UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 and 15(d) of
the Securities Exchange Act of 1934
February 4, 1998
Date of Report (Date of earliest event reported)
SA TELECOMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-18048 75-2258519
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1600 Promenade Center, 15th Floor
Richardson, TX 75080
(Address of Principal Executive Office)
(972) 690-5888
(Registrant's Telephone Number, Including Area Code)
(Not Applicable)
(Former Name or Former Address,
if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
As previously reported, SA Telecommunications, Inc. and its
subsidiaries (collectively, the "Company") filed petitions for relief under
Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") (Cases No. 97-2395 through 97-2401). Since that date, the Company has
continued as a debtor-in-possession pursuant to the Bankruptcy Code.
On or about February 4, 1998, the Company filed its Monthly Operating
Report for the month ending December 31, 1997 (the "December MOR") with the
Office of the United States Trustee and the Bankruptcy Court.
A copy of the December MOR is attached hereto as Exhibit 99.1 and
incorporated herein by reference.1
1 The attachments and exhibits referenced in the December MOR are not
attached as part of Exhibit 99.1, but are available at the Office of
the United States Trustee and the Bankruptcy Court. In addition, the
Company agrees that it will furnish a copy of any omitted schedule or
similar attachment to the Commission upon its request.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits:
99.1 Monthly Operating Report of the Company for the month ending
December 31, 1997.
<PAGE>
SIGNATURE
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 hereunto duly authorized.
SA TELECOMMUNICATIONS, INC.
DATE: February 11, 1998 BY: /s/ Albert B. Gordon, Jr.
-------------------------
Albert B. Gordon, Jr.
Chief Executive Officer
Case No.: 97-02395PJW THRU 97-02401PJW ACCRUAL BASIS-1
OFFICE OF THE UNITED STATES TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
for the month ending December 31, 1997
<TABLE>
<CAPTION>
Document Previously Explanation
Required Attachments: Attached Submitted Attached
<S> <C> <C> <C>
1. Tax Receipts ( x ) ( ) ( )
2. Bank Statements ( x ) ( ) ( )
3. Most recently filed Income Tax Return ( ) ( x ) ( )
4. Most recent Annual Financial Statements ( ) ( x ) ( )
prepared by accountant
</TABLE>
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT (ACCRUAL BASIS-1 THROUGH ACCRUAL BASIS-9) AND THE ACCOMPANYING
ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT
AND COMPLETE. DECLARATION OF PREPARER (OTHER THAN RESPONSIBLE PARTY) IS BASED ON
ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ A.B. Gordon, Jr. Chief Executive Officer
- ---------------------------------- -----------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
A.B. Gordon, Jr. 2/3/98
- ---------------------------------- -----------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
PREPARER:
/s/ M.S. Nutt Asst. Controller
- ---------------------------------- -----------------------
SIGNATURE OF PREPARER TITLE
M.S. Nutt 2/3/98
- ---------------------------------- -----------------------
PRINTED NAME OF PREPARER DATE
All Chapter 11 debtors must file this report with the Court and serve a copy
on the United States Trustee no later than the 15th day of the month
following the end of the month covered by the report.
<PAGE>
In Re: SA Telecommunications, Inc. Accrual Basis-2
Cases Nos.97-2395 (PJW) through 97-2401 (PJW)
COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
4th Quarter
- ------------------------------------------------------------------------------------------------------------------
ASSETS Month Month
11/30/97 12/31/97
<S> <C> <C>
1 Cash $ 121,406 $ 229,202
2 Accounts Receivable (Net) 4,276,832 4,091,441
3 Inventory 136,875 136,875
4 Notes Receivable
5 Prepaid Expenses 316,484 287,089
6 Other (Attach List) 317,184 317,184
7 Total Current Assets 5,168,781 5,061,791
- ------------------------------------------------------------------------------------------------------------------
8 Property, Plant & Equipment 14,642,389 14,595,763
9 Less: Accumulated Depreciation/Depletion 2,901,818 3,018,734
