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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-10588
INTELLICALL, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1993841
(State or other jurisdiction of (I.R.S. Employer Identification number)
incorporation or organization)
2155 Chenault, Suite 410
Carrollton, TX 75006
(Address of Principal Executive Offices)
(972) 416-0022
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class May 12,1997
Common Stock $.01 par value 9,292,931
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<PAGE>
INDEX
INTELLICALL, INC.
Part I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at March 31, 1997
(Unaudited) and December 31, 1996..................................1
Consolidated Statements of Operations for each of the three
month periods ended March 31, 1997 and 1996
(Unaudited)........................................................2
Consolidated Statements of Cash Flows for each of the three
month periods ended March 31, 1997 and 1996
(Unaudited)........................................................3
Notes to Consolidated Financial Statements.........................4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K..................................13
Signatures...................................................................14
<PAGE>
Part I. Financial Information
Item 1. Consolidated Financial Statements
INTELLICALL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Restricted cash $ 17 $ 15
Cash and cash equivalents 2,421 2,271
Receivables, net 20,935 22,499
Inventories 8,394 7,902
Other current assets 1,538 1,684
-------- --------
Total current assets 33,305 34,371
Fixed assets, net 1,999 1,964
Notes receivable, net 1,422 992
Intangible assets, net 906 928
Capitalized software costs, net 4,824 4,904
Other assets, net 2,336 2,095
-------- --------
$ 44,792 $45,254
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,189 $ 6,064
Dealer payable 3,670 3,737
Deferred debit card revenue 815 1,028
Accrued liabilities 1,396 1,451
Current portion of long-term debt 85 85
--------- --------
Total current liabilities 13,155 12,365
Long-term debt 18,454 19,312
Deferred revenue 244 595
Other liabilities 200 200
Minority Interest 132 113
-------- --------
Total liabilities 32,185 32,585
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized; none issued -- --
Common stock, $.01 par value; 20,000,000
shares authorized; 9,317,839 and 8,646,278
shares issued, respectively 93 87
Additional capital 53,260 51,602
Less common stock in treasury, at cost;
24,908 shares (258) (258)
Accumulated deficit (40,488) (38,762)
-------- -------
Total stockholders' equity 12,607 12,669
-------- -------
$ 44,792 $ 45,254
======== =========
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
INTELLICALL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
---- ----
<S> <C> <C>
Revenues and sales:
Service revenues $ 19,882 $ 12,979
Equipment sales 3,272 4,251
------- -------
23,154 17,230
------- -------
Cost of revenues and sales:
Service revenues 17,887 11,131
Equipment sales 3,617 3,669
------- -------
21,504 14,800
------- -------
Gross profit
Service revenues 1,995 1,848
Equipment sales (345) 582
------ -------
1,650 2,430
Selling, general and administrative expenses 2,630 2,536
Provision for doubtful accounts 104 81
Research and development expenses 119 140
------- -------
Operating loss (1,203) (327)
Interest income 96 101
Interest expense (600) (772)
Minority interest (19) --
------- -------
Net loss $ (1,726) $ (998)
========== =========
Net loss per common and common
equivalent share $ (.19) $ (.13)
--------- ---------
Weighted average number of common and common
equivalent shares outstanding 9,001 7,684
========= ========
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
INTELLICALL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
---- ----
<S> <C> <C>
Operating Activities:
Net loss $ (1,726) $ (998)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 992 966
Provision for doubtful accounts 104 81
Provision for inventory -- 18
Minority interest in income of ILD 19 --
Changes in operating assets and liabilities:
Restricted cash (2) 482
Receivables 1,150 (189)
Inventories (492) (297)
Other current assets 125 (536)
License fee receivable 59 218
Investment in sales type leases 70 353
Notes receivable (263) 635
Accounts payable 1,058 745
Accrued liabilities (268) (145)
Deferred revenues (351) (87)
Other 121 (719)
------- -------
Net cash provided by operating activities 596 527
Investing activities:
Purchase of equipment (250) (180)
Capitalized software (475) (500)
------- -------
Net cash used in investing activities (725) (680)
Financing activities:
Proceeds from borrowings on long-term debt 66 --
Principal payments on long-term debt (21) (129)
Proceeds from issuance of stock under stock option plans 234 17
------- -------
Net cash provided by (used in) financing activities 279 (112)
Net increase (decrease) in cash and cash equivalents 150 (265)
Cash and cash equivalents at beginning of period 2,271 613
------- -------
Cash and cash equivalents at end of period $ 2,421 $ 348
========= =========
Supplemental cash flow information:
Interest paid $ 323 $ 507
======== =========
Supplemental non cash information:
Conversion of debt to equity $ 945 $ --
======== =========
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - CERTAIN ACCOUNTING POLICIES
Basis of Presentation. The accompanying consolidated financial statements
of Intellicall, Inc. (the "Company") have been prepared in accordance with the
requirements of Form 10-Q and do not include all disclosures normally required
by generally accepted accounting principles or those normally made in annual
reports on Form 10-K. In management's opinion, all adjustments necessary for a
fair presentation of the results of operations for the periods shown have been
made and are of a normal and recurring nature.
