<PAGE>
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) November 19, 1999
-----------------------------
ADVANCED COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-13875 76-0549396
- --------------------------------------------------------------------------------
(State or other Commission File Number (IRS Employer
jurisdiction of Identification No.)
incorporation)
390 South Woods Mill Road, Suite 150, St. Louis, Missouri 63017
- --------------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 205-8668
----------------------------
(Former name or former address, if changed since last report)
<PAGE>
The undersigned registrant hereby amends its Form 8-K dated and filed on
December 6, 1999 by adding Item 7(b).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS
(b) Pro Forma Financial Information
See the Index to Financial Statements to
Financial Statements attached hereto and
incorporated herein by reference.
(c) See the Exhibit Index attached hereto and incorporated
herein by reference.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this first amendment on Form 8-K/A to its Current
Report on Form 8-K to be signed on its behalf by the undersigned hereunto
duly authorized.
ADVANCED COMMUNICATIONS GROUP, INC.
By: /s/ Michael A. Pruss
-----------------------------
Michael A. Pruss
Chief Financial Officer
Date: January 6, 2000
3
<PAGE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1 Omitted -Inapplicable
2 Omitted -Inapplicable
4 Omitted - Inapplicable
10 Omitted - Inapplicable
16 Omitted - Inapplicable
17 Omitted - Inapplicable
20 Omitted - Inapplicable
23 Omitted - Inapplicable
24 Omitted - Inapplicable
27 Omitted - Inapplicable
99 (a) Unaudited Pro Forma Combined Statements of
Operations for the Nine Months Ended September 30,
1999. p. 1
(b) Unaudited Pro Forma Combined Statements of
Operations for the Year Ended December 31, 1998.
p. 2
(c) Unaudited Pro Forma Combined Balance Sheet as of
September 30, 1999. p. 5
</TABLE>
4
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ADVANCED YPTEL WEB YP BIG STUFF PRO FORMA PRO FORMA
HISTORICAL HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues.............................. $42,337 $31,940 $ 611 $ 757 $ (703)(a) $74,942
------- ------- ------- ----- ------- -------
Operating costs:
Printing, distribution and
listings.......................... 11,946 7,501 -- -- $ (703)(a) 18,744
Sales and marketing................. 9,755 6,325 2,562 653 19,295
General and administrative.......... 15,386 11,330 1,036 334 28,086
Depreciation and amortization....... 3,522 1,838 74 143 5,135 (b) 10,712
------- ------- ------- ----- ------- -------
Total operating costs................. 40,609 26,994 3,672 1,130 4,432 76,837
------- ------- ------- ----- ------- -------
Operating margin...................... 1,728 4,946 (3,061) (373) (5,135) (1,895)
Other income (expense):
Other income and expense, net....... 1 (332) -- -- (331)
Interest expense.................... (3,517) (2,692) -- (67) 563 (c) (5,713)
------- ------- ------- ----- ------- -------
Income (loss) from continuing
operations before income taxes....... (1,788) 1,922 (3,061) (440) (4,572) (7,939)
Income tax expense (benefit).......... 612 672 -- -- (1,058)(d) 226
------- ------- ------- ----- ------- -------
Net income (loss) from continuing
operations........................... $(2,400) $ 1,250 $(3,061) $(440) $(3,514) $(8,165)
======= ======= ======= ===== ======= =======
Net income (loss) per share from
continuing operations................ $ (.12) $ (.19)
======= =======
Weighted average shares outstanding... 19,896 23,243 (e) 43,139
======= ======= =======
</TABLE>
- ------------------------
(a) Reflects the elimination of revenue and cost of sales for services provided
to Advanced by Big Stuff and Web YP.
