<PAGE> 1
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): JANUARY 23, 1997
PCA INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
North Carolina 0-8550 56-0888429
(State or other jurisdiction (Commission (IRS employer
of incorporation) File Number) identification no.)
815 Matthews-Mint Hill Road, Matthews, North Carolina 28105
(Address of principal executive offices) (Zip Code)
(704) 847-8011
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On December 20, 1996, pursuant to an Agreement and Plan of Merger,
dated as of December 17, 1996, as amended (the "Merger Agreement"), by and among
American Studios, Inc., a North Carolina corporation (the "Registrant"), and ASI
Acquisition Corp., a North Carolina corporation and a wholly owned subsidiary of
the Registrant (the "Purchaser"), the Purchaser commenced a tender offer for all
outstanding shares of common stock, par value $.001 per share (the "Shares"), of
ASI, at a price of $2.50 per share, net to the Seller in cash (the "Offer").
Upon consummation of the offer on January 27, 1997, the Registrant beneficially
owned 20,333,508 shares (including 15,311 shares subject to guarantees of
delivery), which represents approximately 95% of ASI.
On February 28, 1997, ASI merged (the "Merger") with and into the
Purchaser, with the Purchaser continuing as the surviving corporation and a
direct wholly owned subsidiary of the Registrant. The merger became effective on
February 28, 1997 (the "Effective Time"). At the Effective Time, each issued and
outstanding share (other than shares owned by ASI, the Registrant, the Purchaser
or any other wholly owned subsidiary of the Registrant and other than shares
held by shareholders exercising dissenters' rights under North Carolina law)
converted into the right to receive $2.50 in cash. In accordance with the Merger
Agreement, the Registrant paid to ASI, and ASI paid to the holders of certain of
ASI's outstanding stock options, an additional $4,000 in consideration for the
cancellation of such options to purchase shares.
The Registrant currently intends to continue to use the portrait
processing facility, equipment and other physical property of ASI to provide
portrait photography service.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
The following pro forma financial statements of PCA International, Inc.
and Subsidiaries are set forth in Annex A hereto:
PCA International, Inc.:
Pro Forma Consolidated Balance Sheet as of October 27, 1996.
Pro Forma Consolidated Statements of Income for the Nine Months Ended
October 27, 1996 and for the Fiscal Year Ended January 28, 1996.
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.
Date: March 25, 1997
PCA INTERNATIONAL, INC.
/s/ John Grosso
----------------------------------
By: /s/ John Grosso
Name: John Grosso
Title: President
2
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ANNEX A
PCA INTERNATIONAL, INC.
Index to Financial Statements
Page
----
Financial Statements:
Pro Forma Consolidated Balance Sheet as of
October 27, 1996. F-1
Pro Forma Consolidated Statements of Income F-2 - F-3
for the Nine Months Ended October 27, 1996
and for the Fiscal Year Ended January 26, 1996.
3
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The following unaudited pro forma consolidated balance sheet information
presents the pro forma consolidated financial position of the Company as of
October 27, 1996, the Company's third-quarter end, assuming the acquisition of
ASI had been consummated as of such date. This consolidated balance sheet
information reflects the preliminary purchase price allocation, which will be
subject to further adjustment as the Company finalizes the determination and
allocation of purchase price.
<TABLE>
<CAPTION>
Pro Forma Pro Forma Pro Forma
The Company ASI Adjustments Adjustments Balance Sheet
----------- ----------- ----------- ----------- -------------
Debit Credit
<S> <C> <C> <C> <C> <C>
Current assets $21,767,813 $ 4,483,000 $ 259,150 (2) $ 670,000 (1) $ 25,839,963
Property, plant, and equipment 47,175,686 25,271,000 -- 8,594,436 (3) 63,852,250
Intangible assets -- 4,000,000 57,982,461 (4) -- 61,982,461
Other assets 1,524,959 1,849,000 2,575,000 (5) 349,665 (6) 5,599,294
Deferred taxes -- -- 5,879,250 (7) -- 5,879,250
------------------------------------------------------------------------------
Total assets $70,468,458 $35,603,000 $66,695,861 $ 9,614,101 $163,153,218
==============================================================================
Current liabilities $30,819,113 $23,021,000 -- $ 4,287,847 (8) $ 58,127,960
Deferred income taxes 5,178,245 -- -- -- 5,178,245
Long-term debt -- 5,038,000 -- 59,559,763 (9) 64,597,763
Other liabilities 2,773,508 -- -- -- 2,773,508
------------------------------------------------------------------------------
Total liabilities 38,770,866 28,059,000 -- 63,847 610 130,677,476
------------------------------------------------------------------------------
Minority interest -- -- -- 259,150 (2) 259,150
Shareholders' equity 31,697,592 7,544,000 7,544,000 (4) 549,000 (5) 32,246,592
------------------------------------------------------------------------------
Total liabilities and shareholders' equity $70,468,458 $35,603,000 $ 7,544,000 $64,655,760 $163,183,218
==============================================================================
</TABLE>
The above pro forma consolidated balance sheet reflects adjustments related to
the acquisition as follows:
1) write-down of certain inventory to net realizable value;
2) minority interest relating to shares of ASI not tendered as of the
balance sheet date;
3) write-down of certain fixed assets to net realizable value; and
adjustment of real property to fair value;
4) estimated intangible asset and equity adjustment resulting from the
purchase transaction;
5) debt transaction costs and stock warrants issued in connection with the
debt;
6) write-down of certain other assets to net realizable value;
7) estimated deferred taxes resulting from the purchase transaction;
8) liabilities incurred as a result of the purchase transaction for
separation pay, payments to former ASI executives, and other reserves;
and
9) debt incurred to finance the purchase.
