UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 0-15512.
ALPNET, Inc.
(Exact name of registrant as specified in its charter)
Utah 87-0356708
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4444 South 700 East Suite #204
Salt Lake City, Utah 84107-3075
(Address of principal executive offices) (Zip Code)
(801) 265-3300
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of the registrant's no par
value Common Stock as of November 9, 1994, was 15,562,223.
<PAGE>
ALPNET, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Operations--Three months
ended September 30, 1994 and 1993, and Nine months
ended September 30, 1994 and 1993
Consolidated Balance Sheets--September 30, 1994, and
December 31, 1993
Consolidated Statements of Cash Flows--Nine months
ended September 30, 1994 and 1993
Notes to Consolidated Financial Statements--September
30, 1994
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Thousands of dollars and shares, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Sales of services $5,486 $4,963 $14,631 $14,565
Operating expenses:
Cost of services sold 4,818 4,091 13,309 11,922
Selling, general and admini-
strative expenses 453 515 1,401 1,569
Development costs 31 38 91 135
Amortization of goodwill 90 85 260 258
Total operating expenses 5,392 4,729 15,061 13,884
Operating income (loss) 94 234 (430) 681
Interest expense 44 98 150 302
Income (loss) before
income taxes 50 136 (580) 379
Income taxes 25 17 66 49
Net income (loss) $ 25 $ 119 $ (646) $ 330
Net income (loss) per share $ .001 $ .008 $ (.036) $ .023
Weighted average shares of
Common Stock and Common
Stock equivalents outstanding 22,199 14,340 17,799 14,074
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Thousands of dollars)
<CAPTION>
September 30 December 31
1994 1993
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 659 $ 1,012
Trade accounts receivable less
allowance of $328 in 1994 and
$314 in 1993 4,074 3,415
Work-in-process 214 229
Income taxes receivable 56 74
Prepaid expenses and other 675 756
Total current assets 5,678 5,486
Property, equipment and leasehold
improvements:
Office facilities and leasehold
improvements 144 132
Equipment 3,564 3,177
3,708 3,309
Less accumulated depreciation
and amortization 2,758 2,575
950 734
Other assets:
Goodwill, less accumulated
amortization of $2,416 in 1994
and $1,983 in 1993 6,577 6,327
Other 222 217
6,799 6,544
Total assets $13,427 $12,764
</TABLE>
See accompanying notes.<PAGE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - continued
(Thousands of dollars and shares)
<CAPTION>
September 30 December 31
1994 1993
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 1,600 $ 1,208
Accounts payable 1,515 1,056
Accrued payroll and related benefits 531 660
Other accrued expenses 539 785
Deferred revenue 135 106
Current portion of long-term debt 69 54
Current portion of long-term debt to
affiliates 39 822
Guarantee liability (Note 5) 670
Total current liabilities 4,428 5,361
Long-term debt, less current portion 108 86
Long-term debt to affiliates, less current
portion 388 1,228
Guarantee liability (Note 5) 990
Commitments and contingencies (Note 5)
Shareholders' equity:
Convertible Preferred Stock, no par
value; authorized 2,000 shares;
issued and outstanding 1,044 shares
in 1994 and 459 shares in 1993 2,894 1,151
Common Stock, no par value, authorized
40,000 shares; issued and outstanding
15,562 shares 37,946 38,274
Retained earnings (deficit) (31,855) (31,209)
Equity adjustment from foreign currency
translation (1,472) (2,127)
7,513 6,089
Total liabilities and shareholders' equity $13,427 $12,764
</TABLE>
See accompanying notes.<PAGE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of dollars)
<CAPTION>
Nine Months Ended September 30
1994 1993
<S> <C> <C>
Operating activities:
Net income (loss) $ (646) $ 330
Adjustments to reconcile net
income (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization of
property, equipment and leasehold
improvements 230 239
Amortization of goodwill 260 258
Other 45 (83)
Changes in operating assets and
liabilities:
Trade accounts receivable (393) (207)
Accounts payable and accrued
expenses 63 (143)
Other (30) 96
Net cash provided by (used in) operating
activities (471) 490
Investing activities:
Purchase of property, equipment and
leasehold improvements (413) (196)
Financing activities:
Proceeds from notes payable to banks 424 207
Principal payments on notes payable
to banks (128) (125)
Proceeds from long-term debt, including
debt to affiliates 251 23
Principal payments on long-term debt,
including debt to affiliates (39) (552)
Sale of Common Stock for cash 525
Net cash provided by financing activities 508 78
Effect of exchange rate changes on cash 23 (6)
Net increase (decrease) in cash and cash
equivalents (353) 366
Cash and cash equivalents at beginning
of period 1,012 227
Cash and cash equivalents at end of period $ 659 $ 593
Cash paid (received) during the period for:
Interest $ 151 $ 310
Income taxes (12) (6)
</TABLE>
See accompanying notes.<PAGE>
ALPNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1994
1. BASIS OF PRESENTATION
ALPNET, Inc. and its subsidiaries (the "Company"), together
with its affiliates, form a worldwide network dedicated to
providing specialized language services for businesses
engaged in international trade. The Company has combined
computer translation technology with experienced human
translators in its worldwide network to provide a full
spectrum of services to fulfill the language needs of
customers in international business.
