SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
May 17, 1995
FISERV, INC.
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation)
0-14948 39-1506125
(Commission File Number) (IRS Employer Identification No.)
255 FIserv Drive 53045
Brookfield, Wisconsin (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code
(414) 879-5000
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 17, 1995, the Registrant completed the acquisition of Information
Technology, Inc. (ITI), which is engaged in the business of developing,
licensing and maintenance of computer software for financial institutions and
the sale of related computer equipment. The transaction will be accounted for
as a purchase and, accordingly, the operations of ITI will be included with
those of the Registrant from the date of acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of Information Technology, Inc.:
Report of Independent Accountants
Balance Sheets as of December 31, 1994, 1993 and 1992
Statements of Income and Retained Earnings for the years ended
December 31, 1994, 1993 and 1992
Statements of Cash Flows for the years ended December 31, 1994,
1993 and 1992
Notes to Financial Statements
Balance Sheet (unaudited) as of March 31, 1995
Statements of Operations and Retained Earnings (unaudited) for the three
months ended March 31, 1995 and 1994
Statements of Cash Flows (unaudited) for the three months ended March 31,
1995 and 1994
Notes to Financial Statements
(b) Unaudited Pro forma condensed consolidated financial information of FIserv,
Inc. and ITI:
Pro Forma Condensed Consolidated Balance Sheet as of December 31, 1994
Pro Forma Condensed Consolidated Statement of Income for the Year Ended
December 31, 1994
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1995
Pro Forma Condensed Consolidated Statement of Income for the three months
ended March 31, 1995
Notes to Pro Forma Consolidated Financial Statements
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 hereunto duly authorized.
FISERV, INC.
By EDWARD P. ALBERTS
-----------------
EDWARD P. ALBERTS
Senior Vice President - Finance
Date: May 17, 1995
<PAGE>
INFORMATION TECHNOLOGY, INC.
REPORT ON AUDITS OF FINANCIAL STATEMENTS
for the years ended December 31, 1994, 1993 and 1992
This information is confidential and is provided for the
restricted use of your staff, board of directors or examining
agencies. Because this information is often requested by the
various agencies during examinations, please notify the
appropriate staff members of its receipt and file accordingly.
<PAGE>
ACCOUNTANTS' REPORT
Report of Independent Accountants
- ---------------------------------
TO THE STOCKHOLDERS AND
BOARD OF DIRECTORS
INFORMATION TECHNOLOGY, INC.
We have audited the accompanying balance sheets of Information Technology,
Inc. as of December 31, 1994, 1993 and 1992 and the related statements of income
and retained earnings, and cash flow for the years then ended. These financial
statements are the responsibility of the Companys' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Information Technology, Inc.
as of December 31, 1994, 1993 and 1992 and the results of its operations and its
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
The company changed its method of accounting for investment securities as
described in note 3. The 1993 and 1992 financial statements were restated as
described in note 6.
Coopers & Lybrand L.L.P.
700 Cornhusker Plaza
Lincoln, Nebraska
February 7, 1995
<PAGE>
INFORMATION TECHNOLOGY, INC.
December 31, 1994, 1993 & 1992
BALANCE SHEETS
ASSETS
______________________________________________________________________________
1994 1993 1992
Current Assets:
Cash and cash equivalents $31,076,452 $16,253,908 $9,975,496
Accounts receivable 7,322,335 5,787,588 6,302,850
Deposits and prepaids 7,943,019 6,166,091 5,674,076
Investment securities 16,831,427 24,836,405 25,183,212
----------- ----------- -----------
63,173,233 53,043,992 47,135,634
----------- ----------- -----------
Property, plant and equipment at
cost:
Land 1,909,630 1,909,630 1,909,630
Building and improvements 7,399,346 6,995,730 3,589,550
Transportation equipment 4,430,716 4,430,716 3,240,096
Furniture and equipment 5,576,898 4,747,154 3,105,858
Building in Process - 206,663 46,577
----------- ----------- -----------
19,316,590 18,289,893 11,891,711
Less accumulated depreciation 9,634,395 7,953,965 8,069,309
----------- ----------- -----------
9,682,195 10,335,928 3,822,402
Investment securities 21,323,693 19,342,521 19,187,853
Other assets 546,321 514,063 485,720
----------- ----------- -----------
$94,725,442 $83,236,504 $70,631,609
=========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
<PAGE>
INFORMATION TECHNOLOGY, INC.
