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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 2, 1995
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T/SF COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-10263 73-1341 805
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2407 East Skelly Drive, Tulsa, Oklahoma 74105
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 918-747-2600
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N/A
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 2, 1995, the Registrant completed the sale of certain trade
journals and related activities of its BMT Communications Inc. subsidiary, to
Trade Publishing L.L.C., a Delaware limited liability company (Buyer), an
affiliate of Macfadden Publishing, Inc., a Delaware corporation, pursuant to the
terms of that certain Asset Purchase Agreement, dated June 16, 1995 (the Asset
Purchase Agreement), as amended. A copy of the Asset Purchase Agreement was
filed with the Companys Form 10-Q for the three months and six months ended June
30, 1995.
The assets sold were three trade journals, Convenience Store News, United
States Distribution Journal and The Journal of Petroleum Marketing, and certain
related activities, including the CSN/NAG Expo, a trade show directed to the
convenience store industry. In exchange for the transferred assets, Buyer paid
$21,000,000 in cash at closing. In addition, within 60 days after closing, the
parties may make certain additional adjustments based on calculations of working
capital included in the transfer and the interim operations of the business
conducted with the transferred assets since July 1, 1995, the Effective Date of
the transfer.
At closing, the parties entered into and delivered the documents and
agreements contemplated by the Asset Purchase Agreement, including covenants-
not-to-compete, bills of sale, assumptions of liabilities and assignments of
contracts. The nature and amount of consideration paid by the Buyer were
determined through arms length negotiations between the Registrant and Macfadden
Publishing, Inc. There was not and is not currently any material relationship
between the Buyer or Macfadden Publishing, Inc., and the Registrant or any of
its affiliates or any director or officer of the Registrant or any of their
associates. Reference is made to Exhibits 2.1 and 2.2 incorporated herein by
reference for a more complete description of the transaction described.
ITEM 5. OTHER EVENTS
By press release dated August 14, 1995, the Registrant announced that it
had reached agreement with The Prudential Insurance Company of America
(Prudential) to acquire the 464,814 shares of common stock, $0.10 par value, of
the Registrant owned by Prudential. The purchase price was $11.00 per share or
a total of $5,112,954. The agreement with Prudential was closed August 16,
1995.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information. Included herewith are the following
pro forma financial statements required pursuant to Article XI of Regulation S-
X:
Pro forma consolidated condensed statements of operations for the year
ended December 31, 1994 and six months ended June 30, 1995
Pro forma consolidated condensed balance sheet as of June 30, 1995
2
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(c) Exhibits.
2.1 Asset Purchase Agreement, incorporated by reference to Exhibit 10.4 to
the Registrants Quarterly Report on Form 10-Q for the three months and
six ended June 30, 1995.
2.2 Memorandum of Closing and Amendment to Agreement, incorporated by
reference to Exhibit 10.5 to the Registrants Quarterly Report on Form
10-Q for the three months and six months ended June 30, 1995.
2.3 Letter Agreement, dated August 14, 1995, by and between the Registrant
and The Prudential Insurance Company of America.
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.
T/SF COMMUNICATIONS CORPORATION
By: /s/ Howard G. Barnett, Jr.
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Howard G. Barnett, Jr., Chairman,
President and Chief Executive Officer
Date: August 16, 1995
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T/SF Communications Corporation
Pro Forma Consolidated Condensed
Statements of Operations
The following Unaudited Pro Forma Condensed Statements of Operations give
effect to the Asset Purchase Agreement, dated June 16, 1995, as amended, between
BMT Communications Inc. ("BMT"), a wholly-owned subsidiary of the Registrant,
and Trade Publishing L.L.C. ("Buyer"), an affiliate of Macfadden Publishing,
Inc., for the sale of all of the assets, except cash, and operations of three
BMT trade journals to Buyer, which was completed on August 2, 1995, as if the
transaction had occurred on January 1, of each respective reporting period.
These unaudited Pro Forma Consolidated Condensed Statements of Operations
should be read in conjunction with the separate historical financial statements
of the Registrant and with the notes attached hereto. In particular, reference i
made to the Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995. On May 25, 1995, Tribune/Swab-Fox Companies Inc., ("Tribune/Swab-
Fox"), the parent of the Registrant, was merged (the"Merger") with and into the
Registrant. While the Merger was structured for legal purposes as a merger of
Tribune/Swab-Fox with and into the Registrant, the Merger is accounted for as a
downstream merger. Thus, for accounting purposes, Tribune/Swab-Fox is the
acquiring entity even though, from a legal or structural standpoint, the
Registrant is the acquiri and surviving entity. Accordingly, the historical
financial statements of the Registrant, as the surviving entity, are th
financial statements of Tribune/Swab-Fox. Earnings per share for the periods are
restated to reflect the number of equivalent shares of the Registrant. These
statements do not purport to be indicative of the results of operations which
actually would have occurred had the sale occurred on January 1 of each
respective reporting period or which may be expected to occur in the future.
<TABLE>
<CAPTION>
For the Year Ended For the Six Months Ended
December 31, 1994 June 30, 1995
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Adjustments Adjustments
Historical (Note A) Pro Forma Historical (Note A) Pro Forma
--------- -------------- ---------- ---------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
(in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Revenues $56,919 $ (11,837) (1)(2) $45,082 $30,436 $(6,327) (1)(2) $24,109
------- --------- ------- ------- ------- -------
Operating costs and
expenses 35,069 (8,165) (1) 26,904 20,411 4,283) (1) 16,128
General and administrative 11,862 (1,804) (1) 10,058 5,662 (936) (1) 4,726
Interest expense 736 - 736 434 - 434
Depreciation and
amortization 3,118 (746) (1) 2,372 1,906 (342)(1) 1,564
------- --------- ------- ------- ------- -------
Total costs and expenses 50,785 (10,715) 40,070 28,413 (5,561) 22,852
------- --------- ------- ------- ------- -------
Income (loss) before income taxes
income taxes 6,134 (1,122) 5,012 2,023 766) 1,257
(Provision) for income tax (2,589) 382 (3) (2,207) (895) 244 (3) (651)
Minority interest in consolidated
subsidiaries (981) 192 (789) (266) 114 (152)
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Income from continuing
operations $ 2,564 $ (548) $ 2,016 $ 862 $ (408) $ 454
======= ========= ======= ======= ======= =======
Per share amounts (Note B):
Earnings per common share
from continuing operations $ 0.69 $ 0.54 $ 0.22 $ 0.11
======= ======= ======= =======
</TABLE>
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T/SF Communications Corporation
Notes to Pro Forma Consolidated Condensed
Statements of Operations
Note A: The Pro Forma Consolidated Condensed Statements of Operations
give effect to the following unaudited pro forma adjustments:
(1) Elimination of the three BMT trade journals' operations for the
period.
(2) Recognize income of $130,000 for the year ended December 31, 1994,
and $65,000 for the six months ended June 30, 1995, from the
Covenant-not-to-Compete entered into with the Buyer for the period.
(3) Recognize the effect on income taxes resulting from the adjustments
described above.
Note B: Earnings per share and pro forma earnings per share are based on
3,733,000 common equivalent shares outstanding for the year ended
December 31, 1994 and 3,869,000 common equivalent shares for the six
months ended June 30, 1995.
Note C: The gain on the sale of assets of approximately $9,960,000 is not
included in the pro forma statements of operations.
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T/SF Communications Corporation
Pro Forma Consolidated Condensed
Balance Sheet
The following Unaudited Pro Forma Consolidated Condensed Balance Sheet
gives effect to the Asset Purchase Agreement, dated June 16, 1995, as amended,
between BMT Communications Inc. ("BMT"), a wholly-owned subsidiary of the
Registrant, and Trade Publishing L.L.C. ("Buyer"), an affiliate of Macfadden
Publishing, Inc., for the sale of all the assets, except cash, and operations of
three BMT trade journals to Buyer, which was completed on August 2, 1995, as if
the transaction had occurred on June 30, 1995.
This unaudited Pro Forma Consolidated Condensed Balance Sheet should be
read in conjunction with the separate historical financial statements of the
Registrant and with the notes attached hereto. In particular, reference is made
to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995.
<TABLE>
<CAPTION>
June 30, 1995
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Adjustments
Historical Note A Pro Forma
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(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS (in thousands)
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Current Assets $ 24,937 $ 14,366 $ 39,303
Investments 1,634 1,634
Contract and Notes Receivable 1,740 1,740
Property, Plant and Equipment, net 4,848 4,848
Deferred Tax Assets 919 919
Intangibles and Other Assets, net 13,109 13,109
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Total Assets $ 47,187 $ 14,366 $ 61,533
======== ======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities $ 17,471 $ 4,146 $ 21,617
Long-Term Debt 4,612 4,612
Deferred Contract Liabilities 2,209 260 2,469
Common Stock Subject to Put 525 525
Stockholders' Equity 22,370 9,960 32,330
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Total Liabilities and Stockholders' Equity $ 47,187 $ 14,366 $ 61,553
======== ======== ========
</TABLE>
Note A: These adjustments consist of (i) the sale of all of the assets, except
cash, related to three trade journals of BMT, included in current assets
as "Assets held for sale" of $6,634,000, (ii) the recognizing of the
cash receive of $21,000,000, and (iii) to reflect the gain in
stockholders' equity net of the accrual of estimated costs related the
sale.
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T/SF COMMUNICATIONS CORPORATION
EXHIBIT INDEX
EXHIBIT NUMBER
2.1 Asset Purchase Agreement, incorporated by reference to
Exhibit 10.4 to the Registrants Quarterly Report on Form 10-
Q for the three months and six ended June 30, 1995.
2.2 Memorandum of Closing and Amendment to Agreement,
incorporated by reference to Exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the three
months and six months ended June 30, 1995.
2.3 Letter Agreement, dated August 14, 1995, by and between the
Registrant and The Prudential Insurance Company of America.
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[LETTERHEAD OF T/SF COMMUNICATIONS CORPORATION]
Exhibit 2.3
August 14, 1995
The Prudential Insurance Company of America
% Prudential Capital Group
4900 Renaissance Tower
1201 Elm Street
Dallas, TX 75270
Re: Sale of Common Stock of T/SF Communications Corporation
Gentlemen:
This letter is to formalize the agreement whereby T/SF Communications
Corporation, a Delaware corporation (T/SF), will purchase from The Prudential
Insurance Company of America (Prudential) the 464,814 shares owned by Prudential
(the Prudential Shares) of the common stock, $0.10 par value, of T/SF (the T/SF
Common Stock). In connection with such purchase, the parties have agreed as
follows:
1. Representations and Warranties of T/SF. T/SF hereby represents and
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warrants to Prudential as follows:
A. T/SF has full power and authority to execute, deliver and perform
this letter agreement and has received the requisite approval for
such actions by its Board of Directors.
B. T/SF is acquiring the Prudential Shares for purposes of retiring the
same and not with an intent to sell or distribute them after the
purchase.
C. T/SF has furnished Prudential with the financial statements of T/SF
set forth in the Joint Proxy Statement, dated April 24, 1995, and a
copy of its Quarterly Report on Form 10-Q for the three months ended
June 30, 1995. Such financial statements (including any related
schedules and/or notes) are true and correct in all material
respects, have been prepared in accordance with generally accepted
accounting principles (as in effect from time to time) applied on a
consistent basis throughout the periods involved (except as may
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The Prudential Insurance Company of America
August 14, 1995
Page 2
be indicated therein or in the notes or the schedules thereto) and
show all liabilities, direct and contingent, of T/SF required to be
shown in accordance with such principles. The balance sheets fairly
present the financial condition of T/SF as at the dates thereof, and
the statements of income, stockholders equity and cash flows fairly
present the results of the operations of T/SF and its subsidiaries
and their cash flows for the periods indicated. There has been no
material change in the business, condition (financial or otherwise)
or operations of T/SF since June 30, 1995, except as disclosed in
the footnotes to said Form 10-Q.
