<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: AUGUST 9, 1995
(Date of earliest event reported)
BRITE VOICE SYSTEMS, INC.
----------------------------------------
(Exact name of Registrant as specified
in its Articles of Incorporation)
KANSAS 0-17920 48-0986248
- ---------------------------- ----------------- ------------------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
7309 EAST 21ST STREET NORTH, WICHITA, KANSAS 67206
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (316) 652-6500
NOT APPLICABLE
--------------------------------
(Former name, or former address,
if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF THE TSL COMPANIES.
Page
----
Report of Independent Auditors . . . . . . . . . . . . . 3
Combined Balance Sheets. . . . . . . . . . . . . . . . . 4
Combined Statements of Operations and
Retained Earnings (Deficit) . . . . . . . . . . . . 5
Combined Statements of Cash Flows. . . . . . . . . . . . 6
Notes to Combined Financial Statements . . . . . . . . . 7
2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Boards of Directors
Telecom Services Limited (U.S.), Inc.
Telecom Services Limited (West), Inc.
TSL Software Services, Inc.
TSL Management Group, Inc.
We have audited the accompanying combined balance sheets of Telecom Services
Limited (U.S.), Inc., Telecom Services Limited (West), Inc., TSL Software
Services, Inc., and TSL Management Group, Inc. as of December 31, 1994 and 1993,
and the related combined statements of operations and retained earnings
(deficit), and cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Telecom
Services Limited (U.S.), Inc., Telecom Services Limited (West), Inc., TSL
Software Services, Inc., and TSL Management Group, Inc. at December 31, 1994 and
1993, and the combined results of their operations and their cash flows for each
of the three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
MetroPark, New Jersey
April 7, 1995
3
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
COMBINED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31
JUNE 30, ----------------------
1995 1994 1993
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents............................ $2,120,573 $1,524,616 $ 456,075
Accounts receivable.................................. 1,641,623 1,714,265 2,018,096
Prepaid expenses..................................... 168,490 6,107 17,906
---------- ---------- ----------
Total current assets............................... 3,930,686 3,244,988 2,492,077
Furniture and equipment................................ 777,613 692,092 639,048
Less accumulated depreciation.......................... (555,326) (486,944) (382,794)
---------- ---------- ----------
Net furniture and equipment............................ 222,287 205,148 256,254
Intangible assets:
Restrictive covenants................................ 137,540 137,500 137,500
Deferred acquisition costs........................... 13,043 13,043 13,043
Organization costs................................... 5,000 5,000 5,000
---------- ---------- ----------
155,543 155,543 155,543
Less accumulated amortization........................ (155,543) (155,543) (129,924)
---------- ---------- ----------
-- -- 25,619
---------- ---------- ----------
$4,152,973 $3,450,136 $2,773,950
---------- ---------- ----------
---------- ---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Current portion of long-term debt (Note 2)........... $ 7,081
Current portion of long-term debt to former
stockholder (Note 2)................................ $ 70,000 $ 70,000 70,000
Accounts payable and accrued expenses................ 282,000 280,984 121,251
Loans payable -- officers (Note 3)................... 3,471,717 2,711,997 1,340,908
Income taxes payable................................. 500,000 438,885 72,354
---------- ---------- ----------
Total current liabilities.......................... 4,323,717 3,501,866 1,611,594
Long-term debt due to former stockholder, less current
portion (Note 2)...................................... 105,000 140,000 210,000
Commitments (Note 5)
Stockholders' equity (deficiency):
Common stock (Note 4)................................ 6,000 6,000 6,000
Additional paid-in capital........................... 127,000 127,000 127,000
Retained earnings (deficit).......................... (408,744) (324,730) 819,356
---------- ---------- ----------
Total stockholders' equity (deficiency)............ (275,744) (191,730) 952,356
---------- ---------- ----------
$4,152,973 $3,450,136 $2,773,950
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30 YEAR ENDED DECEMBER 31
---------------------------- --------------------------------------------
1995 1994 1994 1993 1992
------------- ------------- -------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................. $ 7,307,156 $ 6,839,884 $ 13,636,254 $ 9,553,735 $ 6,666,586