(b) Reflects the amortization of goodwill resultant from the acquisitions over
periods ranging from
10 to 30 years, as follows:
<TABLE>
<CAPTION>
AMORTIZATION PERIOD
(IN THOUSANDS) ------------ --------
<S> <C> <C>
YPtel................................................... $2,327 30 years
Web YP.................................................. 2,034 10 years
Big Stuff............................................... 774 10 years
------
$5,135
======
</TABLE>
(c) Reflects the elimination of interest expense incurred on the $15.0 million
5% Subordinated Notes payable, which will be converted to common stock in
connection with the acquisitions.
(d) Reflects the incremental provision for federal and state income taxes at an
effective tax rate of 38% for the applicable pro forma adjustments and for
income taxes on S-corporation income.
(e) Reflects the issuance of 19,545,454 shares issued for the purchase of the
acquired companies; 2,840,909 shares issued for the conversion of the 5%
Subordinated Notes payable; and 856,364 shares issued for the conversion of
the estimated loans in the amount of $4.7 million from stockholders of Web
YP and Big Stuff.
1
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ADVANCED YPTEL WEB YP BIG STUFF PRO FORMA PRO FORMA
PRO FORMA(A) HISTORICAL(B) HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
------------- ------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues...................... $47,336 $34,408 $ 384 $ 1,648 $ (1,252)(c) $ 82,524
------- ------- ------- ------- -------- --------
Operating costs:
Printing, distribution and
listings.................. 11,307 8,165 -- -- (1,252)(c) 18,220
Sales and marketing......... 10,806 6,857 753 1,049 19,465
General and
administrative............ 19,249 12,103 1,232 257 32,841
Depreciation and
amortization.............. 4,751 662 51 301 8,893 (d) 14,658
Other compensation.......... 1,760 1,381 -- -- 3,141 (h)
------- ------- ------- ------- -------- --------
Total operating costs......... 47,873 29,168 2,036 1,607 7,641 88,325
------- ------- ------- ------- -------- --------
Operating margin.............. (537) 5,240 (1,652) 41 (8,893) (5,801)
Other income (expense):
Other income and expense,
net....................... 190 495 -- -- 685
Interest expense............ (1,955) (568) -- (60) (2,156)(e) (4,739)
------- ------- ------- ------- -------- --------
Income (loss) from continuing
operations before income
taxes........................ (2,302) 5,167 (1,652) (19) (11,049) (9,855)
Income tax expense
(benefit).................... 670 -- -- -- 724 (f) 1,394
------- ------- ------- ------- -------- --------
Net income (loss) from
continuing operations........ $(2,972) $ 5,167 $(1,652) $ (19) $(11,773) $(11,249)
======= ======= ======= ======= ======== ========
Net income (loss) per share
from continuing operations... $ (0.15) $ (0.26)
======= ========
Weighted average shares
outstanding.................. 19,646 23,243 (g) 42,889
======= ======== ========
</TABLE>
- ------------------------
(a) Advanced acquired Great Western on February 18, 1998. The pro forma results
of Advanced were prepared as if the acquisition occured on January 1, 1998.
As a result, revenue of $9.2 million and net income of $.3 million of Great
Western for the period January 1, 1998 to February 18, 1998 has been
combined with the historical results of Advanced.
(b) YPtel historical results of operations for the year ended December 31, 1998
include the results of its predecessor for the period January 1, 1998
through October 31, 1998 and the results of YPtel Corporation for the period
November 1, 1998 through December 31, 1998. The results of YPtel Corporation
include the results of operations of its predecessor.
(c) Reflects the elimination of revenue and cost of sales for services provided
to Advanced by Big Stuff and Web YP.
(d) Reflects the amortization of the goodwill resultant from the acquisitions,
over periods ranging from 10 to 30 years, as follows:
<TABLE>
<CAPTION>
AMORTIZATION PERIOD
(IN THOUSANDS) ------------ --------
<S> <C> <C>
YPtel................................................... $3,102 30 years
Web YP.................................................. 2,712 10 years
Big Stuff............................................... 1,032 10 years
YPtel's Acquisition of Pacific Coast Publishing......... 2,047 30 years
------
$8,893
======
</TABLE>
(e) Reflects the addition of $2.9 million interest expense relating to YPtel
debt as a result of its acquisition of Pacific Coast Publishing. This amount
is partially offset by the elimination of $750,000 interest expense incurred
on the $15.0 million 5% Subordinated Notes, which will be redeemed for
Advanced common stock in connection with the acquisitions.
