<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
December 15, 1998
Affiliated Computer Services, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
Delaware 024787 51-0310342
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<S> <C> <C>
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION)
</TABLE>
2828 North Haskell Avenue
Dallas, Texas 75204
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(214) 841-6111
<PAGE> 2
EXPLANATORY NOTE
This Form 8-K/A amends Item 7 of the current report on Form 8-K filed by
Affiliated Computer Services, Inc. ("ACS") on December 30, 1998 to include
financial statements that were not available at the time of the filing of the
initial report. The financial statements are required as a result of the
acquisition by ACS of 8,704,238 shares of the common stock of a subsidiary of
BRC Holdings, Inc. ("BRC") on December 15, 1998 pursuant to a tender offer.
Such shares represented approximately 63% of the then outstanding common stock
of BRC. ACS contemplates acquiring the balance of the outstanding shares by a
merger in February 1999.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BRC HOLDINGS, INC. (incorporated by reference
to pages 22 through 49 of BRC's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and pages 1 through 11 of its
Quarterly Report on Form 10-Q for the quarter ended September 30,
1998.)
Consolidated Statements of Income for the Three Years Ended
December 31, 1997
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements of Changes in Shareholders' Equity for the
Three Years Ended December 31, 1997
Consolidated Statements of Cash Flows for the Three Years Ended
December 31, 1997
Notes to Consolidated Financial Statements
Report of Independent Accountants
Consolidated Condensed Balance Sheets - September 30, 1998 and
December 31, 1997 (Unaudited)
Consolidated Condensed Statements of Income - Three and Nine
Months Ended September 30, 1998 and 1997 (Unaudited)
Consolidated Condensed Statement of Shareholders' Equity - Nine
Months Ended September 30, 1998 and Year Ended December 31,
1997 (Unaudited)
Condensed Statements of Cash Flows - Nine Months Ended September
30, 1998 and 1997 (Unaudited)
Notes to Consolidated Condensed Financial Statements (Unaudited)
(b) PRO FORMA FINANCIAL INFORMATION (UNAUDITED).
Pro Forma Condensed Consolidated Statement of Income for the
Six Months Ended December 31, 1998 and Related Notes
Pro Forma Condensed Consolidated Statement of Income for the
Year Ended June 30, 1998 and Related Notes
(c) EXHIBITS.
2 Agreement and Plan of Merger, dated as of October 19, 1998,
among Purchaser, ACS, and BRC, incorporated herein by
reference to Exhibit 10 to the Schedule 14D-1 filed by
Purchaser and ACS on October 23, 1998.
99.1 Financial Statements of BRC Holdings, Inc. (incorporated by
reference to pages 22 through 49 of BRC's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
pages 1 through 11 of its Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998.)
*99.2 Pro Forma Financial Information.
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* Filed herewith
3
<PAGE> 4
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.
Dated: February 5, 1999 AFFILIATED COMPUTER SERVICES, INC.
By: /s/ Mark A. King
-------------------------------------
Mark A. King
Executive Vice President, Chief
Financial Officer and Director
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
NO. DESCRIPTION
- -------- -----------
<S> <C>
2 Agreement and Plan of Merger, dated as of October 19, 1998,
among Purchaser, ACS, and BRC, incorporated herein by
reference to Exhibit 10 to the Schedule 14D-1 filed by
Purchaser and ACS on October 23, 1998.
99.1 Financial Statements of BRC Holdings, Inc. (incorporated by
reference to pages 22 through 49 of BRC's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
pages 1 through 11 of its Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998.)
*99.2 Pro Forma Financial Information.