The results of operations for the three months ended March 31, 1997, are
not necessarily indicative of the results of operations for the full year 1997.
The consolidated financial statements herein should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Statement Presentation. Certain prior year amounts have been reclassified
to conform to current year presentation.
Software Development Costs. The Company capitalizes costs related to the
development of certain software products. In accordance with Statement of
Financial Accounting Standards No. 86, capitalization of costs begins when
technological feasibility has been established and ends when the product is
available for general release to customers. Amortization is computed on an
individual product basis based on the products' estimated economic life using
the straight line method, not to exceed four years.
The amounts of software development costs capitalized in the first quarter
of 1997 and 1996 were $475,000 and $500,000, respectively. The Company recorded
$555,000 and $380,000 of software amortization expense for the three months
ended March 31, 1997 and 1996, respectively.
Cash and Cash Equivalents. For purposes of the balance sheets and
statements of cash flows, cash and cash equivalents include short-term liquid
investments purchased with remaining maturities of three months or less.
Earnings per Share: In February 1997, the Financial Accounting Standards
Board issued FAS No. 128, Earnings per Share ("FAS 128"), which is effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods. Effective December 31, 1997, the Company will adopt
FAS 128, which establishes standards
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<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
for computing and presenting earnings per share (EPS). The statement
requires dual presentation of basic and diluted EPS on the face of the income
statement for entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. Basic EPS excludes
the effect of potentially dilutive securities while diluted EPS reflects the
potential dilution that would occur if securities or other contracts to issue
common stock were exercised, converted into or resulted in the issuance of
common stock that then shared in the earnings of the entity. For the three
months ended March 31, 1997 and 1996, calculated basic and diluted earnings per
share equals earnings per share shown on the face of the consolidated statements
of operations.
Other. The allowance for doubtful accounts was $3.3 million at March 31,
1997, and $3.2 million at December 31, 1996.
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<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - LONG-TERM DEBT AND LINE OF CREDIT
As of March 31, 1997 and December 31, 1996, the Company's debt consisted of
the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
<S> <C> <C>
Intellicall, Inc.
8% Convertible subordinated notes, due 2000 $ 3,215 $ 4,160
8% Convertible subordinated notes, due 2001 5,000 5,000
Convertible subordinated note, due 1999 1,000 1,000
Asset-based note collateralized by certain assets, due 1999 6,928 6,862
Installment note, due 1998 92 113
-------- --------
16,235 17,135
Less unamortized debt discount (626) (660)
-------- --------
15,609 16,475
-------- --------
ILD Communications, Inc.
Senior secured debt, due 2001 2,000 2,000
Convertible subordinated notes, due 2001 1,000 1,000
------- --------
3,000 3,000
Less unamortized debt discount (70) (78)
------- --------
2,930 2,922
------- --------
Total debt 18,539 19,397
Less: Current portion of long-term debt (85) (85)
------- --------
Total long-term debt $ 18,454 $ 19,312
========= ==========
</TABLE>
On February 15, 1994 the Company issued a $1.0 million, 10.0%, convertible,
subordinated note to T.J. Berthel Investments, L.P., which controls 8.9% of the
Company's outstanding common stock. Interest is payable quarterly and commenced
March 31, 1994. The entire principal amount matures on March 31, 1999. The note
may be converted by the holder into 160,000 shares of the Company's common stock
at any time.
On December 29, 1995 the Company completed the sale of $7.5 million of 8.0%
convertible subordinated notes, due December 31, 2000, to Banca Del Gottardo in
Lugano, Switzerland. The notes were issued with warrants to purchase 300,000
shares of the Company's Common Stock $.01 par value (the "Common Stock"). The
notes are convertible into 1,785,714 shares of the Company's Common Stock at a
price of $4.20 per share. As of March 31, 1997, $4.3
- 6 -
<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
million of the Banca Del Gottardo Notes were converted into 1,020,232 shares of
the Company's Common Stock. Interest is payable semi-annually and commenced June
30, 1996.
