SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Earliest Event Reported): January 16, 1996
Exact Name of Registrant
as Specified in its Charter: The Diana Corporation
State or Other Jurisdiction of Incorporation: Delaware
Commission File Number: 1-5486
I.R.S. Employer Identification Number: 36-2448698
Address of Principal Executive Office: 8200 West Brown Deer Road
Suite 200
Milwaukee, WI 53223
Registrant's Telephone Number, Including Area Code: (414) 355-0037
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Form 8-K
Report dated November 20, 1995 as set forth in the pages attached
hereto:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired:
The audited financial statements of Valley
Communications, Inc. ("Valley") for the years ended
October 31, 1992, 1993, 1994 and for the ten months
ended August 31, 1995 are filed with this report.
(b) Pro Forma Financial Information:
The following unaudited pro forma condensed
consolidated financial information is filed with this
report:
Pro Forma Condensed Consolidated Balance Sheet at
October 14, 1995
Pro Forma Condensed Consolidated Statements of
Operations for the 52 Weeks Ended April 1, 1995
and the 28 Weeks Ended October 14, 1995
<PAGE>
On November 20, 1995, C&L Acquisition
Corporation, a subsidiary of the Registrant's
subsidiary, C&L Communications, Inc. acquired 80% of
the common stock of Valley from Henry P. Mutz,
Christopher M. O'Connor and Kenneth R. Hurst for
approximately $4,320,000 including expenses
and future consideration contingent on Valley
attaining defined levels of pre tax earnings in
specified time periods through March 2001 (the
"Acquisition").
The following unaudited pro forma financial
statements give effect to the Acquisition which is
accounted for as a purchase. The unaudited pro forma
condensed consolidated balance sheet presents the
combined financial position of Diana and Valley as of
October 14, 1995 assuming that the Acquisition had
occurred as of November 30, 1995. Such pro forma
information is based upon the historical balance
sheet data of Diana as of October 14, 1995, and
Valley as of November 30, 1995. The unaudited pro
forma condensed consolidated statement of operations
for the 52 weeks ended April 1, 1995 gives effect to
the Acquisition by combining the following results of
operations:
1) Diana for the 52 weeks ended April 1, 1995
2) Valley for the year ended April 30, 1995
The unaudited pro forma condensed consolidated
statement of operations for the 28 weeks ended
October 14, 1995 gives effect to the Acquisition by
combining the following results of operations:
1) Diana for the 28 weeks ended October 14, 1995
2) Valley for the 6 months ended October 31, 1995
The unaudited pro forma condensed consolidated
financial information has been prepared by the
Registrant based upon assumptions deemed proper by
it. The unaudited pro forma condensed consolidated
financial information presented herein is shown for
illustrative purposes only and is not necessarily
indicative of the future financial position or future
results of operations of the Registrant, or of the
financial position or results of operations of the
Registrant that would have actually occurred had the
transaction been in effect as of the date or for the
periods presented.
The unaudited pro forma condensed consolidated
financial information should be read in conjunction
with the historical financial statements and related
notes of the Registrant.
<PAGE>
(c) Exhibits
2.1 Purchase Agreement ("PA") dated August 14, 1995
by and between C&L Acquisition Corporation and
Henry Mutz, Chris O'Connor and Ken Hurst.
2.2 First Amendment to PA dated November 20, 1995.
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this amendment to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE DIANA CORPORATION
Date: July 12, 1996 /s/ R. Scott Miswald
Vice President and Treasurer
<PAGE>
THE DIANA CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
Pro Forma Condensed Consolidated Balance Sheet:
NOTE 1 - To include Valley's Balance Sheet as of November 30, 1995.
NOTE 2 - To reflect purchase accounting adjustments. The total
cost of the acquisition, including expenses of $410,000, was
$4,320,000. The minority shareholders 20% ownership interest
amounts to $305,000. The excess of the cost of the acquisition
over the book value was allocated as follows. The amounts and
amortization period were determined pursuant to an appraisal.
Amortization
Period
------------
Equipment $ 93,000 5 years
Non-Competition Agreements 108,000 7 years
Goodwill 2,901,000 40 years
---------
$3,102,000
=========
NOTE 3 - To reflect cash payments made toward the acquisition.
NOTE 4 - To reflect the cost of the acquisition including expenses
of $4,320,000 and deferred debt costs of $65,000.
NOTE 5 - To reflect the current portion of borrowings incurred to
make the acquisition. Borrowings of $1,000,000 were made from the
minority shareholders of Valley and are payable over a 5 year
period at 10% per year.
NOTE 6 - To reflect the non-current portion of borrowings incurred
to make the acquisition. A proforma interest rate of 8.5% per year
was used for other borrowings to make the acquisition.
Pro Forma Condensed Consolidated Statement of Operations:
NOTE 7 - To include Valley's Statement of Operations for the year
ended April 30, 1995 and the 6 months ended October 31, 1995,
respectively.
<PAGE>
NOTE 8 - To reflect the reduction of officers payroll expense due
to new employment agreements executed by Valley's officers. In
addition, to reflect the current period amortization of the write
up of equipment, non-competition agreements and goodwill (see Note
2).
52 Weeks Ended 28 Weeks Ended
April 1, 1995 October 14, 1995
Depreciation and amortization $ 107,000 $ 55,000
Officers payroll expense
reduction (444,000) (445,000)
$(337,000) $(390,000)
The minority shareholders of Valley entered into 5 year employment
agreements with Valley providing for annual compensation at
$150,000 per year.
NOTE 9 - To reflect interest expense on borrowings incurred to make
the acquisition (see Notes 5 and 6).
NOTE 10 - To eliminate Valley's provision for federal income taxes
due to existing federal income tax net operating loss carry
forwards of the consolidated group.
NOTE 11 - To reflect the minority shareholders 20% proportionate
share of Valley's results of operations as adjusted for certain of
the pro forma adjustments.
