<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 14, 1999 ( July 30, 1999)
---------------------------------
Date of Report (Date of earliest event reported)
ALPNET, Inc.
------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Utah 0-15512 87-0356708
---- ------- ----------
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
Incorporation) Identification No.)
</TABLE>
4460 South Highland Drive,
Suite #100
Salt Lake City, Utah 84124-3543
-------------------------------
(Address of principal executive offices including zip code)
(801) 273-6600
--------------
(Registrant's telephone number,
including area code)
Not applicable
(Former name or former address if changed since last report)
<PAGE>
ALPNET,INC.AND SUBSIDIARIES
The Current Report on Form 8-K/A amends and supplements the Current Report on
Form 8-K dated August 10, 1999.
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS.
On July 30, 1999, the Registrant acquired all of the outstanding share capital
of Technical Publishing Services B.V. ("TPS"), formerly Stork TPS, a Dutch
corporation based in Hengelo, The Netherlands. In connection therewith,
Registrant hereby files (i) TPS' audited financial statements and notes thereto
for the years ended December 31, 1998 and 1997, (ii) Registrant's unaudited pro
forma condensed consolidated balance sheet as of June 30, 1999, and (iii)
Registrant's unaudited pro forma consolidated statements of operations for the
year ended December 31, 1998; and for the six months ended June 30, 1999.
ITEM 7: FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
<S> <C>
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
TPS audited financial statements and notes thereto for the years ended
December 31, 1998 and 1997.
(b) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION.
(i) ALPNET, Inc. unaudited pro forma condensed consolidated balance
sheet as of June 30, 1999;
(ii) ALPNET, Inc. unaudited pro forma consolidated statements of
operations for the year ended December 31, 1998;
(iii) ALPNET, Inc. unaudited pro forma consolidated statements of
operations for the six months ended June 30, 1999; and
(iv) Notes to the unaudited pro forma consolidated financial
information.
(c) EXHIBITS.
The following Exhibits are filed with this Current Report on Form 8-K:
Exhibit No: Description
- ----------- -----------
2.1 Stock Purchase Agreement, dated July 30, 1999 (previously filed).
99.1 TPS audited financial statements and notes thereto for the years
ended December 31, 1998 and 1997.
99.2 ALPNET, Inc. unaudited pro forma consolidated financial
information.
</TABLE>
2
<PAGE>
ALPNET, INC. AND SUBSIDIARIES
SIGNATURE
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.
By: /s/ John W. Wittwer
-------------------
Name: John W. Wittwer
Title: Chief Financial Officer
Date: October 14, 1999
3
<PAGE>
EXHIBIT 99.1
Combined financial statements 1998
and 1997 of Stork Technical
Publications Services (TPS)
<PAGE>
EXHIBIT 99.1 (continued)
CONTENTS
Report of independent auditors 3
Combined statements of net assets as at December 31, 1998 and 1997 4
Combined profit and loss accounts for the years ended December 31, 1998
and 1997 5
Combined statements of cash flows for the years ended
December 31, 1998 and 1997 6
Notes to the combined financial statements 7
2
<PAGE>
EXHIBIT 99.1 (continued)
REPORT OF INDEPENDENT AUDITORS
Board of Directors of Stork N.V.:
We have audited the combined statements of net assets of Technical Publication
Services and its subsidiary ("TPS") representing the technical publication
operations of Stork N.V. and its subsidiaries (as defined in Note 1 of the Notes
to the Combined Financial Statements) as at December 31, 1998 and 1997 and the
related combined profit and loss accounts and cash flows for each of the years
in the two year period ended December 31, 1998. These combined financial
statements, which are expressed in Dutch Guilders, are the responsibility of
TPS's management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the Netherlands, which are substantially the same as auditing standards
generally accepted in the United States. These standards require that we plan
and perform the audit to obtain reasonable assurance about whether the combined
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the combined financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of TPS at December 31,
1998 and 1997, and the combined results of its operations and cash flows for
each of the years in the two year period ended December 31, 1998, in conformity
with generally accepted accounting principles in the Netherlands.