On May 10, 1996 a majority-owned subsidiary of the Company, ILD
Communications, Inc. ("ILD") completed the sale of $1.0 million of 10.0%
convertible subordinated notes, due May 10, 2001, to Triad-ILD Partners, L.P.
and Morris Telecommunications, LLC in the amounts of $666,666.67 and
$333,333.33, respectively. The notes can be converted at the rate of one (1)
share of common stock of ILD for each $90.00 of principal then due the holder.
Also issued with the notes was a warrant to purchase 6,000 shares at $90.00 per
share. Interest is paid quarterly.
On May 10, 1996 ILD issued Secured Promissory Notes in the aggregate
principal amount of $2.0 million with warrants to purchase an aggregate of 7,239
shares of ILD common stock at a price of $0.01 per share. Sirrom Capital
Corporation purchased a note in the original amount of $1.5 million with a
warrant to purchase 5,429 shares of common stock and Reedy River Ventures
Limited Partnership purchased a note in the original amount of $500,000 with a
warrant to purchase 1,810 shares of common stock at a price of $0.01 per share.
The notes are payable on May 10, 2001 and bear interest at 13.5% annually.
Interest is paid quarterly.
On November 22, 1996 the Company completed the sale of $5.0 million of 8.0%
convertible subordinated notes, due November 22, 2001, to Banca Del Gottardo in
Lugano, Switzerland. The notes were issued with warrants to purchase 200,000
shares of the Company's Common Stock at $5.00 per share. The notes are
convertible into one million shares of the Company's Common Stock at a price of
$5.00 per share. Interest is payable semi-annually beginning May 1997.
On November 22, 1996 the Company entered into a Loan and Security Agreement
(the "Loan Agreement") with Finova Capital Corporation ("Finova") pursuant to
which Finova agreed to loan the Company up to $12,000,000 (the "Loan") based on
an available borrowing base. The borrowing base consists primarily of call
traffic and trade equipment receivables, and inventory, subject to eligibility
requirements determined by Finova. Amounts loaned subject to the borrowing base
are determined by percentages established in the Loan Agreement, but are within
the discretion of Finova. Such percentages are subject to change based on
experience and Finova's expectations regarding future collectibility of
receivables and usage of inventory.
The Loan is evidenced by a Secured Revolving Credit Note (the "Note")
payable to the order of Finova. Borrowings under the Loan bear interest at the
rate of prime plus 1.75%.
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<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The interest rate may be decreased prospectively by up to 0.5% based on future
profitability of the Company. The Company used the proceeds from the Finova Loan
and Gottardo Notes (net of placement fees of $509,406) to repay the remaining
balance of its Series A Notes due to Nomura Holding America, Inc in the amount
of $12.7 million. Also the Loan has an unused line fee equal to one quarter of
one percent (0.25%) per annum of the unused portion of the Total Facility and a
facility fee equal to one-half of one percent (0.50%) per annum of the amount of
the Total Facility payable on the first anniversary of the Agreement and
annually thereafter.
The initial term of the Loan Agreement is three years at which time, unless
extended, all amounts then outstanding must be repaid. The Loan Agreement
contains prepayment penalties in the event it is terminated prior to expiration
of its initial term. The Loan is secured by first and prior liens and security
interests encumbering substantially all of the assets of the Company, including
inventory, equipment, accounts receivable, general intangibles, trademarks and
tradenames. The Loan Agreement contains various restrictions (including a
prohibition against the payment of dividends, limitations on capital
expenditures, and restrictions on investments) and financial ratio maintenance
requirements (including minimum working capital and net worth requirements). As
of March 31, 1997 the Company was in compliance with all required covenants.
NOTE 3 - INVENTORY
As of March 31, 1997 and December 31, 1996, the Company's inventory
consisted of the following (in thousands):
March 31, December 31,
1997 1996
---- ----
Raw materials $ 3,551 $ 4,850
Work-in-process 2,614 511
Finished goods 2,229 2,541
-------- --------
Total inventory $ 8,394 $ 7,902
=========== ==========
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<PAGE>
INTELLICALL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - LITIGATION
In April 1997, U.S. Long Distance, Inc. ("USLDI") filed a Second Amended
Complaint against the Company. The case is pending in the United States District
Court for the Western District in San Antonio, Texas. The complaint seeks actual
damages of $4.0 million, exemplary damages, attorney's fees and interest for the
Company's alleged tortious interference of USLDI's existing and prospective
contractual relationships with PhoneTel Technologies, Inc. ("PhoneTel"). The
Second Amended Complaint alleges the Company and its then subsidiary,
Intellicall Operator Services, Inc. interfered with USLDI's existing contractual
relationship with PhoneTel, another defendant, when PhoneTel executed an
operator services agreement with the Company and its subsidiary. The Company
intends to vigorously contest the allegations contained in the Second Amended
Complaint.