December 31, 1994, 1993 & 1992
BALANCE SHEETS
LIABILITIES
______________________________________________________________________________
1994 1993 1992
Current Liabilities:
Accounts payable $10,553,612 $8,884,114 $9,317,242
Accrued liabilities 872,780 662,032 563,610
Customer downpayments 5,613,687 4,476,357 4,128,325
Deferred maintenance income 12,702,000 10,527,000 9,483,000
Dividend Payable 50,000,000 - -
----------- ----------- -----------
79,742,079 24,549,503 23,492,177
----------- ----------- -----------
EQUITY
______________________________________________________________________________
Common stock, $.50 par value,
20,000 shares authorized, issued
and outstanding $10,000 $10,000 $10,000
Unrealized loss on Investment
Securities (1,056,617)
Retained earnings 16,029,980 58,677,001 47,129,432
----------- ----------- -----------
14,983,363 58,687,001 47,139,432
----------- ----------- -----------
$94,725,442 $83,236,504 $70,631,609
=========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
<PAGE>
INFORMATION TECHNOLOGY, INC.
For the years ended
December 31, 1994 & 1993 & 1992
STATEMENTS OF INCOME & RETAINED EARNINGS
1994 1993 1992
Revenues:
Equipment $64,476,399 $52,744,268 $51,558,986
Software license 22,963,784 19,512,982 16,537,978
Software maintenance 20,815,007 18,495,194 16,098,737
Other 7,076,068 5,961,974 5,571,925
----------- ----------- ----------
115,331,258 96,714,418 89,767,626
----------- ----------- ----------
Operating expenses:
Cost of equipment sold 54,462,706 44,156,780 43,577,134
Salaries and benefits 10,050,471 10,844,992 10,148,498
Depreciation 2,078,438 1,313,029 795,107
Other 7,283,614 6,109,045 3,404,118
----------- ----------- ----------
73,875,229 62,423,846 57,924,857
----------- ----------- ----------
Operating income 41,456,029 34,290,572 31,842,769
----------- ----------- ----------
Other income (expense):
Interest and dividend income 2,596,775 2,584,606 2,302,832
Interest expense (54) (6,172) (1,935)
Gain on disposal of fixed assets 237,601 (1,853) (542)
Loss on sale of investments (201,041) 490,350 312,090
----------- ----------- ----------
2,633,281 3,066,931 2,612,445
----------- ----------- -----------
Net income 44,089,310 37,357,503 34,455,214
----------- ----------- -----------
Beginning retained earnings as
previously reported 58,677,001 47,129,432 42,711,343
Restatement (Note 6) - - (8,141,000)
----------- ----------- -----------
Retained earnings as restated 58,677,001 47,129,432 34,570,343
Dividends (86,736,331) (25,809,934) (21,896,125)
----------- ----------- -----------
Retained earnings end of year $16,029,980 $58,677,001 $47,129,432
=========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
<PAGE>
INFORMATION TECHNOLOGY, INC.
For the years ended
December 31, 1994, 1993 & 1992
STATEMENTS OF CASH FLOWS
1994 1993 1992
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $44,089,310 $37,357,503 $34,455,214
----------- ----------- -----------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 2,078,438 1,313,029 795,107
Gain on sale of fixed assets (237,601) 1,853 542
Loss on sale of investments 201,041 (490,350) (312,090)
Increase in deposits and
prepaids (1,776,928) (492,015) (5,020,069)
Increase in accounts
receivable (1,534,747) 515,262 (1,933,694)
Increase in deferred
maintenance income 2,175,000 1,044,000 1,342,000
Increase in accounts payable 1,669,498 (433,128) 5,862,033
Increase in accrued
liabilities 210,748 98,422 (336,050)
Increase in customer
downpayments 1,137,330 348,032 1,623,477
----------- ----------- -----------
Total adjustments 3,922,779 1,905,105 2,021,256
----------- ----------- -----------
Net cash provided by
operating activities $48,012,089 $39,262,608 $36,476,470
----------- ----------- -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
<PAGE>
INFORMATION TECHNOLOGY, INC.