The components of current liabilities in the pro forma balance sheet are as
follows:
<TABLE>
<S> <C>
Short-term Borrowings $16,965,964
Accounts Payable 17,121,112
Other current liabilities 24,040,884
-----------
Total $58,127,960
</TABLE>
F-1
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The following unaudited pro forma consolidated statements of operations combines
the consolidated historical results of the Company with the historical results
of ASI for the nine months ended October 27, 1996 and the fiscal year ended
January 28, 1996, after giving effect to certain adjustments, as explained
below, before any nonrecurring charges or credits, such as separation pay,
one-time training costs, and other nonrecurring operational costs of the
transaction.
These unaudited pro forma consolidated statements do not purport to be
indicative of the results that would have occurred had the transaction taken
place at the beginning of the period presented or of future results.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED OCTOBER 27, 1996
--------------------------------------------------------------------------
PRO FORMA
PRO FORMA PRO FORMA STATEMENT OF
THE COMPANY ASI ADJUSTMENTS ADJUSTMENTS OPERATIONS
--------------------------------------------------------------------------
DEBIT CREDIT
<S> <C> <C> <C> <C> <C>
Sales $104,297,847 $ 68,686,000 $ 172,983,847
Cost of sales 82,555,867 60,716,000 1,117,965(1) 142,153,902
--------------------------------------------------------------------------
Gross profit 21,741,980 7,970,000 -- (1,117,965) 30,829,945
General and administrative 18,219,525 11,398,000 29,617,525
Amortization -- 487,000 731,332(2) 1,218,332
--------------------------------------------------------------------------
Income (loss) from operations before
interest and income taxes 3,522,455 (3,915,000) (731,332) (1,117,965) (5,912)
Interest expense 83,485 1,210,000 3,049,484(3) 4,342,969
--------------------------------------------------------------------------
Income (loss) from operations before
income taxes 3,438,970 (5,125,000) (3,780,816) (1,117,965) (4,348,881)
Income tax expense (benefit) 1,426,783 -- 2,679,003(4) (1,252,220)
--------------------------------------------------------------------------
Net income (loss) $ 2,012,187 $ (5,125,000) $(3,780,816) $(3,796,968) $ (3,096,661)
==========================================================================
Net loss per common share $ (0.38)
=============
Weighted average number of shares outstanding
and common stock equivalents 8,132,387
=============
</TABLE>
F-2
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<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED JANUARY 28, 1996
-------------------------------------------------------------------------
PRO FORMA
PRO FORMA PRO FORMA STATEMENT OF
THE COMPANY ASI ADJUSTMENTS ADJUSTMENTS OPERATIONS
--------------------------------------------------------------------------
DEBIT CREDIT
<S> <C> <C> <C> <C> <C>
Sales $144,714,535 $101,900,000 $ 246,614,535
Cost of sales 107,610,764 91,338,000 1,490,620(1) 197,458,144
--------------------------------------------------------------------------
Gross profit 37,103,771 10,562,000 -- (1,490,620) 49,156,391
General and administrative 23,781,509 18,825,000 42,606,509
Amortization -- 677,000 947,442(2) 1,624,442
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Income (loss) from operations before
interest and income taxes 13,322,262 (8,940,000) (947,442) (1,490,620) 4,925,440
Interest expense 458,923 581,000 4,750,702(3) 5,790,625
--------------------------------------------------------------------------
Income (loss) from operations before
income taxes 12,863,339 (9,521,000) (5,698,144) (1,490,620) (865,185)
Income tax expense (benefit) 5,245,178 (3,529,000) 1,412,475(4) 303,703
--------------------------------------------------------------------------
Net income (loss) $ 7,618,161 $ (5,992,000) $(5,698,144) $(2,903,095) $ (1,168,888)
==========================================================================
Net loss per common share $ (0.14)
=============
Weighted average number of shares
outstanding and common stock equivalents 8,110,453
=============
</TABLE>
The above pro forma consolidated statement of operations reflects adjustments
related to the acquisition as follows:
1) reduction in depreciation expense related to the write-down of certain
fixed assets to net realizable value;
2) amortization of intangible assets over a 35 year period;
3) interest expense related to acquisition debt, including amortization of
debt transaction cost over a five year period; and
4) income taxes based on an effective income tax rate of 40%.
Pro forma income per common share is computed by dividing pro forma net income
by the estimated weighted average number of common shares and common share
equivalents outstanding. Common share equivalents include all stock options and
warrants.
F-3
