Equity:
Current liabilities:
Accounts payable $ 7,756 $ 314 $ 8,070
Other current liabilities 4,342 1,173 5,515
----------- ----------- -------------- --------------
Total current liabilities 12,098 1,487 - 13,585
Long term liabilities - 141 - 141
----------- ----------- -------------- --------------
Total liabilities 12,098 1,628 - 13,726
----------- ----------- -------------- --------------
Stockholders' equity:
Common stock-- Icon CMT Corp. 15 - 1 16
Common stock-- Frontier Media Group - 7 (7) -
Additional paid-in-capital 61,725 29 6 61,760
Retained earnings (accumulated deficit) (25,353) 139 - (25,214)
----------- ----------- -------------- --------------
Total stockholders' equity 36,387 175 - 36,562
----------- ----------- -------------- --------------
Liabilities and Stockholders Equity $ 48,485 $ 1,803 $ - $ 50,288
=========== =========== ============== ==============
</TABLE>
(1) The pro forma condensed balance sheet gives effect to the acquisition
by the Company of all of the outstanding capital stock of Frontier by
combining the respective balance sheets of the companies at March 31,
1998 on a pooling of interests basis. As shown above, the capital
accounts have been adjusted to reflect the issuance of 728,325 shares
of the Company's common stock, par value $.001 per share, in exchange
for 2,800,000 shares of Frontier, no par value per share, comprising
all of Frontier's outstanding common stock. The excess of the recorded
value of Frontier shares received in exchange over the par value of
the Company's shares issued has been credited to Additional
paid-in-capital.
F-15
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------- -------------- --------------- ---------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues, net:
Services:
Professional $ 4,599 $ 1,991 $ 6,590
Communications 189 - 189
------------ -------------- --------------- ---------------
Total services revenues 4,788 1,991 - 6,779
------------- -------------- --------------- ---------------
Products 21,424 - 21,424
------------- -------------- --------------- ---------------
Total revenues, net 26,212 1,991 - 28,203
------------- -------------- --------------- ---------------
Cost of revenues:
Services 2,596 1,202 3,798
Products 17,653 - 17,653
------------- -------------- --------------- ---------------
Total costs of revenues 20,249 1,202 - 21,451
Gross Profit 5,963 789 - 6,752
------------- -------------- --------------- ---------------
Operating expenses 6,524 773 - 7,297
------------- -------------- --------------- ---------------
Income (loss) from operations (561) 16 - (545)
Other income (expense), net (62) (13) (75)
------------- -------------- --------------- ---------------
Income (loss) before income taxes (623) 3 - (620)
Benefit for income taxes (183) - (183)
------------- -------------- --------------- ---------------
Net income (loss) $ (440) $ 3 - $ (437)
============= ============== =============== ===============
Basic and diluted income (loss)
per share (Note (1)) $ (0.07) $ 0.01 $ 0.00 $ (0.06)
============= ============== =============== ===============
Weighted average shares outstanding
used for basic and diluted income (loss)
per share 6,545 2,800 (2,072) 7,273
============= ============== =============== ===============
</TABLE>
(1) Net income per share amounts are based on the weighted average number
of common shares of the respective companies outstanding during each
period. Outstanding shares of Frontier have been adjusted to reflect
the number of shares of the Company received by the stockholders of
Frontier as if the exchange of common stock of the Company had
occurred as of the beginning of the period.
F-16
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues, net:
Services:
Professional $ 7,099 $ 4,596 $ 11,695
Communications 1,268 - 1,268
------------ -------------- --------------- ---------------
Total services revenues 8,367 4,596 - 12,963
------------- -------------- --------------- ---------------
Products 29,741 - 29,741
------------- -------------- --------------- ---------------
Total revenues, net 38,108 4,596 - 42,704
------------- -------------- --------------- ---------------
Cost of revenues:
Services 6,842 2,371 9,213
Products 24,607 - 24,607
------------- -------------- --------------- ---------------
Total costs of revenues 31,449 2,371 - 33,820
Gross Profit 6,659 2,225 - 8,884
------------- -------------- --------------- ---------------
Operating expenses 14,939 1,352 - 16,291
------------- -------------- --------------- ---------------
Income (loss) from operations (8,280) 873 - (7,407)
Other income (expense), net 32 1 33
------------- -------------- --------------- ---------------
Income (loss) before income taxes (8,248) 874 - (7,374)
Benefit for income taxes (210) - (210)
------------- -------------- --------------- ---------------
Net income (loss) $ (8,038) $ 874 - $ (7,164)
============= ============== =============== ===============
Basic and diluted income (loss)
per share (Note (1)) $ (1.31) $ 0.31 $ (0.06) $ (1.06)
============= ============== =============== ===============
Weighted average shares outstanding used for
basic and diluted income (loss) per share 6,545 2,800 (2,072) 7,273
============= ============== =============== ===============
</TABLE>
(1) Net income per share amounts are based on the weighted average number
of common shares of the respective companies outstanding during each
period. Outstanding shares of Frontier have been adjusted to reflect
the number of shares of the Company received by the stockholders of
Frontier as if the exchange of common stock of the Company had
occurred as of the beginning of the period.