2
<PAGE>
(f) Reflects the incremental provision for federal and state income taxes at an
effective tax rate of 38% for the applicable pro forma adjustments and for
income taxes on S-corporation income.
(g) Reflects the issuance of 19,545,454 shares issued for the purchase of the
acquired companies; 2,840,909 shares issued for the conversion of the 5%
Subordinated Notes payable; and 856,364 shares issued for the conversion of
the estimated loans in the amount of $4.7 million from stockholders of Web
YP and Big Stuff.
(h) Represents stock-based compensation of Advanced and shareholder remuneration
of YPtel.
3
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADVANCED YPTEL WEB YP BIG STUFF PRO FORMA PRO FORMA
HISTORICAL HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
------------ ---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..... $ 1,408 $ 207 $ 15 $ 1 $ 42,600(e) $ 1,631
Accounts receivable, net...... 17,681 11,366 199 82 29,328
Deferred costs................ 2,236 7,462 -- -- 9,698
Prepaid expenses and other.... 289 1,992 1,534 185 4,000
Deferred taxes................ 3,782 -- -- -- 3,782
-------- ------- ------ ------ -------- --------
Total current assets........ 25,396 21,027 1,748 268 42,600 48,439
-------- ------- ------ ------ -------- --------
Property, plant and equipment,
net............................ 957 652 213 339 2,161
Intangible assets, net.......... 76,546 40,376 -- 122 130,511 (a) 247,555
Other assets.................... 2,259 -- -- -- 2,259
Net assets held for sale........ 41,222 -- -- -- (41,222)(e) 41,222
-------- ------- ------ ------ -------- --------
Total other assets.......... 120,984 41,028 213 461 131,889 293,197
-------- ------- ------ ------ -------- --------
Total assets................ $146,380 $62,055 $1,961 $ 729 $131,889 $341,636
======== ======= ====== ====== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses.................... $ 6,704 $ 5,700 $ 123 $ 92 $ 6,000 (a) $ 17,994
(625)(b)
1,378 (e)
Short-term debt and current
maturities of long-term
debt........................ 55,000 3,882 -- 64 (15,000)(b) 43,946
Deferred revenue.............. -- 1,660 459 -- 2,119
Notes due to shareholders..... -- -- 3,510 1,200 (4,710)(a) --
Other current liabilities..... 2,691 -- 166 -- 2,857
-------- ------- ------ ------ -------- --------
Total current liabilities... 64,395 11,242 4,258 1,356 (12,957) 66,916
Long-term liabilities:
Long-term debt................ -- 35,786 -- -- 35,786
Deferred taxes................ 10,704 134 -- -- 10,838
-------- ------- ------ ------ -------- --------
Total liabilities........... 75,099 47,162 4,258 1,356 (12,957) 113,540
-------- ------- ------ ------ -------- --------
Stockholders' equity:
Preferred stock............... -- -- -- -- --
Common stock.................. 2 13,720 -- -- 2 (a) 4
(13,720)(c)
Treasury stock................ (938) -- -- -- (938)
Additional paid-in capital.... 147,744 -- 2,432 1,523 156,551 (d) 308,250
Retained earnings (deficit)... (75,527) 1,173 (4,729) (2,150) (3,693)(b) (79,220)
5,706 (c)
-------- ------- ------ ------ -------- --------
Total stockholders'
equity.................... 71,281 14,893 (2,297) (627) 144,846 228,096
-------- ------- ------ ------ -------- --------
Total liabilities and
stockholders' equity...... $146,380 $62,055 $1,961 $ 729 $131,889 $341,636
======== ======= ====== ====== ======== ========
</TABLE>
- ------------------------
SEE NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET ON FOLLOWING PAGE
4
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(a) Records the purchase of YPtel, Web YP and Big Stuff for approximately $147.2
million, composed of the following:
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------ --------------------------------- TOTAL
(IN THOUSANDS) STOCK COMMON STOCK TRANSACTION PURCHASE
COMMON STOCK OPTIONS STOCK OPTIONS COSTS PRICE
------------- -------- -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
YPtel................ 15,000,000(1) 351,281 $102,000 $1,964 $4,000 $107,964
Web YP............... 4,020,000(2) -- 27,336 -- 1,000 28,336
Big Stuff............ 1,454,545 -- 9,891 -- 1,000 10,891
---------- ------- -------- ------ ------ --------
20,474,545 351,281 $139,227 $1,964 $6,000 $147,191
========== ======= ======== ====== ====== ========
</TABLE>
For financial reporting purposes, the Advanced common stock was valued at
$6.80 per share (the average closing price for the five days before and
after the announcement of the acquisitions). The stock options were valued
using the Black-Scholes option pricing model. Transaction costs consist
primarily of legal, accounting, tax and financial advisory costs associated
with the acquisitions.
