UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 1996.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to .
---------- ----------
Commission File Number: 0-23172
NETWORK LONG DISTANCE, INC.
-----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 77-1122018
------------------------------- ------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identi-
Incorporation or Organization) fication Number)
525 FLORIDA STREET
BATON ROUGE, LOUISIANA 70801
----------------------------------------------------------
Address of Principal Executive Offices, Including Zip Code
(504) 343-3125
---------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required 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 periods
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
------ ------
There were 6,767,639 shares of the Registrant's $.0001 par value common
stock issued and outstanding as of December 31, 1996.
<PAGE>
NETWORK LONG DISTANCE, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1996
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets
December 31, 1996 and March 31, 1996. . . . . . . . . . . 2
Consolidated Statements of Income
Three months and nine months ended December 31, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
Nine months ended December 31, 1996 and 1995. . . . . . . 4
Notes to Consolidated Financial Statements. . . . . . . . . . 5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . 6-8
PART II - OTHER INFORMATION
Exhibits and Current Reports on Form 8-K. . . . . . . . . . . . 9
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
NETWORK LONG DISTANCE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 MARCH 31,
UNAUDITED 1996
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 641,600 $ 892,572
Accounts receivable, net of allowance
for doubtful accounts of $2,071,000
and $1,001,000 at December 31, 1996,
and March 31, 1996 respectively 8,402,502 9,325,997
Other receivables 670,242 708,962
Deferred income tax asset 586,564 0
Other current assets 416,048 668,231
---------- ----------
Total current assets 10,716,956 11,595,762
Property and equipment
Land 75,000 75,000
Building and improvements 729,305 697,285
Telecommunications equipment 1,399,864 2,338,866
Furniture and fixtures 1,728,989 1,371,197
---------- ----------
3,933,158 4,482,348
Less accumulated depreciation (2,121,917) (1,758,936)
---------- ----------
Total property and equipment, net 1,811,241 2,723,412
Customer acquisition costs, Net 6,022,037 5,002,702
Goodwill, Net 2,579,701 3,358,081
Other intangibles, net 222,904 412,219
Other assets 515,226 218,940
---------- ----------
Total assets $21,868,064 $23,311,116
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term debt and current maturities
of long-term debt $ 1,117,685 $ 202,280
Accounts payable 231,251 1,657,423
Accrued telecommunications cost 4,837,239 2,736,999
Other accrued liabilities 1,928,924 1,152,591
Customer deposits 132,990 176,210
Deferred income tax liability 0 242,872
Current maturities of capital
lease obligations 92,994 82,855
---------- ----------
Total current liabilities 8,341,083 6,251,230
Deferred income tax liability 0 58,201
Long-Term Debt 2,834,716 2,889,138
Capital Lease Obligation 33,202 126,481
Series A convertible preferred stock -
$.01 par value; 25,000,000 shares
authorized; no shares issued and
outstanding at December 31, 1996,
and March 31, 1996. 0 0
Stockholders' equity
Common stock - $.0001 par value;
20,000,000 shares authorized;
6,767,639 and 6,523,878 shares
issued and outstanding at December 31,
1996 and March 31, 1996, respectively 677 652
Additional paid-in capital 14,787,036 12,970,833
Retained earnings (4,036,360) 1,106,871
Treasury stock (92,290) (92,290)
---------- ----------
Total stockholders' equity 10,659,063 13,986,066
---------- ----------
Total liabilities and
stockholders' equity $21,868,064 $23,311,116
========== ==========
See notes to consolidated financial statements.