F-17
<PAGE>
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1997
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues, net:
Services:
Professional $ 17,229 $ 5,344 $ 22,573
Communications 5,979 - 5,979
------------- -------------- --------------- ---------------
Total services revenues 23,208 5,344 - 28,552
------------- -------------- --------------- ---------------
Products 23,769 - 23,769
------------- -------------- --------------- ---------------
Total revenues, net 46,977 5,344 - 52,321
------------- -------------- --------------- ---------------
Cost of revenues:
Services 17,001 2,918 19,919
Products 19,401 - 19,401
------------- -------------- --------------- ---------------
Total costs of revenues 36,402 2,918 - 39,320
Gross Profit 10,575 2,426 - 13,001
------------- -------------- --------------- ---------------
Operating expenses 23,048 1,998 - 25,046
------------- -------------- --------------- ---------------
Income (loss) from operations (12,473) 428 - (12,045)
Other income (expense), net (268) 3 (265)
------------- -------------- --------------- ---------------
Income (loss) before income taxes (12,741) 431 - (12,310)
Provision for income taxes 256 - 256
------------- -------------- --------------- ---------------
Net income (loss) $ (12,997) $ 431 - $ (12,566)
============= ============== =============== ===============
Basic and diluted income (loss)
per share (Note (1)) $ (2.17) $ 0.15 $ 0.12 $ (1.90)
============= ============== =============== ===============
Weighted average shares outstanding used for
basic and diluted income (loss) per share 6,545 2,800 (2,072) 7,273
============= ============== =============== ===============
</TABLE>
(1) Net income per share amounts are based on the weighted average number
of common shares of the respective companies outstanding during each
period. Outstanding shares of Frontier have been adjusted to reflect
the number of shares of the Company received by the stockholders of
Frontier as if the exchange of common stock of the Company had
occurred as of the beginning of the period.
F-18
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the three months ended March 31, 1997
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues, net:
Services:
Professional $ 3,284 $ 1,131 $ 4,415
Communications 938 - 938
------------- -------------- --------------- ---------------
Total services revenues 4,222 1,131 - 5,353
------------- -------------- --------------- ---------------
Products 4,795 - 4,795
------------- -------------- --------------- ---------------
Total revenues, net 9,017 1,131 - 10,148
------------- -------------- --------------- ---------------
Cost of revenues:
Services 3,137 623 3,760
Products 3,813 - 3,813
------------- -------------- --------------- ---------------
Total costs of revenues 6,950 623 - 7,573
------------- -------------- --------------- ---------------
Gross Profit 2,067 508 - 2,575
------------- -------------- --------------- ---------------
Operating expenses 4,652 491 - 5,143
------------- -------------- --------------- ---------------
Income (loss) from operations (2,585) 17 - (2,568)
Other income (expense), net (109) (2) (111)
------------- -------------- --------------- ---------------
Income (loss) before income taxes (2,694) 15 - (2,679)
Provision for income taxes 256 - 256
------------- -------------- --------------- ---------------
Net income (loss) $ (2,950) $ 15 - $ (2,935)
============= ============== =============== ===============
Basic and diluted income (loss)
per share (Note (1)) $ (0.47) $ 0.01 $ (0.04) $ (0.42)
============= ============== =============== ===============
Weighted average shares outstanding used for
basic and diluted income (loss) per share 6,545 2,800 (2,072) 7,273
============= ============== =============== ===============
</TABLE>
(1) Net income per share amounts are based on the weighted average number
of common shares of the respective companies outstanding during each
period. Outstanding shares of Frontier have been adjusted to reflect
the number of shares of the Company received by the stockholders of
Frontier as if the exchange of common stock of the Company had
occurred as of the beginning of the period.
