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Previous: ML FUTURES INVESTMENTS II LP, 10-Q, 1998-05-11 |
Next: FUNDAMENTAL FIXED INCOME FUND, PRRN14A, 1998-05-11 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 6, 1998
DAVOX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
----------------------------------------------
(State or other jurisdiction of incorporation)
0-15578 02-0364368
- --------------------------- -----------------------------------
(Commission File Number) (IRS Employer Identification No.)
6 TECHNOLOGY PARK DRIVE, WESTFORD, MASSACHUSETTS 01886
----------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code:
(978) 952-0200
--------------
<PAGE>
As the result of a transmission error, certain pages of the undersigned
registrant's Current Report on Form 8-K dated May 6, 1998, filed May 8, 1998
(the "Form 8-K"), were omitted. Therefore, the undersigned registrant hereby
amends and restates the Form 8-K so that as so amended and restated the Form 8-K
shall read in its entirety as follows:
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 6, 1998, Duke Acquisition Corporation ("DAC"), a wholly-owned subsidiary
of Davox Corporation (the "Company"), merged (the "Merger") with and into
AnswerSoft, Inc. ("AnswerSoft"). As a result of the Merger, AnswerSoft has
become a wholly-owned subsidiary of the Company and the former securityholders
of AnswerSoft will receive 2,384,271 shares of the Company's common stock, $.10
par value (the "Common Stock"). The terms of this transaction and the
consideration received by AnswerSoft stockholders were the result of arm's-
length negotiations between representatives of AnwerSoft and the Company. The
terms of the Merger and the exchange of AnswerSoft securities for the Common
Stock are more fully described in the Amended and Restated Agreement and Plan of
Merger (the "Merger Agreement") dated as of April 6, 1998 among the Company,
AnswerSoft and DAC. This transaction will be accounted for as a pooling of
interests.
A copy of the Merger Agreement is filed as Exhibit 2.1 to this report and is
incorporated herein by reference.
The information contained in the press release of Davox dated May 7, 1998
attached as Exhibit 99.2 is hereby incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED:
The financial statements required by this item were previously filed:
(i) in the Registrant's Form S-4 Registration Statement (No. 333-49479)
filed April 6, 1998 (Pages F-18 through F-29); and
(ii) as Exhibit 99.2 to the Company's Current Report on Form 8-K dated
March 17, 1998.
(b) Pro Forma Financial Information. The following unaudited pro forma
-------------------------------
combined financial statements appear as Exhibit 99.1 to this Current Report
on Form 8-K and are incorporated herein by this reference:
(i) Unaudited Pro Forma combined Financial Statements as of December 31,
1994, 1995, 1996 and 1997 and for each of the years then ended.
(ii) Unaudited Pro Forma combined Financial Statements for each of the nine
fiscal quarters in the period from January 1, 1996 to March 31, 1998.
(c) Exhibits.
---------
Exhibit No. Description
----------- -----------
2.1 Amended and Restated Agreement and Plan of Merger dated as
of April 6, 1998 among Davox Corporation, Duke Acquisition
Corporation and Answersoft, Inc. (incorporated by reference
to Exhibit 2.1 to the Company's Registration Statement on
Form S-4 (No. 333-49479))
99.1 Unaudited Pro Forma combined financial statements
99.2 Press Release of Davox Corporation announcing the
consummation of the Merger
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DAVOX CORPORATION
By: /s/ John J. Connolly
--------------------------------------
John J. Connolly
Vice President, Finance,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
Dated: May 8, 1998
-3-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
2.1 Amended and Restated Agreement and Plan of Merger dated as
of April 6, 1998 among Davox Corporation, Duke Acquisition
Corporation and Answersoft, Inc. (incorporated by reference
to Exhibit 2.1 to the Company's Registration Statement on
Form S-4 (No. 333-49479))
99.1 Unaudited Pro Forma combined financial statements
99.2 Press Release of Davox Corporation announcing the
consummation of the Merger
-4-
<PAGE>
Exhibit 99.1
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
have been prepared to give effect to the merger, using the pooling of
interests method of accounting.
The unaudited pro forma combined condensed financial statements reflect
certain assumptions deemed probable by Davox regarding the Merger (e.g., that
share information used in the unaudited pro forma information approximates
actual share information at the effective date). No adjustments to the
unaudited pro forma combined condensed financial information have been made to
account for different possible results in connection with the foregoing, as
Davox believes that the impact on such information of the varying outcomes,
individually or in the aggregate would not be materially different.
The unaudited pro forma combined condensed balance sheets give effect to the
merger as if it had occurred on each balance sheet date and combines the audited
consolidated balance sheet of Davox and the audited balance sheet of AnswerSoft
as of each balance sheet date.
The unaudited pro forma combined condensed statements of operations combine
the historical consolidated statements of operations of Davox and AnswerSoft for
the years ended December 31, 1994, 1995, 1996, 1997 and for each of the nine
fiscal quarters in the period From January 1, 1996 to March 31, 1998, in each
case as if the Merger had occurred at the beginning of the period presented.
Davox and AnswerSoft estimate that they will incur direct transaction costs
of approximately $1.5 million associated with the Merger, which will be
charged to operations upon consummation of the Merger. In addition, it is
expected that following the Merger, the combined company will incur an
additional significant charge to operations, which is not currently reasonably
estimable, to reflect costs associated with integrating the two companies.
There can be no assurance that the combined company will not incur additional
charges to reflect costs associated with the Merger or that management will be
successful in its efforts to integrate the operations of the two companies.