</TABLE>
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* Filed herewith
5
<PAGE> 1
EXHIBIT 99.2
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited pro forma condensed consolidated statements of income
for the six months ended December 31, 1998 and for the year ended June 30, 1998
set forth below present the results of operations of ACS for such period and
such year as if the following transactions had occurred at the beginning of such
period: (i) the consummation of the acquisition of BRC Holdings, Inc. ("BRC");
and (ii) the four additional acquisitions completed during fiscal 1998 and the
five acquisitions (excluding BRC) completed subsequent to July 1, 1998
(collectively, the "Other Acquisitions"). The unaudited pro forma condensed
consolidated statement of income for the six months ended December 31, 1998
combines, with appropriate adjustments, ACS's unaudited consolidated statements
of income for the six months ended December 31, 1998 with the unaudited
consolidated statement of income of BRC and the Other Acquisitions for the
same six month period to the extent they are not included in ACS's statements of
income. The unaudited pro forma condensed consolidated statement of income for
the year ended June 30, 1998 combines, with appropriate adjustments, ACS's
audited consolidated statements of income for its fiscal year ended June 30,
1998 and the unaudited consolidated statement of income of BRC and the Other
Acquisitions for the twelve months ended June 30, 1998 to the extent they are
not included in ACS's consolidated statements of income. Certain
reclassifications were made to conform the historical financial statements of
BRC and the Other Acquisitions with ACS's historical financial statements.
The unaudited pro forma condensed consolidated statements of income have been
prepared on the basis of preliminary assumptions and estimates. The pro forma
adjustments represent ACS's preliminary determinations of these adjustments and
are based on available information and certain assumptions ACS considers
reasonable under the circumstances. Final amounts could differ from those set
forth herein. The unaudited pro forma condensed consolidated statements of
income may not be indicative of the results of operations that would have been
achieved if the acquisition of BRC and the Other Acquisitions had been effected
on the dates indicated or which may be achieved in the future. The unaudited pro
forma condensed consolidated statements of income and notes thereto should be
read in conjunction with ACS's "Selected Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the interim and annual consolidated statements of income of ACS,
not included herein, and BRC, incorporated by reference herein.
<PAGE> 2
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
(In thousands, except per share amounts)
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<CAPTION>
Pro Forma
------------------------------------------------
BRC BRC
Acquisition Divested BRC
ACS BRC (A) Adjustments Operations(B) Subtotal
----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 754,990 $ 54,540 $ -- $ (5,690) $ 48,850
Operating expenses
Wages and benefits 319,152 27,557 (925) (C) (4,171) 22,461
Services and supplies 234,951 13,791 (516) (C) (1,731) 11,544
Rent, lease
and maintenance 87,895 4,123 (151) (C) (357) 3,615
Depreciation and
amortization 31,347 3,105 (227) (D) (235) 2,643
Other operating
expenses 8,735 612 -- 275 887
----------- ----------- ----------- ----------- -----------
Total operating
expenses 682,080 49,188 (1,819) (6,219) 41,150
----------- ----------- ----------- ----------- -----------
Operating income 72,910 5,352 1,819 529 7,700
Other non-operating
(income) expense, net 6,004 (3,282) 7,134 (E) 32 3,884
----------- ----------- ----------- ----------- -----------
Pretax profit from
continuing operations 66,906 8,634 (5,315) 497 3,816
Income tax expense 27,272 3,419 (1,364) (F) 199 2,254
----------- ----------- ----------- ----------- -----------
Income from continuing
operations $ 39,634 $ 5,215 $ (3,951) $ 298 $ 1,562
=========== =========== =========== =========== ===========
Earnings common share:
Basic $ 0.82
Diluted $ 0.77
Shares used in computing
earnings per common
shares:
Basic 48,488 -- -- -- --
Diluted 55,304 -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
---------------------------------
Other
Other Acquisitions
Acquisitions(G) Adjustments(H) Combined
--------------- -------------- ------------
<S> <C> <C> <C>
Revenues $ 16,382 $ (1,369) $ 818,853
Operating expenses
Wages and benefits 5,522 (151) 346,984
Services and supplies 5,578 (1,401) 250,672
Rent, lease
and maintenance 699 -- 92,209
Depreciation and
amortization 429 435 34,854
Other operating
expenses 1,074 (5) 10,691
------------ ------------ -------------
Total operating
expenses 13,302 (1,122) 735,410
------------ ------------ -------------
Operating income 3,080 (247) 83,443
Other non-operating
(income) expense, net -- 179 10,067
------------ ------------ -------------
Pretax profit from
continuing operations 3,080 (426) 73,376
Income tax expense 1,217 (166) 30,577
------------ ------------ -------------
Income from continuing
operations $ 1,863 $ (260) $ 42,799
============ ============== ============
Earnings common share:
Basic $ 0.88
Diluted $ 0.83
Shares used in computing
earnings per common
shares:
Basic -- 273 (I) 48,761
Diluted -- 273 (I) 55,577
</TABLE>
<PAGE> 3
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(A) Information obtained from the unaudited financial statements of BRC for
the six months ended December 31, 1998 to the extent they are not
included in ACS's results of operations.