Generally accepted accounting principles in the Netherlands differ in certain
significant respects from generally accepted accounting principles in the United
States. Application of generally accepted accounting principles in the United
States would have affected combined results of operations for each of the years
in the two year period ended December 31, 1998 and net assets at December 31,
1998 and 1997 to the extent summarised in Note 16 to the notes to the combined
financial statements.
Enschede, June 14, 1999
KPMG Accountants N.V.
3
<PAGE>
EXHIBIT 99.1 (continued)
COMBINED STATEMENTS OF NET ASSETS AS AT DECEMBER 31, 1998
AND 1997
(after profit appropriation)
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
- ---------------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible fixed assets 330 388
--------------- ---------------
330 388
CURRENT ASSETS
Raw materials 15 15
Work in progress 1,038 294
Accounts receivable and other receivables 1,515 2,931
Cash 138 283
--------------- ---------------
2,706 3,523
CURRENT LIABILITIES
Trade creditors 85 142
Tax payable 607 453
Other current liabilities 763 864
--------------- ---------------
1,455 1,459
RESULT CURRENT ASSETS LESS CURRENT LIABILITIES 1,251 2,064
--------------- ----------------
RESULT ASSETS LESS CURRENT LIABILITIES 1,581 2,452
PROVISIONS
Warranties 30 25
Restructuring - 50
Deferred taxes 160 (43)
--------------- ---------------
190 32
--------------- ----------------
NET ASSETS 1,391 2,420
NET INVESTMENT OF STORK N.V* 1,391 2,420
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment of Stork N.V. includes Dfl. 266,000 (1997: Dfl 246,000)
relating to social security premiums and payroll taxes regarding TPS
employees and paid by Stork N.V. on behalf of TPS. The net investment of
Stork N.V. also includes corporate charges of an amount of Dfl. 608,000
(1997: Dfl. 520,000).
4
<PAGE>
EXHIBIT 99.1 (continued)
COMBINED PROFIT AND LOSS ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
- ----------------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C> <C> <C>
Net turnover 14,144 12,268
Cost of sales (10,428) (9,261)
Corporate charges (419) (494)
----------------- ------------------
GROSS OPERATING RESULT 3,297 2,513
Selling and distribution costs 715 655
General administrative expenses 712 493
Corporate charges 136 72
----------------- ------------------
TOTAL OPERATING EXPENSES 1,563 1,220
------------------ ------------------
OPERATING RESULT BEFORE CORPORATE INCOME
TAX 1,734 1,293
TAXES (607) (453)
------------------ ------------------
NET INCOME 1,127 840
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
EXHIBIT 99.1 (continued)
COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
- -----------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income 1,127 840
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 102 174
Increase in work in progress and raw materials (744) (227)
Decrease in trade accounts receivable and other receivables 1,416 144
Decrease in trade creditors (57) (291)
Increase in tax payable 154 453
Decrease (increase) in other current liabilities (101) 276
Increase (decrease) in provisions 158 (151)
-----------------------------------
Net cash provided by operating activities 2,055 1,218
-----------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (44) (305)
Disposals - 106
-----------------------------------
Net cash used by investing activities (44) (199)
-----------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Net intercompany activity (2,156) (956)
-----------------------------------
Net cash used by financing activities (2,156) (956)
-----------------------------------
NET DECREASE (INCREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period 283 220
Decrease/increase of cash and cash equivalents (145) 63
-----------------------------------
Cash and cash equivalents at end of period 138 283
-----------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH
Income tax paid - -
Interest paid - -
- -----------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements
1 PRINCIPLES FOR THE VALUATION OF ASSETS AND LIABILITIES AND THE DETERMINATION
OF THE RESULT
GENERAL
Basis of preparation and combination
Technical Publication Services ("Business Unit") is a business unit of
Koninklijke Machinefabriek Stork B.V. ("KMS B.V."), a private limited company
and a subsidiary of Stork N.V. The Business Unit's principal activities are the
writing and translation of operating manuals for machines and other types of
industrial documentation. TPS B.V. is a separate legal entity and is a
subsidiary of KMS B.V. It has no principal activities other than the employment
of 6 employees. All associated costs incurred by TPS B.V. are charged to the
Business Unit.
