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United States
Securities and Exchange Commission
Washington, D. C. 20549
FORM 8-K/A
Current Report
0-16715
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Commission File Number
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
September 22, 1995
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Date of Report
(Date of Earliest Event Reported)
PHONETEL TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Ohio 34-1462198
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(State of Incorporation) (I.R.S. Identification No.)
1127 Euclid Avenue
650 Statler Office Tower
Cleveland, Ohio 44115-1601
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Address and zip code of principal executive offices
(216) 241-2555
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Registrant's telephone number
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PART I
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The attached is provided in order to satisfy the filing requirements set forth
in the Rules and Regulations of The Securities and Exchange Act of 1934.
Exhibits
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(b) Pro Forma Financial Information:
1. World Communications, Inc. and PhoneTel Technologies,
Inc. Unaudited Pro Forma Combined Condensed Balance
Sheet at June 30, 1995
2. World Communications, Inc. and PhoneTel Technologies,
Inc. Unaudited Pro Forma Combined Condensed Income
Statement For the Year Ended December 31, 1994 and Six
Months Ended June 30, 1995
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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.
PHONETEL TECHNOLOGIES, INC.
(Registrant)
Date: December 11, 1995 /s/ Daniel J. Moos
- ----------------------------- ---------------------------------
Daniel J. Moos
Executive Vice President,
Treasurer and
Chief Financial Officer
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PHONETEL TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial information
gives effect to the acquisition of all of the outstanding shares of common
stock of World Communications, Inc. (WCI) in exchange for 2,415,001 shares of
common stock of PhoneTel and 530,534 shares of preferred stock of PhoneTel.
The acquisition of WCI is being accounted for as a purchase and, therefore, is
included in the Unaudited Pro Forma Combined Condensed Balance Sheet as if the
transaction had occurred on June 30, 1995 and in the Unaudited Pro Forma
Combined Condensed Statements of Income as if the transaction had occurred at
the beginning of each of the periods presented giving effect to the pro forma
adjustments described therein.
The unaudited combined condensed pro forma financial information presented
herein may not be indicative of the results that actually would have occurred
if the merger had occurred on the date indicated, or which may be obtained in
the future. The unaudited pro forma combined condensed financial information
should be read in conjunction with the historical financial statements of
PhoneTel and WCI.
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<TABLE>
PHONETEL TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
<CAPTION>
PhoneTel at WCI at Pro forma Pro forma
June 30, 1995 June 30, 1995 Adjustments Combined
ASSETS ------------- ------------- ------------- ------------
- ------
<S> <C> <C> <C> <C>
Cash $357,657 $193,430 $551,087
Accounts receivable, net 795,499 705,603 1,501,102
Inventories 516,086 230,311 746,397
Prepaid expenses 69,902 99,006 168,908
Property and equipment, net 4,778,515 4,076,987 $3,024,122 (1) 11,879,624
Intangibles, net 2,229,173 1,167,368 5,106,271 (1) 8,502,812
Other assets, net 960,042 574,688 1,534,730
------------- ------------- ------------- ------------
Total assets $9,706,874 $7,047,393 $8,130,393 $24,884,660
============= ============= ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- -----------------------------------
Current portion long-term debt and leases $1,768,727 $768,905 $2,537,632
Accounts payable 3,089,367 845,960 3,935,327
Accrued liabilities 762,945 333,442 1,096,387
Subordinated convertible debentures 1,765,000 1,765,000
Long-term debt and capital lease obligations 2,055,440 3,746,013 5,801,453
------------- ------------- ------------- ------------
Total liabilities 7,676,479 7,459,320 15,135,799
------------- ------------- ------------- ------------
Preferred stock, 7% cumulative convertible redeemable 200,000 200,000
Preferred stock, 8% cumulative convertible redeemable 981,084 981,084
Preferred stock, 10% cumulative convertible redeemable 1 1
Preferred stock, 10% nonvoting $5,305,340 (1) 5,305,340
Common stock 103,914 2,699 18,751 (1) 125,364
Additional paid in capital 9,502,575 476,951 1,914,725 (1) 11,894,251
Accumulated deficit (8,757,179) (891,577) 891,577 (1) (8,757,179)
------------- ------------- ------------- ------------
Total stockholders' equity 2,030,395 (411,927) 8,130,393 9,748,861
