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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
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): December 28, 2000
Data Dimensions, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Commission File Number 0-4748
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Delaware 06-0852458
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
Sterling Plaza, 3rd Floor, 3535 Factoria Boulevard SE, Bellevue, WA 98006
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (425) 688-1000
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 28, 2000, Data Dimensions, Inc. ("Company") sold all of the
outstanding capital stock of its wholly-owned subsidiary, Data Dimensions
Information Services, Inc.("DDIS"), a California corporation, to Acxiom
Corporation for $5.4 million in cash pursuant to a Stock Purchase Agreement
dated December 28, 2000.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30, 2000
(In thousands)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Current assets:
Cash $ 3,797 $ 5,400 a $ 9,082
(115) b
Accounts receivable, net 10,418 (686) b 9,732
Income tax receivable 4,169 (1,415) h 2,754
Prepaid and other current assets 2,869 (1,208) b 1,661
Deferred income taxes 600 (419) b 181
----------- ----------- -----------
Total current assets 21,853 1,557 23,410
Equipment and furniture, net 5,264 (2,108) b 3,156
Other assets 897 (656) b 241
----------- ----------- -----------
Total assets $ 28,014 $ (1,207) $ 26,807
=========== =========== ===========
Current liabilities:
Accounts payable $ 1,542 $ (589) b $ 953
Accrued compensation and commissions 2,068 (273) b 1,795
Other accrued liabilities 887 (188) b 699
Capital lease obligations, current 1,755 (1,755) b 0
----------- ----------- -----------
Total current liabilities 6,252 (2,805) 3,447
Non-current obligations 821 (640) b 181
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Total liabilities 7,073 (3,445) 3,628
Equity 21,505 0 21,505
Retained earnings (accumulated deficit) (564) 2,238 e 1,674
----------- ----------- -----------
Total stockholders' equity 20,941 2,238 23,179
Total liabilities and stockholders' equity $ 28,014 $ (1,207) $ 26,807
=========== =========== ===========
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Nine Months Ended September 30, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 31,705 $ (6,836) c $ 24,869
Direct costs 24,246 (7,171) c 17,075
----------- ----------- -----------
Gross margin 7,459 335 7,794
General, administrative and selling expenses 19,964 (1,147) c 18,817
Non-recurring item (136) (136)
----------- ----------- -----------
Loss from operations (12,369) 1,482 (10,887)
Other expense (income), net (56) (158) c (385)
(171) f
----------- ----------- -----------
Loss from continuing operations before income tax (12,313) 1,811 (10,502)
Income tax benefit (4,802) 706 (4,096)
----------- ----------- -----------
Loss from continuing operations $ (7,511) $ 1,105 $ (6,406)
=========== =========== ===========
Loss from continuing operations per share - basic $ (0.55) $ (0.47)
Loss from continuing operations per share - diluted $ (0.55) $ (0.47)
Weighted average shares outstanding - basic 13,559 13,559
Weighted average shares outstanding - diluted 13,559 13,559
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Nine Months Ended September 30, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 86,090 $ (9,238) c $ 76,852
Direct costs 50,820 (8,747) c 42,073
----------- ----------- -----------
Gross margin 35,270 (491) 34,779
General, administrative and selling expenses 32,653 (1,074) c 31,579
Non-recurring item 1,923 1,923
----------- ----------- -----------
Income from operations 694 583 1,277
Other expense (income), net 213 (60) c 4
(149) f
----------- ----------- -----------
Income from continuing operations before income tax 481 792 1,273
Income tax provision 188 309 497
----------- ----------- -----------
Income from continuing operations $ 293 $ 483 $ 776
=========== =========== ===========
Income from continuing operations per share - basic $ 0.02 $ 0.06
Income from continuing operations per share - diluted $ 0.02 $ 0.06
Weighted average shares outstanding - basic 13,533 13,533
Weighted average shares outstanding - diluted 13,596 13,596
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Year Ended December 31, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 102,106 $ (11,702) c $ 90,404
Direct costs 61,431 (11,257) c 50,174
----------- ----------- -----------
Gross margin 40,675 (445) 40,230
General, administrative and selling expenses 39,143 (1,408) c 37,735
Non-recurring item 1,838 (667) d 1,171
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Income (loss) from operations (306) 1,630 1,324
Other expense (income), net (1,688) (254) c (2,141)
(199) f
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Income from continuing operations before income tax 1,382 2,083 3,465
Income tax provision 539 812 1,351
----------- ----------- -----------
Income from continuing operations $ 843 $ 1,271 $ 2,114
=========== =========== ===========
Income from continuing operations per share - basic $ 0.06 $ 0.16
Income from continuing operations per share - diluted $ 0.06 $ 0.16
Weighted average shares outstanding - basic 13,537 13,537
Weighted average shares outstanding - diluted 13,555 13,555
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Year Ended December 31, 1998
(In thousands, except per share data)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 114,544 $ (12,811) c $ 101,733
Direct costs 58,072 (8,895) c 49,177
----------- ----------- -----------
Gross margin 56,472 (3,916) 52,556
General, administrative and selling expenses 40,361 (1,567) c 38,794
Non-recurring item 757 757