10 Net Property, Plant & Equipment 11,740,571 11,577,029
- ------------------------------------------------------------------------------------------------------------------
11 Due From Affiliates & Insiders
12 Intangibles (Attach List) 25,218,756 25,044,498
12a Debt Issuance Cost 2,212,362 2,293,201
13 Other (Attach List) 263,125 248,693
14 Total Assets $ 44,603,595 $ 44,225,212
- ------------------------------------------------------------------------------------------------------------------
POSTPETITION LIABILITIES
15 Accounts Payable 18,370 175,092
15a Accrued Telecommunications Costs 667,878 2,020,228
16 Taxes Payable 105,813 150,155
16a Accrued Taxes Payable
17 Notes Payable -- --
18 Professional Fees
19 Secured Debt -- --
20 Due to Affiliates & Insiders
21 Other (Attach List) 152,620 294,967
22 Total Postpetition Liabilities 944,681 2,640,442
- ------------------------------------------------------------------------------------------------------------------
PREPETITION LIABILITIES
23 Secured Debt 8,227,915 8,019,105
24 Priority Debt (attach list) 624,551 481,645
24a Redeemable Preferred Stock 1,401,940 1,401,940
25 Unsecured Debt 45,481,335 44,517,301
26 Other (Attach List)
27 Total Prepetition Liabilities 55,735,741 54,419,991
- ------------------------------------------------------------------------------------------------------------------
28 Total Liabilities 56,680,422 57,060,433
- ------------------------------------------------------------------------------------------------------------------
Equity
29 Owner's Prepetition Equity (11,788,256) (11,788,256)
30 Postpetition Cumulative Profit or (Loss) (288,571) (1,046,965)
31 Total Equity (Deficit) (12,076,827) (12,835,221)
- ------------------------------------------------------------------------------------------------------------------
32 Total Liabilities & Owners' Equity $ 44,603,595 $ 44,225,212
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
In Re: SA Telecommunications, Inc. Accrual Basis-2
Case Nos. 97-2395 (PJW) through 97-2401 (PJW)
<TABLE>
<S> <C> <C>
6 Other Current Assets
A/R-Jack Matz 15,214 15,214
A/R Prarie Systems, Inc. 59,917 59,917
A/R Line Costs 93,368 93,368
Long Distance Network N/R 148,685 148,685
-------------------------- --------------------------
317,184 317,184
========================== ==========================
12 Intangibles:
Goodwill (net of amortization) 25,218,756 25,044,498
========================== ==========================
13 Other Non-Current Assets
Prepaid Employee Settlement (net) 240,953 226,521
Security Deposits 22,172 22,172
-------------------------- --------------------------
263,125 248,693
========================== ==========================
21 Other Post-Petition Liabilities
Accr Payroll/Payroll Taxes/Benefits 131,881 206,336
Accr Medical Ins -- 48,281
Accr Property Taxes 20,739 40,350
-------------------------- --------------------------
152,620 294,967
========================== ==========================
24 Priority Debt
Accrued Payroll/Employee Benefits 100,674 4,092
Accrued Property Taxes 119,375 119,375
Accrued Sales Taxes 404,502 358,178
-------------------------- --------------------------
624,551 481,645
========================== ==========================
</TABLE>
<PAGE>
Case Nos. 97-2395 (PJW) through 97-2401(PJW) Accrual Basis-3
SA Telecommunications, Inc.
INCOME STATEMENT
<TABLE>
<CAPTION>
4th Quarter
- ------------------------------------------------------------------------------------------------------------------
Month Month
Nov. 20, 1997
through
Nov. 30, 1997 Dec., 1997
-------------------------- -------------------------
<S> <C> <C>
REVENUES
1 Gross Revenues $ 948,594 $ 2,168,289
2 Less: Returns & Discounts 3,831 30,615
3 Net Revenue $ 944,763 $ 2,137,674
- ------------------------------------------------------------------------------------------------------------------
COST OF GOODS SOLD
4 Beginning Inventory
5 Add: Purchases
6 Less: Ending Inventory
7 Cost Of Goods Sold 701,083 1,611,391
8 Gross Profit 243,680 526,283
- ------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
9 Officer/Insider Compensation 32,724 52,321
10 Direct Labor/Salaries 244,807 368,226
11 Payroll Taxes 15,776 25,954
12 Rent & Lease Expense 10,403 56,611
13 Insurance 16,288 44,665