The purchase price was preliminarily allocated to the fair value of the net
assets acquired as summarized below:
<TABLE>
<CAPTION>
YPTEL WEB YP BIG STUFF TOTAL
(IN THOUSANDS) -------- -------- --------- --------
<S> <C> <C> <C> <C>
Net working capital................... $ 9,785 $ 1,000 $ 112 $ 10,897
Property and equipment................ 652 213 339 1,204
Long-term debt........................ (35,786) -- -- (35,786)
Deferred taxes........................ (134) -- -- (134)
Intangible assets..................... 133,447 27,123 10,440 171,010
-------- ------- ------- --------
Total purchase price.............. $107,964 $28,336 $10,891 $147,191
======== ======= ======= ========
</TABLE>
----------------------------
(1) Included in the shares issued as consideration for YPtel are all shares
of Advanced common stock expected to be issued either directly and or
indirectly through exchange of Class A Special Shares. The Class A
Special Shares may be issued in lieu of Advanced common stock for
Canadian tax reasons but are exchangeable into a like number of Advanced
common stock.
(2) Included in the shares issued as consideration for the Web YP
acquisition are 929,091 shares assumed to be issued in order to convert
loans in the aggregate amount of $4.7 million which have been made to
finance operations of Web YP and Big Stuff until the transaction closes.
According to the terms of the acquisition agreements, up to $6.0 million
of such loans may be made to Web YP and Big Stuff which will be converted
into Advanced common stock based on the agreed upon conversion price of
$5.50 per share. If the entire $6.0 million were loaned, 1,090,909 shares
of Advanced common stock would be issued.
(b) Reflects the conversion of the $15.0 million 5% subordinated notes payable
and $625,000 accrued interest owed by Advanced into 2,840,909 shares of
common stock and the resultant loss from the conversion. For financial
reporting purposes the stock was valued at $6.80 per share and will result
in an extraordinary loss of $3.7 million as a loss on early extinguishment
of debt. This extraordinary loss is not reflected in the pro forma financial
statements.
(c) Records the elimination of YPtel, Web YP and Big Stuff's historical retained
earnings (deficit) and common stock.
5
<PAGE>
(d) Records the net effect of the following adjustments on capital in excess of
par value:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Issuance of shares and stock options for acquisitions....... $141,188
Issuance of shares for 5% Subordinated Notes payable........ 19,318
Elimination of YPtel, Web YP and Big Stuff's historical
paid-in capital........................................... (3,955)
--------
$156,551
========
</TABLE>
(e) Reflects the closing of the sale of the telecommunications operations for
cash consideration of $49.8 million less adjustments for working capital,
property, plant and equipment and other adjustments in the amount of
$7.2 million. Net proceeds totaled approximately $42.6 million and related
liabilities in connection with the closing approximate $1.4 million.
6