------------- ------------- ------------- ------------
</TABLE>
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<TABLE>
PHONETEL TECHNOLOGIES, INC
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
<CAPTION>
PhoneTel for WCI for
the year ended the year ended Pro forma Pro forma
Dec. 31, 1994 Dec. 31, 1994 Adjustments Combined
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net revenues $15,866,087 $7,534,916 $23,401,003
Operating expenses 14,348,640 5,560,869 ($800,000) (2) $21,416,509
Operating expenses 2,307,000 (3)
-------------- -------------- -------------- ------------
Gross profit 1,517,447 1,974,047 (1,507,000) 1,984,494
Selling, general & administrative 2,831,775 1,583,076 (500,000) (2) 3,914,851
-------------- -------------- -------------- ------------
Operating income (1,314,328) 390,971 (1,007,000) (1,930,357)
Other income/(expense) (380,794) (271,887) (652,681)
-------------- -------------- -------------- ------------
Income before taxes (1,695,122) 119,084 (1,007,000) (2,583,038)
Income tax provision
-------------- -------------- -------------- ------------
Net income (1,695,122) 119,084 (1,007,000) (2,583,038)
Preferred stock dividends 291,980 530,534 (4) 822,514
-------------- -------------- -------------- ------------
Income applicable to common stock ($1,987,102) $119,084 ($1,537,534) ($3,405,552)
============== ============== ============== ============
Income per common share ($0.23) ($0.31)
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Weighted average number of
shares outstanding 8,822,914 2,145,001 10,967,915
============== ============== ============
</TABLE>
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<TABLE>
PHONETEL TECHNOLOGIES, INC
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
<CAPTION>
PhoneTel for WCI for
6 months ended 6 months ended Pro forma Pro forma
June 30, 1995 June 30, 1995 Adjustments Combined
-------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $7,878,062 $4,172,528 $12,050,590
Operating expenses 7,583,176 3,474,750 ($400,000) (2) 11,811,426
Operating expenses 1,153,500 (3)
-------------- -------------- ----------- -----------
Gross profit 294,886 697,778 (753,500) 239,164
Selling, general & administrative 1,494,244 925,840 (250,000) (2) 2,170,084
-------------- -------------- ----------- -----------
Operating income (1,199,358) (228,062) (503,500) (1,930,920)
Other income/(expense) (213,642) (290,682) (504,324)
-------------- -------------- ----------- -----------
Income before taxes (1,413,000) (518,744) (503,500) (2,435,244)
Income tax provision
-------------- -------------- ----------- -----------
Net income (1,413,000) (518,744) (503,500) (2,435,244)
Preferred stock dividends 154,834 265,267 (4) 420,101
-------------- -------------- ----------- -----------
Income applicable to common stock ($1,567,834) ($518,744) ($768,767) ($2,855,345)
============== ============== =========== ===========
Income per common share ($0.16) ($0.24)
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Weighted average number of
shares outstanding 9,516,845 2,145,001 11,661,846
============== ============== ===========
Statements used for above information.
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MCM MCM carved-out finan MCM carved-out financials
MCS Balances per fax, 11/1 Balances per fax, 11/10/95
AHC Balances per fax, 11/1 Balances per fax, 11/10/95
</TABLE>
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PHONETEL TECHNOLOGIES, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
FOOTNOTES TO FINANCIAL INFORMATION
(1) Represents the issuance of 2,415,001 shares of PhoneTel's common
stock, $.01 par value, at an assumed price of $1.125 per share and
the issuance of 530,534 shares of PhoneTel's 10% cumulative,
nonvoting preferred stock, $10 stated value per share in exchange
for all of the outstanding common stock of WCI. In conjunction with
the merger, property and equipment was written up by $3,124,122 to
its estimated fair value and $5,106,271 was recorded relating to the
value of WCI's existing phone contracts. As required by purchase
accounting, the accumulated deficit of WCI prior to the merger was
eliminated.
(2) Represents the estimated recurring benefits as a result of the
merger of WCI into PhoneTel. The savings are primarily the result
of backroom efficiencies, including the elimination of substantially
all administrative personnel at WCI and economies of scale in
billing and other operating areas.
(3) Represents the incremental depreciation and amortization associated
with the merger. The increase to property and equipment is assumed
to depreciate over 60 months while the intangible asset relating to
WCI's existing phone contracts is being amortized over 36 months.
(4) Represents the preferred dividend on the 10% cumulative, nonvoting
preferred stock, $10 stated value, issued to the existing stock-
holders of WCI in connection with the merger.