- 9 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Statements - Cautionary Statements
This Form 10-Q contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Specifically, all statements other than statements
of historical facts included in this report regarding the Company's financial
position, business strategy and plans and objectives of management of the
Company for future operations are forward-looking statements. These
forward-looking statements are based on the beliefs of the Company's management,
as well as assumptions made by and information currently available to the
Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect," and "intend" and words or phrases of similar
import, as they relate to the Company or Company management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company with respect to future events and are subject to risks,
uncertainties and assumptions related to various factors including, without
limitation, competitive factors, general economic conditions, customer
relations, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, product introductions and
acceptance, technological change, changes in industry practices described herein
(the "cautionary statements") and one-time events. Although the Company believes
that expectations are reasonable, it can give no assurance that such
expectations will prove to be correct. Based upon changing conditions, should
any one or more of these risks or uncertainties materialize, or should any
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the applicable cautionary statements.
Financial Condition
Liquidity and Capital Resources
During the three months ended March 31, 1997 the Company generated $596,000
of cash from operations including changes in assets and liabilities. The Company
invested $250,000 in capital equipment and $475,000 in software and product
development. Borrowings under the Company's asset based note agreement with
Finova increased $66,000. The net result of such changes described above was a
$150,000 increase in cash and cash equivalents.
The net effect of changes in operating assets and liabilities was an
increase in cash of $1.2 million. The primary factors affecting these changes
were a decrease in accounts receivable of $1.15 million, and an increase in
accounts payable of $1.0 million during the first quarter of 1997 from the
balance due at December 31, 1996. The reduction in accounts receivable was
principally the result of the seasonal decline in call traffic revenues from the
fourth quarter of 1996 to the first quarter of 1997. An increase in inventory
balances and a
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<PAGE>
decline in certain accrued expenses and deferred revenue partially offset the
changes in accounts receivable and accounts payable.
The outstanding balance under the Company's 8% convertible subordinated
notes, due 2000 declined $945,000 from the conversion into common stock by the
holders of such amount of the notes. Such conversion had no effect on the cash
position of the Company.
Absent the changes in operating assets and liabilities and proceeds from
financing activities, the Company showed a decline in cash balances of
approximately $1.3 million for the first quarter of 1997. The Company's future
liquidity will depend on spending levels, working capital turnover, the volume
and timing of equipment sales and gross margins. There can be no assurances that
the Company's efforts to maintain or enhance liquidity will be successful, and,
under certain circumstances, the Company may be required to limit its
operations, dispose of certain assets, consider the sale of additional equity,
or take other actions as considered necessary.
Results of Operations
Service Revenues. Service revenues for the first quarter ended March 31,
1997 increased $6.9 million to $19.9 million, compared to $13.0 million for the
same period in 1996. The table below provides a detailed analysis of service
revenues by type for the quarters ended March 31, 1997 and 1996.
Three Months Ended
March 31,
1997 1996
---- ----
Call traffic revenue........................ $11,057 $9,022
Long-distance resale........................ 1,108 824
Operator services........................... 6,330 2,335
Prepaid calling services.................... 1,387 798
------- -------
$19,882 $12,979
======= =======
Call traffic revenues were $2.0 million higher in the first quarter of 1997
compared to the first quarter of 1996. The increase reflects a higher number of
pay telephones utilizing the "Intelli*Star" automated operator services
technology from 57,669 to 61,986 and an increase in the volume of call revenues
processed under the Company's "Jail*Star" inmate services program. Partially
offsetting increases from the higher base of reporting phones was a decline in
the number of calls processed per payphone.
Long-distance revenues were $284,000 higher in the three months ended March
31, 1997 compared to the three months ended March 31, 1996. The revenue growth
resulted from a greater number of customers purchasing long-distance services in
1997.
Operator service revenues increased $4.0 million for the three months ended
March 31, 1997 compared to the same three month period in 1996. The addition of
a significant new
- 11 -
<PAGE>
customer in April of 1996 resulted in revenue of $1.9 million for the three
months ended March 31, 1997. On April 1, 1996 the Company entered into a new
operating arrangement with its third party operator service provider. The new
agreement contractually changes the methods by which the Company receives
payment for call traffic and pays for services rendered. Based on the terms of
the new contract, beginning April 1, 1996 the Company began recording operator
services call traffic at its gross amount, and recording the costs for services
provided as cost of sales. The Company believes the new contractual arrangements
warrant the gross presentation of revenues. The effect of the change on the
first quarter of 1997 was to increase reported revenue approximately $2.5
million.