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and
footnote disclosures required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only
of normal recurring adjustments) considered necessary for a
fair presentation have been included. Operating results for
the periods presented are not necessarily indicative of the
results that may be expected for the respective complete
years. For further information, refer to the Consolidated
Financial Statements and notes thereto included in the
Company's Annual Report to Shareholders for the year ended
December 31, 1993.
Certain amounts as of December 31, 1993 and for the nine-
month period ended September 30, 1993 have been reclassified
to conform to the 1994 presentation.
[This space intentionally left blank.]
<PAGE>
2. CAPITAL RESTRUCTURING
As of December 31, 1993, the Company's long-term debt to
affiliates consisted of the following:
(Thousands of dollars)
Secured note payable to a major
shareholder and former director,
due in quarterly installments
commencing March 31, 1994 through
June 30, 1996, interest at prime
plus 1.5% payable monthly $1,632
Secured note payable (300,000 Swiss
francs) to another shareholder who
is also currently a director, due
in quarterly installments commencing
March 31, 1994 through June 30,
1996, interest at 9% payable monthly 243
Unsecured note payable to a third
corporate shareholder which is a
related party to another former
director and the current chairman
of the board of directors, due in
quarterly installments commencing
March 31, 1994 through
September 30, 1995, interest
at prime plus 3% payable quarterly 175
2,050
Less current portion 822
$1,228
In June 1994, the Company completed a capital restructuring
with all three of the shareholders holding the debt described
above. The agreements with these shareholders provide for
the following:
(1) Conversion of $1,807,000 of current and long-
term debt into a new series of Convertible
Preferred Stock of the Company;
(2) Deferral of the due dates for repayment of the
300,000 Swiss francs ($243,000) note payable; and
(3) Elimination of all of the outstanding warrants
currently held by these shareholders to purchase up
to 8,390,000 additional shares of the Company's
Common Stock.
The conversion of $1,807,000 of debt ($1,743,000, net of
related costs) to preferred shares resulted in the issuance
of 584,257 shares of Series C Preferred Stock. This
Preferred Stock is convertible at the option of the
shareholders into common shares at a rate of nine common
shares for each preferred share, has voting rights as if the
shares were already converted, and features a 10% non-
cumulative dividend subject to the discretion of the board of
directors. Following the completion of these transactions,
the Company has approximately 22.2 million shares of Common
Stock and Common Stock Equivalents outstanding and no
warrants outstanding.
Substantially all of the Company's assets were encumbered
under the former debt agreements with affiliates. Following
the transactions, the only assets which remain as security
for long-term debt to affiliates are the accounts receivable
and any inventory of ALPNET, Inc. (the U.S. parent company).
In conjunction with the capital restructuring described
above, the Company entered into a "financial monitoring
agreement" with the Company's major shareholder which
requires the Company, among other things, to obtain prior
approval from this shareholder for major financing
transactions and the purchase or sale of a major portion of
the Company's assets.
As described in more detail in Note 5, the former owner of
the Company's German subsidiary also agreed to an additional
deferral of two years for the acquisition guarantee.