For the years ended
December 31, 1994 & 1993 & 1992
STATEMENTS OF CASH FLOWS
1994 1993 1992
---- ---- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant,
and equipment ($1,573,929) ($7,841,236) ($275,301)
Proceeds from sale of fixed
assets 386,825 12,828 995
Purchases of Investments (113,407,333) (86,017,663) (71,439,948)
Proceeds from sales, calls and
maturities of investments 118,173,481 86,700,152 59,964,984
Increase in other assets (32,258) (28,343) (26,178)
------------ ----------- -----------
Net cash provided by (used in)
investing activities 3,546,786 (7,174,262) (11,775,448)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends (36,736,331) (25,809,934) (21,896,125)
------------ ----------- -----------
Net increase in cash and cash
equivalents 14,822,544 6,278,412 2,804,897
Cash and cash equivalents,
beginning of year 16,253,908 9,975,496 7,170,599
------------ ----------- -----------
Cash and cash equivalents,
end of year $31,076,452 $16,253,908 $9,975,496
============ =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest $ 54 $ 6,172 $ 1,935
Cash paid for income taxes 713,599 396,563 268,085
Dividends declared 50,000,000 - -
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
<PAGE>
INFORMATION TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES:
--------------------
THE FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING
POLICIES FOLLOWED IN THE PREPARATION OF THESE FINANCIAL STATEMENTS. CERTAIN
1993 AND 1992 AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE 1994
PRESENTATION.
(A) INDUSTRY INFORMATION:
---------------------
INFORMATION TECHNOLOGY, INC.'S (ITI) PRINCIPAL BUSINESS ACTIVITY IS THE
DEVELOPMENT, LICENSING AND MAINTENANCE OF COMPUTER SOFTWARE USED BY
FINANCIAL INSTITUTIONS AND THE SALE OF RELATED COMPUTER EQUIPMENT.
(B) INVESTMENTS:
------------
INVESTMENTS CLASSIFIED AS AVAILABLE FOR SALE ARE STATED AT FAIR VALUE.
UNREALIZED GAINS AND LOSSES FROM SECURITIES AVAILABLE FOR SALE ARE
REPORTED AS A SEPARATE COMPONENT OF EQUITY. COSTS USED IN COMPUTING
GAINS OR LOSSES ON THE SALE OF INVESTMENT SECURITIES ARE DETERMINED BY
SPECIFIC IDENTIFICATION.
(C) DEPRECIATION:
-------------
PROPERTY, PLANT AND EQUIPMENT ARE STATED AT COST LESS ACCUMULATED
DEPRECIATION. DEPRECIATION IS COMPUTED USING ACCELERATED METHODS OVER
THE ESTIMATED USEFUL LIVES OF THE ASSETS.
MAJOR REPLACEMENTS AND BETTERMENTS ARE CAPITALIZED WHILE MAINTENANCE AND
REPAIRS AND MINOR REPLACEMENTS ARE CHARGED TO EXPENSE WHEN INCURRED.
GAINS OR LOSSES ON DISPOSITIONS ARE REFLECTED IN CURRENT OPERATIONS.
(D) REVENUES:
---------
ITI RECOGNIZES SOFTWARE LICENSE AND EQUIPMENT REVENUES AS INCOME AT THE
TIME OF DELIVERY. MAINTENANCE REVENUES ARE RECOGNIZED OVER THE TERM OF
THE RELATED AGREEMENTS.
(E) CASH AND CASH EQUIVALENTS:
--------------------------
CASH AND CASH EQUIVALENTS INCLUDE CASH ON HAND, BANK ACCOUNTS, MONEY
MARKET ACCOUNTS AND CERTIFICATES OF DEPOSIT WITH MATURITIES OF NINETY
(90) DAYS OR LESS.