14 Depreciation/Amortization 144,748 374,852
15 General & Administrative 55,305 254,492
16 Other (Attach List)
17 Total Operating Expenses 520,051 1,177,121
18 Operating Income $ (276,371) $ (650,838)
- ------------------------------------------------------------------------------------------------------------------
OTHER INCOME & EXPENSES
19 Other Income (Attach List)
20 Other Expenses (Attach List)
21 Interest Expense (6,999) (78,909)
22 Other (5,201) (28,647)
23 Net Other Income & Expenses (12,200) (107,556)
- ------------------------------------------------------------------------------------------------------------------
REORGANIZATION EXPENSES
24 Professional Fees
25 U.S. Trustee Fees
26 Other (Attach List)
27 Total Reorganization Expenses 0 0
28 Income Tax
- ------------------------------------------------------------------------------------------------------------------
29 NET PROFIT (LOSS) $ (288,571) $ (758,394)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Case Nos. 97-2395 (PJW) through 97-2401 (PJW) Accrual Basis - 4
CASH RECEIPTS AND DISBURSEMENTS
<TABLE>
<CAPTION>
TOTAL
TOTAL TOTAL TOTAL TOTAL SATEL
TOTAL SATEL TOTAL SATEL SATEL SATEL SATEL SATEL PETTY
A/P MAIN OPER. P/R GREYROCK MISC. CD & NEC CASH TOTAL SATEL
--- ---------- --- -------- ----- -------- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. BEG. BAL 102,136.55 106,528.66 (156,883.99) 61,473.69 (33,390.09) 41,387.41 4,878.85 126,131.08
2. CASH SALES -- -- -- -- -- -- -- --
3. RECEIPTS 22,629.43 2,305,319.41 -- 15,914.20 -- 86.55 -- 2,343,949.59
4. LOANS &
ADVANCES -- -- -- -- -- -- -- --
5. SALE ASSETS -- -- -- -- -- -- -- --
6. (OTHER)
PAYDOWNS
ON REVOLVER 852,827.98 (1,468,715.93) 505,673.81 -- 65,830.00 -- (28,688.92) (73,073.06)
-------------- -------------- ------------ ---------- ----------- ---------- ----------- --------------
7. TOTAL RECEIPTS 875,457.41 836,603.48 505,673.81 15,914.20 65,830.00 86.55 (28,688.92) 2,270,876.53
8. TOTAL CASH
AVAIL. 977,593.96 943,132.14 348,789.82 77,387.89 32,439.91 41,473.96 (23,810.07) 2,397,007.61
============== ============== ============ ========== =========== ========== =========== ==============
*DISBURSEMENTS (1,186,903.82) (602,000.00) (312,178.62) (6,480.02) (60,243.03) -- -- (2,167,805.49)
-------------- -------------- ------------ ---------- ----------- ---------- ----------- --------------
EOM BALANCE (209,309.86) 341,132.14 36,611.20 70,907.87 (27,803.12) 41,473.96 (23,810.07) 229,202.12
============== ============== ============ ========== =========== ========== ============ ==============
</TABLE>
*See attached detail of disbursements by check number, date, payee and amount.
<PAGE>
Debtor: SA Telecommunications, Inc. and Subsidiaries Accrual Basis-5
Case No. 97-2395 through 97-2401
ACCOUNTS RECEIVABLE AGING
0 - 30 days old $ 3,378,727
31 - 60 days old 799,111
61 - 90 days old 429,735
91 + days old 2,240,139
Total Accounts Receivable $ 6,847,712
Amount Considered Uncollectable 2,756,271
Account Receivable $ 4,091,441
AGING OF POSTPETITION ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
0 - 30 31 - 60 61 - 90 91+
DAYS DAYS DAYS DAYS TOTAL
------------------- ------------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
ACCOUNTS PAYABLE $ 175,092 $ 175,092
- ----------------------------- ------------------- ------------------- --------------- -------------- ----------------
</TABLE>
STATUS OF POSTPETITION TAXES
<TABLE>
<CAPTION>
BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY* OR ACCRUED PAID LIABILITY TAXES
---------- ---------- ---- --------- ----------
<S> <C> <C> <C> <C> <C>
FEDERAL
Withholding** 18,354 42,951 55,696 5,609
FICA-Employee** 10,384 18,649 27,483 1,550
FICA-Employer** 10,384 18,649 27,483 1,550
Unemployment 77 157 214 20
Income
Other (Attach List)
Total Federal Taxes 39,199 80,406 110,876 8,729 -
STATE AND LOCAL
Withholding 155 - 87 68
Sales 53,485 99,446 45,842 107,089
Excise
Unemployment 303 590 - 893
Real Property
Personal Property
Other (Attach List)
Total State & Local 53,943 100,036 45,929 108,050 -
Total Taxes 93,142 180,442 156,805 116,779 -
</TABLE>
* The beginning tax liability should represent the liability from the
prior month or, if this is the first operating report, the amount
should be zero.