Accordingly, the September 30, 1994 consolidated balance
sheet reflects the acquisition guarantee of $990,000 as long-
term rather than as a current liability.
3. DEBT TO AFFILIATES
In July 1994, the Company entered into an agreement with a
current shareholder (who is also the former owner of the
Company's German subsidiary) in order to finance a portion of
a pension obligation owed to this shareholder. In connection
with this agreement, the Company entered into a 300,000
Deutsche Mark ($185,000) note payable which is unsecured,
bears interest at 8%, and is due in monthly installments of
approximately $3,000 through June 1999.
Following this transaction and the conversion of debt to
equity and the deferral of the due dates of the $243,000 note
payable described in Note 2, the Company's maturities for all
debt to affiliates are as follows:<PAGE>
(Thousands of dollars)
Year Ending
December 31
1994 $ 9
1995 39
1996 88
1997 136
1998 136
1999 19
$427
4. INCOME TAXES
The Company files a consolidated U.S. Federal income tax
return which includes all domestic operations. Tax returns
of foreign subsidiaries are filed in accordance with
applicable laws. Fluctuations in the amount of income taxes
arise primarily from the varying combinations of income and
losses of the Company's subsidiaries in the various domestic
and foreign tax jurisdictions, including the utilization in
various degrees of net operating loss carryforwards in many
of these jurisdictions.
As of December 31, 1993, the Company's operating loss
carryforwards for state income tax purposes expired.
Accordingly, income taxes for the nine months ended September
30, 1994 include a provision of approximately $30,000 for
State of Utah income taxes with no corresponding provision
for 1993.
5. ACQUISITION GUARANTEE
In 1988, the Company acquired its German subsidiary for a
combination of cash and shares of the Company's Common Stock.
The acquisition agreement requires the Company to give
additional consideration if the value of the shares of Common
Stock did not reach an agreed-upon level within a specified
period following the acquisition, and remain at that level
until the former owner was able to sell the shares of the
Company's Common Stock for an amount equal to the stipulated
purchase price in the acquisition agreement. As a result of
this requirement, the Company issued additional shares to the
former owner in 1990.
In 1993, the Company and the former owner entered into an
agreement which amended the original acquisition agreement.
This agreement waives the requirement to pay any additional
consideration if the value of all shares of Common Stock
previously issued reached the stipulated purchase price on or
before September 30, 1994 (which date was subsequently
extended to September 30, 1996, as discussed below). If the
stock value does not reach such amount, the Company is
required to pay interest on the stock value deficiency
beginning on September 30, 1996. Alternatively, the Company
could settle such deficiency by making additional payments to
the former owner.
As a result of this waiver agreement, the Company recorded a
guarantee liability in the consolidated balance sheets for
the stock value deficiency calculated based on the trading
value per share of the Company's Common Stock as compared to
the guaranteed value at the balance sheet dates. A decrease
in shareholders' equity has also been recorded for the same
amounts.
In conjunction with the capital restructuring discussed in
Note 2, the former owner of the German subsidiary agreed to
an additional deferral of two years (from September 1994 to
September 1996) before any potential interest payments would
be required to be made for any stock value deficiency.
[This space intentionally left blank.]
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following Management's Discussion and Analysis should be read
in conjunction with the Consolidated Financial Statements and
notes thereto.
Foreign Operations
The Company serves its customers from 25 offices in 10 countries.
The operations of the Company are predominantly located outside
the U.S. Accordingly, the Company is subject to the effects of
foreign currency exchange rate fluctuations among U.S. dollars,
British pounds sterling, German marks, French francs, Canadian
dollars, Swiss francs and other currencies. For all of the
Company's foreign subsidiaries, the functional currency has been
determined to be the local currency. Accordingly, assets and
liabilities are adjusted to reflect period-end exchange rates,
and operating statement items are adjusted at average exchange
rates prevailing during the period. The resultant cumulative
foreign currency adjustments to the assets and liabilities are
recorded as a separate component of shareholders' equity. A
significant portion of the cumulative foreign currency adjustment
relates to changes in the recorded amount of goodwill.