The accompanying combined financial statements of Technical Publication Services
("TPS") for the two years ended December 31, 1998 were prepared in connection
with the acquisition of TPS by ALPNET, Inc. in order to show the financial
position, profit and loss account and cash flows for TPS as a whole. They have
been prepared by aggregating the financial information included within the
consolidated accounts of KMS B.V. relating to the Business Unit and TPS B.V. and
as if TPS had formed a discreet operation for the entire two year period. KMS
B.V. financial statements are submitted to Stork N.V. for inclusion in its
consolidated accounts.
TPS is not a separate legal entity, it has not been separately financed and has
not necessarily been subject to full taxation on its results. In addition,
central management and pension charges reflect the cost structure and pension
arrangements for Stork N.V. Central management and pension charges and taxation
have been reflected in the combined financial statements on the basis and to the
extent indicated below.
Certain central management and other similar costs have been directly attributed
to the Business Unit and TPS B.V. based on an appropriate allocation of such
costs between other Stork N.V. businesses and TPS's operations.
The pension cost attributable to TPS has been based on the actual premiums paid
by Stork N.V. relating to the individual employees working for TPS.
During the two years ended December 31, 1998, the operations of TPS were not
separate legal entities or did not operate within the business structure
reflected in the combined financial statements and were not necessarily subject
to full taxation of their results. The tax charge attributable to TPS has been
based on 35% of the statutory tax rate applied to pre-tax earnings.
The principles applied in respect of the valuation of assets and liabilities and
determination of the result are the Stork N.V accounting principles and
practises. Due to their materiality and relevance, the applied practices have
been adjusted for the following aspects:
. the bad debts provision does not include a general provision;
. the work in progress provision made for expected losses does not include a
general provision;
. the warranty provision is accounted for based on the estimated warranty
costs;
. the accrual for completed projects has been based on the expected costs to be
incurred in the future.
7
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
Insofar as not stated otherwise, monetary assets and liabilities are shown at
nominal value.
TANGIBLE FIXED ASSETS
Machinery and equipment are valued at historical cost. Depreciation is
calculated using the straight-line method on the basis of useful life.
The rates of depreciation are:
. Machinery: 10%
. Other equipment: 6,67 - 20%
RAW MATERIALS
Raw materials are valued at historical cost less a provision for obsolescence.
WORK IN PROGRESS
Work in progress is stated at direct costs plus an allocation of indirect costs
which includes an allocation for charges for innovation, less provisions made
for expected losses and amounts billed. Profits are recognised in the profit and
loss account on completion of the project ("completed contract method").
ACCOUNTS RECEIVABLE
Accounts receivable are stated at nominal value less a bad debt provision.
CASH AT BANKS AND IN HAND
Cash at banks and in hand are stated at nominal value.
PROVISIONS
Warranty provisions
The warranty provision is accounted for based on the estimated warranty costs.
RESTRUCTURING PROVISIONS
The restructuring provision is accounted for based on the estimated redundancy
costs of personnel.
COMBINED PROFIT AND LOSS ACCOUNT
NET TURNOVER
Net turnover includes the proceeds from the sale and delivery of goods and
services after deducting discounts and bonuses as well as taxes on sales.
EXPENSES
Expenses are included in the profit and loss account at historical costs.
INTEREST
The profit and loss account does not include interest charges or interest income
as the operations of TPS are funded through operating cash flows and advances
from KMS, if any, which are on an interest free basis.
8
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
INCOME TAXES
TPS forms part of the fiscal unity of Stork N.V for tax purposes. For purposes
of these combined financial statements, the income taxes are calculated as if
TPS were a stand-alone legal entity. The tax expense is calculated at 35% of
pre-tax earnings, which is the statutory income tax rate in the Netherlands.
2 FIXED ASSETS
TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Plant and Other fixed Total
machinery assets
- ------------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
Balance as at 31 December 1997:
<S> <C> <C> <C>
Historical costs 462 1,071 1,533
Accumulated depreciation 392 753 1,145
-----------------------------------------------------------
Book value 70 318 388
-----------------------------------------------------------
Movements in book value:
Investments - 44 44
Depreciation (10) (92) (102)
-----------------------------------------------------------
Balance (10) (48) (58)
-----------------------------------------------------------
Balance as at 31 December 1998:
Historical costs 462 1,115 1,577
Accumulated depreciation 402 845 1,247
-----------------------------------------------------------
Book value 60 270 330
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The current value is approximately Dfl. 900,000.