** Attach photocopies of IRS Form 6123 or your FTD coupon and payment
receipt to verify payment or deposit.
<PAGE>
Case Nos. 97-02395PJW thru 97-02401PJW ACCRUAL BASIS - 6
SA TELECOMMUNICATIONS, INC.
<TABLE>
<CAPTION>
BANK RECONCILIATIONS Acct #1 Acct #2 Acct #3 Acct #4 Acct #5 Acct #6 Acct #7
USC USC USC NEC LDN USC USC
A. Bank Compass Compass Compass Various Southwest Bank Compass Compass
B. Acct # 701-8488-5 708-5277-2 708-5279-9 Various 9050078 712-0018-3 11-110098
C. Purpose A/P - Oper Concentration Payroll Misc. Depository Savings Greyrock Insurance
---------- ------------- ------- ---------------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Balance per Bank
Statement 147,407.21 308,905.70 1,451.64 17,653.81 3,901.10 38,528.20 38,774.29
2. + Deposits not
credited
3. - Outstanding
Checks (260,432.95) - (19,007.74) - - - (64,492.83)
4. +/- Other
Reconciling
items (146,274.18) 41,652.45 11,331.33 - - - (3,396.70)
----------- ---------- ---------- --------- -------- --------- -----------
5. Month End Balance
per books. (259,299.92) 350,558.15 (6,224.77) 17,653.81 3,901.10 38,528.20 (29,115.24)
=========== ========== ========== ========= ======== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
BANK RECONCILIATIONS Acct #8 Acct #9
USC AddTel
A. Bank n/a Wells Fargo
B. Acct # Petty Cash 690018810
C. Purpose Accounts Sales Tax Acct
---------- --------------
<S> <C> <C>
1. Balance per Bank
Statement 1,870.33 17,235.91
2. + Deposits not
credited
3. - Outstanding
Checks - (8,855.47)
4. +/- Other
Reconciling
items - (7,068.32)
-------- ---------
5. Month End Balance
per books. 1,870.33 1,312.12
======== ========
</TABLE>
<PAGE>
Cases Nos. 97-02395PJW ACCRUAL BASIS - 6
SA TELECOMMUNICATIONS, INC.
<TABLE>
<CAPTION>
BANK RECONCILIATIONS Acct #10 Acct #11 Acct #12 Acct #13 Acct #14 Acct #15 Acct #16
AddTel AddTel AddTel AddTel AddTel AddTel AddTel
A. Bank Wells Fargo Wells Fargo Wells Fargo Wells Fargo Wells Fargo Wells Fargo n/a
B. Acct # 0933 051211 1290-000025-000 4443-332515 4443-332762 0933 041063 934 041063
C. Purpose Sweep CD Greyrock Returned Checks Amtec/ZBA Payroll/ZBA Petty Cash
----- -- -------- --------------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Balance per Bank
Statement (3,764.85) 20,612.69 32,379.75 - - - 2,975.57
2. + Deposits not
credited
3. - Outstanding
Checks - -
4. +/- Other
Reconciling
items (5,551.16) (0.08) - 42,835.97
---------- --------- --------- ------- ------- --------- --------
5. Month End
Balance per
books (9,316.01) 20,612.69 32,379.67 - - 42,835.97 2,975.57
========== ========= ========= ======= ======= ========= ========
</TABLE>
<TABLE>
<CAPTION>
BANK RECONCILIATIONS Acct #17 Acct #18
Uniquest Uniquest
A. Bank Compass Bank of America
B. Acct # 711 9526 0 83130 00519
C. Purpose A/P Payroll
--- -------
<S> <C> <C>
1. Balance per Bank
Statement 25,945.18 6,950.11
2. + Deposits not
credited
3. - Outstanding
Checks (1,018.07) -
4. +/- Other
Reconciling
items (488.53)
--------- -------
5. Month End
Balance per
books 24,927.11 6,461.58
========= ========
</TABLE>
<PAGE>
Case Nos. 97-02395 (PJW) thru 97-2401 (PJW) Accrual Basis-7
SA Telecommunications, Inc.
and Subsidiaries
OF THE TOTAL DISBURSEMENTS SHOWN FOR THE MONTH, LIST THE AMOUNT PAID TO INSIDERS
(AS DEFINED IN SECTION 101 (31) (A)-(F) OF THE BANKRUPTCY CODE) AND TO
PROFESSIONALS FOR PAYMENTS TO INSIDERS, IDENTIFY THE TYPE OF COMPENSATION PAID
(e.g. SALARY, BONUS, COMMISSION, INSURANCE, HOUSING ALLOWANCE, TRAVEL CAR
ALLOWANCE, ETC.) ATTACH ADDITIONAL SHEETS IF NECESSARY.