-2-
<PAGE>
NETWORK LONG DISTANCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months ended Nine Months ended
December 31, December 31,
--------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
Revenues (including
excise taxes of $342,561
and $242,907 for the
three months ended
December 31, 1996 and
1995, respectively and
$1,074,000 and $592,014
for the nine months
ended December 31, 1996
and 1995 respectively) $14,384,688 $11,465,271 $44,029,652 $31,294,438
Operating expenses:
Telecommunications costs 10,201,738 8,209,529 30,901,479 22,885,397
Selling, general and
administrative 3,855,657 2,496,976 10,661,864 6,479,602
Depreciation and
amortization 465,941 370,763 1,326,503 771,467
Provision for losses
on accounts receivable 1,988,486 (30,982) 2,663,463 143,314
Provision to reduce
carrying value of
certain assets 4,050,000 0 4,050,000 0
---------- ---------- ---------- ----------
Total operating expenses 20,561,822 11,046,286 49,603,309 30,279,780
---------- ---------- ---------- ----------
Operating income (6,177,134) 418,985 (5,573,657) 1,014,658
Interest (income)
expense, net 141,486 77,617 397,065 157,395
Other (income)
expense, net 0 0 0 (22,827)
---------- ---------- ---------- ----------
Income before income taxes (6,318,620) 341,368 (5,970,722) 880,090
Provision (benefit) for
income taxes (953,001) 94,791 (709,186) 262,914
---------- ---------- ---------- ----------
Net income applicable to
common stockholders (5,365,619) 246,577 (5,261,536) 617,176
Proforma Adjustment (Note 1):
Income tax provision 0 44,366 4,700 104,511
---------- ---------- ---------- ----------
Proforma Net Income
applicable to common
stockholders $(5,365,619) $ 202,211 $(5,266,236) $ 512,665
========== ========== ========== ==========
Earnings per common share $ (0.87) $ 0.04 $ (0.87) $ 0.12
========== ========== ========== ==========
Proforma earnings per
common share n/a $ 0.03 $ (0.87) $ 0.10
========== ========== ========== ==========
See notes to consolidated financial statements.
-3-
<PAGE>
NETWORK LONG DISTANCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine months
ended December 31,
-------------------------
1996 1995
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(5,261,536) $ 617,176
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation 377,166 413,086
Amortization 949,337 358,381
Provision for losses on
accounts receivable 2,663,463 143,314
Provision (benefit) for deferred
income taxes (1,157,374) 193,014
Provision for employee stock
incentive plan 38,061 38,064
Loss on impairment of intangibles 4,050,000 0
Changes in assets and liabilities,
net of effect of business
combinations:
Increase in accounts receivable (1,094,348) (3,041,378)
Decrease (increase) in other
receivables 38,720 (9,568)
Increase (decrease) in other assets 218,596 (722,380)
Decrease in accrued line costs 1,572,185 1,496,599
(Decrease) Increase in accounts
payable (1,455,721) 726,725
Increase (Decrease) in accrued
liabilities 646,869 (71,240)
---------- ----------
Net cash provided by operating activities 1,585,418 141,793
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (238,355) (1,836,295)
Acquisition and related costs (3,829,181) (2,219,256)
Increase in intangible assets 92,399 (320,019)
Proceeds from sale of equipment 764,363 0
Proceeds from the sale of short
term investments 0 1,558,562
---------- ----------
Net cash used in investing activities (3,210,774) (2,817,008)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings 21,879,904 8,890,151
Principal payments on debt (20,978,803) (5,746,769)
Decrease in capital lease obligation (63,305) (54,601)
Dividends on common stock 0 (36,386)
---------- ----------
Net cash provided by financing activities 837,796 3,052,395
---------- ----------
Net increase (decrease) in cash
and cash equivalents (787,560) 377,180
Effect of change in fiscal year-end of UWI 536,588 0
Cash and cash equivalents at beginning
of period 892,572 523,267
---------- ----------
Cash and cash equivalents at end of period $ 641,600 $ 900,447
========== ==========
See notes to consolidated financial statements.