9
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
3 RAW MATERIALS
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Acquisition price 37 15
Less: Provision for obsolescence (22) -
-------------------------------------
Book value 15 15
- --------------------------------------------------------------------------------------------
</TABLE>
4 WORK IN PROGRESS
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Costs of labour and raw materials
and indirect attributable wage costs and overheads 2,386 1,410
Less: Invoiced instalments (1,283) (1,044)
Provision for expected losses (30) (40)
Other provision (35) (32)
-------------------------------------
1,038 294
- --------------------------------------------------------------------------------------------
</TABLE>
5 ACCOUNTS RECEIVABLE
TRADE DEBTORS
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Nominal value of outstanding accounts receivable 1,754 2,789
Less: Bad debt provision (214) (90)
-------------------------------------
1,540 2,699
- --------------------------------------------------------------------------------------------
</TABLE>
OTHER RECEIVABLES
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Other receivables (25) 232
-------------------------------------
(25) 232
- --------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
6 CASH AT BANKS AND IN HAND
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- -------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Bank 138 283
- -------------------------------------------------------------------------------------------
</TABLE>
7 OTHER CURRENT LIABILITIES
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Holiday allowance 148 144
Vacation days 182 200
Social security premiums (43) 188
Accruals for completed projects 476 332
-------------------------------------
763 864
- --------------------------------------------------------------------------------------------
</TABLE>
8 PROVISIONS
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
- -------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Provision for warranties 30 25
Provision for restructuring - 50
Provision for deferred taxes 160 (43)
-------------------------------------
190 32
- -------------------------------------------------------------------------------------------
</TABLE>
9 NET INVESTMENT OF STORK N.V.
<TABLE>
<CAPTION>
1998 1997
- --------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
At the beginning of the year 2,420 2,536
Profit retained for the financial year 1,127 840
Net intercompany activity (2,156) (956)
-------------------------------------
At the end of the year 1,391 2,420
- --------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
10 OFF-BALANCE SHEET COMMITMENTS
LEASE
As at December 31, 1998 TPS has 12 lease agreements concerning the leasing of
cars. The average contract period is 4 years. The average annual costs amounts
Dfl. 200,000 (including fuel).
RENT
There are internal rent arrangements concerning the charges of rent to business
units.
11 NET TURNOVER
The net turnover for the year ending December 31, 1998 includes an amount of
Dfl. 2,042,000 (1997: Dfl. 2,592,000) sales to group companies of Stork N.V.
12 CORPORATE CHARGES
The charges of corporate costs include allocated business unit costs, management
fee of Stork N.V., allocated overhead costs by KMS B.V. and contribution in the
costs of human resource management.
13 DEPRECIATION FIXED ASSETS
<TABLE>
<CAPTION>
1998 1997
- --------------------------------------------------------------------------------------------------------
(in thousand guilders)
<S> <C> <C>
Depreciation fixed assets 102 135*
- ---------------------------------------------------------------------------------------------------------
* The difference with the amount of Dfl. 174,000 presented in the movement schedule of the fixed
assets is included in other items of the profit and loss account.
</TABLE>
14 WAGES AND SALARIES
<TABLE>
<CAPTION>
1998 1997
- --------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Gross wages and salaries 3,313 3,035
Social security premiums and pension costs 1,184 749
Other personal costs 196 83
-------------------------------------
Total 4,693 3,867
- --------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
15 NUMBER OF EMPLOYEES
During the financial year 1998 the average number of employees amounted 48
(1997:42). The number of employees can be specified as follows:
<TABLE>
<CAPTION>
1998 1997
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Direct 34 30
Indirect 12 12
---------------------------
Total 48 42
- ----------------------------------------------------------------------------------------
</TABLE>
16 DIFFERENCES BETWEEN DUTCH GAAP AND US GAAP
The combined financial statements of TPS have been prepared in accordance with
accounting principles generally accepted in the Netherlands (Dutch GAAP) which
differ in certain significant respects from those generally accepted in the
United States (US GAAP).