Costs and expenses:
Salaries and wages................. 2,098,477 1,535,241 3,390,268 3,064,042 2,291,255
Additional compensation to
shareholders and officers......... 3,471,717 4,323,854 7,529,470 2,760,602 2,615,882
Other operating expenses........... 1,785,376 1,547,111 3,589,380 3,030,886 2,217,167
------------- ------------- -------------- ------------- -------------
7,355,570 7,406,206 14,509,118 8,855,530 7,124,304
------------- ------------- -------------- ------------- -------------
Income (loss) from operations........ (48,414) (566,322) (872,864) 698,205 (457,718)
Other income and (expenses):
Interest income.................... 25,515 15,352 116,663 37,478 44,755
Interest expense................... (3,144) (7,197)
------------- ------------- -------------- ------------- -------------
25,515 15,352 116,663 34,334 37,558
------------- ------------- -------------- ------------- -------------
Income (loss) before state income
taxes............................... (22,899) (550,970) (756,201) 732,539 (420,160)
Provision for state income taxes..... 61,115 194,000 387,885 72,354 15,900
------------- ------------- -------------- ------------- -------------
Net income (loss).................... (84,014) (744,970) (1,144,086) 660,185 (436,060)
Retained earnings (deficit) at
beginning of period................. (324,730) 819,356 819,356 159,171 595,231
------------- ------------- -------------- ------------- -------------
Retained earnings (deficit) at end of
period.............................. $ (408,744) $ 74,386 $ (324,730) $ 819,356 $ 159,171
------------- ------------- -------------- ------------- -------------
------------- ------------- -------------- ------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30 YEAR ENDED DECEMBER 31
-------------------------- ---------------------------------------
1995 1994 1994 1993 1992
------------ ------------ ------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating activities
Net income (loss).............................. $ (85,000) $ (745,000) $ (1,144,086) $ 660,185 $ (436,060)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization................ 68,000 64,000 129,769 132,787 127,518
Severance to former stockholder.............. -- 280,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts
receivable................................ 73,000 (1,022,000) 303,831 (1,214,634) 189,732
Decrease (increase) in prepaid expenses.... -- 11,799 (8,978) (501)
Increase (decrease) in accounts payable and
accrued expenses.......................... 1,901,000 4,503,000 159,733 37,098 (19,949)
Increase (decrease) in income taxes
payable................................... (101,000) 185,000 366,531 47,083 (20,982)
------------ ------------ ------------ ------------ -----------
Net cash provided by (used in) operating
activities.................................... 1,856,000 2,985,000 (172,423) (66,459) (160,242)
Investing activities
Purchases of furniture and equipment........... (86,000) (53,000) (53,044) (46,594) (69,879)
------------ ------------ ------------ ------------ -----------
Net cash used in investing activities.......... (1,175,000) (53,000) (53,044) (46,594) (69,879)
Financing activities
(Decrease) increase in loans payable --
officers...................................... (1,140,000) (1,340,000) 1,371,089 21,981 414,606
Principal payments on long-term debt........... (7,000) (7,081) (39,934) (36,791)
Principal payment of debt to former
stockholder................................... (35,000) (35,000) (70,000)
Proceeds from sale of common stock............. 1,000
------------ ------------ ------------ ------------ -----------
Net cash (used in) provided by financing
activities.................................... (1,175,000) (1,382,000) 1,294,008 (16,953) 377,815
------------ ------------ ------------ ------------ -----------
(Decrease) increase in cash and cash
equivalents................................... 595,000 1,550,000 1,068,541 (130,006) 147,694
Cash and cash equivalents at beginning of
period........................................ 1,525,000 456,000 456,075 586,081 438,387
------------ ------------ ------------ ------------ -----------
Cash and cash equivalents at end of period..... $ 2,120,000 $ 2,006,000 $ 1,524,616 $ 456,075 $ 586,081
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
Non-cash financing activity
Debt to former stockholder..................... $ 280,000
------------
------------
Interest paid during the period................ $ - 0 - $ - 0 - $ 127 $ 3,144 $ 7,197
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
Income taxes paid (refunded) during the
period........................................ $ - 0 - $ 21,000 $ 22,354 $ 25,271 $ (9,371)
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
</TABLE>
SEE ACCOMPANYING NOTES.
6
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
MARCH 31, 1995 AND 1994 (UNAUDITED)
1. DESCRIPTION OF COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION
The combined financial statements include the accounts of Telecom Services
Limited (U.S.), Inc., Telecom Services Limited (West), Inc., TSL Software
Services, Inc., and TSL Management Group, Inc. (collectively, the Company).
These companies are affiliated through common ownership. All significant
intercompany accounts and transactions have been eliminated in the preparation
of the combined financial statements.
The Company, formed in 1986, maintains corporate locations in New York, New
York, Parsippany, New Jersey and San Francisco, California and performs
telephone billing verifications, provides propriety tele-management and call
accounting software, and offers consulting assistance for systems integration
and implementation. In 1989, the Company acquired the business of Aud/Cyn
Associates which has developed and marketed mainframe and PC-based
telecommunications management software applications. The Company's principal
customers are headquartered in the New York metropolitan region and California.
INTERIM FINANCIAL STATEMENTS
The accompanying combined financial statements at June 30, 1995 and for the
six months ended June 30, 1995 and 1994 have been prepared in accordance with
generally accepted accounting principles for interim financial information and,
in the opinion of the Company, include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation thereof.
Operating results for the six months ended June 30, 1995 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1995.
REVENUE RECOGNITION
Revenue is recognized at the time services are provided or, in the case of
telephone billing verifications, when claim proceeds are received from the
telephone company.
CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments with a maturity when
purchased of three months or less.
FURNITURE AND EQUIPMENT
Furniture and equipment is stated at cost. Depreciation is computed
principally by the straight-line method over periods of 5 to 7 years.
INTANGIBLE ASSETS
Intangible assets consist principally of assets arising from the acquisition
of Aud/Cyn Associates. Amortization has been computed by the straight-line
method over a five-year period.
INCOME TAXES
All entities of the Company have elected to be taxed under the provisions of
Subchapter "S" of the Internal Revenue Code. This election eliminates federal
income taxes at the corporate level and the Company's profits are includable in
the income tax return of its stockholders. State income taxes have been provided
in certain states in which the S Corporation election has not been made.
Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes". There
was no cumulative effect adjustment to net income as a result of adopting the
new statement.
7
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
2. LONG-TERM DEBT
The Company had an installment loan note with a financial institution, with
an annual interest rate of 10.75%, which expired in February 1994.
In accordance with the terms of a separation agreement dated December 31,
1993, the Company agreed to pay an individual $280,000 over four years in equal
installments of $70,000. These payments began in 1994 and will be made each
calendar year after that through 1997. No interest is associated with this debt.
3. LOANS PAYABLE -- OFFICERS
Loans payable -- officers represents short-term, non-interest bearing
borrowings generally repaid within one year of the respective balance sheet
date.
4. COMMON STOCK
The authorized, issued and outstanding common stock for each entity of the
Company is as follows:
<TABLE>
<CAPTION>
TELECOM TELECOM TSL
SERVICES LIMITED SERVICES LIMITED TSL SOFTWARE MANAGEMENT
(U.S.), INC. (WEST), INC. SERVICES, INC. GROUP, INC.
---------------------- ---------------------- ---------------------- ----------------------
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
SHARES $ SHARES $ SHARES $ SHARES $
----------- --------- ----------- --------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Authorized, no par........... 1,000 1,000 2,500 2,500
Issued and outstanding at
December 31, 1992........... 200 $ 1,000 100 $ 3,000 100 $ 1,000
Issued and outstanding at
December 31,1993 and 1994... 200 1,000 100 3,000 100 1,000 1,000 $ 1,000
<CAPTION>
COMBINED
----------------------
NUMBER OF
SHARES $
----------- ---------
<S> <C> <C>
Authorized, no par........... 7,000
Issued and outstanding at
December 31, 1992........... 400 $ 5,000
Issued and outstanding at
December 31,1993 and 1994... 1,400 6,000
</TABLE>
1,000 shares of TSL Management Group, Inc. common stock were issued in 1993.
5. COMMITMENTS
The Company leases its corporate offices under operating leases. The leases
are renewable at the option of the Company upon expiration based on terms
specified in the lease agreements. Rent expense amounted to $126,474, $139,170
and $110,454 in 1994, 1993 and 1992, respectively. Rent expense for the six
months ended June 30, 1995 and 1994 was $90,692 and $78,593, respectively.
Aggregate future minimum lease payments under noncancelable leases are as
follows:
<TABLE>
<S> <C>
1995................................................ $ 133,515
1996................................................ 88,967
1997................................................ 73,763
1998................................................ 73,763
1999................................................ 73,763
Thereafter.......................................... 12,294
</TABLE>
Effective December 31, 1993, the Company entered into an employment
agreement with one individual which entitles the employee to receive an amount
equal to 2% of the fair market value of the capital stock of each of the
entities comprising the Company upon the occurrence of (a) a sale of
substantially all of the capital stock of the Company; (b) death of the
employee; or (c) termination of employment without cause. The employee will not
be entitled to receive the payment if employment is terminated by the Company
for cause or if the individual terminates his employment voluntarily.
8
<PAGE>
TELECOM SERVICES LIMITED (U.S.), INC. AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
5. COMMITMENTS (CONTINUED)
Effective June 1, 1991, the Company entered into an employment agreement
with an officer of the Company. In addition to base compensation, the officer is
entitled to receive additional compensation of 20% of the net profits (as
defined in the agreement) of two of the companies for each fiscal year.
In July 1994, the Company entered into an agreement with an investment
banking firm to represent and assist the Company in connection with the possible
sale of the Company. The Company paid a $25,000 fee charged to the Company in
1994 for services provided. Additionally, in accordance with the compensation
terms of the agreement, the Company has accrued a $150,000 performance fee which
is due when the Company and its shareholders receive a bonafide transaction
proposal from one or more third-parties. Such transaction proposal was received
in 1994. A fee equal to 3.5% of the selling price is due to the investment
banking firm upon the successful consummation of a transaction.
6. RETIREMENT PLANS
Telecom Services Limited (U.S.), Inc. has a qualified employee 401(k)
retirement savings plan in which eligible employees may elect to participate by
authorizing a withholding from compensation. The Company does not currently
provide an employer matching contribution into this plan.
Telecom Services Limited (West), Inc. has a 401(k) retirement savings plan
in which employer contributions are made. The employer will match 50% of
employee contributions up to a maximum of 5% of yearly compensation. Employer
contributions under this plan amounted to $17,575, $31,607 and $11,925 in 1994,
1993 and 1992, respectively. Employer contributions for the six months ended
June 30, 1995 and 1994 were $4,638 and $2,868, respectively.
7. MAJOR CUSTOMERS
One customer accounted for 17%, 14% and 12% of total revenues for the years
ended December 31, 1994, 1993 and 1992, respectively. A second customer
accounted for 17% of total revenues for the year ended December 31, 1994, and
10% of total revenues for the year ended December 31, 1992. No other customer
accounted for more than 10% of total revenues.
8. SUBSEQUENT EVENTS
In February 1995, the Company reached a settlement agreement on litigation
that was pending against former employees of the Company. Under terms of the
settlement agreement, the Company received $155,000.
On May 24, 1995, the Company entered into an Agreement and Plan of
Reorganization and Merger pursuant to which they were merged with and into
Brite Voice Systems, Inc. (Brite) on August 8, 1995 in exchange for 3,331,000
shares of Brite common stock.
9
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION - THE COMPANY AND THE TSL COMPANIES
Page
----
Unaudited Pro Forma Combined Condensed
Balance Sheets. . . . . . . . . . . . . . . . . . . 11
Unaudited Pro Forma Combined Condensed
Statements of Income for the Six
Months Ended June 30, 1995. . . . . . . . . . . . . 12
Unaudited Pro Forma Combined Condensed
Statements of Income for the Six
Months Ended June 30, 1994. . . . . . . . . . . . . 13
Unaudited Pro Forma Combined Condensed
Statements of Income for the Year
Ended December 31, 1994 . . . . . . . . . . . . . . 14
Unaudited Pro Forma Combined Condensed
Statements of Income for the Year
Ended December 31, 1993 . . . . . . . . . . . . . . 15
Unaudited Pro Forma Combined Condensed
Statements of Income for the Year
Ended December 31, 1992 . . . . . . . . . . . . . . 16
Notes to Unaudited Pro Forma Combined
Condensed Financial Statements. . . . . . . . . . . 17
10
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
BRITE TSL PRO FORMA PRO FORMA
JUNE 30, 1995 JUNE 30, 1995 ADJUSTMENTS COMBINED
-------------- --------------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current Assets:
Cash and equivalents................................ $ 7,077 $ 2,121 $ $ 9,191
Short-term investments, at cost which approximates
market............................................. 647 -- 647
Accounts receivable, net of allowances.............. 20,869 1,642 22,511
Inventories......................................... 10,594 -- 10,594
Other current assets................................ 2,134 168 2,302
-------------- ------- ------ -----------
Total current assets............................ 41,314 3,931 45,245
Property and Equipment, net........................... 10,732 222 10,954
Other Assets.......................................... 2,128 -- 2,128
-------------- ------- ------ -----------
Total............................................. $ 54,174 $ 4,153 $ $ 58,327
-------------- ------- ------ -----------
-------------- ------- ------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities................................... $ 14,463 $ 4,324 $ (2,028) $ 16,759
-------------- ------- ------ -----------
Deferred Income Taxes................................. 90 -- 90
-------------- ------- ------ -----------
Long-Term Debt........................................ -- 105 105
-------------- ------- ------ -----------
Stockholders' Equity:
Common stock........................................ 33,763 6 127 33,896
Capital in excess of par value...................... -- 127 (127) --
Retained earnings (deficit)......................... 5,986 (409) 2,028 7,605
Foreign currency translation adjustment............. (128) -- (128)
-------------- ------- ------ -----------
Total stockholders' equity........................ 39,621 (276) 2,028 41,373
-------------- ------- ------ -----------
Total........................................... $ 54,174 $ 4,153 $ - 0 - $ 58,327
-------------- ------- ------ -----------
-------------- ------- ------ -----------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
11
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
BRITE TSL ADJUSTMENTS COMBINED
--------- --------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues....................................................... $ 37,727 $ 7,307 $ $ 45,034
Costs and Expenses............................................. 33,679 7,356 (3,263) 37,772
--------- --------- ------- -----------
Income from Operations......................................... 4,048 (49) 3,263 7,262
Other Income, Net.............................................. 260 25 285
--------- --------- ------- -----------
Income Before Taxes............................................ 4,308 (24) 3,263 7,547
Provision for Income Taxes..................................... 1,079 61 1,235 2,375
--------- --------- ------- -----------
Net Income..................................................... $ 3,229 (85) $ 2,028 $ 5,172
--------- --------- ------- -----------
--------- --------- ------- -----------
Earnings Per Share............................................. $ .38 $ $ $ .43
--------- --------- ------- -----------
--------- --------- ------- -----------
Average Number of Common and Common Equivalent Shares.......... 8,577 3,331 11,908
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
12
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
BRITE TSL ADJUSTMENTS COMBINED
--------- --------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues....................................................... $ 30,392 $ 6,840 $ $ 37,232
Costs and Expenses............................................. 27,587 7,406 (4,065) 30,928
--------- --------- ------- -----------
Income (Loss) from Operations.................................. 2,805 (566) 4,065 6,304
Other Income, Net.............................................. 189 15 204
--------- --------- ------- -----------
Income (Loss) Before Taxes..................................... 2,994 (551) 4,065 6,508
Provision for Income Taxes..................................... 921 194 1,211 2,326
--------- --------- ------- -----------
Net Income (Loss).............................................. $ 2,073 $ (745) $ 2,854 $ 4,182
--------- --------- ------- -----------
--------- --------- ------- -----------
Earnings Per Share............................................. $ .25 $ $ $ .36
--------- --------- ------- -----------
--------- --------- ------- -----------
Average Number of Common and Common Equivalent Shares.......... 8,131 3,331 11,462
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
13
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
BRITE TSL ADJUSTMENTS COMBINED
--------- --------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues...................................................... $ 66,304 $ 13,636 $ $ 79,940
Costs and Expenses............................................ 59,426 14,509 (6,989)(A) 66,946
--------- --------- ------- -----------
Income (Loss) from Operations................................. 6,878 (873) 6,989 12,994
Other Income, Net............................................. 470 116 586
--------- --------- ------- -----------
Income (Loss) Before Taxes.................................... 7,348 (757) 6,989 13,580
Provision for Income Taxes.................................... 1,779 388 2,105(B) 4,272
--------- --------- ------- -----------
Net Income (Loss)............................................. $ 5,569 $ (1,145) $ 4,884 $ 9,308
--------- --------- ------- -----------
--------- --------- ------- -----------
Earnings Per Share............................................ $ .68 $ $ $ .81
--------- --------- ------- -----------
--------- --------- ------- -----------
Average Number of Common and Common Equivalent Shares......... 8,195 3,331 11,526
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
14
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
BRITE TSL ADJUSTMENTS COMBINED
--------- --------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues...................................................... $ 46,857 $ 9,554 $ 56,411
Costs and Expenses............................................ 49,161 8,856 58,017
--------- --------- ------- -----------
Income (Loss) from Operations................................. (2,304) 698 (1,606)
Other Income, Net............................................. 377 34 411
--------- --------- ------- -----------
Income (Loss) Before Taxes.................................... (1,927) 732 (1,195)
Provision for Income Taxes.................................... 36 72 108
--------- --------- ------- -----------
Net Income (Loss)............................................. $ (1,963) $ 660 $ $ (1,303)
--------- --------- ------- -----------
--------- --------- ------- -----------
Earnings (Loss) Per Share..................................... $ (.25) $ $ $ (.12)
--------- --------- ------- -----------
--------- --------- ------- -----------
Average Number of Common and Common Equivalent Shares......... 7,737 3,331 11,068
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
15
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
BRITE TSL ADJUSTMENTS COMBINED
--------- --------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues...................................................... $ 35,599 $ 6,666 $ $ 42,265
Costs and Expenses............................................ 39,092 7,124 46,216
--------- --------- ------- -----------
Income (Loss) from Operations................................. (3,493) (458) (3,951)
Other Income, Net............................................. 608 38 646
--------- --------- ------- -----------
Loss Before Taxes............................................. (2,885) (420) (3,305)
Provision (Credit) for Income Taxes........................... (898) 16 (882)
--------- --------- ------- -----------
Net Loss...................................................... $ (1,987) $ (436) $ $ (2,423)
--------- --------- ------- -----------
--------- --------- ------- -----------
Earnings (Loss) Per Share..................................... $ (.26) $ $ $ (.22)
--------- --------- ------- -----------
--------- --------- ------- -----------
Average Number of Common and Common Equivalent Shares......... 7,534 3,331 10,865
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
16
<PAGE>
BRITE VOICE SYSTEMS, INC.