-4-
<PAGE>
NETWORK LONG DISTANCE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - MERGER
On November 15, 1996, Network Long Distance, Inc. (Network), merged with
United Wats, Inc. (UWI) and in connection therewith issued 2,277,780 shares
of common stock for all of UWI's common stock (the Merger). The Merger was
accounted for as a pooling-of-interests and, accordingly, the Network
financial statements for periods prior to the Merger have been restated to
include the results of UWI for all periods presented. Separate and
combined results of operations are as follows:
For the For the
Three months ended Nine months ended
December 31, December 31,
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Network $ 9,029,149 $ 8,292,719 $29,226,114 $24,196,455
UWI 5,355,539 3,172,552 14,803,538 7,097,983
----------- ----------- ----------- -----------
Combined $14,384,688 $11,465,271 $44,029,652 $31,294,438
=========== =========== =========== ===========
Income (Loss) before
income taxes:
Network $(6,670,662) $ 137,781 $(6,736,886) $ 373,129
UWI 352,042 203,587 766,164 506,961
----------- ----------- ----------- -----------
Combined $(6,318,620) $ 341,368 $(5,970,722) $ 880,090
=========== =========== =========== ===========
Prior to the Merger, UWI utilized a December 31 fiscal year end. For
purposes of the consolidated balance sheets, the March 31, 1996 and
December 31, 1996 consolidated balance sheets of Network have been
consolidated with the balance sheets of UWI as of December 31, 1995 and
December 31, 1996, respectively. The consolidated statements of income
of Network for the three month and nine month periods ended December 31, 1996
and December 31, 1995 have been consolidated with the results of UWI for the
three months and nine months ended December 31, 1996 and September 30, 1995,
respectively. The consolidated statements of cash flows of Network for the
nine months ended December 31, 1996 and December 31, 1995 have been
consolidated with the results of UWI for the nine months ended December 31,
1996 and September 30, 1995, respectively. The combined companies of
Network and UWI are hereinafter referred to as the "Company."
NOTE 2 - BASIS OF PRESENTATION
The financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles for
interim financial reporting and Securities and Exchange Commission
regulations. Certain reclassification have been made to the balance sheet
dated March 31, 1996 in order to conform to the balance sheet dated
December 31, 1996. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations. In the opinion of management, the financial
statements reflect all adjustments (of a normal and recurring nature) which
are necessary to present fairly the financial position, results of
operations and cash flows for the interim periods.
NOTE 3 - ACQUISITIONS
In May 1996, the Company purchased substantially all of the customer base
of Universal Network Services,
-5-
<PAGE>
Inc. including the related accounts receivable valued at $776,000 for
approximately 243,750 shares of common stock valued at approximately
$1,825,000, and cash of approximately $3,628,000. The Company has
initially allocated approximately $2,100,000 to customer base and
$2,600,000 to goodwill with estimated useful lives of 7.5 years and 30
years, respectively. The following represents the proforma results of
operations of the Company and Universal Network Services, Inc. for the Nine
months ending December 31, 1996.
For the Nine Months Ended
-------------------------
December 31, 1996
-----------------
Revenues $45,612,993
Net Income (Loss) $(5,898,351)
===========
E.P.S. $ (0.968)
===========
The initial purchase price allocations for the fiscal year 1997
acquisitions were based on estimates as the Company is waiting for more
detailed information concerning the current values of certain assets. As
a result, the final purchase price allocations may differ from the
presented estimates. To identify the intangibles acquired in these
purchases, the Company employs a series of projections of the acquired
customer bases. These projections utilize cash flow models and historic
and projected attrition rates to quantify the values allocated to the
various acquired intangibles and the related useful lives. Management
believes such projections are achievable based on the current results of
the Company's operations.
NOTE 4 - REDUCTION IN CARRYING VALUE OF CERTAIN ASSETS
During the three month period ended December 31, 1996 the Company incurred
non-cash charges related to a reduction in the carrying value of intangible
assets associated with certain acquisitions. The contractual agreements
related to the Company's acquisitions of certain customer bases required
certain re-evaluations as of October 31, 1996. As a result, Management
revised estimates of the recoverability of these intangible assets resulting
in a non-cash, pretax charge of $4,050,000. On a pretax basis the
write-down included $2,740,000 for goodwill and $60,000 for customer
acquisition costs associated with the purchase of selected assets from
Value Tel, Inc., $774,000 for goodwill and $176,000 for customer acquisition
costs associated with the purchase of selected assets from Colorado River
Communications Corp., and $300,000 for customer acquisition costs
associated with the purchase of selected assets from Quantum
Communications, Inc. The fair values of these assets were determined by
estimating the present value of future cash flows to be generated by these
assets.
