<PAGE>
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 31, 1996
INDUSTRIAL TRAINING CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 0-13741 52-1078263
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
13515 DULLES TECHNOLOGY DRIVE
HERNDON, VIRGINIA 20171-3413
(Address of principal executive offices)
Registrant's telephone number, including area code: (703) 713-3335
NONE
(Former name and address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements and pro forma financial information
concerning the Company are being provided in accordance with the instructions to
this item not later than 60 days from the date of the Company's Form 8-K
previously filed on January 13, 1997.
(a) Financial Statements of Business Acquired
(b) Pro forma Financial Information
(c) Exhibits
2.1 Agreement and Plan of Reorganization dated as of
December 31, 1996, by and among Industrial Training
Corporation, ITC Acquisition Corp. and Anderson Soft-
Teach, without annexes or schedules.*
4.1 Registration Rights and Shareholders Agreement dated
as of December 31, 1996 between Industrial Training
Corporation and the former shareholders of Anderson
Soft-Teach identified therein.*
22.1 Press Release dated January 3, 1997 issued by
Industrial Training Corporation.*
23 Independent Auditor's Consent
* These exhibits are incorporated herein by reference to the
corresponding exhibit in the Company's Form 8-K (Commission File No. 0-13741)
filed with the Securities and Exchange Commission on January 13, 1997.
2
<PAGE>
(a) ANDERSON SOFT-TEACH
Financial Statements for the Six Months Ended
December 30, 1996 and the Years Ended June 30,
1996 and 1995 and Independent Auditors' Report
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
Anderson Soft-Teach:
We have audited the accompanying balance sheets of Anderson Soft-Teach (the
"Company") as of December 30, 1996 and June 30, 1996 and 1995, and the related
statements of operations, shareholders' equity, and cash flows for the six
months ended December 30, 1996 and the years ended June 30, 1996 and 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the 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, such financial statements present fairly, in all material
respects, the financial position of Anderson Soft-Teach at December 30, 1996 and
June 30, 1996 and 1995, and the results of its operations and its cash flows for
the six months ended December 30, 1996 and the years ended June 30, 1996 and
1995 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
San Francisco, California
February 21, 1997
4
<PAGE>
<TABLE>
ANDERSON SOFT-TEACH
BALANCE SHEETS
DECEMBER 30, 1996, JUNE 30, 1996 AND 1995
- ---------------------------------------------------------------------------------------------------------------
June 30,
December 30, --------------------------
1996 1996 1995
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 157,002 $ 117,551 $ 95,472
Trade receivables (net of allowance: December 30, 1996, $33,000;
June 30, 1996, $21,000; June 30, 1995, $33,000) 793,032 706,815 926,300
Multimedia and video production costs and inventories 857,568 896,175 814,409
Prepaid expenses 22,828 24,619 21,789
Income taxes receivable 278,001 127,112 --
Deferred tax assets 133,116 14,369 14,476
---------- ---------- ----------
Total current assets 2,241,547 1,886,641 1,872,446
PROPERTY AND EQUIPMENT - Net 254,023 239,881 193,726
OTHER ASSETS 96,946 91,920 80,055
---------- ---------- ----------
TOTAL $2,592,516 $2,218,442 $2,146,227
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 345,375 $ 308,978 $ 523,252
Accrued liabilities 222,614 184,807 179,488
Income tax payable -- -- 108,573
Deferred revenue 306,241 -- --
Bank line of credit 515,000 520,000 --
---------- ---------- ----------
Total current liabilities 1,389,230 1,013,785 811,313
---------- ---------- ----------
DEFERRED RENT 26,407 22,124 2,700
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock (no par value - 20,000,000 authorized) 457,143 62,332 59,412
Shareholders' notes receivable (93,615) -- --
Retained earnings 813,351 1,120,201 1,272,802
---------- ---------- ----------
Total shareholders' equity 1,176,879 1,182,533 1,332,214
---------- ---------- ----------
TOTAL $2,592,516 $2,218,442 $2,146,227
========== ========== ==========
</TABLE>
See notes to financial statements.