For the three months ended September 30, 1994, the foreign
currency adjustment was positive $249,000 compared to a negative
adjustment of $18,000 for the three months ended September 30,
1993. For the nine months ended September 30, 1994, the foreign
currency adjustment was positive $655,000 compared to a negative
adjustment of $191,000 for the nine months ended September 30,
1993. As of September 30, 1994, the cumulative net effect to the
Company of the equity adjustment from foreign currency
fluctuations is a reduction of $1.5 million in shareholders'
equity.
Results of Operations
In addition to the above balance sheet effects, fluctuating
foreign currency exchange rates also affected the consolidated
operations of the Company for the periods presented. The
following paragraphs describe these effects on results for the
three- and nine-month periods ended September 30, 1994 as
compared with the three- and nine-month periods ended September
30, 1993.
The Company recorded net income of $25,000 for the three months
ended September 30, 1994 compared with net income of $119,000 for
the three months ended September 30, 1993. If foreign currency
exchange rates for 1994 had remained unchanged from 1993, the
Company would have recorded net income of $37,000 instead of
$25,000. Therefore, the decrease in net operating results from
1993 to 1994 of $94,000 consists of a decrease due to actual
operating results of $82,000 and a $12,000 decrease due to
currency exchange rate fluctuations.
The Company experienced a net loss of $646,000 for the nine
months ended September 30, 1994 compared with net income of
$330,000 for the nine months ended September 30, 1993. If
foreign currency exchange rates for 1994 had remained unchanged
from 1993, the Company would have recorded a net loss of $648,000
instead of $646,000. Therefore, the decrease in net operating
results from 1993 to 1994 of $976,000 consists of a decrease due
to actual operating results of $978,000 and a $2,000 increase due
to currency exchange rate fluctuations.
The following table shows a comparison of sales of services in
each of the Company's primary geographic areas for the nine
months ended September 30, 1994 and 1993:
<TABLE>
(Thousands of dollars)
<CAPTION>
Increase (Decrease) in
Nine Months Sales of Services due to Total
Ended September 30 Sales Currency Increase
1994 1993 Volume Differences (Decrease)
<S> <C> <C> <C> <C> <C>
United States $ 1,573 $ 1,900 $ (327) $ $(327)
Canada 2,572 2,334 417 (179) 238
Europe 11,336 11,279 11 46 57
Asia 1,205 978 196 31 227
Eliminations (2,055) (1,926) (134) 5 (129)
Total Sales $14,631 $14,565 $ 163 $ (97) $ 66
</TABLE>
Sales of services were approximately $5.5 million for the three
months ended September 30, 1994 as compared with approximately
$5.0 million for the three months ended September 30, 1993. The
$525,000 increase in reported sales from the third quarter of
1993 to the third quarter of 1994 consists of an increase in
sales volume of $365,000 and a $160,000 increase due to currency
exchange rate variances.
Sales of services were $14.63 million for the nine months ended
September 30, 1994 as compared with $14.56 million for the nine
months ended September 30, 1993. The $66,000 increase in
reported sales from the first nine months of 1993 to the first
nine months of 1994 consists of an increase in sales volume of
$163,000 and a $97,000 decrease due to currency exchange rate
variances. There were significant increases in sales volume in
Canada, the U.K. and Asia. However, these increases in sales
were largely negated by significant decreases in the U.S. and
Germany.
Canadian sales have improved markedly despite a difficult
economic environment in that country and are due in part to
increased international trading as well as marketing efforts
initiated in mid-1993. Increased sales in the UK are primarily a
result of improved economic conditions and, to a lesser extent,
the implementation of a focused sales and marketing plan. Asian
sales are growing as a result of increased client demand for
translation into Asian languages and the opening in July 1994 of
an office in Korea.
The decreases in sales volume in the U.S. and Germany primarily
resulted from reductions in sales to large customers in these
countries as major customers reduced the size and frequency of
their orders for the translation of their product documentation.
The market in the U.S. has been extremely price competitive and
the Company has lost certain repeat orders from existing
customers due to price considerations. The decline in sales in
Germany also reflects the residual effects of a generally
sluggish economy, despite signs of economic improvement in recent
months.