(F) SOFTWARE DEVELOPMENT AND MAINTENANCE:
-------------------------------------
ITI CHARGES THE COSTS OF DEVELOPING AND MAINTAINING SOFTWARE TO EXPENSE
AT THE TIME SUCH COSTS ARE INCURRED. DEVELOPMENTAL COSTS REQUIRING
CAPITALIZATION IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS #86
WERE EXPENSED DUE TO THEIR IMMATERIALITY TO THE FINANCIAL STATEMENTS.
2. INCOME TAXES:
-------------
EFFECTIVE OCTOBER 1, 1985, ITI ELECTED TO BE TAXED AS AN S CORPORATION UNDER
THE PROVISIONS OF THE INTERNAL REVENUE CODE. ACCORDINGLY, NO PROVISION IS MADE
FOR FEDERAL INCOME TAXES SINCE SUCH AMOUNTS ARE ASSETS OR LIABILITIES OF THE
INDIVIDUAL STOCKHOLDERS. CERTAIN STATE INCOME TAXES ARE INCLUDED IN OTHER
OPERATING EXPENSES.
IF ITI HAD NOT ELECTED TO BE TAXED UNDER THE PROVISIONS OF SUBCHAPTER S OF THE
INTERNAL REVENUE CODE, THE PROVISION FOR INCOME TAXES WOULD HAVE APPROXIMATED
$17,806,000, $14,623,000 AND $13,133,000 FOR THE YEARS ENDED DECEMBER 31, 1994,
1993 AND 1992, RESPECTIVELY.
<PAGE>
INFORMATION TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENTS:
------------
ITI ADOPTED THE PROVISIONS OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS
#115 ON JANUARY 1, 1994. THE STATEMENT REQUIRES THE USE OF FAIR VALUE
ACCOUNTING FOR SECURITIES CLASSIFIED AS AVAILABLE FOR SALE. PRIOR TO JANUARY 1,
1994, INVESTMENTS WERE RECORDED AT COST, WHICH APPROXIMATED FAIR VALUE.
CARRYING AMOUNTS AND FAIR VALUES OF INVESTMENT SECURITIES ARE SUMMARIZED AS
FOLLOWS:
DECEMBER 31, 1994
-----------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----- ----- ----- -----
U.S. TREASURY SECURITIES $ 2,977,382 $14,564 $ 63,771 $ 2,928,175
OBLIGATIONS OF STATE AND
POLITICAL SUBDIVISIONS 36,234,355 78,237 1,085,647 35,226,945
----------- ---------- ---------- -----------
TOTAL INVESTMENT SECURITIES $39,211,737 $92,801 $1,149,418 $38,155,120
=========== ========== ========== ===========
REALIZED GAINS AND LOSSES IN 1994 WERE $343,147 AND $544,188, RESPECTIVELY.
THE FOLLOWING TABLE SHOWS THE BOOK VALUE AND MATURITY DISTRIBUTION OF THE
INVESTMENT PORTFOLIO:
DECEMBER 31, 1994
--------------------------
FAIR
COST VALUE
----- -----
DUE WITHIN 1 YEAR $17,129,062 $16,831,427
DUE AFTER 1 YEAR THROUGH 5 YEARS 16,304,213 15,777,372
DUE AFTER 5 YEARS THROUGH 10 YEARS 5,778,462 5,546,321
----------- -----------
TOTAL INVESTMENT SECURITIES $39,211,737 $38,155,120
=========== ===========
4. PROFIT SHARING PLAN:
--------------------
ITI MAINTAINS A DEFINED CONTRIBUTION PROFIT SHARING PLAN FOR ALL ELIGIBLE
EMPLOYEES. CONTRIBUTIONS TO THE PLAN WERE APPROXIMATELY $676,000, $701,000 AND
$642,000 FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992, RESPECTIVELY.