5
<PAGE>
ANDERSON SOFT-TEACH
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED DECEMBER 30, 1996 AND
YEARS ENDED JUNE 30, 1996 AND 1995
- -----------------------------------------------------------------------------
Six Months Year Ended
Ended June 30,
December 30, ------------------------
1996 1996 1995
NET REVENUES $2,503,238 $4,707,569 $6,787,524
---------- ---------- ----------
COSTS AND EXPENSES:
Cost of revenues 887,056 1,832,313 2,449,121
Sales and marketing 1,083,111 1,838,683 2,333,857
General and administrative 570,068 1,086,843 1,250,831
Research and development 139,317 207,674 154,929
Acquisition expenses 123,277 -- --
---------- ---------- ----------
Total costs and expenses 2,802,829 4,965,513 6,188,738
---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (299,591) (257,944) 598,786
OTHER INCOME -- 39,564 38,826
INTEREST EXPENSE - Net (23,857) (28,789) (11,234)
---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES (323,448) (247,169) 626,378
INCOME TAX BENEFIT (PROVISION) 16,598 94,568 (251,821)
---------- ---------- ----------
NET INCOME (LOSS) $ (306,850) $ (152,601) $ 374,557
========== ========== ==========
See notes to financial statements.
6
<PAGE>
<TABLE>
ANDERSON SOFT-TEACH
STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED DECEMBER 30, 1996 AND
YEARS ENDED JUNE 30, 1996 AND 1995
- ---------------------------------------------------------------------------------------------------------
Common Stock Shareholders'
-------------------- Notes Retained
Shares Amount Receivable Earnings Total
<S> <C> <C> <C> <C> <C>
BALANCE, July 1, 1994 2,013,958 $ 58,586 $ 898,245 $ 956,831
Exercise of stock options 7,396 826 -- 826
Net income -- -- 374,557 374,557
--------- -------- ---------- ----------
BALANCE, June 30, 1995 2,021,354 59,412 1,272,802 1,332,214
Exercise of stock options 27,166 2,920 -- 2,920
Net loss -- -- (152,601) (152,601)
--------- -------- ---------- ----------
BALANCE, June 30, 1996 2,048,520 62,332 1,120,201 1,182,533
Exercise of stock options 280,750 93,615 -- -- 93,615
Shareholders' notes receivable -- -- $(93,615) -- (93,615)
Tax benefit of stock options
exercised -- 251,789 -- -- 251,789
Stock option compensation -- 49,407 -- -- 49,407
Net loss -- -- -- (306,850) (306,850)
--------- -------- -------- ---------- ----------
BALANCE, December 30, 1996 2,329,270 $457,143 $(93,615) $ 813,351 $1,176,879
========= ======== ======== ========== ==========
</TABLE>
See notes to financial statements.
7
<PAGE>
<TABLE>
ANDERSON SOFT-TEACH
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 30, 1996 AND
YEARS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended
Ended June 30,
December 30, --------------------------
1996 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (306,850) $ (152,601) $ 374,557
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Stock option compensation 49,407 -- --
Write-off of obsolete inventory -- 264,048 101,437
Depreciation and amortization:
Video production costs 291,178 258,074 645,208
Property and equipment 41,691 75,610 84,150
Deferred income taxes (118,747) 107 (2,768)
Changes in assets and liabilities:
Trade receivables (86,217) 219,485 156,943
Inventories 8,961 136,438 (137,069)
Prepaid expenses 1,792 (2,830) (7,819)
Income taxes receivable 100,900 (127,112) 70,248
Accounts payable 36,397 (214,274) 9,841
Accrued liabilities 37,807 5,319 (33,547)
Deferred revenue 306,241 -- --
Deferred rent 4,283 19,424 (50,736)
Income taxes payable -- (108,573) 108,573
--------- --------- --------
Net cash provided by operating activities 366,843 373,115 1,319,018
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Multimedia and video production cost additions (261,532) (740,326) (672,894)
Property and equipment additions (55,834) (121,765) (95,984)
Other (5,026) (11,865) (21,640)
--------- --------- --------
Net cash used in investing activities (322,392) (873,956) (790,518)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under bank line of credit, net (5,000) 520,000 (450,000)
Exercise of stock options -- 2,920 826
--------- --------- --------
Net cash (used in) provided by investing activities (5,000) 522,920 (449,174)
--------- --------- --------
NET INCREASE IN CASH 39,451 22,079 79,326
CASH, Beginning of period 117,551 95,472 16,146
--------- --------- --------
CASH, End of period $ 157,002 $ 117,551 $ 95,472
========= ========= ========
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest $ 27,096 $ 33,890 $ 16,309
Cash paid for income taxes -- 141,011 69,708
Noncash financing activities:
Common stock issued in exchange for shareholder notes receivable 93,615
Tax benefit of stock options exercised 251,789
</TABLE>
See notes to financial statements.
