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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 (Date of earliest event reported): June 16, 1998
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Commission file number: 000-23735
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PRECEPT BUSINESS SERVICES, INC.
(Exact name of registrant as specified in its charter)
Texas 75-2487353
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1909 Woodall Rodgers Freeway, Suite 500 75201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 754-6600
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ITEM I. ACQUISITION OR DISPOSITION OF ASSETS
On June 1, 1998, Precept Business Services, Inc. ("Precept"), a Texas
corporation, sold its interest in 75% of the common stock of U.S. Trucking,
Inc., a Nevada corporation ("USTI"), pursuant to that certain First Amended
and Restated Stock Purchase Agreement, dated as of May 29, 1998, by and among
Precept Transportation Services, L.L.C., a Nevada limited liability company
and a wholly owned subsidiary of the Company ("Precept Transportation"),
Logistics Management LLC, a Kentuck limited liability company, Association
Services, Inc., a Kentucky corporation, Roxanne Pixler, Dan Pixler and
Anthony Huff. Precept Transportation had acquired its interests in USTI from
U.S. Transportation Systems, Inc., a Nevada corporation on March 19, 1998.
USTI operates in the long-haul trucking business.
To the best knowledge of Precept and except as described below, at the
time of the divestiture of its interest in USTI, there was no material
relationship between (I) Logistics Management LLC, Association Services,
Inc., Roxanne Pixler, Dan Pixler and Anthony Huff on the one hand and (ii)
Precept, or any of its affiliates, shareholders, any director or officer of
Precept, or any associate of such director or officer on the other. Prior to
the aforementioned divestiture, Precept Transportation owned an interest in
75% of the common stock of USTI and Logistics Management owned the remaining
25% of the common stock of USTI. Dan Pixler is the President of USTI and
Anthony Huff is the Manager of Logistics Management, LLC.
The aggregate consideration received by Precept as a result of the
divestiture was $1,950,000, composed of $200,000 in cash and a promissor note
with an original principal balance of $1,750,000, payable in monthly
installments of principal and interest equal to $15,000 commencing July 1,
1998 with the total outstanding principal and interest coming due on April 1,
2000. The note carries an interest rate equal to the prime rate of Wells
Fargo Bank (Texas), N.A., adjusted annually. The consideration received by
the Company in this divestiture was determined by arms-length negotiations
between the parties t the First Amended and Restated Stock Purchase Agreement.
<PAGE>
ITEM 7. PRO FORMA FINANCIAL STATEMENTS OF PRECEPT
PRECEPT BUSINESS SERVICES, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Precept acquired the common stock and warrants of USTS in a transaction which
is more fully described in Precept's Form S-4, which became effective
February 9, 1998. This transaction ("USTS Acquisition") has been accounted
for using the purchase method of accounting. The excess of purchase price
over the estimated fair values has been recognized as goodwill, which will be
amortized over 40 years.
Effective April 13, 1998, Precept executed a Stock Purchase Agreement with
InfoGraphix ("InfoGraphix Stock Purchase") in which Precept exchanged
2,058,077 shares of Precept Class A Common Stock for all of the outstanding
stock of InfoGraphix. This Infographix Stock Purchase has been accounted for
by the pooling method of accounting.
Subsequent to the USTS Acquisition, Precept determined to divest of its 75%
ownership in USTI, which represents the long-haul delivery transportation
related services segment of USTS. Effective May 29, 1998, Precept completed
the sale of its share of USTI. The net assets of USTI have been recorded at
their estimated net realizable value of $200,000 and have been classified as
net assets of discontinued operations in the Precept March 31, 1998
historical quarterly financial statements.
The Unaudited Pro Forma Statement of Operations does not purport to represent
what Precept's results of operations actually would have been if the events
described above had occurred as of the date indicated or what results will be
for any future periods.
The following Unaudited Pro Forma Consolidated Balance Sheet as of March 31,
1998 gives effect to the InfoGraphix Stock Purchase as though it had occurred
on that date. The Unaudited Pro Forma Consolidated Statement of Operations
for the year ended June 30, 1997 (which combines USTS' financial information
for the nine-months ended December 31, 1996 and six-months ended June 30,
1997; and includes InfoGraphix' financial information for the year ended
September 30, 1997, which was InfoGraphix' fiscal year end) and for the
nine-months ended March 31, 1998 (which combines InfoGraphix' financial
information for the three-months ended September 30, 1997 and the six-months
ended March 31, 1998), gives effect as if the Transactions had occurred on
July 1, 1996.
The Unaudited Pro Forma Consolidated Financial Information should be read in
conjunction with the Consolidated Financial Statements of Precept and USTS
and the Notes thereto previously included in Precept's Form S-4 filing, which
became effective on February 9, 1998.