Cost of services sold increased as a percentage of sales of
services for the three- and nine- months ended September 30,
1994, as compared with the same periods in 1993, as a result of
significant competitive pressures on sales prices and resulting
margins, the volume and nature of direct production costs of
large project sales in each period, and certain fixed costs which
do not vary with fluctuating sales levels. There was also an
$85,000 decrease in cost of services attributable to currency
exchange rate differences for the nine months ended September 30,
1994 compared to the same period in 1993.
Generally, the volume of work the Company is producing has been
increasing; however, the work has been sold at much lower prices
in 1994 than in 1993. Due to increased competition, especially
with regard to pricing, the Company expects pressures on gross
margins to continue throughout the remainder of 1994 and into
1995. The Company does not expect to be able to return to 1993
pricing levels in the foreseeable future and is continuing its
efforts to reduce costs to offset the effects of these pricing
pressures.
The decreases in selling, general and administrative expenses for
the three- and nine-months ended September 30, 1994, compared
with the same periods in 1993, are principally the result of
decreases in general corporate administrative costs, partially
offset by the costs of increased marketing efforts and the
opening of new offices in the U.S., Germany and Korea during 1993
and 1994.
The decrease in interest expense of approximately $50,000 and
$150,000, respectively, for the three- and nine-months ended
September 30, 1994, compared with the same periods in 1993,
resulted principally from the capital restructuring completed in
the second quarter of 1994 which eliminated approximately $1.8
million of long-term debt to affiliates. Reference is made to
Note 2 to the Consolidated Financial Statements, "Capital
Restructuring," for further details of the restructuring
transactions.
The U.S. parent company and each of its subsidiaries are separate
legal and taxable entities subject to the domestic or foreign
taxes pertaining to operations in their respective jurisdictions.
For tax purposes, the U.S. parent company and most of its
subsidiaries have unused net operating losses from prior years
which can be utilized to reduce future years' taxable income of
the respective entities. The availability of these net operating
losses is governed by applicable domestic and foreign tax rules
and regulations, some of which limit the utilization of such
losses due to minimum tax requirements and other provisions.
Income tax expense, as presented in the accompanying Consolidated
Financial Statements, represents the combined income tax expense
and income tax credits of each of the entities of the Company.
Fluctuations in the amount of income taxes arise primarily from
the varying combinations of income and losses of the Company's
subsidiaries in the various domestic and foreign tax
jurisdictions, including the utilization in various degrees of
net operating loss carryforwards in many of these jurisdictions.
Note 4 to the accompanying Consolidated Financial Statements,
"Income Taxes," contains additional information pertaining to the
computation of income taxes.
Liquidity and Sources of Capital
At September 30, 1994, the Company's cash and cash equivalents
were approximately $660,000 and the Company had working capital
of approximately $1,250,000. At December 31, 1993, the Company's
working capital was approximately $125,000. The primary reason
for the increase in working capital during the first nine months
of 1994 is the elimination of the current portion of long-term
debt as a result of the previously mentioned capital
restructuring.
For the nine months ended September 30, 1994, the Company had a
negative cash flow from operating activities of $470,000 compared
with a positive cash flow from operations for the nine months
ended September 30, 1993 of $490,000. For both periods, the
Company's investing activities consisted primarily of the
acquisition of equipment needed to maintain or upgrade production
capability.
Financing activities for both periods included fluctuations in
the amounts utilized under bank lines of credit which are used to
finance the Company's working capital needs. Additionally, in
1994, the Company increased its borrowings from affiliates by
$185,000 in order to finance a pension obligation owed to one of
the affiliates, the former owner of one of its subsidiaries. In
1993, the Company issued Common Stock for cash of $525,000 and
primarily used the proceeds to retire long-term debt to banks.
The Company's primary working capital needs relate to the funding
of customer accounts receivable. The Company funds some of its
working capital needs with various lines of credit with banks in
the U.K., Spain, Germany and Canada. Most of the lines of credit
are secured by accounts receivable and other assets of the
respective subsidiaries and are subject to annual renewals. In
addition to available cash, as of September 30, 1994 the Company
had unused amounts under these lines of credit of approximately
$370,000. If future operations provide a positive cash flow, the
Company believes the available amounts under these lines of
credit will be sufficient to fund operations at current levels as
well as enable the Company to grow at a modest level without
seeking significant new sources of working capital.