NOTE 5 - NET INCOME (LOSS) PER SHARE
Net income (loss) per share was calculated based on the following number of
common and common equivalent shares outstanding: 6,082,354 and 5,805,192
for the three months ended December 31, 1996 and 1995, respectively, and
6,039,100 and 5,370,551 for the nine months ended December 31, 1996 and
1995, respectively.
NOTE 6 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
For the nine months ended December 31, 1996 and 1995, interest paid
amounted to $401,000 and $99,000, respectively. Income taxes paid by the
Company during the nine months ended December 31, 1996 and 1995 was
$170,000 and $231,000, respectively.
MANAGEMENT'S DISCUSSION & ANALYSIS
OF FINANCIAL CONDITION
& RESULTS OF OPERATIONS
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the three months and nine months
ended December 31, 1996 and 1995 after giving effect to the mergers with
United Wats, Inc. (UWI) and Long Distance Telecom, Inc. dba Blue Ridge
Telephone (Blue Ridge), which were accounted for as a pooling of interests.
The information should be read in conjunction with the Company's
Consolidated Financial Statements and the Notes thereto.
Certain statements set forth in Management's Discussion and Analysis of
Financial Condition and Results of Operations, which are not historical
facts, are forward-looking statements under the Private Securities
Litigation Reform Act of 1995
-6-
<PAGE>
that are subject to risks and uncertainties that could cause actual results
to differ materially from those set forth in the forward-looking statements.
Among the factors that could cause actual future results to differ materially
are competitive pressures, the timing and technique used in marketing by
third-party distributors and the market acceptance of certain services.
RESULTS OF OPERATIONS
For the three months ended December 31, 1996, revenues, inclusive of excise
taxes and fees, were $14,384,688, compared to $11,465,271 for the third
fiscal quarter of 1996, an increase of 25.5% and $44,029,652 for the nine
months ended December 31, 1996 compared to $31,294,438 for the same period
in 1995, an increase of 40.7%. The rise in revenues reflects an overall
increase in long distance calling volume resulting from the enhanced sales
efforts of the Company's nationwide retail, agent, and affinity marketing
divisions; and from new calling traffic generated by the Company's expanded
acquisition program, see Note 3 to the Financial Statements.
Cost for telecommunications for the three months ended December 31, 1996
were $10,201,738, representing approximately 70.9% of revenue, compared to
$8,209,529, representing 71.6% of revenue for the same period in 1995.
For the nine month period ended December 31, 1996, cost of
telecommunications were $30,901,479 representing 70.2% of revenue, compared
to $22,885,397 representing 73.1% of revenue for the same period in 1995.
This reduction as a percentage of revenues is a reflection of economies of
scale resulting from the increased calling volume from both internal
generated sales and through the Company's mergers and acquisition activity.
Selling, general and administrative expenses were $3,855,657 for the three
months ended December 31, 1996, representing 26.8% of revenue. This
compares with SG&A expense of $2,496,976 for the three months ended
December 31, 1995, representing 21.8% of revenues. SG&A for the nine month
period ended December 31, 1996 was $10,661,864 or 24.2% of revenue compared
to $6,479,602 or 20.7% of revenues for the same period last year. The
increases are associated with one-time charges relating to the mergers with
UWI and Blue Ridge and an increase in personnel costs associated with a
build up of operations in anticipation of future revenue growth.
Depreciation and amortization expense was $465,941 for the three months
ended December 31, 1996, representing 3.2% or revenues. This is compared
to $370,763, or 3.2% of revenue, for the same period in 1995. For the nine
month period ended December 31, 1996, depreciation and amortization expense
was $1,326,503 or 3.0% of revenue compared to $771,467 or 2.5% of revenue
for the same period last year. This increase is related to the
amortization of the customer bases acquired, primarily those acquired from
Universal Network Services, Inc. and Value Tel, Inc., and from depreciation
of additional equipment acquired during the periods.