The principal differences are set out below.
1. The pension cost included in the combined profit and loss accounts are
computed in accordance with Dutch GAAP. For defined benefit plans, those
amounts are based upon the actuarially determined premiums which TPS is
required to pay each year. No assets or obligations in respect of these
benefits is included in the combined statements of net assets. Under US
GAAP pension costs are determined in accordance with Statement No.
87,"Employer's Accounting for Pensions" which requires that pension costs
be determined based on a comparison of the projected benefit obligation
with the market value of the underlying plan assets and other unrecognised
gains and losses on an actuarial basis and the accrual or prepaid pension
costs are recorded in the balance sheet.
2. Under Dutch GAAP, TPS recognises the profit or loss on work in progress as
the work is completed (completed contract method). Under US GAAP, the
percentage of completion method is required if progress and costs to
completion can be estimated. The US GAAP adjustment is the difference
between profit recognised under Dutch GAAP and profit recognised based on
percentage of completion as determined under US GAAP.
3. Under Dutch GAAP and for purposes of these combined financial statements,
certain corporate charges are made by KMS to TPS and have been included in
the cost of sales. For US GAAP purposes charges in excess of actual costs
incurred by KMS would not qualify for recognition in the profit and loss
accounts. Accordingly, these excess costs have been removed.
13
<PAGE>
EXHIBIT 99.1 (continued)
Notes to the combined financial statements (con't)
<TABLE>
<CAPTION>
1998 1997
- ------------------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Net income in conformity with Dutch GAAP 1,127 840
(1) Pension costs 20 30
(2) Work in progress valued at percentage of completion method 82 (126)
(3) Corporate charges 220 263
(4) Income tax effect(35%) (113) (58)
---------------------------------------
Total adjustments 209 109
Net income in conformity with US GAAP 1,336 949
- ----------------------------------------------------------------------------------------------------------
</TABLE>
NET ASSETS
<TABLE>
<CAPTION>
1998 1997
- ------------------------------------------------------------------------------------------------------------------
(in thousands of Dutch guilders)
<S> <C> <C>
Net assets in conformity with Dutch GAAP 1,391 2,420
(1) Pension costs 220 200
(2) Work in progress valued at percentage of completion method 142 60
(3) Corporate charges - -
(4) Income tax effect (127) (91)
---------------------------------------
Total adjustments 235 169
Net assets in conformity with US GAAP 1,626 2,589
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Hengelo, June 14, 1999
Managing Director
J.M. Ros
14
<PAGE>
EXHIBIT 99.2
ALPNET, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1999
<TABLE>
<CAPTION>
Proforma Pro Forma
adjustments Condensed
Thousands of dollars ALPNET,Inc. TPS (Note 3) Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 1,275 $ 7 $ 225 (a) $ 1,507
Trade accounts receivable 9,369 - - 9,369
Work-in-process 3,427 662 - 4,089
Prepaid expenses and other 928 46 - 974
----------------------------------------------------------------
Total current assets 14,999 715 225 15,939
Property, equipment, and leasehold improvements:
Property, equipment, and leasehold improvements: 7,668 131 - 7,799
Less accumulated depreciation and amortization 4,358 - - 4,358
----------------------------------------------------------------
Net property, equipment, and leasehold improvements 3,310 131 - 3,441
Other assets
Goodwill and other assets less accumulated amortization 6,095 - 6,392 (b) 12,487
----------------------------------------------------------------
Total assets $ 24,404 $ 846 $ 6,617 $ 31,867
================================================================
Liabilities and shareholders' equity
Current liabilities:
Notes payable to banks $ 3,224 $ - $ - $ 3,224
Notes payable to affiliates - 572 225 (a) 797
Accounts payable 4,440 - - 4,440
Accrued payroll and related benefits 1,380 207 - 1,587
Other accrued liabilities 2,291 67 256 (b) 2,614
Current portion of long-term debt 1,040 - - 1,040
----------------------------------------------------------------
Total current liabilities 12,375 846 481 13,702
Long-term liabilities 1,017 - - 1,017
Shareholders' equity:
Convertible Preferred Stock 242 - - 242
Common Stock 42,800 - 6,136 (b) 48,936
Accumulated deficit (29,502) - - (29,502)
Accumulated other comprehensive income (2,528) - - (2,528)
----------------------------------------------------------------
Total shareholders' equity 11,012 - 6,136 17,148
----------------------------------------------------------------
Total liabilities and shareholders' equity $ 24,404 $ 846 $ 6,617 $ 31,867
================================================================
</TABLE>
See accompanying notes.