F-19
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the three months ended March 31, 1998
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues, net:
Services:
Professional $ 5,847 $ 1,683 $ 7,530
Communications 2,813 - 2,813
------------- ------------- --------------- ---------------
Total services revenues 8,660 1,683 - 10,343
------------- ------------- --------------- ---------------
Products 9,056 - 9,056
------------- ------------- --------------- ---------------
Total revenues, net 17,716 1,683 - 19,399
------------- ------------- --------------- ---------------
Cost of revenues:
Services 6,241 985 7,226
Products 7,986 - 7,986
------------- ------------- --------------- ---------------
Total costs of revenues 14,227 985 - 15,212
------------- ------------- --------------- ---------------
Gross Profit 3,489 698 - 4,187
------------- ------------- --------------- ---------------
Operating Expenses 7,899 972 - 8,871
------------- ------------- --------------- ---------------
Loss from operations (4,410) (274) - (4,684)
Other income (expense), net 127 3 130
------------- ------------- --------------- ---------------
Loss before taxes (4,283) (271) - (4,554)
Provision for income taxes - - -
------------- ------------- --------------- ---------------
Net Loss $ (4,283) $ (271) - $ (4,554)
============= ============= =============== ===============
Basic and diluted loss per
share (Note (1)) $ (0.41) $ (0.10) $ 0.10 $ (0.41)
============= ============= =============== ===============
Weighted average shares outstanding used for
basic and diluted loss per share 10,974 2,800 (2,072) 11,702
============= ============= =============== ===============
</TABLE>
(1) Net income per share amounts are based on the weighted average number
of common shares of the respective companies outstanding during each
period. Outstanding shares of Frontier have been adjusted to reflect
the number of shares of the Company received by the stockholders of
Frontier as if the exchange of common stock of the Company had
occurred as of the beginning of the period.
F-20
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT CASH FLOWS
For the year ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------ ------------ --------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (440) $ 3 $ (437)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 228 50 278
Stock option compensation 133 - 133
Deferred income taxes, net (198) - (198)
Changes in assets and liabilities, net (1,035) 200 (835)
------------ ------------ --------------- ---------------
Net cash provided by (used in) operating activities (1,312) 253 - (1,059)
------------ ------------ --------------- ---------------
Cash flows from investing activities:
Capital expenditures (1,000) (22) (1,022)
------------ ------------ --------------- ---------------
Net cash used in investing activities (1,000) (22) - (1,022)
------------ ------------ --------------- ---------------
Cash flows from financing activities:
Proceeds from the issuance of short-term notes 3,000 - 3,000
Loans to stockholders (150) - (150)
Principal payments under capital lease obligations - (24) (24)
Distributions to stockholders - (21) (21)
------------ ------------ --------------- ---------------
Net cash provided by (used in) financing activities 2,850 (45) - 2,805
------------ ------------ --------------- ---------------
Net increase in cash 538 186 - 724
Cash and cash equivalents at beginning of period 82 39 121
------------ ------------ --------------- ---------------
Cash and cash equivalents at end of period $ 620 $ 225 - $ 845
============ ============ =============== ===============
</TABLE>
F-21
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT CASH FLOWS
For the year ended December 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (8,038) $ 874 $ (7,164)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,054 126 1,180
Deferred income taxes, net (62) - (62)
Changes in assets and liabilities, net 2,059 (396) 1,663
------------ ------------ -------------- ---------------
Net cash provided by (used in) operating activities (4,987) 604 - (4,383)
------------ ------------ -------------- ---------------
Cash flows from investing activities:
Capital expenditures (3,701) (231) (3,932)
------------ ------------ -------------- ---------------
Net cash used in investing activities (3,701) (231) - (3,932)
------------ ------------ -------------- ---------------
Cash flows from financing activities:
Proceeds from the issuance of short-term notes 2,194 - 2,194
Net repayments of short-term notes (3,000) - (3,000)
Net proceeds from issuance of mandatorily redeemable
convertible preferred stock 9,389 - 9,389
Principal payments under capital lease obligations - (32) (32)
Distributions to stockholders - (359) (359)
------------ ------------ -------------- ---------------
Net cash provided by (used in) financing activities 8,583 (391) - 8,192
------------ ------------ -------------- ---------------
Net decrease in cash (105) (18) - (123)
Cash and cash equivalents at beginning of period 620 225 845