5. CREDIT AGREEMENT:
-----------------
ITI HAS AN AVAILABLE UNSECURED LINE OF CREDIT WITH A REGIONAL BANK WHICH
PERMITS BORROWING AT THE NATIONAL PRIME RATE. THE LINE OF CREDIT AVAILABLE AT
DECEMBER 31, 1994 WAS $10 MILLION. NO BORROWINGS WERE OUTSTANDING AT DECEMBER
31, 1994.
6. RESTATEMENT:
------------
THE 1993 AND 1992 FINANCIAL STATEMENTS HAVE BEEN RESTATED TO REFLECT
RECOGNITION OF INCOME FROM MAINTENANCE AGREEMENTS OVER THE TERM OF THE
AGREEMENTS. THE EFFECT OF THE RESTATEMENT IS TO DECREASE NET INCOME FOR 1993
AND 1992 BY $1,044,000 AND $1,342,000 RESPECTIVELY AND RETAINED EARNINGS AT
DECEMBER 31, 1991 BY $8,141,000.
<PAGE>
INFORMATION TECHNOLOGY, INC.
FINANCIAL STATEMENTS
FOR THREE MONTHS
ENDING MARCH 31, 1995
(UNAUDITED)
<PAGE>
INFORMATION TECHNOLOGY, INC.
BALANCE SHEET
March 31, 1995
(Unaudited)
--------------
ASSETS
Current assets:
Cash and cash equivalents $ 9,692,219
Accounts receivable 12,805,179
Deposits and prepaids 7,910,717
Investment securities 3,708,648
------------
Total current assets 34,116,763
Property, plant and equipment, net 9,424,982
Other assets 540,274
------------
$44,082,019
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,934,227
Accrued liabilities 770,392
Customer downpayments 7,825,045
Deferred maintenance income 13,916,271
------------
Total current liabilities 35,445,935
------------
Stockholders' equity:
Common stock, $.50 par value, 20,000 shares
authorized, issued and outstanding 10,000
Unrealized loss on investment securities (27,524)
Retained earnings 8,653,608
------------
8,636,084
------------
$44,082,019
============
The accompanying notes are an integral
part of the financial statements.
<PAGE>
INFORMATION TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
for the three months ended March 31, 1995 and 1994
(Unaudited)
-------------
Three Months Ended
March 31,
------------------------------
1995 1994
------ ------
Revenues $ 35,107,094 $26,771,576
------------ -----------
Cost of revenues:
Operating expenses 21,777,828 17,107,731
Depreciation and amortization 363,120 406,566
------------ -----------
22,140,948 17,514,297
------------ -----------
Operating income 12,966,146 9,257,279
Other - net (335,380) 100,532
------------ -----------
Net income 12,630,766 9,357,811
Retained earnings, beginning of
period 16,029,980 58,677,001
Dividends (20,007,138) (712,314)
------------ -----------
Retained earnings, end of period $ 8,653,608 $67,332,498
============ ===========
The accompanying notes are an integral
part of the financial statements.
<PAGE>
INFORMATION TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
for the three months ended March 31, 1995 and 1994
(Unaudited)
-------------
Three Months Ended
March 31,
------------------------------
1995 1994
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,630,766 $ 9,357,811
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 363,120 406,566
Loss on sale of investments 956,393 -
(Increase) decrease in:
Accounts receivable (5,482,844) (1,394,517)
Deposits and prepaids 32,302 2,526,404
Increase (decrease) in:
Accounts payable 2,380,615 (1,392,103)
Accrued liabilities (102,388) (137,498)
Customers downpayments 2,211,358 259,180
Deferred maintenance income 1,214,271 1,150,193
Dividend payable (50,000,000) -
------------ ------------
Net cash provided by (used in)
operating activities (35,796,407) 10,776,036
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and
equipment (105,907) (48,933)
Purchases of investments - (15,624,674)
Proceeds from sales, calls and
maturities of investments 34,519,172 -
Decrease in other assets 6,047 -
------------ ------------
Net cash provided by (used in)
investing activities 34,419,312 (15,673,607)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends (20,007,138) (712,314)
------------ ------------
Net decrease in cash and cash
equivalents (21,384,233) (5,609,885)
Cash and cash equivalents,
beginning of period 31,076,452 16,253,908
------------ ------------
Cash and cash equivalents, end of
period $ 9,692,219 $ 10,644,023
============ ============
The accompanying notes are an integral
part of the financial statements.