8
<PAGE>
ANDERSON SOFT-TEACH
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 30, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations - Anderson Soft-Teach (the "Company") develops,
produces and markets multimedia and videotape training courses in the use of
personal computers and software for business professionals. The Company's
customers are primarily large and mid-sized corporations, and federal, state and
local governments. Products are sold worldwide by the Company's sales offices
in the United States, England, and Australia and by an international network of
distributors.
Fiscal Year End - The Company's fiscal year ends June 30, 1996. The
accompanying financial statements present the Company's financial statements at
December 30, 1996, immediately prior to the December 31, 1996 acquisition by
Industrial Training Corporation (see Note 2).
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments - The carrying amount of the Company's cash
and cash equivalents approximates fair value because of the short-term maturity
of those instruments. The carrying amounts of accounts receivable, accounts
payable, and bank line of credit approximate their fair values.
Multimedia and video production costs, which consist of costs associated with
the production of the Company's multimedia and videotape training products, are
capitalized and amortized using the straight-line method based on estimated
product lives, generally 500 units or one year, whichever occurs first. Product
lives are evaluated and adjusted periodically on a product-by-product basis.
Inventories of CD's, diskettes, videotapes, printed materials and packaging
materials are stated at the lower of cost (weighted average) or market.
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over estimated useful lives which range from three to seven
years.
Revenue Recognition - Revenues from the sale of training courses are recognized
upon shipment. Royalty revenues from training courses marketed under other
companies' labels are recognized when earned. Revenues from certain licensing
agreements are recognized over the life of the agreement, generally one year.
Deferred revenues represent cash collections in advance under such license
agreements.
Income Taxes - The Company utilizes the asset and liability method of accounting
and reporting income taxes under Statement of Financial Accounting Standards
("SFAS") No. 109, Accounting for Income Taxes. Under this approach, the Company
computes its tax liabilities and assets at each financial statement date by
applying provisions of current tax laws to temporary differences between
financial statement and income tax bases. The measurement of current tax assets
is reduced, if necessary, by tax benefits which are not
9
<PAGE>
expected to be realized. Changes in tax laws, including rate changes, result in
a cumulative adjustment to deferred tax accounts during the period of change.
Stock-Based Compensation - The Company accounts for its stock-based awards to
employees using the intrinsic value method in accordance with APB No. 25,
Accounting for Stock Issued to Employees. The Company adopted the disclosure
requirements of Statement of Financial Accounting Standards No. 123 ("SFAS
123"), Accounting for Stock-Based Compensation, effective July 1, 1996.
Principally because there were no stock option grants since the fiscal year
beginning July 1, 1995, pro forma disclosures of net income (loss) under the
provisions of SFAS 123 are not required.
New Accounting Standards - The Company adopted SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
effective July 1, 1996. SFAS 121 establishes recognition and measurement
criteria for impairment losses whenever events or changes in circumstances
indicate that the carrying value of assets may not be recoverable. There was no
financial statement impact of adopting SFAS 121.
2. ACQUISITION BY INDUSTRIAL TRAINING CORPORATION
Effective December 31, 1996, the Company was acquired by Industrial Training
Corporation ("ITC") pursuant to the Agreement of Reorganization (the
"Agreement"). Total consideration for the acquisition was $4,500,000 in cash
and 300,000 shares of ITC common stock. Pursuant to the Agreement, such total
consideration is subject to certain working capital and other adjustments.
In conjunction with the acquisition, certain shareholders exercised their rights
under the Company's Stock Option Plan. The Company financed such exercises
through the issuance of shareholder notes receivable. Such shareholders' notes
receivable of $93,615 are presented as a reduction in shareholders' equity at
December 30, 1996. The notes were fully repaid in January 1997.