D. Neither this Agreement nor any other document, certificate or
statement furnished to Prudential by or on behalf of T/SF in
connection with the purchase of the Prudential Shares (including the
information referred to in Section 2D below) contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and
therein not misleading.
E. T/SF has acted as a principal in negotiating the purchase of the
Prudential Shares and there are no brokers or other intermediaries
who could claim a fee or commission on such purchase through or by
reason of actions of T/SF.
2. Representations and Warranties of Prudential. Prudential hereby
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represents and warrants to T/SF as follows:
A. The Prudential Shares are owned by Prudential free and clear of all
liens, encumbrances, claims and charges, and Prudential has the full
right and authority to transfer the same to T/SF.
B. All corporate actions of Prudential necessary to authorize the
execution, delivery and performance of this letter agreement and the
sale of the Prudential Shares to T/SF have been taken, and the
officer executing this letter agreement and the stock power
delivered as provided in paragraph 3 below, is duly authorized to
take such action and to bind Prudential thereby.
C. The Prudential Shares are evidenced by Certificate No. 1
representing 3,703,704 shares of the Class B Common Stock, $0.10 par
value, of Tribune/Swab-Fox Companies, Inc. (the Prudential
Certificate) which, pursuant to the merger of Tribune/Swab-Fox
Companies, Inc., with and into T/SF, which was effective May 25,
1995, now represents 464,814 shares of T/SF Common Stock.
<PAGE>
The Prudential Insurance Company of America
August 14, 1995
Page 3
D. Prudential has been afforded the opportunity to ask questions of and
receive answers thereto from the officers of T/SF concerning the
business of T/SF, its prospects and planned activities and has taken
advantage of such opportunity and has otherwise received such
material and information as Prudential has determined to be
necessary to evaluate the appropriateness of selling the Prudential
Shares at the price set forth herein. Without limiting the
generality of the foregoing, Prudential acknowledges having received
information on the expected results of operations of T/SF for the
second quarter of 1995.
E. Prudential has acted as a principal in negotiating the sale of the
Prudential Shares and there are no brokers or other intermediaries
who could claim a fee or commission on such sale through or by
reason of actions of Prudential.
3. Sale; Closing. Prudential hereby agrees to sell and T/SF hereby agrees
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to buy the Prudential Shares for a purchase price of $5,112,954, or $11.00 per
share. To effect a closing of the sale of the Prudential Shares to T/SF
hereunder, on the Closing Date (as defined below), the parties will take the
following actions:
A. Prudential shall deliverer to T/SF the Prudential Certificate,
together with an Assignment Separate from Certificate duly executed
by an authorized officer of Prudential.
B. T/SF shall wire to Prudential the sum of $5,112,954 in full payment
for the sale of the Prudential Shares to T/SF to Morgan Guaranty
Trust Company of New York, ABA No. 021-000-238, for credit to the
account of The Prudential Insurance Company of America, Account No.
050-54-526, Reference: T/SF Communications sale.
A closing shall occur as soon as practicable at a date (the Closing Date)
to be agreed upon at the offices of Prudential at 1201 Elm Street, Suite 4900,
Dallas, Texas 75270, but in any event, no later than August 18, 1995.
4. Miscellaneous.
---------------
A. This agreement is made in and shall be governed by the laws of the
State of Texas.
B. This agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
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The Prudential Insurance Company of America
August 14, 1995
Page 4
C. This agreement may be executed in multiple counterparts each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument.
D. For no additional consideration, each party hereto shall execute and
deliver such additional documents or instruments as the other party
hereto shall reasonably request to put into effect or further
evidence the agreements made herein.
If the foregoing correctly sets forth your understanding of our agreement,
please execute in the space provided below.
Yours very truly,
T/SF COMMUNICATIONS CORPORATION
/s/ Howard G. Barnett, Jr.
Howard G. Barnett, Jr.
Chairman, President and Chief Executive Officer
The above is agreed to and accepted this 14th day of August, 1995.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Paul L. Meiring
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Name: Paul L. Meiring
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Vice President