<PAGE>
INFORMATION TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
------------
1. Basis of Presentation:
----------------------
The accompanying unaudited financial statements include the accounts of
Information Technology, Inc. (the "Company"). In the opinion of management,
the financial statements contain all adjustments necessary to present fairly
the Company's financial position and results of operations for the three
months ended March 31, 1995 and 1994. Such adjustments consisted of normal
recurring items. These unaudited financial statements should be read in
conjunction with the audited financial statements as of December 31, 1994,
and the notes thereto.
2. Subsequent Event:
-----------------
On April 6, 1995, FIserv, Inc. entered into a Stock Purchase Agreement to
purchase the Company for approximately $373,000,000, two-thirds in cash and
one-third in FIserv Common Stock. The acquisition is subject to several
conditions precedent, including receipt of government approvals, and is
expected to close by the end of May.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated balance sheets
combine the condensed consolidated balance sheets of FIserv and ITI as of
December 31, 1994 and March 31, 1995. The following unaudited condensed
consolidated statements of income combine the condensed consolidated
statements of income of FIserv and ITI for the year ended December 31, 1994
and the three months ended March 31, 1995. The financial information
presented as of any date other than December 31 has been prepared from the
books and records without audit. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the financial information for the periods indicated,
have been included.
The pro forma condensed consolidated balance sheets as of December 31,
1994 and March 31, 1995 and the pro forma condensed consolidated statements
of income for the periods then ended have been prepared by FIserv management
based upon the audited and unaudited financial statements of FIserv and ITI for
the periods indicated. The allocations of the purchase price assigned to the
assets acquired, including their related amortizations, and the liabilities
assumed in the accompanying pro forma financial statements are based upon
preliminary estimates and will be revised when the final fair value allocations
are determined, as will the related income tax effects of the pro forma
adjustments.
The pro forma condensed consolidated statements of income are not necessarily
indicative of the results that actually would have occurred if the acquisition
had occurred at the beginning of the periods indicated or which may be obtained
in the future. The pro forma financial statements should be read in conjunction
with the audited financial statements of ITI (included herein) and of FIserv for
the year ended December 31, 1994, as included in its Annual Report on Form 10-K
for the year, incorporated herein by reference.
<PAGE>
FISERV, INC. AND INFORMATION TECHNOLOGY, INC.
Unaudited Pro Forma Combined Condensed Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
December 31, 1994
------------------------------------------------------------
Information Pro Forma Pro Forma
FIserv, Inc. Technology, Inc. Adjustments Combined
------------------------------------------------------------
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $28,294 $31,077 $(21,818)1(a) $ 37,553
Accounts receivable 120,033 7,322 127,355
Prepaid expenses and other
assets 34,391 8,489 42,880
Investment securities 807,819 807,819
Other investments 64,777 38,155 (38,155)1(a) 64,777
Property and equipment-net 113,448 9,682 123,130
Internally generated computer
software-net 67,820 1,600 1(b) 69,420
Identifiable intangible assets
relating to acquisitions-Net 34,090 34,090
Goodwill-net 147,686 369,943 1(b) 517,629
---------- -------- -------- ----------
Total $1,418,358 $94,725 $311,570 $1,824,653
========== ======== ======== ==========
Liabilities and shareholders' equity
Accounts payable $21,440 $10,553 $31,993
Accrued expenses 59,126 873 $3,449 1(b) 63,448
Accrued income taxes 1,851 1,851
Deferred revenues 10,836 18,316 29,152
Trust account deposits 809,324 809,324
Long-term debt 139,864 248,736 1(b) 388,600
Other obligations 2,314 50,000 (50,000)1(a) 2,314
Deferred income taxes 22,800 22,800
---------- -------- -------- ----------
Total liabilities 1,067,555 79,742 202,185 1,349,482
Commitments and contingencies
Shareholders' equity:
Common stock outstanding,
$0.01 par value, 75,000,000
shares authorized, 39,156,884
shares issued and
outstanding, (Pro Forma
shares issued and outstanding
43,462,887) 392 10 36 1(b) 438
Additional paid-in capital 184,574 124,322 1(b) 308,896
Unrealized gain (loss) on
investments 11,054 (1,057) 1057 1(a) 11,054
Accumulated earnings 154,783 16,030 (11,030)1(a)
(5,000)1(b) 154,783
---------- -------- -------- ----------
Total shareholders' equity 350,803 14,983 109,385 475,171
---------- -------- -------- ----------
Total $1,418,358 $94,725 $311,570 $1,824,653
========== ======== ======== ==========
The accompanying notes are an integral part of these
pro forma combined condensed financial statements.