Gross profits from services were $2.0 million or 10.0% of the related
revenues for the three months ended March 31, 1997. Percentage gross profits in
1996 were 14.2% of related revenues. The decline in gross profit percentages is
primarily the result of the higher number of inmate services customers upon
which the Company earns a lower profit margin. In addition, the change in the
arrangement for operator services caused a decline in percentage profits,
although absolute values remained consistent.
Equipment Sales. The Company's equipment sales were $3.3 million and $4.3
million in the three months ended March 31, 1997 and 1996, respectively. The
following table presents an analysis of sales to the Company's primary markets
(in thousands):
Three Months Ended
March 31,
1997 1996
---- ----
Independent payphone providers.......... $ 3,245 $ 3,087
International........................... 17 867
Regulated............................... 10 297
------- -------
Total equipment sales................. $ 3,272 $ 4,251
======= =======
The decline in equipment sales is principally attributable to lower
international shipments in the first quarter of 1997 compared to the first
quarter of 1996 partially offset by higher sales to independent payphone
providers. The improvement in independent payphone provider sales is a
reflection of customer acceptance of AstraTel 2, the Company's recently
introduced line- powered phone.
Gross loss from equipment sales was $345,000 (10.5% of related sales) for
the three months ended March 31, 1997 as compared to a gross profit of $582,000
(13.7% of related sales) for the three months ended March 31, 1996. The negative
gross margin is attributable to low sales volume and high sales discounts.
Compared with the first quarter of 1996, the deterioration in gross margin
resulted from an unfavorable sales mix, the decline in sales volume, an increase
in software amortization expense and lower prices obtained from sales of the
Company's older product lines.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased approximately $94,000, for the three months
ended March 31, 1997 from the same period ended March 31, 1996. Selling, general
and administrative expenses of growth
- 12 -
<PAGE>
segments of the Company's business, principally ILD and prepaid calling
services rose by $159,000. Other SG&A expenses declined by $65,000.
Research and Development Expenses. Gross spending for research and
development decreased $46,000 for the three months ended March 31, 1997, as
compared to the same period in 1996. In the first quarter of 1997, the Company
capitalized software development costs of $475,000 as compared to $500,000 in
the first quarter of 1996.
Provision for Doubtful Accounts. During the quarter ended March 31, 1997
the Company reserved $104,000 for doubtful accounts as compared to $81,000 in
the same quarter in 1996.
Part II. Other Information
Item 1. Legal Proceedings
In April 1997, U.S. Long Distance, Inc. ("USLDI") filed a Second Amended
Complaint against the Company. The case is pending in the United States District
Court for the Western District in San Antonio, Texas. The complaint seeks actual
damages of $4.0 million, exemplary damages, attorney's fees and interest for the
Company's alleged tortious interference of USLDI's existing and prospective
contractual relationships with PhoneTel Technologies, Inc. ("PhoneTel"). The
Second Amended Complaint alleges the Company and its then subsidiary,
Intellicall Operator Services, Inc. interfered with USLDI's existing contractual
relationship with PhoneTel, another defendant, when PhoneTel executed an
operator services agreement with the Company and its subsidiary. The Company
intends to vigorously contest the allegations contained in the Second Amended
Complaint.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None.
- 13 -
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INTELLICALL, INC.
/s/ William O. Hunt
Chairman of the Board, President and
Chief Executive Officer
/s/ Michael H. Barnes
Senior Vice President Corporate Staff
and Chief Financial Officer
(principal financial officer)
Date: May 15, 1997
- 14 -
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000818674
<NAME> INTELLICALL, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 2,438
<SECURITIES> 0
<RECEIVABLES> 24,195
<ALLOWANCES> 3,260
<INVENTORY> 8,394
<CURRENT-ASSETS> 1,538
<PP&E> 10,946
<DEPRECIATION> 8,947
<TOTAL-ASSETS> 44,792
<CURRENT-LIABILITIES> 13,155
<BONDS> 0
0
0
<COMMON> 93
<OTHER-SE> 12,607
<TOTAL-LIABILITY-AND-EQUITY> 44,792
<SALES> 3,272
<TOTAL-REVENUES> 23,154
<CGS> 3,617
<TOTAL-COSTS> 21,504
<OTHER-EXPENSES> 2,853
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 600
<INCOME-PRETAX> (1,726)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,726)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,726)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> 0
</TABLE>