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PRECEPT BUSINESS SERVICES, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
------------------------- PRO FORMA PRO FORMA PRO FORMA
PRECEPT INFOGRAPHIX ADJUSTMENTS ADJUSTMENTS CONSOLIDATED
----------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,675,824 $ - $ - $ - $ 1,675,824
Accounts receivable, net of allowance 10,147,976 4,264,473 - - 14,412,449
Accounts receivable from affiliates 763,724 196,791 - - 960,515
Notes and other receivables 795,680 - - - 795,680
Inventory 4,850,407 232,806 - - 5,083,213
Assets held for sale 748,333 - - - 748,333
Income taxes refundable 511,845 - - - 511,845
Deferred income taxes 1,090,886 - - - 1,090,886
Net assets of discontinued ops. 1,092,416 - - - 1,092,416
Prepaid and other 970,468 59,412 - - 1,029,880
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Total current assets 22,647,559 4,753,482 - - 27,401,041
Property, plant & equipment, net 4,692,407 720,365 - - 5,412,772
Intangible assets, net 18,856,554 - - - 18,856,554
Deferred income taxes 615,019 - - - 615,019
Other assets 2,168,521 334,365 - - 2,502,886
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Total assets $48,980,060 $5,808,212 $ - $ - $54,788,272
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LIABILITIES
Current Liabilities:
Current portion of long term debt and
capitalized leases $ 480,785 $ - $ - $ - $ 480,785
Cash overdraft - 198,220 - - 198,220
Note payable and line of credit 847,167 1,750,000 - - 2,597,167
Accounts payable and accrued expenses 14,384,193 2,072,293 - - 16,456,486
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Total current liabilities 15,712,145 4,020,513 - - 19,732,658
Due to related party 965,059 - - - 965,059
Long term obligations 14,086,114 - - - 14,086,114
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Total liabilities 30,763,318 4,020,513 - - 34,783,831
Shareholder's equity:
Common stock 460,913 118,930 (98,349) (98,349)A 481,494
Additional paid in capital 21,650,143 48,349 48,349 A 21,698,492
Retained earnings (deficit) (3,703,043) 1,718,769 - - (1,984,274)
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18,408,013 1,837,699 (50,000) (50,000) 20,195,712
Treasury stock (191,271) (50,000) 50,000 50,000 A (191,271)
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Total shareholders' equity 18,216,742 1,787,699 - - 20,004,441
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Total liabilities & shareholders' equity $48,980,060 $5,808,212 $ - $ - $54,788,272
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</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements
<PAGE>
PRECEPT BUSINESS SERVICES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED MARCH 31, 1998
9/10/98
<TABLE>
<CAPTION>
B
HISTORICAL Black & White
------------------------------------ Cab B C Pro Forma PRO FORMA
PRECEPT USTS INFOGRAPHIX Company BancPro US Trucking Adjustments CONSOLIDATED
-------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Business products 51,516,093 - 18,487,920 - - - - 70,004,013
Transportation 5,535,704 23,647,759 - (114,413) (1,080,564) (17,437,887) - 10,550,599
Other - - - - - - - -
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Total revenues 57,051,797 23,647,759 18,487,920 (114,413) (1,080,564) (17,437,887) - 80,554,612
EXPENSES:
Cost of goods sold 34,762,816 - 12,352,412 - - - - 47,115,228
Selling, general and
administrative 20,355,433 31,523,683 6,074,082 (109,819) (945,978) (16,629,310) - 40,268,091
Depreciation and amortization 1,102,454 1,562,069 153,388 (2,625) (29,884) (1,192,475) (6,095) D 1,586,832
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Total expenses 56,220,703 33,085,752 18,579,882 (112,444) (975,862) (17,821,785) (6,095) 88,970,151
Operating income (loss) 831,094 (9,437,993) (91,962) (1,969) (104,702) 383,898 6,095 (8,415,539)
Other income (expenses):
Interest expense (486,937) (1,045,376) (66,562) - 25,000 548,271 - (1,025,604)
Interest income - - - - - - - -
Other - - - - - - - -
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Total other expenses (486,937) (1,045,376) (66,562) - 25,000 548,271 - (1,025,604)
Income (loss) from
continuing operations
before income taxes 344,157 (10,483,369) (158,524) (1,969) (79,702) 932,169 6,095 (9,441,143)
Income tax provision 137,663 - (63,410) (788) (31,881) - 2,438 E 44,023
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Net income (loss) from
continuing operations 206,494 (10,483,369) (95,114) (1,181) (47,821) 932,169 3,657 (9,485,166)
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Net income (loss) per
share - basic $ 0.01 $ (0.20)
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Weighted average common
shares outstanding - basic 36,422,527 47,670,577
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Net income (loss) per
share - diluted $ 0.01 $ (0.20)
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Weighted average common
shares outstanding -
diluted 37,148,346 48,612,178
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</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements
<PAGE>
PRECEPT BUSINESS SERVICES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997
9/10/98
<TABLE>
<CAPTION>
B
HISTORICAL Black &
--------------------------------------- B White Cab B
Precept USTS Infographix BancPro Company ATAB
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<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Business products 70,778,087 - 20,966,892 - - -
Transportation 6,565,838 29,930,630 - (1,917,875) (284,628) (2,222,112)