</TABLE>
<PAGE>
FISERV, INC. AND INFORMATION TECHNOLOGY, INC.
Unaudited Pro Forma Combined Condensed Statement of Income
(in thousands, except per share data)
<TABLE>
<CAPTION>
Year ended December 31, 1994
------------------------------------------------------------
Information Pro Forma Pro Forma
FIserv, Inc. Technology, Inc. Adjustments Combined
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $563,590 $115,331 $678,921
--------- --------- ---------
Cost of revenues:
Operating expenses 463,149 71,797 534,946
Depreciation and amortization
of property and equipment 29,987 2,078 32,065
Amortization of intangible
assets 10,846 $ 9,249 1(c) 20,095
Capitalization of internally
generated computer software-
net (9,599) (9,599)
--------- --------- --------- ---------
Total 494,383 73,875 9,249 577,507
--------- --------- --------- ---------
Operating income 69,207 41,456 (9,249) 101,414
Interest expense-net 6,433 (2,633) 25,019 1(d) 28,819
--------- --------- --------- ---------
Income before income taxes 62,774 44,089 (34,268) 72,595
Income tax provision 25,110 3,936 1(e) 29,046
--------- --------- --------- ---------
Net income $37,664 $44,089 $(38,204) $43,549
========= ========= ========= =========
Net income per common and
common equivalent share $.95 $.98
========= =========
Shares used in computing net
income per share 39,854 4,574 1(b) 44,428
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
pro forma combined condensed financial statements.
<PAGE>
FISERV, INC. AND INFORMATION TECHNOLOGY, INC.
Unaudited Pro Forma Combined Condensed Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
March 31, 1995
------------------------------------------------------------
Information Pro Forma Pro Forma
FIserv, Inc. Technology, Inc. Adjustments Combined
------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 30,626 $ 9,692 $ 82 1(a) $ 40,400
Accounts receivable 117,837 12,805 130,642
Prepaid expenses and other
assets 35,851 8,451 44,302
Investment securities 714,641 714,641
Other investments 62,965 3,709 (3,709)1(a) 62,965
Property and equipment-net 121,004 9,425 130,429
Internally generated computer
software-net 69,388 1,600 1(b) 70,988
Identifiable intangible assets
relating to acquisitions-Net 32,401 32,401
Goodwill-net 152,532 369,943 1(b) 522,475
---------- -------- -------- ----------
Total $1,337,245 $44,082 $367,916 $1,749,243
========== ======== ======== ==========
Liabilities and shareholders' equity
Accounts payable $22,054 $12,934 $34,988
Accrued expenses 45,807 770 $3,449 1(b) 50,026
Accrued income taxes 3,075 3,075
Deferred revenues 22,881 21,741 44,622
Trust account deposits 714,796 714,796
Long-term debt 136,458 248,736 1(b) 385,194
Other obligations 2,578 2,578
Deferred income taxes 27,266 27,266
---------- -------- -------- ----------
Total liabilities 974,915 35,445 252,185 1,262,545
Commitments and contingencies
Shareholders' equity:
Common stock outstanding,
$0.01 par value, 75,000,000
shares authorized, 39,325,998
shares issued and
outstanding, (Pro Forma
shares issued and outstanding
43,632,001) 393 10 36 1(b) 439
Additional paid-in capital 184,811 124,322 1(b) 309,133
Unrealized gain (loss) on
investments 11,623 (27) 27 1(a) 11,623
Accumulated earnings 165,503 8,654 (3,654)1(a)
(5,000)1(b) 165,503
---------- -------- -------- ----------
Total shareholders' equity 362,330 8,637 115,731 486,698
---------- -------- -------- ----------
Total $1,337,245 $44,082 $367,916 $1,749,243
========== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these
pro forma combined condensed financial statements.