Such unaudited pro forma combined condensed financial information is
presented for illustrative purposes only and is not necessarily indicative of
the financial position or results of operations that would have actually been
reported had the Merger occurred at the beginning of the periods presented,
nor is it necessarily indicative of future financial position or results of
operations. These unaudited pro forma combined condensed financial statements
are based upon the respective historical consolidated financial statements of
Davox and AnswerSoft and should be read in conjunction with the respective
historical consolidated financial statements and notes thereto of Davox and
AnswerSoft, and do not incorporate, nor do they assume, any benefits from cost
savings or synergies of operations of the combined company.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
December 31, 1994
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 5,278 $ 5,290 $ - $ 10,568
Accounts receivable, net 4,700 7 - 4,707
Prepaid expenses and other current assets 976 12 - 988
Total current assets ------------ ----------- ----------- ------------
10,954 5,309 - 16,263
------------ ----------- ----------- ------------
Property and equipment, net 2,537 186 - 2,723
------------ ----------- ----------- ------------
Other assets, net 1,286 4 - 1,290
------------ ----------- ----------- ------------
Total assets $ 14,777 $ 5,499 $ - $ 20,276
============ =========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 2,531 $ 225 $ - $ 2,756
Accrued expenses 3,820 59 - 3,879
Customer deposits 830 - - 830
Deferred revenue 1,858 - - 1,858
Current portion of long-term obligations 108 19 - 127
------------ ----------- ----------- ------------
Total current liabilities 9,147 303 - 9,450
------------ ----------- ----------- ------------
Long-term obligations, less current portion 138 17 - 155
------------ ----------- ----------- ------------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 658 4 139 801
Additional paid-in capital 41,922 - 8,341 50,263
Accumulated deficit (37,064) (3,305) - (40,369)
------------ ----------- ----------- ------------
5,516 (3,301) 8,480 10,695
Less - treasury stock, at cost (24) - - (24)
------------ ----------- ----------- ------------
Total stockholders' equity (deficit) 5,492 (3,301) 8,480 10,671
------------ ----------- ----------- ------------
$ 14,777 $ 5,499 $ - $ 20,276
============ =========== =========== ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue $30,047 $36 $- $30,083
Cost of revenue 16,234 - - 16,234
------------ ------------ ----------- ----------
Gross profit 13,813 36 - 13,849
------------ ------------ ----------- ----------
Research, development and engineering expenses 3,540 1,320 - 4,860
Selling, general and administrative expenses 12,681 996 - 13,677
Restructuring costs 3,379 - - 3,379
Purchased technology - 1,032 - 1,032
------------ ------------ ----------- ----------
Total operating expenses 19,600 3,348 - 22,948
------------ ------------ ----------- ----------
Loss from operations (5,787) (3,312) - (9,099)
Interest income, net 37 7 - 44
------------ ------------ ----------- ---------
Net loss ($5,750) ($3,305) $- ($9,055)
============ ============ =========== =========
Loss per share:
Basic $ (1.01)
Weighted average shares outstanding:
Basic 8,951,362
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1995
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 12,936 $ 2,648 $ - $ 15,584
Accounts receivable, net 4,460 301 - 4,761
Prepaid expenses and other current assets 1,061 33 - 1,094
----------- ------------ ------------- ------------
Total current assets 18,457 2,982 - 21,439
----------- ------------ ------------- ------------
Property and equipment, net 1,865 302 - 2,167
----------- ------------ ------------- ------------
Other assets, net 502 7 - 509
----------- ------------ ------------- ------------
Total assets $ 20,824 $ 3,291 $ - $ 24,115
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 2,927 $ 69 $ - $ 2,996
Accrued expenses 3,925 180 - 4,105
Customer deposits 1,293 - - 1,293
Deferred revenue 1,629 15 - 1,644
Current portion of long-term obligations 93 9 - 102
----------- ------------ ------------- ------------
Total current liabilities 9,867 273 - 10,140
----------- ------------ ------------- ------------
Long-term obligations, less current portion 45 5 - 50
----------- ------------ ------------- ------------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 685 6 139 830
Additional paid-in capital 42,509 2 8,341 50,852
Accumulated deficit (32,258) (5,475) - (37,733)
----------- ------------ ------------- ------------
10,936 (5,467) 8,480 13,949
Less - treasury stock, at cost (24) - - (24)
----------- ------------ ------------- ------------
Total stockholders' equity (deficit) 10,912 (5,467) 8,480 13,925
----------- ------------ ------------- ------------
$ 20,824 $ 3,291 $ - $ 24,115
=========== ============ ============= ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenue $37,556 $1,041 $ - $38,597
Cost of revenue 16,452 712 - 17,164
--------- ------- -------- ---------
Gross profit 21,104 329 - 21,433
--------- ------- -------- ---------
Research, development and engineering expenses 4,020 881 - 4,901
Selling, general and administrative expenses 12,166 1,801 - 13,967
--------- ------- -------- ---------
Total operating expenses 16,186 2,682 - 18,868
--------- ------- -------- ---------
Income (loss) from operations 4,918 (2,353) - 2,565
Interest income, net 422 207 - 629
--------- ------- -------- ---------
Income (loss) before provision (benefit) for income taxes 5,340 (2,146) - 3,194
Provision (benefit) for income taxes 534 25 (215)(i) 344
-------- -------- -------- ---------
Net income (loss) $4,806 ($2,171) $ 215 $2,850
======== ======== ======== =========
Earnings per share:
Basic $.25
Diluted $.22
Weighted average shares outstanding:
Basic 11,280,129
Diluted 12,845,770
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1996
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 16,792 $ 2,314 $ - $ 19,106
Accounts receivable, net 6,144 490 - 6,634