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Total revenues 77,343,925 29,930,630 20,966,892 (1,917,875) (284,628) (2,222,112)
EXPENSES:
Cost of goods sold 50,157,418 20,261,902 14,013,773 (1,221,376) - (838,784)
Selling, general and
administrative 24,350,230 11,601,558 6,011,623 (231,733) (404,675) (829,312)
Depreciation and
amortization 1,498,473 1,982,274 169,116 (39,551) (5,413) (65,671)
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Total Expenses 76,006,121 33,845,734 20,194,512 (1,492,660) (410,088) (1,733,767)
Operating Income (loss) 1,337,804 (3,915,104) 772,380 (425,215) 125,460 (488,345)
Other income (expenses):
Interest expense (425,314) (903,458) (66,401) - (1,406) -
Interest income - 579,089 - - - -
Other - (280,418) (5,954) - - -
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Total Other Expenses (425,314) (604,787) (72,355) - (1,406) -
Income (loss) from
continuing operations
before income taxes 912,490 (4,519,891) 700,025 (425,215) 124,054 (488,345)
Income tax provision 380,884 750,000 280,010 (170,086) 49,622 (195,338)
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Net income (loss) from
continuing operations 531,606 (5,269,891) 420,015 (255,129) 74,432 (293,007)
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Net income (loss) per
share - basic $ 0.02
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Weighted average common
shares outstanding -
basic 33,986,503
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Net income (loss) per
share - diluted $ 0.01
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Weighted average common
shares outstanding -
diluted 36,324,852
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<CAPTION>
C Pro Forma PRO FORMA
US Trucking Adjustments CONSOLIDATED
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<S> <C> <C> <C>
REVENUES:
Business products - - 91,744,979
Transportation (19,715,659) - 12,356,194
Total revenues (19,715,659) - 104,101,173
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EXPENSES:
Cost of goods sold - - 82,372,933
Selling, general and
administrative (20,027,144) - 20,470,547
Depreciation and
amortization (876,515) (484,434) D 2,178,279
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Total Expenses (20,903,659) (484,434) 105,021,759
Operating Income (loss) 1,188,000 484,434 (920,586)
Other income (expenses):
Interest expense 238,188 - (1,158,391)
Interest income (438) - 578,651
Other (160,460) - (446,832)
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Total Other Expenses 77,290 - (1,026,572)
Income (loss) from
continuing operations
before income taxes 1,265,290 484,434 (1,947,158)
Income tax provision 460,120 193,774 E 1,748,986
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Net income (loss) from
continuing operations 805,170 290,660 (3,696,144)
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Net income (loss) per
share - basic $ (0.08)
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Weighted average common
shares outstanding -
basic 45,657,080
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Net income (loss) per
share - diluted $ (0.08)
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Weighted average common
shares outstanding -
diluted 47,995,429
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</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PRECEPT BUSINESS SERVICES, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(A) Pro forma adjustments are made to eliminate the Common stock and
Treasury stock of InfoGraphix and to record the issuance of
2,058,077 shares of Precept Class A Common Stock ($0.01 par value) in
conjunction with the InfoGraphix Stock Purchase.
(B) Pro forma adjustments are made to remove the results of operations
of BancPro, ATAB and Black & White Cab Company from the historical
results of operations of USTS. These operations were not acquired as
part of the USTS Acquisition.
(C) Pro forma adjustments are made to remove the results of operations
USTI as a result of the sale of USTI by Precept.
(D) Pro forma adjustments to reflect the change in depreciation and
amortization expense as a result of the transactions described
previously are as follows:
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Year Ended June
1998 30, 1997
---------------------------------
<S> <C> <C>
Historical depreciation and amortization
expense recorded by USTS, after reductions
for BancPro, ATAB, Black & White Cab
Company, and USTI $(337,085) $(995,124)
Depreciation expense relating to the fair
value of property, plant and equipment from
the Transactions to be amortized over
periods ranging from 1 to 15 years (a) 104,055 208,110
Amortization expense related to goodwill
resulting from the Transactions, to be
amortized over 40 years 226,935 302,580
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Pro forma adjustment to depreciation and
amortization $ (6,095) $(484,434)
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</TABLE>
(a) Property, plant and equipment to be acquired (with applicable
estimated average remaining useful lives) include highway coaches
(8 years), school buses, and other revenue equipment (4 years)
and other depreciable assets (7 years).
(E) The pro forma adjustment to income taxes is to apply the effective income
tax rate (40%) to net adjustments made to income (loss) from continuing
operations.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly issued this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRECEPT BUSINESS SERVICES, INC.
September 11, 1998 By:
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William W. Solomon, Jr.
Senior Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