(B) Reflects an adjustment to eliminate operating results for certain
businesses of BRC which ACS has determined are to be either divested or
shut down after consummation of the merger. The operating results for
these businesses are included in BRC's historical financial information
noted in (A) above.
(C) Reflects employee terminations (i.e., salary and related expenses of
general and administration personnel) and elimination of redundant
public company and facility costs to be effected immediately after
consummation of the acquisition.
(D) Reflects additional amortization expense of approximately $2.0 million
resulting from the allocation of the excess cost of the acquisition to
software, non-compete agreements and goodwill, offset by a reduction in
depreciation and amortization expense of approximately $2.2 million as a
result of recording BRC's fixed assets at their respective fair values
based upon an independent appraisal.
(E) Reflects interest expense for the financing of the transaction based
upon the terms of ACS's increase in its revolving line of credit.
(F) Reflects the income tax effect for the pro forma adjustments at the
statutory tax rate adjusted for the impact of non-deductible goodwill
amortization.
(G) Other Acquisitions reflects the aggregate historical results of
operations for three acquisitions made by ACS during the period from
July 1, 1998 through December 31,1998 (excluding BRC). Two other
acquisitions made by ACS during the period from July 1, 1998 through
December 31, 1998 were effective July 1, 1998 and are therefore included
in ACS's unaudited consolidated results of operations for the six months
ended December 31, 1998.
(H) Reflects the aggregate pro forma adjustments from the three acquisitions
made by the Company during the period noted in (G) above. Such
adjustments represent primarily: (i) decreases to revenue to conform
revenue recognition policies of an acquired company to those of the
Company, (ii) net decreases to expenses upon the consolidation of the
acquired business operations, including the elimination of costs
associated with the prior owners and overhead allocations by the prior
owners which would not be reflective of the ongoing operations of the
acquired operations, (iii) the net decrease to depreciation and
amortization expense from the allocation of the purchase price of each
acquisition to the assets and liabilities of the business acquired, (iv)
the increase to amortization expense resulting from the allocation of
the excess cost of the acquisition to customer contracts, software and
goodwill after recording the fair value of the assets acquired and the
liabilities assumed, (v) the net increase to interest expense reflecting
the financing of the transactions, (vi) the related tax effect of the
pro forma adjustments at the statutory tax rates adjusted for the impact
of non-deductible goodwill amortization, and (vii) the elimination of
sales between ACS and the acquired businesses during the period
presented.
<PAGE> 4
(I) Reflects an adjustment to the shares used in computing earnings per
common share issued in connection with the purchase of Other
Acquisitions as if the issuance had occurred at the beginning of the
period.
