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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): August 18, 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 7 FINANCIAL STATEMENTS
Item 7(a) Condensed Operating Results and Balance Sheet for Years ended
June 30, 1998 and 1997
Included as Exhibit 99.1 is the Company's press release dated
August 18, 1998 in which the Company announced its preliminary operating
results and financial position for fiscal year 1998.
Item 7(c) Exhibits
99.1 Press release dated August 18, 1998 - Fiscal Year 1998 Operating
Results.
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:
William W. Solomon, Jr.
Senior Vice President, Chief
Financial Officer
(Principal Financial and Accounting
Officer)
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FOR IMMEDIATE RELEASE
PRECEPT BUSINESS SERVICES ANNOUNCES
FY 1998 OPERATING RESULTS
COMPANY WELL-POSITIONED AS CONSOLIDATOR IN $20 BILLION GRAPHICS
AND $4 BILLION CORPORATE TRANSPORTATION INDUSTRIES
DALLAS, Texas (August 18, 1998) - Precept Business Services, Inc. (NASDAQ:
"PBSIA") the nation's largest independent distributor of printed business
products and document management services, today announced operating results for
its fourth quarter and fiscal year ended June 30, 1998.
Precept's operating income for the fourth quarter of 1998 increased by 306% to
$1.4 million and its EBITDA, a measure of operating cash flow, increased by 452%
to $2.0 million. For the full fiscal (FY) 1998, Precept's operating income
increased 50% to $3.9 million and its EBITDA increased to $5.3 million from
$0.6 million.
For the fourth quarter ended June 30, 1998, the Company's revenues increased 18%
($6.1 million) to $33.5 million, when compared with revenues of $28.4 million in
the fourth quarter of FY 1997. Revenues from the Company's products businesses
rose $2.9 million from the year-earlier period, while revenues from Precept's
transportation division increased $2.2 million, reflecting acquisition of the
limousine and livery operations of U. S. Transportation Systems in a merger
which was completed in March 1998.
Cross profit during the fourth quarter of FY 1998 increased 32% to $9.6 million
(28.6% of revenues), versus $7.3 million (25.5% of revenues) in the same quarter
last year. Selling, general and administrative (SG&A) expenses in the fourth
quarter of 1998 amounted to 22.9% of revenues, an increase from 22.2% a year
earlier. The $1.4 million increase in SG&A expenses reflected higher operating
costs associated with businesses acquired during the 1998 fiscal year.
Net income from continuing operations for the quarter ended June 30, 1998
increased 381% to $592,809 ($0.01 per share), compared with net income of
$137,710 ($0.00 per share). Earnings per share were calculated on 52.2 million
average shares of common stock outstanding during the most recent quarter,
versus 42.6 million shares in the prior-year period. The increase in common
shares outstanding was primarily due to the issuance of additional common stock
in the acquisition of U. S. Transportation Systems.
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For the fiscal year ended June 30, 1998, revenues approximated $123.0 million,
which represented a 6% increase when compared with FY 1997 revenues of $115.9
million. The higher revenues for FY 1998 primarily reflect the impact of
business products distribution and transportation companies acquired during the
past twelve months.
Gross profit of $37.7 million in FY 1998 compared with $36.2 million in the
previous fiscal year while the SG&A expense ratio improved to 26.0% of revenues,
versus 27.4% in FY 1997. Net income from continuing operations reached
$1,185,814 ($0.03 per share) in the fiscal year ended June 30, 1998 compared
with net income from continuing operations of $1,155,790 ($0.03 per share) in
the previous fiscal year.
"During Precept's first quarter operating as a public company and as a
consolidator in the business products and transportation industries, Precept
realized solid revenue and EBITDA growth as well as improved earnings per
share," stated David Neely, Precept's chairman and chief executive officer. "The
fourth quarter reflects our success as an aggressive consolidator."
"Fiscal 1998 was a very important year for Precept Business Services, Inc.,"
commented Neely. "Not only were we able to report an increase in net income
during a very difficult year in the printed business products industry, but we
completed a number of significant acquisitions and became a publicly traded
company through our acquisition of U. S. Transportation Systems."
During the last quarter of FY 1998, the Company announced the acquisitions of
Infographix and MBF Corporation, two business products distribution companies
based in Boston, Massachusetts and Monroe, Louisiana, respectively. Since the
end of its 1998 fiscal year, the Company has acquired two additional business
products distribution businesses in Salt Lake City, Utah and Houston, Texas.
"Our annualized revenue 'run rate' now exceeds $130 million, and we believe that
Precept is ideally positioned to move forward aggressively to consolidate the
highly fragmented graphics and corporate transportation industries," continued
Neely. "Our objectives in Fiscal 1999 are focused upon improving operating
margins and realizing important economies from the acquisitions completed during
the past year, while continuing to make strategic acquisitions on a selective
basis."
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Precept Business Services, Inc. is the nation's largest nationwide independent
distributor of printed business products and document management services. The
Company also provides corporate transportation services in Texas, New York, Ohio
and Michigan. Recent acquisitions have diversified the Company's revenue base
and positioned Precept as a consolidator within the $20 billion business
products and document management services industry, and the $4 billion corporate
transportation industry. The Company is headquartered in Dallas, Texas and its
common stock is traded on NASDAQ under the symbol "PBSIA".
THIS PRESS RELEASE INCLUDE STATEMENTS WHICH MAY CONSTITUTE "FORWARD-LOOKING"
STATEMENTS, USUALLY CONTAINING THE WORDS "BELIEVE", "ESTIMATE", "PROJECT",
"EXPECT" OR SIMILAR EXPRESSIONS. THESE STATEMENTS ARE MADE PURSUANT TO THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FORWARD-LOOKING STATEMENTS INHERENTLY INVOLVE RISKS AND UNCERTAINTIES THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT WOULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, CONTINUED ACCEPTANCE OF THE COMPANY'S PRODUCTS IN THE MARKETPLACE,
COMPETITIVE FACTORS, DEPENDENCE UPON THIRD-PARTY VENDORS, AND OTHER RISKS
DETAILED IN THE COMPANY'S PERIODIC REPORT FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. BY MAKING THESE FORWARD-LOOKING STATEMENTS, THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE THESE STATEMENTS FOR REVISIONS OR CHANGES
AFTER THE DATE OF THIS RELEASE.
FOR FURTHER INFORMATION, PLEASE CONTACT:
BILL SOLOMON, CFO AT (214)-754-6620
R. JERRY FALKNER, CFA, INVESTOR RELATIONS COUNSEL AT (800) 377-9893
(FINANCIAL HIGHLIGHTS FOLLOW)
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PRECEPT BUSINESS SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATING RESULTS
QUARTER ENDED JUNE 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Revenue:
Business products $29,609,538 $26,702,946
Transportation and other 3,919,871 1,695,584
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33,529,409 28,398,530
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Costs and expenses:
Cost of goods sold 23,933,268 21,144,189
Selling, general and administrative 7,671,384 6,312,423
Depreciation and amortization 547,655 491,947
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32,152,307 27,948,559
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Operating income 1,377,102 449,971
Interest and other expense (income) 389,087 190,779
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Income from continuing operations 988,015 259,192
Provision for income taxes 395,206 121,482
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Net income from continuing operations 592,809 137,710
Loss from discontinued operations and disposal
of discontinued operations (33,023) (497,971)
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Net income (loss) $ 559,786 $ (360,261)
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Basic income per share data:
Income from continuing operations $ 0.01 $ --
Loss from discontinued operations -- (0.01)
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Basic income (loss) per common share $ 0.01 $ (0.01)
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Weighted average common shares outstanding 52,235,880 42,623,332
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Diluted income per share data:
Income from continuing operations $ 0.01 $ --
Loss from discontinued operations -- (0.01)
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Basic income (loss) per common share $ 0.01 $ (0.01)
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Weighted average common shares outstanding 53,045,559 42,623,332
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EBITDA $ 2,006,538 $ 443,947
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</TABLE>
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PRECEPT BUSINESS SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATING RESULTS
FISCAL YEARS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Revenue:
Business products $113,536,213 $109,396,670
Transportation and other 9,455,575 6,565,838
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122,991,788 115,962,508
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Costs and expenses:
Cost of goods sold 85,281,274 79,729,325
Selling, general and administrative 31,959,950 31,843,921
Depreciation and amortization 1,837,109 1,787,624
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119,078,333 113,360,870
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Operating income 3,913,455 2,601,638
Interest and other expense (income) 1,937,098 617,750
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Income from continuing operations 1,976,357 1,983,889
Provision for income taxes 790,543 828,099
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Net income from continuing operations 1,185,814 1,155,790
Loss from discontinued operations and disposal
of discontinued operations (467,393) (3,839,082)
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Net income (loss) $ 718,421 $ (2,683,292)
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Basic income per share data:
Income from continuing operations $ 0.03 $ 0.03
Loss from discontinued operations (0.01) (0.09)
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Basic income (loss) per common share $ 0.02 $ (0.06)
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Weighted average common shares outstanding 45,362,272 42,623,332
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Diluted income per share data:
Income from continuing operations $ 0.03 $ 0.03
Loss from discontinued operations (0.01) (0.09)
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Basic income (loss) per common share $ 0.02 $ (0.06)
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Weighted average common shares outstanding 46,190,596 42,623,332
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EBITDA $ 5,301,548 $ 554,391
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</TABLE>
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PRECEPT BUSINESS SERVICES, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,291,303 $ 2,432,202
Trade accounts receivable 16,782,141 14,190,979
Inventories 5,133,484 3,225,470
Prepaid expenses and other current assets 2,839,632 3,353,418
Net assets of discontinued operations 1,115,125 3,560,246
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Total current assets 28,161,685 26,762,315
Property, plant and equipment, net 6,345,317 3,475,389
Goodwill and other intangible assets, net 19,732,593 5,039,906
Other assets 3,663,488 2,013,936
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Total assets $57,903,083 $37,291,546
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,603,316 $ 5,964,754
Accrued liabilities 7,791,066 4,922,140
Notes payable and current portion of
long-term debt 1,421,477 2,477,450
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Total current liabilities 15,815,860 13,364,344
Long-term debt 20,084,756 7,820,773
Shareholders' equity:
Common stock 522,357 491,145
Paid in capital 21,703,022 17,377,653
Accumulated deficit (31,641) (750,062)
Treasury stock (191,271) (191,271)
Shareholder notes receivable -- (821,036)
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Total shareholders' equity 22,002,467 16,106,428
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Total liabilities and shareholders'
equity $57,903,083 $37,291,546
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</TABLE>
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