3. MULTIMEDIA AND VIDEO PRODUCTION COSTS AND INVENTORIES
Multimedia and video production costs and inventories consist of:
<TABLE>
<CAPTION>
June 30,
December 30, -----------------------------------
1996 1996 1995
<S> <C> <C> <C>
CDs, videotapes, printed materials and packaging
materials $310,696 $319,657 $456,095
Multimedia and video production costs (net of
accumulated amortization: December 30, 1996,
$4,616,038; June 30, 1996, $4,325,860; June 30,
1995, $3,803,738) 546,872 576,518 358,314
-------- -------- --------
Total $857,568 $896,175 $814,409
======== ======== ========
</TABLE>
During the years ended June 30, 1996 and 1995, the Company wrote off $264,048
and $101,437, respectively, in obsolete inventory.
10
<PAGE>
4. PROPERTY AND EQUIPMENT
Property and equipment consist of:
<TABLE>
<CAPTION>
December 30, June 30,
1996 1996 1995
----------- ------------------------
<S> <C> <C> <C>
Computer and office equipment $ 423,259 $ 367,626 $ 323,315
Furniture and fixtures 229,214 229,014 233,550
--------- --------- ---------
Total 652,473 596,640 556,865
Accumulated depreciation and amortization (398,450) (356,759) (363,139)
--------- --------- ---------
Total $ 254,023 $ 239,881 $ 193,726
========= ========= =========
</TABLE>
5. BANK LINE OF CREDIT AGREEMENTS
At December 30, 1996, the Company had $515,000 outstanding under two revolving
bank line of credit agreements totaling $915,000 which expire March 15, 1997.
Borrowings bear interest at prime (8.25% at December 30, 1996) plus 1.25%.
Borrowings under these agreements are collateralized by trade receivables and
property and equipment not otherwise used as collateral. At December 30, 1996
and June 30, 1996, the Company was not in compliance with the covenants
regarding cash flow coverage and profitability of the bank line of credit
agreements, which the bank subsequently waived. In January 1997, subsequent to
the acquisition by ITC (see Note 2), all outstanding balances under bank line of
credit agreements were repaid and the agreements were canceled.
6. LEASE OBLIGATIONS
The Company leases its corporate and shipping facilities under noncancelable
operating leases which expire in 2001. The corporate facility lease contains a
five-year renewal option. Rent expense is being recognized on a straight-line
basis over the term of the lease. Rent expense, principally for facilities, was
$158,963 for the six months ended December 30, 1996 and $312,257 and $205,400
for the years ended June 30, 1996 and 1995, respectively.
Future minimum annual lease payments are as follows:
Twelve months ending December 31:
1997 $ 297,733
1998 307,040
1999 316,352
2000 186,802
----------
Total minimum lease payments $1,107,927
==========
11
<PAGE>
7. INCOME TAXES
The income tax provision consists of the following:
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30,
December 30, ------------------------
1996 1996 1995
<S> <C> <C> <C>
Currently (receivable) payable:
Federal $ 48,070 $(101,686) $189,264
State 54,079 800 59,255
Foreign -- 6,211 6,069
--------- --------- --------
Total currently (receivable) payable 102,149 (94,675) 254,588
--------- --------- --------
Deferred:
Federal (103,442) 9,935 (1,290)
State (15,305) (9,828) (1,477)
--------- --------- --------
Total deferred (118,747) 107 (2,767)
--------- --------- --------
Total income tax benefit $ (16,598) $ (94,568) $251,821
========= ========= ========
</TABLE>
A reconciliation of the federal statutory rate to the Company's effective tax
rate was as follows for the periods ended:
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30,
December 30, -----------------------------------
1996 1996 1995
----------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Federal benefit at statutory rate $(109,972) (34)% $(84,037) (34)% $212,969 34%
State benefit, net of federal
benefit (7,747) (2) (10,531) (4) 38,852 6
Increase in valuation allowance 35,057 11
Nondeductible acquisition
expenses 53,379 16
Other 12,685 4
--------- --- -------- --- -------- --
Income tax (benefit) expense $ (16,598) (5)% $(94,568) (38)% $251,821 40%
========= === ======== === ======== ==
</TABLE>
12
<PAGE>
Deferred income taxes reflect the net tax effects of (a) temporary differences
between carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes and (b) operating loss
carryforwards. The deferred tax balances consisted of the following:
<TABLE>
June 30,
Decenber 30, ----------------------------
1996 1996 1995
<S> <C> <C> <C>
Deferred tax assets:
Reserves not currently deductible $ 17,507 $10,854 $16,230
Deferred revenue 132,602 - -
Net operating loss carryforward 35,057 12,723 --
-------- ------- -------
185,166 23,577 16,429
Valuation allowance (35,057) - -
-------- ------- -------
Deferred tax assets 150,109 23,577 16,429
-------- ------- -------
Deferred tax liabilities:
Deferred sales expenses (5,859) - -
Excess tax over book depreciation and other (11,134) (9,208) (1,953)
-------- ------- -------
Deferred tax liabilities (16,993) (9,208) (1,953)
-------- ------- -------
Net deferred tax assets $133,116 $14,369 $14,476
======== ======= =======
</TABLE>
At December 30, 1996, the Company has established a valuation allowance of
$35,057 related to the state net operating loss carryforwards which it believes
are unlikely to be realized.