<PAGE> 5
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
-------------------------------------- -----------------------
BRC BRC Other
Acquisition Divested BRC Other Acquisitions
ACS BRC(A) Adjustments Operations(B) Subtotal Acquisitions(G) Adjustments(H) Combined
----------- --------- ----------- ------------- -------- --------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $1,189,123 $ 113,723 $ -- $ (17,769) $ 95,954 $ 157,194 $ (2,400) $1,439,871
Operating expenses
Wages and benefits 504,284 60,871 (2,221)(C) (10,498) 48,152 84,253 (974) 635,715
Services and supplies 364,285 25,287 (1,238)(C) (5,503) 18,546 42,792 (4,076) 421,547
Rent, lease and
maintenance 150,253 8,844 (362)(C) (827) 7,655 7,205 (2) 165,111
Depreciation and
amortization 47,475 8,135 (933)(D) (860) 6,342 5,490 1,386 60,693
Merger costs 12,974 -- -- -- -- -- -- 12,974
Other operating
expenses 11,533 2,707 -- (1,305) 1,402 3,600 (5) 16,530
---------- --------- -------- --------- -------- --------- -------- ----------
Total operating
expenses 1,090,804 105,844 (4,754) (18,993) 82,097 143,340 (3,671) 1,312,570
---------- --------- -------- --------- -------- --------- -------- ----------
Operating Income 98,319 7,879 4,754 1,224 13,857 13,854 1,271 127,301
Other non-operating
(income)
expense, net 4,227 (873) 17,741(E) (241) 16,627 615 4,755 26,224
---------- --------- -------- --------- -------- --------- -------- ----------
Pretax profit from
continuing
operations 94,092 8,752 (12,987) 1,465 (2,770) 13,239 (3,484) 101,077
Income tax expense 39,670 5,177 (3,090)(F) 579 2,666 5,783 (1,276) 46,843
---------- --------- -------- --------- -------- --------- -------- ----------
Income from
continuing
operations $ 54,422 $ 3,575 $ (9,897) $ 886 $ (5,436) $ 7,456 $ (2,208) $ 54,234
========== ========= ======== ========= ======== ========= ======== ==========
Earnings per common
share:
Basic $ 1.14 $ 1.13
Diluted $ 1.11 $ 1.10
Shares used in
computing earnings
per common share:
Basic 47,599 -- -- -- -- -- 314(I) 47,913
Diluted 50,487 -- -- -- -- -- 314(I) 50,801
</TABLE>
<PAGE> 6
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
INCOME FOR THE YEAR ENDED JUNE 30, 1998
(A) Information obtained from the unaudited financial statements of BRC for
the twelve months ended June 30, 1998. In December 1997, BRC recognized
a $5.8 million charge to other non-operating income related to the
impairment of goodwill and other intangible assets of BRC's payor
services healthcare business unit in accordance with Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
(B) Reflects an adjustment to eliminate operating results for certain
businesses of BRC which ACS has determined are to be either divested or
shut down after consummation of the merger. The operating results for
these businesses are included in BRC's historical financial information
noted in (A) above.
(C) Reflects employee terminations (i.e., salary and related expenses of
general and administrative personnel) and elimination of redundant
public company and facility costs to be effected immediately after
consummation of the acquisition.
(D) Reflects additional amortization expense of approximately $4.8 million
resulting from the allocation of the excess cost of the acquisition to
software, non-compete agreements and goodwill, offset by a reduction in
depreciation and amortization expense of approximately $5.7 million as a
result of recording BRC's fixed assets at their respective fair values
based upon an independent appraisal.
(E) Reflects interest expense for the financing of the transaction based
upon the terms of ACS's increase in its revolving line of credit.
(F) Reflects the income tax effect for the pro forma adjustments at the
statutory tax rate adjusted for the impact of non-deductible goodwill
amortization.
(G) Other Acquisitions reflects the aggregate historical results of
operations for the nine acquisitions made by ACS during the period from
July 1, 1997 through December 31, 1998 (excluding BRC).
(H) Reflects the aggregate pro forma adjustments from the nine acquisitions
made by ACS during the period noted in (G) above. Such adjustments
represent primarily: (i) decreases to revenue to conform revenue
recognition policies to those of the Company, (ii) net decreases to
expenses upon the consolidation of the acquired business' operations,
including the elimination of costs associated with the prior owners and
overhead allocations by the prior owners which would not be reflective
of the ongoing operations of the acquired operations, (iii) the net
decrease to depreciation and amortization expense from the allocation of
the purchase price of each acquisition to the assets and liabilities of
the businesses acquired, (iv) the increase to amortization expense
resulting from the allocation of the excess cost of the acquisition to
customer contracts, software and goodwill after recording the fair value
of the assets acquired and the liabilities assumed, (v) the net increase
to interest expense reflecting the financing of the transactions, (vi)
the related tax effect of the pro forma adjustments at the statutory tax
rates adjusted for the impact of non-deductible goodwill amortization,
and (vii) the elimination of sales between ACS and the acquired
businesses during the period presented.
(I) Reflects an adjustment to the shares used in computing earnings per
common share issued in connection with the purchase of Other
Acquisitions as if the issuance had occurred at the beginning of the
period.