----------- ----------- -----------
Income from operations 15,354 (2,349) 13,005
Other expense (income), net 231 (106) c (83)
----------- ----------- -----------
Income from continuing operations before income tax 15,123 (2,035) 13,088
Income tax provision 5,921 (794) 5,127
----------- ----------- -----------
Income from continuing operations $ 9,202 $ (1,241) $ 7,961
=========== =========== ===========
Income from continuing operations per share - basic $ 0.69 $ 0.60
Income from continuing operations per share - diluted $ 0.69 $ 0.59
Weighted average shares outstanding - basic 13,347 13,347
Weighted average shares outstanding - diluted 13,412 13,412
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Year Ended December 31, 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
Data Dimensions, Inc. Pro Forma Pro Forma
As Reported Adjustments As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 60,444 $ (7,378) c $ 53,066
Direct costs 29,965 (5,353) c 24,612
----------- ----------- -----------
Gross margin 30,479 (2,025) 28,454
General, administrative and selling expenses 28,572 (1,265) c 27,307
Non-recurring item 4,024 (206) g 3,818
----------- ----------- -----------
Loss from operations (2,117) (554) (2,671)
Other expense (income), net 56 (210) f (154)
----------- ----------- -----------
Loss from continuing operations before income tax (2,173) (344) (2,517)
Income tax provision 700 (134) 566
----------- ----------- -----------
Loss from continuing operations $ (2,873) $ (210) $ (3,083)
=========== =========== ===========
Loss from continuing operations per share - basic $ (0.22) $ (0.24)
Loss from continuing operations per share - diluted $ (0.22) $ (0.24)
Weighted average shares outstanding - basic 12,772 12,772
Weighted average shares outstanding - diluted 12,772 12,772
</TABLE>
The accompanying footnotes are an integral part of the unaudited pro forma
consolidated financial statements.
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DATA DIMENSIONS, INC. AND SUBSIDIARIES
Footnotes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated financial statements have
been prepared to present the effect of the sale by the Company of its
subsidiary, Data Dimensions Information Services, Inc. The unaudited pro
forma consolidated financial statements have been prepared based upon the
historical financial statements of the Company as if the sale had taken
place at the beginning of the period reported.
The unaudited Pro Forma Consolidated Statements of Operations may not be
indicative of the results of operations that actually would have occurred
if the transaction had been in effect as of the beginning of the period nor
do they purport to indicate the results of future operations of the
Company. The unaudited pro forma consolidated financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Company's 1999 Annual Report on Form 10-K. Management of
the Company believes that all adjustments necessary to fairly present such
unaudited pro forma consolidated financial statements have been made based
on the terms and the structure of the transaction.
2. RECLASSIFICATIONS
Certain amounts have been reclassified in prior year unaudited pro forma
consolidated financial statements to conform with current year
presentations.
3. PRO FORMA ADJUSTMENTS
a. To reflect the sale of the DDIS subsidiary for $5.4 million in cash,
as if the sale had occurred on September 30, 2000.
b. To reflect the reduction in assets and liabilities related to the DDIS
business.
c. To reflect the decrease in Revenue, Direct costs, General,
administrative and selling expense, and other expense (income), net
related to the DDIS business.
d. To reflect asset write downs in DDIS resulting from the transition of
the business from Y2K related projects to non-Y2K related projects.
e. To reflect the disposition of the DDIS operations.
f. To record imputed interest income on the proceeds from the sale of
DDIS.
g. To reflect merger related costs for the purchase of Pyramid
Information Services, Inc. which was renamed Data Dimensions
Information Services, Inc.
h. To record the tax impact of the disposition of the DDIS operation.
4. The gain recognized on the sale of DDIS was approximately $1.8 million, net
of tax. The gain is net of estimated transaction costs and may be adjusted
per the Stock Purchase Agreement. The gain is not reflected in the above Pro
Forma Statements of Operations.
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(c) Exhibits
2.1 Stock Purchase Agreement dated December 28, 2000 between Data
Dimensions, Inc. and Acxiom Corporation. The following exhibits and
schedules to the Stock Purchase Agreement have been omitted:
Exhibit A - Form of Promissory Note
Exhibit B - Form of Stock Pledge Agreement
Exhibit C - Form of Legal Opinion of Greenberg Traurig, LLP
Exhibit D - Form of Legal Opinion of Garvey, Schubert & Barer
Exhibit E - Form of Consulting Agreement with Eugene Stabile
Exhibit F - Allocation of Purchase Price
Seller's Disclosure Schedule
Schedule 1.3 - Net Working Capital Procedures
The Registrant undertakes to furnish supplementally a copy of any omitted
schedule or exhibit to the Commission upon request.
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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.
DATA DIMENSIONS, INC.
(Registrant)
Date: January 12, 2001 /s/ Laurence C. Leslie
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Laurence C. Leslie
Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial and Accounting
Officer)
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Index to Exhibits
2.1 Stock Purchase Agreement dated December 28, 2000 between Data Dimensions,
Inc. and Acxiom Corporation.
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