1
<PAGE>
EXHIBIT 99.2 (continued)
ALPNET, INC. AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Statement of Operations for the year ended
December 31, 1998
<TABLE>
<CAPTION>
Proforma
TPS adjustments Pro Forma
Thousands of dollars and shares ALPNET, Inc. (Note 2) (Note 3) Consolidated
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales of services $ 49,771 $ 7,143 $ - $ 56,914
Operating expenses:
Cost of services sold 38,561 5,266 - 43,827
Selling, general, and administrative expenses 8,400 838 (147) (c) 9,091
Development costs 1,423 - - 1,423
Amortization of goodwill 417 - 533 (d) 950
Restructuring expenses 1,291 - - 1,291
--------------------------------------------------------------------
Total operating expenses 50,092 6,104 386 56,582
--------------------------------------------------------------------
Operating income (321) 1,039 (386) 332
Interest expense, net 343 - 40 (e) 383
--------------------------------------------------------------------
Income (loss) before income taxes (664) 1,039 (426) (51)
Income taxes 546 364 36 (f) 946
--------------------------------------------------------------------
Net income (loss) $ (1,210) $ 675 $ (462) $ (997)
====================================================================
Loss per share - basic (0.051) (0.037)
====================================================================
Loss per share - assuming dilution (0.051) (0.037)
====================================================================
Shares used in loss per share calculations
Basic 23,888 3,000 26,888
====================================================================
Assuming Dilution 23,888 3,000 26,888
====================================================================
</TABLE>
See accompanying notes.
2
<PAGE>
EXHIBIT 99.2 (continued)
ALPNET, INC. AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Statement of Operations for the six months
ended June 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proforma
adjustments Pro Forma
Thousands of dollars and shares ALPNET, Inc. TPS (Note 3) Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Sales of services $ 25,366 $ 4,225 $ - $ 29,591
Operating expenses:
Cost of services sold 19,553 3,147 - 22,700
Selling, general, and administrative expenses 4,625 636 (157) (c) 5,104
Development costs 311 - - 311
Amortization of goodwill 204 - 266 (d) 470
-----------------------------------------------------------------------------------
Total operating expenses 24,693 3,783 109 28,585
-----------------------------------------------------------------------------------
Operating income 673 442 (109) 1,006
Interest expense, net 213 - 20 (e) 233
-----------------------------------------------------------------------------------
Income (loss) before income taxes 460 442 (129) 773
Income taxes 216 154 48 (f) 418
-----------------------------------------------------------------------------------
Net income (loss) $ 244 $ 288 $ (177) $ 355
===================================================================================
Income per share - basic 0.010 0.013
===================================================================================
Income per share - assuming dilution 0.009 0.012
===================================================================================
Shares used in loss per share calculations
Basic 24,422 3,000 27,422
===================================================================================
Assuming Dilution 26,156 3,876 30,032
===================================================================================
</TABLE>
See accompanying notes.
3
<PAGE>
ALPNET, INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Consolidated Financial Statements
1. Basis of Presentation
On July 30, 1999, the Registrant entered into a Stock Purchase Agreement to
acquire the entire outstanding share capital of Technical Publishing Services
B.V. ("TPS"), formerly Stork TPS, a Dutch corporation based in Hengelo, The
Netherlands. The purchase price approximated $6,392,000.
The unaudited pro forma condensed consolidated balance sheet assumes the
acquisition took place as of June 30, 1999 and combines ALPNET's unaudited
consolidated balance sheet as of June 30, 1999 with TPS' unaudited balance sheet
as of June 30, 1999.
The unaudited pro forma consolidated statements of operations assume that the
acquisition took place as of the beginning of 1998 and then carried forward into
fiscal 1999. ALPNET's consolidated statements of operations for the periods
presented include the acquistion of EP Publishing Partners GmbH ("EP") as
previously filed in the Current Report on Form 8-K/A dated September 10, 1999.