Prepaid expenses and other current assets 1,219 34 - 1,253
---------- ---------- ----------- -----------
Total current assets 24,155 2,838 - 26,993
---------- ---------- ----------- -----------
Property and equipment, net 2,171 159 - 2,330
---------- ---------- ----------- -----------
Other assets, net 326 12 - 338
---------- ---------- ----------- -----------
Total assets $ 26,652 $ 3,009 $ - $ 29,661
========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 3,972 $ 110 $ - $ 4,082
Accrued expenses 3,425 192 - 3,617
Customer deposits 2,524 - - 2,524
Deferred revenue 3,686 44 - 3,730
Current portion of long-term obligations 82 21 - 103
---------- ---------- ----------- -----------
Total current liabilities 13,689 367 - 14,056
---------- ---------- ----------- -----------
Long-term obligations, less current portion 30 - - 30
---------- ---------- ----------- -----------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 693 6 139 838
Additional paid-in capital 42,763 2 8,341 51,106
Accumulated deficit (30,499) (5,846) - (36,345)
---------- ---------- ----------- -----------
12,957 (5,838) 8,480 15,599
Less - treasury stock, at cost (24) - - (24)
---------- ---------- ----------- -----------
Total stockholders' equity (deficit) 12,933 (5,838) 8,480 15,575
---------- ---------- ----------- -----------
$26,652 $3,009 $ - $ 29,661
========== ========== =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1996
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenue $11,410 $487 $ - $11,897
Cost of revenue 4,679 136 - 4,815
--------- ------- -------- ---------
Gross profit 6,731 351 - 7,082
--------- ------- -------- ---------
Research, development and engineering expenses 1,268 183 - 1,451
Selling, general and administrative expenses 3,673 568 - 4,241
--------- ------- -------- ---------
Total operating expenses 4,941 751 - 5,692
--------- ------- -------- ---------
Income (loss) from operations 1,790 (400) - 1,390
Interest income, net 163 30 - 193
--------- ------- -------- ---------
Income (loss) before provision (benefit) for income taxes 1,953 (370) - 1,583
Provision (benefit) for income taxes 195 - (37)(i) 158
-------- -------- -------- ---------
Net income (loss) $1,758 ($370) $ 37 $1,425
======== ======== ======== =========
Earnings per share:
Basic $.12
Diluted $.11
Weighted average shares outstanding:
Basic 11,561,378
Diluted 13,302,947
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1996
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 22,592 $ 2,054 $ - $ 24,646
Accounts receivable, net 4,893 660 - 5,553
Prepaid expenses and other current assets 1,744 35 - 1,779
----------- ------------ ------------- ------------
Total current assets 29,229 2,749 - 31,978
----------- ------------ ------------- ------------
Property and equipment, net 2,995 156 - 3,151
----------- ------------ ------------- ------------
Other assets, net 307 12 - 319
----------- ------------ ------------- ------------
Total assets $ 32,531 $ 2,917 $ - $ 35,448
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 3,691 $ 159 $ - $ 3,850
Accrued expenses 4,074 251 - 4,325
Customer deposits 5,478 - - 5,478
Deferred revenue 3,254 88 - 3,342
Current portion of long-term obligations 67 9 - 76
----------- ------------ ------------- ------------
Total current liabilities 16,564 507 - 17,071
----------- ------------ ------------- ------------
Long-term obligations, less current portion 10 - - 10
----------- ------------ ------------- ------------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 720 6 139 865
Additional paid-in capital 43,712 2 8,341 52,055
Accumulated deficit (28,451) (6,078) - (34,529)
----------- ------------ ------------- ------------
15,981 (6,070) 8,480 18,391
Less - treasury stock, at cost (24) - - (24)
----------- ------------ ------------- ------------
Total stockholders' equity (deficit) 15,957 (6,070) 8,480 18,367
----------- ------------ ------------- ------------
$ 32,531 $ 2,917 $ - $ 35,448
=========== ============ ============= ============
</TABLE>
See accompanying notes to unaudited pro froma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1996
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Revenue $12,665 $626 $- $13,291
Cost of revenue 5,138 175 - 5,313
---------- ----------- ----------- --------------
Gross profit 7,527 451 - 7,978
---------- ----------- ----------- --------------
Research, development and engineering expenses 1,416 213 - 1,629
Selling, general and administrative expenses 4,054 494 - 4,548
---------- ----------- ----------- --------------
Total operating expenses 5,470 707 - 6,177
---------- ----------- ----------- --------------
Income (loss) from operations 2,057 (256) - 1,801
Interest income, net 219 24 - 243
---------- ----------- ----------- --------------
Income (loss) before provision (benefit) for income taxes 2,276 (232) - 2,044
Provision (benefit) for income taxes 228 - (23)(i) 205
---------- ----------- ----------- --------------
Net income (loss) $2,048 ($232) $23 $1,839
========== =========== =========== ==============
Earnings per share:
Basic $.16
Diluted $.14
Weighted average shares outstanding:
Basic 11,850,170
Diluted 13,584,762
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1996
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
---------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 24,331 $ 1,799 $ - $ 26,130
Short-term investments 3,297 - - 3,297
Accounts receivable, net 3,569 948 - 4,517
Prepaid expenses and other current assets 1,538 39 - 1,577
---------- ---------- ---------- ----------
Total current assets 32,735 2,786 - 35,521
---------- ---------- ---------- ----------
Property and equipment, net 3,586 148 - 3,734
---------- ---------- ---------- ----------
Other assets, net 95 12 - 107
---------- ---------- ---------- ----------
Total assets $ 36,416 $ 2,946 $ - $ 39,362
========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 4,033 $ 115 $ - $ 4,148
Accrued expenses 4,940 192 - 5,132
Customer deposits 5,430 - - 5,430
Deferred revenue 3,076 103 - 3,179
Current portion of long-term obligations 59 6 - 65
---------- ---------- ---------- ----------
Total current liabilities 17,538 416 - 17,954