------------ ------------ -------------- ---------------
Cash and cash equivalents at end of period $ 515 $ 207 - $ 722
============ ============ ============== ===============
</TABLE>
F-22
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT CASH FLOWS
For the year ended December 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (12,997) $ 431 $ (12,566)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,191 179 2,370
Deferred income taxes, net 275 - 275
Non-cash interest expense 20 - 20
Changes in assets and liabilities, net 641 20 661
------------ ------------ -------------- ---------------
Net cash provided by (used in) operating activities (9,870) 630 - (9,240)
------------ ------------ -------------- ---------------
Cash flows from investing activities:
Capital expenditures (4,995) (94) (5,089)
Investment in joint venture (125) - (125)
------------ ------------ -------------- ---------------
Net cash used in investing activities (5,120) (94) - (5,214)
------------ ------------ -------------- ---------------
Cash flows from financing activities:
Proceeds from the issuance of short-term notes 7,750 - 7,750
Net repayments of short-term notes (7,944) (100) (8,044)
Net proceeds from issuance of mandatorily redeemable
convertible preferred stock 16,504 - 16,504
Deferred financing costs (824) - (824)
Principal payments under capital lease obligations - (26) (26)
Distributions to stockholders - (218) (218)
------------ ------------ -------------- ---------------
Net cash provided by (used in) financing activities 15,486 (344) - 15,142
------------ ------------ -------------- ---------------
Net increase in cash 496 192 - 688
Cash and cash equivalents at beginning of period 515 207 722
------------ ------------ -------------- ---------------
Cash and cash equivalents at end of period $ 1,011 $ 399 - $ 1,410
============ ============ ============== ===============
</TABLE>
F-23
<PAGE>
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT CASH FLOWS
For the three months ended March 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (2,950) $ 15 $ (2,935)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 401 39 440
Deferred income taxes, net 275 - 275
Changes in assets and liabilities, net (306) 5 (301)
------------ ------------ -------------- ---------------
Net cash provided by (used in) operating activities (2,580) 59 - (2,521)
------------ ------------ -------------- ---------------
Cash flows from investing activities:
Capital expenditures (503) (39) (542)
------------ ------------ -------------- ---------------
Net cash used in investing activities (503) (39) - (542)
------------ ------------ -------------- ---------------
Cash flows from financing activities:
Proceeds from the issuance of short-term notes 12,035 101 12,136
Net repayments of short-term notes (9,043) - (9,043)
Principal payments under capital lease obligations - (8) (8)
Distributions to stockholders - (10) (10)
------------ ------------ -------------- ---------------
Net cash provided by financing activities 2,992 83 - 3,075
------------ ------------ -------------- ---------------
Net increase (decrease) in cash (91) 103 - 12
Cash and cash equivalents at beginning of period 515 207 722
------------ ------------ -------------- ---------------
Cash and cash equivalents at end of period $ 424 $ 310 - $ 734
============ ============ ============== ===============
</TABLE>
F-24
<PAGE>
ICON CMT CORP. AND
FRONTIER MEDIA GROUP, INC.
PRO FORMA CONDENSED STATEMENT CASH FLOWS
For the three months ended March 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Frontier Consolidated
Icon Media Pro
CMT Corp. Group, Inc. Adjustments Forma
------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (4,283) $ (271) $ (4,554)
AAdjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 843 29 872
Changes in assets and liabilities, net 745 326 1,071
------------ ------------ -------------- ---------------
Net cash used in operating activities (2,695) 84 - (2,611)
------------ ------------ -------------- ---------------
Cash flows from investing activities
Capital expenditures (2,565) (59) (2,624)
------------ ------------ -------------- ---------------
Net cash used in investing activities (2,565) (59) - (2,624)
------------ ------------ -------------- ---------------
Cash flows from financing activities:
Proceeds from the issuance of short-term notes 1,772 - 1,772
Net repayments of short-term notes (2,772) - (2,772)
Net proceeds from issuance of common stock 34,394 - 34,394
Distributions to stockholders - (312) (312)
Principal payments under capital lease obligations - (7) (7)
------------ ------------ -------------- ---------------
Net cash provided by (used in) financing activities 33,394 (319) - (33,075)
------------ ------------ -------------- ---------------
Net increase (decrease) in cash 28,134 (294) - 27,840
Cash and cash equivalents at beginning of period 1,011 399 1,410
------------ ------------ -------------- ---------------
Cash and cash equivalents at end of period $ 29,145 $ 105 - $ 29,250
============ ============ ============== ===============
</TABLE>
F-25