INSIDERS
<TABLE>
<CAPTION>
Cumulative
Type of Amount Unpaid
Name Position Payment Paid Balance
- --------------------------- -------------------------------- --------------- --------------------- --------------
<S> <C> <C> <C> <C>
1 Igor Mamantov VP-Corp Development Payroll $ 3,879.74
2 Dennis Lee Gundy VP-Operations Payroll 6,243.62
3 Jeffery M. Petrie VP-Telemarketing Payroll 4,561.66
4 Windle R. Ewing VP-Tariffs and Reg. Affair Payroll 4,007.62
5 Thomas J. Brighi VP-Telemarketing Payroll 4,991.80
6 George M. Trevino Controller Payroll 4,695.72
7 Kellie Watts Asst. General Counsel Payroll 4,498.32
8 Julie Judd HR Administrator Payroll 1,593.04
9 Cheryl Leahy Asst. Controller Payroll 3,330.84
10 Chuck Leblo Payroll 5,934.72
Total Payments to Insiders $ 43,737.08
</TABLE>
PROFESSIONALS
<TABLE>
<CAPTION>
` Date of Court Total
Type of Order Authorizing Amount Amount Paid
Name Professional Payment Approved Paid To Date
----------------------- ------------------ ----------------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1
2 None None None None None
3
4
Table Payments to
Professionals
</TABLE>
ADEQUATE PROTECTIONS PAYMENTS
<TABLE>
<CAPTION>
Selected Monthly Amounts Paid Total Unpaid
Name of Creditor Payments Due During the Month Post Petition
---------------------- -------------------------- --------------------------- -----------------------
<S> <C> <C> <C> <C>
1
2 None None None
3
4
Total
</TABLE>
<PAGE>
97-02395PJW THRU 97-02401PJW ACCRUAL BASIS-8
QUESTIONNAIRE YES NO
1. Have any assets been sold or transferred outside the X
normal course of business this recording period?
2. Have any funds been disbursed from any account other X1
than a debtor in possession account?
3. Are any postpetition receivables (accounts, notes X
or loans) due from related parties?
4. Have any payments been made on prepetition X2
liabilities this reporting period?
5. Have any postpetition loans been received by the X3
debtor from any party?
6. Are any postpetition payroll taxes past due? X
7. Are any postpetition state or federal income taxes X
past due?
8. Are any postpetition real estate taxes past due? X
9. Are any other postpetition taxes past due? X
10. Are any amounts owed to postpetition creditors past X
due?
11. Have any prepetition taxes been paid during the X
reporting period?
12. Are any wage payments past due? X
If the answer to any of the above questions is "YES", provide a detailed
explanation of each item. Attach additional sheets if necessary.
1 Prepetition accounts retained during this period per Court Order
2 Only items (such as payroll and benefits) approved by Court Order
3 Only amounts per D.I.P. Financing Agreement approved by Court Order
INSURANCE YES NO
1. ARE WORKER'S COMPENSATION, GENERAL LIABILITY AND X
OTHER NECESSARY INSURANCE COVERAGES IN EFFECT?
2. ARE ALL PREMIUM PAYMENTS PAID CURRENT? X
3. PLEASE ITEMIZE POLICIES BELOW.
If the answer to any of the above questions is "no", or if any policies have
been cancelled or not renewed during this reporting period, provide an
explanation below. Attach additional sheets if necessary.
INSURANCE POLICIES
<TABLE>
<CAPTION>
TYPE OF PAYMENT AMOUNT
POLICY CARRIER PERIOD COVERED & FREQUENCY
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
See attached schedule of
current policies.
</TABLE>
<PAGE>
Case Nos. 97-02395 (PJW) thru 97-2401 (PJW) Accrual Basis-9
SA Telecommunications, Inc.
and Subsidiaries
Personnel
Full Time Part Time
Total Total
1. Total number of employees at beginning of period 188 22
2. Total number of employees hired during the period - -
3. Number of employees terminated or resigned during the
period 20 4
4. Total number of employees on payroll at end of period 168 18
Change of Address
If your mailing address has changed and you have not previously
notified the United States Trustee of the change, list your new
address below:
DATE OF CHANGE: ________________________________
NEW ADDRESS:
