<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Month of November, 1999
AMDOCS LIMITED
Tower Hill House Le Bordage
St. Peter Port, Island of Guernsey, GY1 3QT Channel Islands
Amdocs, Inc.
1390 Timberlake Manor Parkway, Chesterfield, Missouri 63017
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)
FORM 20 F X FORM 40 F
----- ----
(Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of
1934.)
YES NO X
---- ----
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 30, 1999, pursuant to an Agreement and Plan of Merger,
dated as of September 3, 1999 (the "Merger Agreement"), among Amdocs Limited, a
corporation organized under the laws of Guernsey, Channel Islands ("Amdocs"),
Ivan Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Amdocs ("Acquisition"), and International Telecommunication Data Systems, Inc.,
a Delaware corporation ("ITDS"), Amdocs acquired ITDS by means of a merger (the
"Merger") of Acquisition with and into ITDS, with ITDS as the surviving
corporation of the Merger.
Pursuant to the Merger Agreement, each outstanding share of Common
Stock of ITDS was converted into the right to receive 0.3717 Ordinary Shares of
Amdocs. Based on the capitalization of ITDS as of the closing date, ITDS
stockholders have the right to receive approximately 6,450,700 Ordinary Shares
of Amdocs. In addition, the 2,979,758 outstanding options to purchase ITDS
Common Stock were converted into options to purchase approximately 1,107,621
Ordinary Shares of Amdocs.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
The financial statements of ITDS for the fiscal year ended December 31,
1998 included in pages F-31 to F-47 of Amendment No. 2 to Form F-3 of Amdocs
(File No. 333-86609), filed with the Securities and Exchange Commission on
October 4, 1999, are hereby incorporated by reference herein.
The financial statements of ITDS for the period ended September 30,
1999 are set forth below.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information as of
September 30, 1999 and for the twelve months ended September 30, 1999 are not
included in this initial report. Such financial information will be filed by
amendment not later than February 14, 2000.
1
<PAGE> 3
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Agreement and Plan of Merger, dated as of
September 3, 1999, among Amdocs, Acquisition
and ITDS (Incorporated by reference from the
Registration Statement on Form F-4 (File No.
333-89673) of Amdocs filed with the
Securities and Exchange Commission on October
26, 1999).
23.1 Consent of Ernst & Young LLP.
99.1 Amdocs Limited Press Release dated November
30, 1999.
2
<PAGE> 4
Financial Statements OF ITDS
International Telecommunication Data Systems, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(UNAUDITED) (SEE NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $44,155 $40,735
Accounts receivable, net of allowances for doubtful accounts of $2,259 and
$2,362, respectively 41,655 34,713
Prepaid expenses and other current assets 3,994 1,843
Deferred income taxes 1,082 840
-------- --------
Total current assets 90,886 78,131
Property and equipment
Computers, including leased property under capital leases of $1,150 in 1999
and 1998 11,565 9,506
Furniture and fixtures 2,578 2,005
Equipment, including leased property under capital leases of $54 in 1999 and
1998 608 706
Leasehold improvements 1,767 970
-------- --------
16,518 13,187
Less: accumulated depreciation and amortization 8,016 5,450
-------- --------
8,502 7,737
Other assets:
Goodwill - net of accumulated amortization of $5,603 and $3,010, respectively 45,664 42,249
Product development costs-at cost, net of accumulated amortization of $10,385
and $5,810 respectively 23,316 22,511
Deferred income taxes 2,945 4,138
Other 2,083 390
-------- --------
74,008 69,288
-------- --------
Total assets $173,396 $155,156
======== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
Page 3
<PAGE> 5
International Telecommunication Data Systems, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(UNAUDITED) (SEE NOTE)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,726 $10,921
Accrued expenses and income taxes payable 4,239 2,919
Accrued compensation 3,036 3,026
Customer advances and deferred revenue 6,671 3,862
Current maturities of capital lease obligations 12 74
Other - 504
-------- --------
Total current liabilities 26,684 21,306
Capital lease obligations 17 25
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value; 40,000,000 shares authorized, 17,498,063
and 17,313,231 shares issued at September 30, 1999 and December 31, 1998,
respectively 175 173
Treasury stock, 177,000 shares at September 30, 1999, at cost (1,931) -
Additional paid-in capital 143,718 141,662
Retained earnings (deficit) 4,754 (7,952)
Unearned compensation (21) (58)
-------- --------
Total stockholders' equity 146,695 133,825
-------- --------
Total liabilities and stockholders' equity $173,396 $155,156
======== ========
</TABLE>
Note: The balance sheet at December 31, 1998 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.
4
<PAGE> 6
International Telecommunication Data Systems, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
-------------------- ------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenue $ 37,266 $ 28,832 $ 105,889 $ 82,198
Costs and expenses:
Operating expenses 14,538 10,789 40,638 31,571
General, administrative and selling expenses 5,815 5,177 17,238 15,138
Depreciation and amortization 3,544 2,795 9,987 7,903
Systems development and programming costs 6,211 4,068 17,099 11,386
Merger related costs 1,163 - 1,163 -
Personnel and indirect acquisition costs - - - 4,713
In-process research and development - - - 20,800
-------- -------- --------- --------
31,271 22,829 86,125 91,511
-------- -------- --------- --------
Operating income (loss) 5,995 6,003 19,764 (9,313)
Foreign currency loss (41) - (341) -
Other income 639 524 1,552 952
Interest expense (32) (47) (85) (2,696)
-------- -------- --------- --------
Income (loss) before income tax expense (benefit) and 6,561 6,480 20,890 (11,057)
extraordinary item
Income tax expense (benefit) 2,569 2,603 8,184 (3,861)
-------- -------- --------- --------
Income (loss) before extraordinary item 3,992 3,877 12,706 (7,196)
Extraordinary loss (net of $562 tax benefit) - - - (826)
-------- -------- --------- --------
Net Income (loss) $ 3,992 $ 3,877 $ 12,706 $ (8,022)
======== ======== ========= =========
Income (loss) per common share - basic:
Income (loss) before extraordinary item $ 0.23 $ 0.22 $ 0.73 $ (0.48)
Extraordinary loss - - - (0.05)
-------- -------- --------- --------
Net Income (loss) $ 0.23 $ 0.22 $ 0.73 $ (0.53)
======== ======== ========= =========
Shares used in computing basic income (loss) per common share 17,326 17,253 17,318 15,038
Income (loss) per common share - diluted:
Income (loss) before extraordinary item $ 0.23 $ 0.21 $ 0.72 $ (0.48)
Extraordinary loss - - - (0.05)
-------- -------- --------- --------
Net Income (loss) $ 0.23 $ 0.21 $ 0.72 $ (0.53)
======== ======== ========= =========
Shares used in computing diluted income (loss) per common share 17,444 18,205 17,599 15,038
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 7
International Telecommunication Data Systems, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
----------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 12,706 $ (8,022)
Adjustments to reconcile net income (loss) before extraordinary loss to net cash
provided by operating activities:
Write off of in-process research and development - 20,800
Depreciation and amortization 9,987 8,004
Deferred income taxes 952 (7,064)
Amortization of unearned compensation 37 161
Change in operating assets and liabilities:
Accounts receivable (6,941) (16,326)
Prepaid expenses (2,152) (96)
Customer advances and deferred revenue 2,809 1,601
Accounts payable, accrued expenses and accrued compensation 2,631 5,561
Other assets and liabilities, net 45 2,353
--------- ---------
Net cash provided by operating activities 20,074 6,972
INVESTING ACTIVITIES
Capital expenditures (3,331) (2,709)
Investment in software/business alliance (2,000) -
Purchase of Intelicom (6,000) (73,832)
Product development costs (5,380) (5,295)
--------- ---------
Net cash used for investing activities (16,711) (81,836)
FINANCING ACTIVITIES
Principal payment of long-term debt (70) (70,177)
Proceeds from long term debt - 70,000
Treasury stock (1,931) -
Proceeds from sale of common stock 1,716 84,817
Financing fee related to acquisition - (1,483)
Tax benefit associated with stock options 342 1,666
--------- ---------
Net cash provided by financing activities 57 84,823
Net increase in cash and cash equivalents 3,420 9,959
Cash and cash equivalents at beginning of period 40,735 28,967
--------- ---------
Cash and cash equivalents at end of period $ 44,155 $ 38,926
======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 85 $ 2,695
Cash paid during the period for taxes $ 5,790 $ 1,220
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES:
In 1998, the Company issued 606,673 shares of its common stock, valued at $10
million, to CSC as partial financing of the acquisition of ITDS Intelicom
Services, Inc.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 8
International Telecommunication Data Systems, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month and nine month periods
ended September 30, 1999 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1999. For further information, refer
to the financial statements and footnotes thereto included in the International
Telecommunication Data Systems, Inc. (the "Company" or "ITDS") Annual Report on
Form 10K for the year ended December 31, 1998.
CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
On January 2, 1998, the Company acquired a subsidiary of Computer Sciences
Corporation ("CSC"), a provider of billing and customer care software, by
acquiring all of the outstanding Capital Stock of CSC Intelicom Inc. (now known
as ITDS Intelicom Services, Inc.) ("Intelicom"). This acquisition was accounted
for using the purchase method of accounting. The purchase price, after working
capital adjustments of approximately $14.2 million, aggregated $83.7 million,
before direct costs of approximately $1.2 million and consisted of 606,673
shares of Common Stock of the Company valued at $10 million (before registration
costs of $100,000) and $73.8 million in cash. In addition, the Company made a $6
million payment in January 1999, which was contingent upon certain performance
factors. The assets acquired and liabilities assumed were recorded at their
estimated fair value on the date of acquisition and the purchase price in excess
of the fair market value of the assets acquired of approximately $45.3 million
is being amortized over 15 years. The additional $6 million payment is being
amortized over the remaining life of the original goodwill, 14 years. In
connection with the acquisition the Company received current assets of $5.9
million, product development costs of $16.6 million, and other non-current
assets of $3 million and assumed accrued liabilities of $7.9 million. In
addition, purchased research and development costs of $20.8 million, and
personnel and indirect acquisition costs of $4.2 million, (principally hiring
and temporary staff of $1.3 million, special bonuses paid to company's employees
and management of $2.3 million and systems and other costs of $600,000)
associated with the Intelicom acquisition have been expensed in 1998. The
operations of Intelicom are included with the Company's financial statements
since the date of acquisition.
USE OF ESTIMATES
The preparation of 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.
COMPREHENSIVE INCOME
For the three and nine months ended September 30,1999 and 1998, the Company had
no other comprehensive income.
7
<PAGE> 9
2. STRATEGIC BUSINESS ALLIANCE
On February 9, 1999, the Company announced it has formed a strategic business
alliance with Novazen, Inc. to include Novazen's Internet-based billing and
customer care software in ITDS' proprietary suite of products and services. In
addition to other distribution rights, the alliance gives ITDS the exclusive
right to provide its clients with Novazen's advanced Internet-based billing and
customer communication software. This software will function with all of ITDS'
proprietary service bureau products and services, which already offer wireless
service providers with customer acquisition, billing, customer care and process
control.
As part of the transaction, a payment of $2 million was made principally to
secure certain software rights. An ownership interest in Novazen was also
received. The software rights, including all enhancement and modification to the
software, are being amortized over a four year period. The Company's ownership
interest in Novazen is being accounted for under the cost method.
3. INCOME TAX
Income tax provisions for interim periods, other than unusual items, are based
on estimated effective annual income tax rates. The Company recognizes deferred
tax assets and liabilities for the expected future tax consequences of temporary
differences between the tax bases, projected state tax rates and financial
reporting bases of assets and liabilities.
The differences between the effective tax rate and the federal statutory rate is
primarily a result of state income taxes and in 1998 the tax benefit anticipated
from the nonrecurring costs associated with the Intelicom acquisition.
4. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, EARNINGS PER SHARE
"SFAS 128", which revises the methodology of calculating earnings per share. The
Company adopted SFAS 128 in the fourth quarter of 1997. In accordance with SFAS
128, all common stock equivalents that have a dilutive effect on earnings per
share are included in the calculation for dilutive income per share.
The following table sets forth the computation of basic and diluted earnings per
share for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ --------------------
1999 1998 1999 1998
In thousands, except per share data
<S> <C> <C> <C> <C>
BASIC:
Net income (loss) $ 3,992 $ 3,877 $ 12,706 $ (8,022)
======== ======== ======== ========
Average shares outstanding 17,326 17,253 17,318 15,038
======== ======== ======== ========
Income (loss) before extraordinary item $ 0.23 $ 0.21 $ 0.73 $ (0.48)
Extraordinary loss -- -- -- (0.05)
-------- -------- -------- --------
Net Income (loss) $ 0.23 $ 0.21 $ 0.73 $ (0.53)
======== ======== ======== ========
DILUTED:
Net income (loss) $ 3,992 $ 3,877 $ 12,706 $ (8,022)
======== ======== ======== ========
Average shares outstanding 17,326 17,253 17,318 15,038
Net effect of dilutive stock options-based on 118 952 281 --
the treasury stock method
-------- -------- -------- --------
Totals 17,444 18,205 17,599 15,038
======== ======== ======== ========
Income (loss) before extraordinary item $ 0.23 $ 0.21 $ 0.72 $ (0.48)
Extraordinary loss -- -- -- (0.05)
-------- -------- -------- --------
Net Income (loss) $ 0.23 $ 0.21 $ 0.72 $ (0.53)
======== ======== ======== ========
</TABLE>
8
<PAGE> 10
International Telecommunication Data Systems, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
5. OFFICER, DIRECTOR AND EMPLOYEE LOANS
For the period ended September 30, 1999 and December 31, 1998, prepaid expenses
and other current assets and other long-term assets included loans and advances
to certain officers, directors and employees of the Company, of approximately
$560,913 and $374,750, respectively.
6. RECENT DEVELOPMENTS
On September 3, 1999, the Company entered into an agreement with Amdocs, Ltd.
pursuant to which Amdocs, Ltd. will acquire all of the outstanding shares of
ITDS in a stock-for-stock merger transaction. Amdocs, Ltd. will account for this
transaction under the purchase method of accounting. In the merger, each ITDS
common share will be exchanged for a number of Amdocs, Ltd. ordinary shares
equal to $10.50 divided by the trading value of an Amdocs, Ltd. ordinary share
so long as the trading value of an Amdocs, Ltd. ordinary share is between $22.81
and $28.25. The trading value will be determined by taking the average of the
closing prices for an Amdocs, Ltd. ordinary share over the ten trading days
ending two business days before the closing date. In no event will the exchange
ratio be less than 0.3717 or more than 0.4603. Closing of the merger is subject
to the approval of ITDS' shareholders, as well as certain other customary
closing conditions.
7. LEGAL PROCEEDINGS
Intelicom, a wholly-owned subsidiary of the Company acquired in January 1998
from Computer Sciences Corporation ("CSC") is party to litigation and has been
threatened with litigation in connection with the operation of its business
prior to its acquisition by the Company. Pursuant to the terms of the
acquisition, CSC and certain of its affiliates are obligated to defend and
indemnify the Company against obligations arising out of such litigation or
threatened litigation.
The Company does not believe that any liabilities relating to any of the legal
proceedings to which it is a party are likely to be, individually or in the
aggregate, material to its consolidated financial position or results of
operations.
9
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMDOCS LIMITED
/s/ Thomas G. O'Brien
Date: December 10, 1999 -----------------------------
Thomas G. O'Brien
Treasurer and Secretary
Authorized U.S. Representative
10
<PAGE> 12
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Agreement and Plan of Merger, dated as of
September 3, 1999, among Amdocs, Acquisition
and ITDS (Incorporated by reference from the
Registration Statement on Form F-4 (File No.
333-89673) of Amdocs filed with the
Securities and Exchange Commission on October
26, 1999).
23.1 Consent of Ernst & Young LLP.
99.1 Amdocs Limited Press Release, dated November
30, 1999.
11
<PAGE> 1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form 6-K of Amdocs Limited
of our report dated February 16, 1999, with respect to the financial statements
and schedules of International Telecommunication Data Systems, Inc. included in
Amendment No 2 to Form F-3 of Amdocs Limited (File No. 333-86609) filed on
October 4, 1999.
/s/ Ernst & Young LLP
Stamford, Connecticut
December 8, 1999
<PAGE> 1
EXHIBIT 99.1
AMDOCS LIMITED COMPLETES INTERNATIONAL TELECOMMUNICATION DATA SYSTEMS INC.
ACQUISITION
ST. LOUIS - November 30, 1999 - Amdocs Limited (NYSE: DOX), a major
international provider of customer care, billing and order management
solutions to the telecom industry, today announced the completion of its
previously announced merger with International Telecommunication Data
Systems Inc. (ITDS), a leading provider of outsourcing and service bureau
solutions to telecom companies. The merger was approved today by the
shareholders of ITDS at a special meeting. As a result of the merger, ITDS
has become a wholly owned subsidiary of Amdocs.
In the merger, each outstanding share of ITDS common stock was converted
into the right to receive 0.3717 Amdocs ordinary shares. As of the record
date of October 22, 1999, there were 17,498,063 shares of ITDS common
stock outstanding.
"We are confident that our acquisition of ITDS will enhance our market
leadership position," said Avinoam Naor, President and Chief Executive
Officer of Amdocs Management Limited. "Our customers and prospects have
reacted positively to the strategy represented by the acquisition. Amdocs
now offers the strongest combination of system solutions and outsourcing
capabilities in the telecom customer care and billing market."
Naor added, "As the integration of ITDS and Amdocs enters the operational
phase, we are proud to welcome the ITDS employees into our global family.
I am confident that all of our constituents will benefit from this
transaction, including new and existing shareholders, customers, and
employees. Amdocs is fully committed to continuing support for ITDS
customers, and we hope to build on these relationships for mutual success
moving forward."
ITDS is an industry leader in outsourcing of billing operations. With
state-of-the-art data centers located in Stamford, Connecticut and
Champaign, Illinois, and a staff of approximately 750 professionals, ITDS
produces almost 9 million telephone invoices each month. ITDS provides its
customers with a full range of operations support, including subscriber
billing, subscriber activation, remittance processing, collections, data
retrieval and reporting, electronic funds transfer, credit management,
inventory management, and data archiving.
About Amdocs
Amdocs is a leading provider of product-driven customer care, billing and
order management solutions to premier telecommunications companies
worldwide. Amdocs has an unparalleled success record in project delivery
of its mission-critical products. Human resources of more than 4,600
information systems professionals are exclusively dedicated to the
telecommunications industry. Amdocs has an installed base of more than 300
successful projects in more than 75 major telecommunications companies
throughout the world. For more information visit our Web site at
www.amdocs.com
This news release may contain certain forward-looking statements relating
to the future performance of Amdocs Ltd. and ITDS. The forward-looking
information is within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Act of 1934, and subject to certain
risks and uncertainties, and actual results may differ materially. These
risks and uncertainties are described in greater detail in Amdocs' and
ITDS' filings with the Securities and Exchange Commission.
For more information contact:
Amdocs
Thomas G. O'Brien
Treasurer and Director of Investor Relations
Amdocs Limited
Tel: 314-212-8328
E-mail: [email protected]
Porter Novelli
Dan Ginsburg
Porter Novelli
Tel: 212-601-8020
Fax: 212-601-8101
E-Mail: [email protected]