---------- ---------- ---------- ----------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 733 6 139 878
Additional paid-in capital 44,144 5 8,341 52,490
Accumulated deficit (25,975) (5,961) - (31,936)
---------- ---------- ---------- ----------
18,902 (5,950) 8,480 21,432
Less - treasury stock, at cost (24) - - (24)
---------- ---------- ---------- ----------
Total stockholders' equity (deficit) 18,878 (5,950) 8,480 21,408
---------- ---------- ---------- ----------
$ 36,416 $ 2,946 $ - $ 39,362
========== ========== ========== ==========
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Revenue $14,079 $960 $- $15,039
Cost of revenue 5,628 137 - 5,765
---------- ----------- ----------- --------------
Gross profit 8,451 823 - 9,274
---------- ----------- ----------- --------------
Research, development and engineering expenses 1,549 224 - 1,773
Selling, general and administrative expenses 4,512 495 - 5,007
---------- ----------- ----------- --------------
Total operating expenses 6,061 719 - 6,780
---------- ----------- ----------- --------------
Income from operations 2,390 104 - 2,494
Interest income, net 363 13 - 376
---------- ----------- ----------- --------------
Income before provision for income taxes 2,753 117 - 2,870
Provision for income taxes 276 - 12 (i) 288
---------- ----------- ----------- --------------
Net income $2,477 $117 ($12) $2,582
========== =========== =========== ==============
Earnings per share:
Basic $.21
Diluted $.19
Weighted average shares outstanding:
Basic 12,115,170
Diluted 13,679,715
</TABLE>
(i) Reflects income tax provision associated with AnswerSoft's income at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1996
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 21,333 $ 2,942 $ - $ 24,275
Short-term investments 9,780 - - 9,780
Accounts receivable, net 3,185 1,179 - 4,364
Prepaid expenses and other current assets 1,306 198 - 1,504
----------- ------------ ------------- ------------
Total current assets 35,604 4,319 - 39,923
----------- ------------ ------------- ------------
Property and equipment, net 4,051 267 - 4,318
----------- ------------ ------------- ------------
Other assets, net 74 163 - 237
----------- ------------ ------------- ------------
Total assets $ 39,729 $ 4,749 $ - $ 44,478
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 4,771 $ 317 $ - $ 5,088
Accrued expenses 6,175 400 - 6,575
Customer deposits 3,414 - - 3,414
Deferred revenue 2,494 1,177 - 3,671
Current portion of long-term obligations 40 5 - 45
----------- ------------ ------------- ------------
Total current liabilities 16,894 1,899 - 18,793
----------- ------------ ------------- ------------
Deferred revenue, less current portion - 315 - 315
----------- ------------ ------------- ------------
Preferred stock, $0.01 par value - 8,480 (8,480) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 1,108 6 137 1,251
Additional paid-in capital 44,894 6 8,343 53,243
Accumulated deficit (23,143) (5,957) - (29,100)
----------- ------------ ------------- ------------
22,859 (5,945) 8,480 25,394
Less - treasury stock, at cost (24) - - (24)
----------- ------------ ------------- ------------
Total stockholders' equity (deficit) 22,835 (5,945) 8,480 25,370
----------- ------------ ------------- ------------
$ 39,729 $ 4,749 $ - $ 44,478
=========== ============ ============= ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED DECEMBER 31, 1996
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
Revenue $15,488 $1,383 $- $16,871
Cost of revenue 6,132 205 - 6,337
----------- ----------- ----------- -------------
Gross profit 9,356 1,178 - 10,534
----------- ----------- ----------- -------------
Research, development and engineering expenses 1,628 253 - 1,881
Selling, general and administrative expenses 4,974 934 - 5,908
----------- ----------- ----------- -------------
Total operating expenses 6,602 1,187 - 7,789
----------- ----------- ----------- -------------
Income (loss) from operations 2,754 (9) - 2,745
Interest income, net 392 13 - 405
---------- ----------- ----------- -------------
Income before provision for income taxes 3,146 4 - 3,150
Provision for income taxes 315 - - 315
---------- ----------- ----------- -------------
Net income $2,831 $ 4 $- $2,835
========== =========== =========== =============
Earnings per share:
Basic $.23
Diluted $.21
Weighted average shares outstanding:
Basic 12,253,883
Diluted 13,779,861
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenue $53,642 $3,456 $ - $57,098
Cost of revenue 21,577 653 - 22,230
--------- ------- -------- ---------
Gross profit 32,065 2,803 - 34,868
--------- ------- -------- ---------
Research, development and engineering expenses 5,861 873 - 6,734
Selling, general and administrative expenses 17,213 2,491 - 19,704
--------- ------- -------- ---------
Total operating expenses 23,074 3,364 - 26,438
--------- ------- -------- ---------
Income (loss) from operations 8,991 (561) - 8,430
Interest income, net 1,137 80 - 1,217
--------- ------- -------- ---------
Income (loss) before provision (benefit) for income taxes 10,128 (481) - 9,647
Provision (benefit) for income taxes 1,014 - (48)(i) 966
-------- -------- -------- ---------
Net income (loss) $9,114 ($481) $ 48 $8,681
======== ======== ======== =========
Earnings per share:
Basic $.73
Diluted $.64
Weighted average shares outstanding:
Basic 11,947,297
Diluted 13,593,082
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1997
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
--------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 27,357 $ 2,200 $ - $ 29,557
Short-term investments 6,540 - - 6,540
Accounts receivable, net 6,890 1,397 - 8,287
Prepaid expenses and other current assets 1,010 195 - 1,205
-------- ------------ ------------- -----------
Total current assets 41,797 3,792 - 45,589
-------- ------------ ------------- -----------
Property and equipment, net 4,202 302 $ - 4,504
-------- ------------ ------------- -----------
Other assets, net 108 43 - 151
-------- ------------ ------------- -----------
Total assets $ 46,107 $ 4,137 $ - $ 50,244