AND
THE TSL COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed combined financial statements
are presented for illustrative purposes only and do not give effect to
synergies, if any, which may occur due to the integration of Brite and TSL's
operations. Additionally, the pro forma combined condensed financial statements
exclude the transaction costs of the Merger, which are estimated at $3,350,
including fees to investment bankers, financial advisors, legal, accounting,
printing and other related expenses. This estimate is preliminary only, and is
therefore subject to change. The transaction costs and other nonrecurring
expenses will be charged to operations upon consummation of the Mergers.
2. PRO FORMA ADJUSTMENTS
(A) Shareholders' compensation -- Compensation of the TSL shareholders has
been reduced by $6,989, $3,263, $4,865, and for the year ended December 31,
1994 and the six months ended June 30, 1994 and 1995, respectively.
Such reductions represent the difference between actual compensation and
compensation contracted for under the employment agreements to be entered
into assuming consummation of the Mergers. The TSL shareholders' duties and
responsibilities will not be diminished with the result that other costs will
be incurred that offset the pro forma financial adjustments to compensation
expense. The Company believes such information is necessary for investors to
assess realistically the impact of the combination.
(B) Income taxes -- TSL has elected "S" Corporation status, and as a
result, TSL earnings were taxed at the stockholder level rather than the
corporate level. The provision for income taxes has been adjusted to reflect an
effective income tax rate of 40% of pro forma taxable income (as adjusted for
the reduction in shareholders' compensation) for the year ended December 31,
1994 and the six months ended June 30, 1994 and 1995.
(C) Common stock and additional paid in capital -- The common stock and
additional paid in capital of TSL have been adjusted to reflect the assumed
issuance of 3,331 shares of Brite Common Stock in exchange for all of the
outstanding shares of TSL.
3. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The pro forma combined condensed financial statements assume that the
Mergers qualify as a "tax-free" reorganization for federal income tax purposes.
17
<PAGE>
10.1 Agreement and Plan of Reorganization and Merger Between Brite
Voice Systems, Inc., and Telecom Services Limited (U.S.), Inc.,
Telecom Services Limited (West), Inc., TSL Software Services,
Inc., and TSL Management Group, Inc.; and Alan C. Maltz, Stephen
B. Rockoff, Scott A. Maltz, and Alan C. Maltz as custodian for
Sari Maltz and Lori Maltz, incorporated by reference to Annex A
to the Company's definitive Proxy Statement dated July 17, 1995.*
23.1 Consent of Ernst & Young LLP.
99.1 Financial statements of the TSL Companies and the report thereon
of Ernst & Young LLP, independent auditors, dated April 7, 1995.*
99.2 Pro Forma Combined Condensed Financial Statements of Brite Voice
Systems, Inc., and the TSL Companies.*
- ---------------------
* Previously filed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 on Form 8-K/A to be signed on
its behalf by the undersigned, thereunto duly authorized.
BRITE VOICE SYSTEMS, INC.
By /s/ Glenn A. Etherington
____________________________________
Glenn A. Etherington
Chief Financial Officer
Dated: October 23, 1995
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Amendment No. 1 to Report on Form 8-K dated
August 9, 1995 of Brite Voice Systems, Inc. of our report dated April 7, 1995
with respect to the financial statements of Telecom Services Limited (U.S.),
Inc. and Affiliates.
/s/ Ernst & Young, LLP
Ernst & Young LLP
MetroPark, New Jersey
October 23, 1995
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