<PAGE>
FISERV, INC. AND INFORMATION TECHNOLOGY, INC.
Unaudited Pro Forma Combined Condensed Statement of Income
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended March 31, 1995
------------------------------------------------------------
Information Pro Forma Pro Forma
FIserv, Inc. Technology, Inc. Adjustments Combined
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $152,605 $35,107 $187,712
--------- --------- ---------
Cost of revenues:
Operating expenses 123,105 21,778 144,883
Depreciation and amortization
of property and equipment 8,961 363 9,324
Amortization of intangible
assets 2,746 $ 2,312 1(c) 5,058
Capitalization of internally
generated computer software-
net (1,649) (1,649)
--------- --------- --------- ---------
Total 133,163 22,141 2,312 157,616
--------- --------- --------- ---------
Operating income 19,442 12,966 (2,312) 30,096
Interest expense-net 1,731 335 5,262 1(d) 7,328
--------- --------- --------- ---------
Income before income taxes 17,711 12,631 (7,574) 22,768
Income tax provision 7,262 2,027 1(e) 9,289
--------- --------- --------- ---------
Net income $ 10,449 $12,631 $(9,601) $ 13,479
========= ========= ========= =========
Net income per common and
common equivalent share $0.26 $0.30
========= =========
Shares used in computing net
income per share 40,065 4,574 1(b) 44,639
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
pro forma combined condensed financial statements.
<PAGE>
FISERV, INC. AND INFORMATION TECHNOLOGY, INC.
<TABLE>
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL INFORMATION
(in $000s)
<CAPTION>
Year Ended Three Months Ended
December 31, 1994 March 31, 1995
<S> <C> <C> <C> <C>
1. Pro Forma Adjustments
(a) Dividends payable $50,000
Accumulated earnings 11,030 $3,654
Unrealized loss on investments $1,057 $27
Cash 21,818 82
Other investments 38,155 3,709
To record distributions to the shareholders
of ITI (a subchapter S corporation)
subsequent to December 31, 1994 but prior to
the closing date.
(b) Internally generated computer software - net 1,600 1,600
Goodwill - net 369,943 369,943
Accumulated earnings 5,000 5,000
Deferred compensation 3,449 3,449
Long-term debt 248,736 248,736
Common stock 10 46 10 46
Additional paid-in capital 124,322 124,322
To record the purchase price of the
acquisition comprising 4,574,458
shares of FIserv common stock valued
at its defined market price
($27.1875 a share) on the day prior to
the closing, or $124,368,000,
plus $248,736,000 cash which will be
borrowed and to allocate to
software and goodwill the cost of the
acquisition in excess of the
net assets acquired ($5,000,000), to
record options granted to key
employees to acquire 126,867 shares of
FIserv common stock valued at
its defined market price and to eliminate
ITI equity balances.
(c) Amortization of intangible assets 9,249 2,312
To record amortization of goodwill recorded
at (b) above.
(d) Interest expense - net 25,019 5,262
To record interest on borrowed funds at 9%
and to eliminate interest earned on other
investments by ITI.
(e) Income tax provision 3,936 2,027
Since ITI is a subchapter S corporation
for federal income tax purposes,
no federal income tax provision appears
on their historical financial
statements. This adjustment records the
federal income tax provision applicable
to ITI historical pretax income plus the
income tax effect of these pro forma
adjustments.
</TABLE>