======== ============ ============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 4,888 $ 314 $ - $ 5,202
Accrued expenses 6,819 497 - 7,316
Customer deposits 2,016 - - 2,016
Deferred revenue 5,005 747 - 5,752
Current portion of long-term obligations 25 - - 25
-------- ------------ ------------- -----------
Total current liabilities 18,753 1,558 - 20,311
-------- ------------ ------------- -----------
Long-term obligations, less current portion - 315 - 315
-------- ------------ ------------- -----------
Preferred stock, $0.01 par value - 8,555 (8,555) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 755 8 141 904
Additional paid-in capital 45,881 51 8,414 54,346
Accumulated deficit (19,258) (6,350) - (25,608)
-------- ------------ ------------- -----------
27,378 (6,291) 8,555 29,642
Less - treasury stock, at cost (24) - - (24)
-------- ------------ ------------- -----------
Total stockholders' equity (deficit) 27,354 (6,291) 8,555 29,618
-------- ------------ ------------- -----------
$ 46,107 $ 4,137 $ - $ 50,244
======== ============ ============= ===========
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1997
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Revenue $ 17,269 $ 1,726 $ - $ 18,995
Cost of revenue 6,309 352 - 6,661
---------- ------------ ------------- -----------
Gross profit 10,960 1,374 - 12,334
---------- ------------ ------------- -----------
Research, development and engineering expenses 1,882 384 - 2,266
Selling, general and administrative expenses 5,072 1,405 - 6,477
---------- ------------ ------------- -----------
Total operating expenses 6,954 1,789 - 8,743
---------- ------------ ------------- -----------
Income (loss) from operations 4,006 (415) - 3,591
Interest income, net 409 22 - 431
---------- ------------ ------------- -----------
Income (loss) before provision (benefit) for income taxes 4,415 (393) - 4,022
Provision (benefit) for income taxes 530 - (47)(i) 483
---------- ------------ ------------- -----------
Net income (loss) $ 3,885 ($393) $ 47 $ 3,539
========== ============ ============= ===========
Earnings per share:
Basic $.28
Diluted $.26
Weighted average shares outstanding:
Basic 12,478,572
Diluted 13,822,930
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 12%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1997
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 28,374 $ 2,051 $ - $ 30,425
Short-term investments 9,504 - - 9,504
Accounts receivable, net 8,557 1,257 - 9,814
Prepaid expenses and other current assets 901 187 - 1,088
---------- ---------- ----------- -----------
Total current assets 47,336 3,495 - 50,831
---------- ---------- ----------- -----------
Property and equipment, net 4,362 293 - 4,655
---------- ---------- ----------- -----------
Other assets, net 113 46 - 159
---------- ---------- ----------- -----------
Total assets $ 51,811 $ 3,834 $ - $ 55,645
========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 4,660 $ 246 $ - $ 4,906
Accrued expenses 7,885 682 - 8,567
Customer deposits 2,956 - - 2,956
Deferred revenue 4,470 357 - 4,827
Current portion of long-term obligations - 2 - 2
---------- ---------- ----------- -----------
Total current liabilities 19,971 1,287 - 21,258
---------- ---------- ----------- -----------
Deferred revenue, less current portion - 315 - 315
Long-term obligations, less current portion - 440 - 440
---------- ---------- ----------- -----------
Preferred stock, $0.01 par value - 8,555 (8,555) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 1,156 9 142 1,307
Additional paid-in capital 45,891 53 8,413 54,357
Accumulated deficit (15,183) (6,825) - (22,008)
---------- ---------- ----------- -----------
31,864 (6,763) 8,555 33,656
Less - treasury stock, at cost (24) - - (24)
---------- ---------- ----------- -----------
Total stockholders' equity (deficit) 31,840 (6,763) 8,555 33,632
---------- ---------- ----------- -----------
$ 51,811 $ 3,834 $ - $ 55,645
========== ========== =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1997
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Revenue $18,170 $1,787 $ - $19,957
Cost of revenue 6,672 420 - 7,092
--------- --------- --------- -----------
Gross profit 11,498 1,367 - 12,865
--------- --------- --------- -----------
Research, development and engineering expenses 2,013 487 - 2,500
Selling, general and administrative expenses 5,315 1,362 - 6,677
--------- --------- --------- -----------
Total operating expenses 7,328 1,849 - 9,177
--------- --------- --------- -----------
Income (loss) from operations 4,170 (482) - 3,688
Interest income, net 461 7 - 468
--------- --------- --------- -----------
Income (loss) before provision (benefit) for income taxes 4,631 (475) - 4,156
Provision (benefit) for income taxes 556 - (57)(i) 499
--------- --------- --------- -----------
Net income (loss) $ 4,075 ($475) $57 $ 3,657
========= ========= ========= ===========
Earnings per share:
Basic $.29
Diluted $.26
Weighted average shares outstanding:
Basic 12,731,749
Diluted 14,059,931
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 12%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1997
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 27,386 $ 4,933 $ - $ 32,319
Short-term investments 15,599 - - 15,599
Accounts receivable, net 8,976 1,270 - 10,246
Prepaid expenses and other current assets 618 59 - 677
---------- ----------- ----------- ------------
Total current assets 52,579 6,262 - 58,841
---------- ----------- ----------- ------------
Property and equipment, net 4,867 635 - 5,502
---------- ----------- ----------- ------------
Other assets, net 66 58 - 124
---------- ----------- ----------- ------------
Total assets $ 57,512 $ 6,955 $ - $ 64,467
========== =========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $4,849 $342 $ - $5,191
Accrued expenses 8,516 543 - 9,059
Customer deposits 2,773 - - 2,773
Deferred revenue 4,329 327 - 4,656
Current portion of long-term obligations - 2 - 2
---------- ----------- ----------- ------------
Total current liabilities 20,467 1,214 - 21,681
---------- ----------- ----------- ------------
Deferred revenue, less current portion - 326 - 326