The provision for losses on accounts receivable for the three month period
ended December 31, 1996 was $1,988,486 or 13.8% of revenues. This compared
to $(30,982) or (0.27)% of revenues for the same period in 1995. For the
nine month period ended December 31, 1996, the provision for losses on
accounts receivable was $2,663,463 or 6.1% of revenues compared to $143,314
or 0.46% of revenues for the same period in 1995. The increases in the
provision for losses on accounts receivable is primarily associated with the
Company's on-going effort to clean-up and de-emphasize its wholesale operations
in order to reduce the Company's exposure to this lower margin sector of the
business, the write-off of uncollectible accounts receivable acquired in
previous acquisitions, and the application of the Company's revised policies
associated with the collection and write-off of accounts receivable.
During the three month period ended December 31, 1996, the Company incurred
non-cash charges related to a reduction in the carrying value of intangible
assets associated with certain acquisitions. The contractual agreements
related to the Company's acquisition of certain customer bases required certain
re-evaluations as of October 31, 1996. As a result, management's revised
estimates of the recoverability of these intangible assets resulted in a
non-cash, pretax charge of $4,050,000. On a pretax basis the write-down
included $2,740,000 for goodwill and $60,000 for customer acquisition costs
associated with the purchase of selected assets from Value Tel, Inc., $774,000
for goodwill and a $176,000 for customer acquisition costs associated with
the purchase of selected assets from Colorado River Communications Corp.,
and $300,000 for customer acquisition costs associated with the purchase of
selected assets from Quantum Communications, Inc. In light of these
reductions, the Company has reviewed its mergers and acquisitions program in
an effort to reduce its exposure to such reductions as they may relate to any
other acquisitions including purchase price allocations and amortization
periods.
-7-
<PAGE>
Net income (loss) for the three months ended December 31, 1996 was
$(5,365,619), compared to $246,577 for the same period in 1995. For the
nine month period ended December 31, 1996, net income was $(5,261,536)
compared to $617,176 for the same period last year. This decrease in net
income is attributable to the reduction in the carrying value of certain
assets and from the increases in selling, general, and administrative
expenses and the provision for losses on accounts receivable.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended December 31, 1996, the Company's cash flow
provided by operating activities was $1,585,418 compared to cash flow
provided by operating activities of $141,418 for the nine months ended
December 31, 1995. The Company made significant capital investments in the
first nine months of fiscal year 1997, resulting in cash used in investing
activities of $3,210,774, compared to $2,817,008 of cash used in investing
activities for the nine months ended December 31, 1995. These investments
included customer base acquisitions, office furniture and fixtures and
leasehold improvements related to the Company's new operations center.
Included in investing activities is $764,363 of proceeds from the sale of
a DEX switch which is being leased back to the Company. The Company has
financed these capital expenditures and acquisitions by utilizing its
revolving line of credit and term loan facility.
In May 1996, the Company entered into a $14,250,000 credit facility with a
bank which includes a revolving credit facility and term loan facility.
Borrowings under the revolving credit portion of the facility may not
exceed the lessor of $11,000,000 minus any reserves the lender may deem
eligible or 85% of eligible receivables. Borrowings under the revolver
will bear interest at the prime rate plus 0.75%. Borrowings and unpaid
interest on the revolving facility are repayable in full at maturity of the
facility on June 1, 1999. The Company is allowed to borrow $3,250,000
under the term loan facility. The term loan is repayable in 36 equal
monthly installments of $90,278 plus accrued interest. The term loan will
bear interest at the prime rate plus 3%. Substantially all of the assets
of the Company are pledged as collateral under the credit facility.
In May 1996, the Company purchased substantially all of the customer base
of Universal Network Services, Inc. including the related accounts
receivable valued at $776,000 for approximately 243,750 shares of common
stock valued at approximately $1,825,000, and cash of approximately
$3,628,000. The Company has initially allocated approximately $2,100,000
to customer base and $2,600,000 to goodwill with estimated useful lives of
7.5 years and 30 years, respectively.