The unaudited pro forma consolidated statements of operations combine:
ALPNET's consolidated statement of operations for the year ended December 31,
1998 (including EP) and TPS' statement of operations for the year ended December
31, 1998, and
ALPNET's consolidated statement of operations for the six months ended June 30,
1999 (including EP) and TPS' statement of operations for the six months ended
June 30, 1999.
There were no material transactions between ALPNET and TPS during the periods
presented.
There are no material differences between the accounting policies of ALPNET and
TPS.
The pro forma consolidated provision for income taxes may not represent the
amounts that would have resulted had ALPNET and TPS filed consolidated income
tax returns during the periods presented.
2. TPS
The amounts shown in the TPS column of the unaudited pro forma consolidated
statement of operations for the year ended December 31, 1998 have been adjusted
to reflect certain US GAAP adjustments as detailed in the notes to the combined
financial statements of TPS.
3. Pro Forma Adjustments
The pro forma adjustments are based on ALPNET management's estimates. In
addition, management is in the process of assessing and formulating its
integration plans and does not foresee any material charges or credits against
income during the 12 months succeeding the acquisition.
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ALPNET, INC. AND SUBSIDIARIES
3. Pro Forma Adjustments (continued)
(a) In conjunction with the acquisition, ALPNET obtained a loan from STORK
N.V., a Netherlands corporation and former parent of TPS ("STORK"), in the
amount of NLG 1,700,000 (approximately $797,000). The proceeds from the loan
were used to satisfy the current account due to STORK (NLG 1,220,000 or
$572,000 as of June 30, 1999) from TPS and to provide additional funding for
ALPNET. The additional funding of $225,000 ($797,000 less $572,000) is
included as a pro forma adjustment. Per the loan agreement, the loan bears
interest at 5 percent and is to be repaid on July 31, 2000.
(b) The purchase price of approximately $6,392,000, including acquisition costs,
was allocated entirely to goodwill which is being amortized over a period of
12 years, its estimated useful life. The purchase price was paid with
3,000,000 shares of ALPNET common stock with a fair value approximating
$6,136,000 and includes acquisition costs approximating $256,000.
(c) The pro forma consolidated statements of operations include certain internal
corporate charges that were allocated from STORK to TPS. On a forward-
looking basis, such costs would not be incurred. As such, these amounts
have been excluded as a pro forma adjustment.
(d) The annual amortization charge to income related to goodwill approximates
$533,000. This charge is reflected in the pro forma consolidated statements
of operations and is presented below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Estimated Calculated Calculated
Useful Amortization Amortization
Life for the year ended for the six months
Amount in Years December 31, 1998 ended June 30, 1999
____________________________________________________________________________________________________
Goodwill $ 6,392,000 12 $ 533,000 $ 266,000
</TABLE>
(e) The annual interest charge to income related to the loan from STORK
approximates $40,000. This charge is reflected in the pro forma
consolidated statements of operations and is presented below:
<TABLE>
<CAPTION>
Calculated Calculated
Interest Interest
Amount Interest for the year ended for the six months
Outstanding Rate December 31, 1998 ended June 30, 1999
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Note to STORK $ 797,000 5% $ 40,000 $ 20,000
</TABLE>
(f) The tax effect of the pro forma adjustments is based on a tax rate of 35%
which is consistent with the rate included in the audited financial
statements of TPS. Goodwill amortization is not deductible for tax
purposes.
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ALPNET, INC. AND SUBSIDIARIES
4. Pro Forma Income (Loss) Per Common Share
Pro forma income (loss) per share - basic was calculated based on the issuance
of approximately 3,000,000 shares of ALPNET common stock. Pro forma loss per
share - assuming dilution, at December 31, 1998, does not include any common
stock equivalents as their effect would be anti-dilutive. Pro forma income per
share - assuming dilution, at June 30, 1999, includes 3,876,000 ALPNET common
shares of which approximately 876,000 are attributable to shares of ALPNET
common stock which will be issued in part or in whole contingent upon the stock
price at July 30, 2000, as defined in the stock purchase agreement which was
previously filed in the Current Report on Form 8-K dated August 10, 1999.
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