At December 30, 1996, the Company had state net operating loss carryforwards of
$35,057. The net operating loss carryforward expires in 2002.
8. INCENTIVE STOCK OPTION PLAN
Under the 1987 Incentive Stock Plan, options to purchase 500,000 shares of
common stock may be granted to key employees, officers, directors, and
consultants at not less than fair market value at the date of grant as
determined by the Board of Directors. Nonqualified options under this Plan may
also be granted at not less than 85% of the fair market value at the date of
grant as determined by the Board of Directors. Options become exercisable over
four years and expire generally at the earlier of ten years from the date of
grant or upon termination of employment. The Company has the right of first
refusal on any sale of stock issued under this plan. This right expires over a
period as determined by the Board of Directors, generally over four years.
13
<PAGE>
Activity in the Incentive Stock Plan is as follows:
Weighted
Average
Exercise
Price
Options Per Share
Outstanding - July 1, 1994 260,750 $ 0.14
Granted 126,000 $ 1.05
Exercised (7,396) $ 0.11
Cancelled (15,604) $ 0.23
--------
Outstanding - June 30, 1995 (225,629 exercisable at a
weighted average price of $0.29) 363,750 $ 0.45
Exercised (27,166) $ 0.11
Cancelled (3,834) $ 0.93
--------
Outstanding - June 30, 1996 (251,448 exercisable at a
weighted average price of $0.29) 332,750 $ 0.47
Exercised (280,750) $ 0.33
Cancelled (52,000) $ 1.09
-------- ------
Outstanding - December 30, 1996 - $ -
======== ======
Compensation expense of $49,407 was recognized in the six months ended December
30, 1996 as a result of the Company's Board of Directors decision to accelerate
vesting on 35,117 employee stock options in contemplation of the acquisition by
ITC (see Note 2). In addition, the Company recorded an income tax benefit of
$251,789 related to employee stock option exercises. Such amount has been shown
as an income tax receivable and reflected as an increase in common stock in the
statement of shareholders' equity at December 30, 1996 due to the Company's
ability to carry back net operating losses to prior years and claim a refund.
As of December 30, 1996, prior to the consummation of the December 31, 1996
acquisition by ITC (see Note 2), all options to purchase shares had been
exercised. There were no shares available for future grant under the Stock
Option Plan.
9. EMPLOYEE BENEFIT PLANS
The Company has a 401(k) tax-deferred savings plan whereby all employees
meeting certain age and service requirements may contribute up to 15% of their
eligible compensation (up to a maximum allowed under IRS rules). Contributions
may be made by the Company at the discretion of the Board of Directors. No
contributions by the Company have been made to the plan since its inception.
******
14
<PAGE>
(b)
INDUSTRIAL TRAINING CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
As Adjusted Retroactively for the Acquisition of Anderson Soft-Teach, Inc.