Long-term obligations, less current portion - 440 - 440
---------- ----------- ----------- ------------
Preferred stock, $0.01 par value - 13,555 (13,555) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 1,163 10 183 1,356
Additional paid-in capital 46,136 57 13,372 59,565
Accumulated deficit (10,230) (8,647) - (18,877)
---------- ----------- ----------- ------------
37,069 (8,580) 13,555 42,044
Less - treasury stock, at cost (24) - - (24)
---------- ----------- ----------- ------------
Total stockholders' equity (deficit) 37,045 (8,580) 13,555 42,020
---------- ----------- ----------- ------------
$57,512 $6,955 $ - $64,467
========== =========== =========== ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Revenue $19,806 $1,079 $- $20,885
Cost of revenue 6,644 351 - 6,995
--------- --------- ---------- ----------
Gross profit 13,162 728 - 13,890
--------- --------- ---------- ----------
Research, development and engineering expenses 2,242 518 - 2,760
Selling, general and administrative expenses 5,774 2,059 - 7,833
--------- --------- ---------- ----------
Total operating expenses 8,016 2,577 - 10,593
--------- --------- ---------- ----------
Income (loss) from operations 5,146 (1,849) - 3,297
Interest income, net 482 27 - 509
--------- --------- ---------- ----------
Income (loss) before provision (benefit) for income taxes 5,628 (1,822) - 3,806
Provision (benefit) for income taxes 675 - (219)(i) 456
--------- --------- ---------- ----------
Net income (loss) $4,953 ($1,822) $219 $3,350
========= ========= ========== ==========
Earnings per share:
Basic $.26
Diluted $.23
Weighted average shares outstanding:
Basic 12,886,838
Diluted 14,362,668
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 12%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1997
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 25,366 $ 3,273 $ - $ 28,639
Short-term investments 23,802 - - 23,802
Accounts receivable, net 10,359 2,240 - 12,599
Deferred tax asset 9,319 - - 9,319
Prepaid expenses and other current assets 969 154 - 1,123
----------- ------------ ------------- ------------
Total current assets 69,815 5,667 - 75,482
----------- ------------ ------------- ------------
Property and equipment, net 4,585 663 - 5,248
----------- ------------ ------------- ------------
Other assets, net 768 62 - 830
----------- ------------ ------------- ------------
Total assets $ 75,168 $ 6,392 $ - $ 81,560
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 4,987 $ 260 $ - $ 5,247
Accrued expenses 10,223 614 - 10,837
Customer deposits 2,018 - - 2,018
Deferred revenue, current 3,783 572 - 4,355
Current portion of long-term obligations - 178 - 178
----------- ------------ ------------- ------------
Total current liabilities 21,011 1,624 - 22,635
----------- ------------ ------------- ------------
Deferred revenue, noncurrent - 253 - 253
Long-term obligations, less current portion - 297 297
----------- ------------ ------------- ------------
Preferred stock, $0.01 par value - 13,911 (13,911) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 1,186 13 226 1,425
Additional paid-in capital 57,758 117 13,685 71,560
Cumulative translation adjustments - 7 - 7
Amounts due from officer - (414) - (414)
Accumulated deficit (4,763) (9,416) - (14,179)
----------- ------------ ------------- ------------
54,181 (9,693) 13,911 58,399
Less - treasury stock, at cost (24) - - (24)
----------- ------------ ------------- ------------
Total stockholders' equity (deficit) 54,157 (9,693) 13,911 58,375
----------- ------------ ------------- ------------
$ 75,168 $ 6,392 $ - $ 81,560
=========== ============ ============= ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED DECEMBER 31, 1997
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Revenue $21,571 $2,146 $ - $23,717
Cost of revenue 6,925 356 - 7,281
---------- ----------- ----------- --------------
Gross profit 14,646 1,790 - 16,436
---------- ----------- ----------- --------------
Research, development and engineering expenses 2,342 550 - 2,892
Selling, general and administrative expenses 6,692 2,031 - 8,723
---------- ----------- ----------- --------------
Total operating expenses 9,034 2,581 - 11,615
---------- ----------- ----------- --------------
Income (loss) from operations 5,612 (791) - 4,821
Interest income, net 600 23 - 623
---------- ----------- ----------- --------------
Income (loss) before provision (benefit) for income taxes 6,212 (768) - 5,444
Provision (benefit) for income taxes 746 - (92)(i) 654
---------- ----------- ----------- --------------
Net income (loss) $ 5,466 ($768) $92 $ 4,790
========== =========== =========== ==============
Earnings per share:
Basic $.37
Diluted $.33
Weighted average shares outstanding:
Basic 12,793,618
Diluted 14,406,117
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 12%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(In thousands, except share and per share amounts)
Pro Forma Pro Forma
Davox AnswerSoft Adjustments Combined
---------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenue $76,816 $6,738 $ - $83,554
Cost of revenue 26,550 1,479 - 28,029
--------- ------- -------- ---------
Gross profit 50,266 5,259 - 55,525
--------- ------- -------- ---------
Research, development and engineering expenses 8,479 1,939 - 10,418
Selling, general and administrative expenses 22,852 6,858 - 29,710
--------- ------- -------- ---------
Total operating expenses 31,331 8,797 - 40,128
--------- ------- -------- ---------
Income (loss) from operations 18,935 (3,538) - 15,397
Interest income, net 1,952 79 - 2,031
--------- ------- -------- ---------
Income (loss) before provision (benefit) for income taxes 20,887 (3,459) - 17,428
Provision (benefit) for income taxes 2,507 - (415)(i) 2,092
-------- -------- -------- ---------
Net income (loss) $18,380 $(3,459) $ 415 $15,336
======== ======== ======== =========
Earnings per share:
Basic $1.19
Diluted $1.07
Weighted average shares outstanding:
Basic 12,940,211
Diluted 14,269,865
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 10%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1998
(In thousands)
Pro Forma Pro Forma
ASSETS Davox AnswerSoft Adjustments Combined
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 21,417 $ 1,877 $ - $ 23,294
Short-term investments 34,101 - - 34,101
Accounts receivable, net 13,225 1,994 - 15,219
Deferred tax asset 9,319 - - 9,319
Prepaid expenses and other current assets 1,172 90 - 1,262
----------- ------------ ------------- ------------
Total current assets 79,234 3,961 - 83,195
----------- ------------ ------------- ------------
Property and equipment, net 4,440 645 - 5,085
----------- ------------ ------------- ------------
Other assets, net 761 563 - 1,324
----------- ------------ ------------- ------------
Total assets $ 84,435 $ 5,169 $ - $ 89,604
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 5,172 $ 180 $ - $ 5,352
Accrued expenses 12,855 1,051 - 13,906
Customer deposits 784 - - 784
Deferred revenue 6,483 782 - 7,265
Current portion of long-term obligations - 262 - 262
----------- ------------ ------------- ------------
Total current liabilities 25,294 2,275 - 27,569
----------- ------------ ------------- ------------
Deferred revenue, less current portion - 195 - 195
Long-term obligations, less current portion - 262 262
----------- ------------ ------------- ------------
Preferred stock, $0.01 par value - 13,911 (13,911) -
Stockholders' equity (deficit):
Common stock, $0.10 par value 1,192 14 187 1,393
Additional paid-in capital 58,341 119 13,724 72,184
Amounts due from officer - (414) (414)
Cumulative translation adjustments (37) 1 - (36)
Accumulated deficit (331) (11,194) - (11,525)
----------- ------------ ------------- ------------
59,165 (11,474) 13,911 61,602
Less - treasury stock, at cost (24) - - (24)
----------- ------------ ------------- ------------
Total stockholders' equity (deficit) 59,141 (11,474) 13,911 61,578
----------- ------------ ------------- ------------
$ 84,435 $ 5,169 $ - $ 89,604
=========== ============ ============= ============
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1998
(In thousands, except share and per share amounts)
Davox AnswerSoft Adjustments Combined
--------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $23,160 $ 1,260 $ - $ 24,420
Cost of revenue 7,568 350 - 7,918
--------- ---------- ----------- -----------
Gross profit 15,592 910 - 16,502
--------- ---------- ----------- -----------
Research, development and engineering expenses 2,486 618 - 3,104
Selling, general and administrative expenses 7,132 2,075 - 9,207
--------- ---------- ----------- -----------
Total operating expenses 9,618 2,693 - 12,311
--------- ---------- ----------- -----------
Income (loss) from operations 5,974 (1,783) - 4,191
Interest income, net 743 6 - 749
--------- ---------- ----------- -----------
Income (loss) before provision (benefit) for income taxes 6,717 (1,777) - 4,940
Provision (benefit) for income taxes 2,284 - (604)(i) 1,680
--------- ---------- ----------- -----------
Net income (loss) $4,433 ($1,777) $ 604 $ 3,260
========= ========== =========== ===========
Earnings per share:
Basic $.25
Diluted $.22
Weighted average shares outstanding:
Basic 13,118,041
Diluted 14,859,967
</TABLE>
(i) Reflects income tax benefit associated with AnswerSoft's loss at Davox's
effective tax rate of 34%.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(1) MERGER SHARES ISSUED
These unaudited pro forma combined financial statements reflect the issuance
of shares of Davox Common Stock in exchange for all shares of AnswerSoft Common
Stock, on a fully diluted basis, which includes the Preferred Stock on an as
converted basis, and the outstanding options and warrants (outstanding as of
March 9, 1998) in connection with the Merger, based on the Exchange Ratios set
forth in the following table. The Exchange Ratios set forth below are different
to an immaterial extent than the final Exchange Ratios as calculated upon
consummation of the Merger.
<TABLE>
<CAPTION>
<S> <C> <C>
AnswerSoft Series A Preferred Stock and warrants, out-
standing as of
March 9, 1998......................................... 8,615,000
Exchange Ratio......................................... 0.1621888
---------
Number of shares of Davox Common Stock exchanged..... 1,397,257
AnswerSoft Series B Preferred Stock, outstanding as of
March 9, 1998......................................... 2,060,047
Exchange Ratio......................................... 0.2137445
---------
Number of shares of Davox Common Stock exchanged..... 440,324
AnswerSoft Common Stock and options, outstanding as of
March 9, 1998......................................... 4,207,785
Exchange Ratio......................................... 0.1299665
---------
Number of shares of Davox Common Stock exchanged..... 546,871
----------
Total Number of shares of Davox Common Stock
Exchanged........................................... 2,384,452
Number of shares of Davox Common Stock outstanding as
of December 31, 1997.................................. 11,864,216
----------
Number of shares of Combined Company Common Stock out-
standing after completion of the Merger............... 14,248,668
==========
</TABLE>
(2) MERGER RELATED EXPENSES
Davox and AnswerSoft estimate they will incur direct transaction costs of
approximately $1.5 million associated with the Merger consisting of
transaction fees for investment bankers, attorneys, accountants, financial
printing and other related charges. These nonrecurring transaction costs will
be charged to operations upon consummation of the Merger. These direct
transaction costs have not been reflected in the unaudited pro forma combined
condensed financial statements.
It is expected that following the Merger, the combined company will incur
additional significant charges to operations, which are not currently
reasonably estimable, to reflect costs associated with integrating the two
companies. These charges have not been reflected in the unaudited pro forma
combined condensed financial statements. There can be no assurance that the
combined company will not incur additional charges to reflect costs associated
with the Merger or that management will be successful in its efforts to
integrate the operations of the two companies.
(3) MERGER CONFORMITY ADJUSTMENTS
The unaudited pro forma combined condensed financial statements do not
include adjustments to conform the accounting policies of AnswerSoft to those
followed by Davox. The nature and extent of such adjustments, if any, will be
based upon further analysis and are not expected to be material.
(4) EARNINGS (LOSS) PER SHARE
The pro forma net earnings per share reflect: (i) the weighted average
number of shares of Davox Common Stock that would have been outstanding if the
Merger occurred at the beginning of the periods presented based
<PAGE>
upon the conversion of each share of AnswerSoft Common Stock, AnswerSoft
Series A Preferred Stock and AnswerSoft Series B Preferred Stock into shares
of Davox Common Stock, assuming Exchange Ratios of 0.1299665, 0.1621888 and
0.2137445, respectively and (ii) the dilutive impact of stock options and
warrants using the treasury stock method. Loss per share does not include stock
options and warrants as their effect would be anti-dilutive. All AnswerSoft
options and warrants to purchase AnswerSoft Common Stock are assumed to be
converted into options to purchase Davox Common Stock at an exchange ratio of
0.1299665 shares of Davox Common Stock for each share of AnswerSoft Common Stock
before application of the treasury stock method. Loss per share does not include
stock options and warrants as their effect would be antidilutive.
(5) RECLASSIFICATIONS
Certain financial statement balances of AnswerSoft have been reclassified to
conform with the Davox financial statement presentation.
<PAGE>
Exhibit 99.2
------------
DAVOX CORPORATION COMPLETES MERGER WITH ANSWERSOFT, INC.
Westford, MA and Richardson, TX (May 7, 1998) -- Davox Corporation (Nasdaq:DAVX)
and AnswerSoft, Inc. today announced the completion of the merger of a
subsidiary of Davox with and into AnswerSoft, resulting in AnswerSoft becoming a
wholly-owned subsidiary of Davox. This merger, approved by the Davox and
AnswerSoft stockholders at meetings held yesterday, is a tax-free, stock-for-
stock transaction which will be accounted for as a pooling-of-interests. In
connection with the merger, Davox will issue approximately 2,384,452 shares of
its common stock.
Commenting on the merger, Alphonse M. Lucchese, Chairman and Chief Executive
Officer of Davox, said: "Our acquisition of AnswerSoft is key to our strategy to
quickly enter and exploit the large inbound call center market. AnswerSoft has
developed an enviable reputation for its ability to automate inbound customer
interactions. We believe that the synergies between our two product lines and
out shared set of corporate values will result in a robust set of products for
our inbound, as well as our outbound call center customers."
AnswerSoft's management team will report directly to Davox President Louis
Marianacci.
Mr. Marianacci noted that: "Davox is using a staged approach to fully integrate
the strengths of AnswerSoft's product suite into its own. When complete, this
fully integrated product line will deliver on the promise of a true, single
platform 'universal agent' solution. No longer will call center managers have to
deal with two different suppliers and methodologies for their inbound and
outbound operations."
Mr. Marianacci continued: "To help ensure this continuity of product development
for our combined customers, I am pleased to announce that AnswerSoft Co-Founder
and Chairman, Jeanne A. Bayless will join Davox as Senior Vice President of
Marketing."
Said Ms. Bayless: "Davox and AnswerSoft are known for their excellent records in
deploying world class call center solutions and their shared commitment to
customer satisfaction. Our goal is now to provide the most comprehensive,
highly-integrated, solution available for inbound, outbound and blended call
center environments."
Davox Corporation, founded in 1981, is a leading supplier of unified call center
solutions for businesses involved in collection, telemarketing, telesales,
customer service, fund-raising and other mission-critical customer contact
activities. Its Unison family of call center management solutions combine open
<PAGE>
-2-
system, client/server, and relational database technology with sophisticated
applications and superior customer support. Davox was ranked 16th in the Boston
Globe's 1997 Top 100 Companies, 9th in the Boston Herald's 1997 HeraldHundred,
and 23rd among the Best Small Corporations in the United States according to a
1997 article in Business Week Magazine. More information about Davox and its
products and services can be obtained from the company's Web site at
www.davox.com.
AnswerSoft, founded in 1993, delivers industry leading Inter-Application
Automation (IAA) solutions that optimize the value of customer-to-company
interactions, personalizing service for telephone and Internet customer
contacts. AnswerSoft consistently delivers award-winning products based on
technological breakthroughs such as smart screen pop, intelligent call routing,
data mining and Internet-enabled call centers. The company's customers include:
Thomson Consumer Electronics, Compaq Computer Corporation, Gateway 2000, Sonoco,
and Prudential Insurance of America. AnswerSoft was ranked 3rd among the "1997
Fast Tech 50," a premiere business award recognizing the 50 fastest-growing high
technology companies in the Dallas metroplex. For further information, visit
AnswerSoft's Web site at www.answersoft.com.
In addition to historical information contained herein, this release contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of
1934, as amended, and are subject to the safe harbors created thereby. The
company's future actual results could differ materially from the forward-looking
statements discussed or implied herein because of risks or uncertainties
including, but not limited to, the difficulty of integrating the two companies,
the potential failure to achieve the beneficial synergies expected to result
from the merger, risks associated with competition and competitive pricing
pressures, technological change, new product introduction and market acceptance,
the ability of Davox to attract and retain key personnel, general economic
conditions in the United States and worldwide markets served by Davox, and those
other factors discussed from time to time in Davox's public reports filed with
the Securities and Exchange Commission, such as those discussed under "Certain
Factors That May Affect Future Results" in Davox's quarterly reports on Form 10-
Q and annual report on Form 10-K, and the section entitled "Risk Factors" in the
Company's recently filed Form S-4.
NOTE: Davox and Unison are registered trademarks and LYRICall and IN/UNISON are
trademarks of Davox Corporation. AnswerSoft is a registered trademark and
Concerto is a trademark of AnswerSoft, Inc.
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