On June 30, 1996, Network Long Distance, Inc. (Network), merged with Long
Distance Telecom, Inc. dba Blue Ridge Telephone (Blue Ridge) and in
connection therewith issued 337,058 shares of common stock for all of Blue
Ridge's common stock (the Merger). The Merger was accounted for as a
pooling-of-interests and, accordingly, the Network financial statements for
periods prior to the Merger have been restated to include the results of
Blue Ridge for all periods presented. Prior to the Merger, Blue Ridge
operated in the form of a partnership under the name "Telecommunications
Ventures Limited Partnership No. 1 T/A Blue Ridge Telephone." On June 17,
1996, Blue Ridge changed to a corporate form of organization. Blue Ridge
did not recognize income tax expense for the periods presented because its
tax attributes flowed to its partners. The consolidated statements of
income include a pro forma adjustment to reflect a provision for income
taxes on a combined basis as if Blue Ridge had been subject to income tax.
On November 15, 1996, Network Long Distance, Inc. (Network), merged with
United Wats, Inc. (UWI) and in connection therewith issued 2,277,780 shares
of common stock for all of UWI's common stock (the Merger). The Merger was
accounted for as a pooling-of-interests and, accordingly, the Network
financial statements for periods prior to the Merger have been restated to
include the results of UWI for all periods presented. Prior to the Merger,
UWI utilized a December 31 fiscal year end. For purposes of the
consolidated balance sheets, the March 31, 1996 and December 31, 1996
consolidated balance sheets of Network have been consolidated with the
balance sheets of UWI as of December 31, 1995 and December 31, 1996. The
consolidated statements of income of Network for the three month and nine
month periods ended December 31, 1996 and December 31, 1995 have been
consolidated with the results of UWI for the three months and nine months
ended December 31, 1996 and September 30, 1995, respectively. The
consolidated statements of cash flows of Network for the nine months ended
December 31, 1996 and December 31, 1995 have been consolidated with the
results of UWI for the nine months ended December 31, 1996 and September
30, 1995, respectively.
-8-
<PAGE>
PART II
OTHER INFORMATION
Item 1: Legal Proceedings
-----------------
None
Item 2: Changes in Securities
---------------------
None
Item 3: Default Upon Senior Securities
------------------------------
None
Item 4: Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5: Other Information
-----------------
None
Item 6: Exhibits and Current Reports on Form 8-K
----------------------------------------
(a) Exhibits - None.
(b) Current reports on Form 8-K
During the quarter ended December 31, 1996, the Company
filed the following current reports: Current report on Form
8-K/A dated September 16, 1996, filed on November 12, 1996,
reporting under Item 7 Financial Statements, Current report
on Form 8-K/A dated September 16, 1996, filed on November
15, 1996, reporting under Item 7 Financial Statements,
Current report on Form 8-K dated November 15, 1996, filed on
November 25, 1996, reporting under Item 2 Acquisition or
Disposition of Assets, Current Form 8-K/A dated November 15,
1996, filed on November 27, 1996, reporting under Item 7
Financial Statements. After the quarter ended December 31,
1996, the Company filed a Current report on Form 8-K/A dated
November 15, 1996, filed on January 14, 1997, reporting
under Item 7 Financial Statements.
-9-
<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, thereunto duly authorized.
NETWORK LONG DISTANCE, INC.
Dated: February 13, 1997 By: /s/ Marc I. Becker
----------------------------------------
Marc I. Becker, Executive Vice President
and Chief Operating Officer
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 641
<SECURITIES> 0
<RECEIVABLES> 10,474
<ALLOWANCES> 2,071
<INVENTORY> 0
<CURRENT-ASSETS> 10,717
<PP&E> 3,933
<DEPRECIATION> 2,122
<TOTAL-ASSETS> 21,868
<CURRENT-LIABILITIES> 8,341
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 10,658
<TOTAL-LIABILITY-AND-EQUITY> 21,868
<SALES> 44,030
<TOTAL-REVENUES> 44,030
<CGS> 30,901
<TOTAL-COSTS> 30,901
<OTHER-EXPENSES> 16,039
<LOSS-PROVISION> 2,663
<INTEREST-EXPENSE> 397
<INCOME-PRETAX> (5,971)
<INCOME-TAX> (709)
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</TABLE>