("AST")
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Pro forma
ITC AST Adjustments ITC
(Historical) (Historical) Dr. (Cr.) Pro forma
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Revenues, net:
Courseware $18,002,803 $ 4,716,170 $22,718,973
Hardware 4,140,767 -- 4,140,767
----------- ----------- -----------
Total revenues, net 22,143,570 4,716,170 26,859,740
Costs and expenses:
Courseware cost of sales 10,999,376 1,935,648 12,935,024
Hardware cost of sales 4,031,627 -- 4,031,627
Reduction in capitalized program
development costs 3,300,000 -- 3,300,000
Acquired research and development 2,500,000 -- 2,500,000
Selling, general and administrative expenses 9,316,163 2,938,255 198,000 12,452,418
Costs of Acquisition -- 123,000 123,000
Equity in earnings of affiliates (216,832) -- (216,832)
----------- ----------- -----------
Total costs and expenses 29,930,334 4,996,903 35,125,237
----------- ----------- -----------
Income (loss) before interest and provision for
income taxes (7,786,764) (280,733) (8,265,497)
Interest income, net 467,454 (23,327) 225,000 219,127
----------- ----------- -----------
Income (loss) before provision for income taxes (7,319,310) (304,060) (8,046,370)
Income tax expense (benefit) (1,660,000) (57,634) (23,000) (1,740,634)
----------- ----------- -----------
Net income (loss) $(5,659,310) $ (246,426) $(6,305,736)
=========== =========== ===========
Net income (loss) per common share $(1.59) $(1.63)
=========== ===========
Weighted average number of shares outstanding 3,566,000 300,000 3,866,000
=========== ======= ===========
</TABLE>
See accompanying notes to Pro forma
Consolidated Statement of Operations
15
<PAGE>
INDUSTRIAL TRAINING CORPORATION
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
The following pro forma adjustments have been made:
(1) Effective December 31, 1996, the Company purchased the common stock of
Anderson Soft-Teach, Inc. (AST), a California corporation, for $4,500,000
in cash and 300,000 shares of the Company's stock. The acquisition of AST
has been accounted for as a purchase in accordance with APB No. 16 Business
Combinations. The fair value of the assets and liabilities of AST assumed
in the purchase has been reflected in the historical balance sheet of ITC
at December 31, 1996. The accompanying unaudited Pro Forma Consolidated
Statement of Operations is presented as if the acquisition of AST occurred
as of January 1, 1996. The Pro Forma Statement of Operations does not
purport to represent what the Company's results of operations would
actually have been if the acquisition, in fact, had occurred on January 1,
1996, nor does it purport to represent the results of operations for future
periods.
(2) Amortization of intangibles associated with the acquisition of AST include
workforce investment, customer base, and goodwill, totaling $2,180,000.
(3) Weighted average number of shares outstanding has been adjusted by 300,000
shares to reflect the issuance of shares of common stock in the acquisition
of AST.
(4) Interest income has been adjusted to reflect interest forgone as a result
of $4,500,000 cash payment for acquisition of AST.
(5) Income tax benefit has been adjusted as result of pro forma adjustments.
16
<PAGE>
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 hereunto duly authorized.
Industrial Training Corporation
By: /s/ Frank A. Carchedi
---------------------------------------
Frank A. Carchedi
Vice President and Chief Financial Officer
Date: March 13, 1997
17
<PAGE>
EXHIBIT INDEX
The following Exhibits to this Report are incorporated herein by reference to
the corresponding exhibits in the Company's Form 8-K (Commission File No. 0-
13741) filed with the Securities and Exchange Commission on January 13, 1997:
Exhibit Description
No.
2.1 Agreement and Plan of Reorganization dated as of December 31,
1996, by and among Industrial Training Corporation, ITC
Acquisition Corp. and Anderson Soft-Teach, without annexes or
schedules.
4.1 Registration Rights and Shareholders Agreement dated as of
December 31, 1996 between Industrial Training Corporation and the
former shareholders of Anderson Soft-Teach identified therein.
22.1 Press Release dated January 3, 1997 issued by Industrial Training
Corporation.
23 Independent Auditor's Consent
18
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EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos. 33-
45036, 333-18941 and 333-18939 of Industrial Training Corporation on Forms S-8
of our report dated February 21, 1997 on the financial statements of Anderson
Soft-Teach, Inc. appearing in this Form 8-K/A of Industrial Training
Corporation.
DELOITTE & TOUCHE LLP
San Francisco, California
March 11, 1997