The Company currently has no significant commitments for capital
expenditures. The Company does plan, however, to acquire and
place additional translation services workstations in its offices
worldwide in connection with future orders from customers, as
such orders are received. Such equipment purchases in future
periods are not expected to vary materially from the levels of
equipment purchases experienced in recent periods. The Company
expects to finance a certain portion of the equipment cost
through bank and/or leasing sources. Additionally, while there
are no current commitments, the Company may open additional
offices in strategic locations worldwide, as customer demands
dictate and opportunities arise. For example, in July 1994, the
Company opened a sales and production office in Korea in order to
meet the increased demand for translation into the Korean
language. The costs of opening this office were not substantial
and were almost exclusively related to the procurement of
computer equipment and other translation-related equipment. The
costs of any additional offices are not expected to require a
significant amount of cash.
As a result of the capital restructuring consummated in the
second quarter of 1994, the Company's long-term debt to
affiliates (including approximately $820,000 which was due in
1994) was reduced from $2,050,000 to $243,000 and outstanding
preferred stock increased by over $1.7 million. As a result of
this and other transactions, since December 31, 1993 the
Company's total shareholders' equity has increased from $6.1
million to $7.5 million.
The Company believes it has the ability to issue additional
equity securities if necessary, but does not currently have any
firm plans to do so. In past years, the Company has relied on
major shareholders of the Company to fund certain obligations,
but does not anticipate using this source of capital in the
foreseeable future.
As a result of anticipated future cash flows from operations and
available cash and bank lines of credit, together with
management's plans to increase revenues and control expenses,
management believes that the Company's cash flow will be adequate
to meet its financial obligations during 1994. It is more
difficult to assess cash flow beyond 1994 and the ability of the
Company to meet its long-term commitments without additional
sources of capital is directly related to the Company's
operations providing a positive cash flow.
Additional details of the Company's notes payable to banks, long-
term debt and long-term debt to affiliates are included in Notes
2 and 3 to the Consolidated Financial Statements included herein
and Note 4 to the Consolidated Financial Statements included in
the Company's 1993 Annual Report to Shareholders.
Due to prior years' operating losses, the Company and many of its
subsidiaries have net operating loss carryforwards available to
offset future taxable income in the various countries in which
the Company operates. As a result, the Company historically has
not had significant income tax liabilities arise requiring the
expenditure of cash. Due to currently available net operating
loss carryforwards, the Company expects this general trend to
continue in 1994 and in 1995.<PAGE>
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
(11) Statement Re: Computation of Per Share Earnings
(b) The Company has filed the following reports on Form 8-K
during the three months ended September 30, 1994.
Date of
Report Item Reported
07/12/94 ALPNET Announces Opening of ALPNET-Korea
08/08/94 ALPNET Announces Second Quarter 1994 Results
<PAGE>
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.
ALPNET, Inc.
Registrant
Date: November 9, 1994 /s/ Thomas F. Seal
Thomas F. Seal
President and Chief Executive Officer
Date: November 9, 1994 /s/ D. Kerry Stubbs
D. Kerry Stubbs
Vice President Finance and
Chief Financial Officer
E X H I B I T 1 1
<TABLE>
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Primary (1)
(Thousands of
dollars and
shares)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net income (loss) $25 $119 $(646) $330
Weighted average
shares of Common
Stock outstanding 15,562 12,962 15,562 12,696
Weighted average
shares of Common
Stock issuable
upon conversion
of Convertible
Preferred Stock 6,637 1,378 2,237 1,378
Total shares of
Common Stock and
Common Stock
equivalents 22,199 14,340 17,799 14,074
Net income (loss)
per share $.001 $.008 $(.036) .023
</TABLE>
(1) Primary and fully diluted per share earnings (loss) are
substantially the same for each period presented.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1993, AND FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<PERIOD-END> SEP-30-1994 DEC-31-1994
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<DEPRECIATION> 2758 2575
<TOTAL-ASSETS> 13427 12764
<CURRENT-LIABILITIES> 4428 5361
<BONDS> 1486 1314
<COMMON> 37946 38274
0 0
2894 1151
<OTHER-SE> (33327) (33336)
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<TOTAL-REVENUES> 14631 19459
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