<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 30 , 1997
-----------------
PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 33-80547 59-3074176
- - --------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building
Suite 400, Atlanta, Georgia 30326
- - --------------------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
---------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Premiere Technologies, Inc. ("Premiere" or the "Company") hereby amends
its Current Report on Form 8-K dated April 30, 1997, filed with the Securities
and Exchange Commission (the "Commission") on May 13, 1997, to amend Item 7(b)
regarding pro forma financial information relating to the Company, TeleT
Communications LLC ("TeleT"), Voice-Tel Enterprises, Inc. ("VTE"), VTN, Inc.
("VTN") and certain independently owned and operated franchisees of VTE that
meet the significance tests of Rule 3-05 of Regulation S-X promulgated by the
Commission (the "Significant Franchisees").
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information relating to the Company and TeleT
has been previously filed with the Commission and is incorporated by
reference from the Company's Amended Current Report on Form 8-K/A
dated September 18, 1996 and the Company's Annual Report on Form 10-K
for the year ended December 31, 1996. The following pro forma
financial information relating to the Company, TeleT, VTE, VTN and the
Significant Franchisees is included herein:
Pro Forma Combined Balance Sheet as of December 31, 1996..........
Pro Forma Combined Statements of Income for the years
ended 1996, 1995 and 1994..................................
Notes to Unaudited Pro Forma Combined Condensed
Financial Statements.......................................
-2-
<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 hereunto duly authorized.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
-------------------------------------------
Patrick G. Jones
Senior Vice President of Finance and Legal
Dated: June 16, 1997
-3-
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Pro forma financial data gives effect to (i) the acquisition of TeleT and
(ii) the acquisitions (the "Significant Acquisitions") by Premiere in separate
transactions of VTE, the general partner of VTN, the limited partner interests
in VTN and certain independently owned and operated franchisees of VTE that meet
the significance tests of Rule 3-05 of Regulation S-X promulgated by the
Commission (the "Significant Franchisees").
The unaudited pro forma combined financial information gives effect to the
Company's acquisition of TeleT on September 18, 1996 as though the transaction
occurred January 1, 1996. Premiere exchanged 498,187 shares of its common
stock and paid approximately $2.8 million in cash for TeleT. This acquisition
has been accounted for under the purchase method of accounting.
In addition, the unaudited pro forma combined financial information gives
effect to the Company's acquisition of VTN on April 29, 1997 as though the
transaction occurred on December 31, 1996 for pro forma balance sheet purposes
and on January 1, 1996 for pro forma statement of income purposes. Premiere
paid approximately $9.2 million in cash for VTN. This acquisition has been
accounted for under the purchase method of accounting. All remaining
Significant Acquisitions were accounted for under the pooling-of-interests
method of accounting and the unaudited pro forma combined financial statements
reflect these transactions as if they had occurred January 1, 1994.
The number of pro forma weighted average number of common shares and common
share equivalents used to compute pro forma net income per share reflects the
aggregate of the weighted average outstanding shares or owners' interests of
the businesses acquired through the Significant Acquisitions, adjusted to
equivalent shares of Premiere for all periods presented.
The Company's historical fiscal period for the nine months ended December
31, 1994 has been adjusted to reflect a comparative twelve month period ended
December 31, 1994 reported for the Significant Franchisees. The additional
three month period adjustment is unaudited and should be read in conjunction
with the Company's Annual Report on Form 10-K for the year ended December 31,
1996 incorporated by reference herein.
Certain balance sheet and income statement amounts contained in historical
financial statements of VTE, VTN and the Significant Franchisees have been
reclassified to conform with the unaudited pro forma combined financial
statements presentation and disclosure practices of Premiere. In connection
with the acquisitions of VTE, VTN and substanially all of the independently
owned and operated franchisees of VTE (the "Voice-Tel Acquisitions"), the
Company will take a charge in the second quarter of 1997 of approximately $40
million to $45 million, consisting of transaction expenses and restructuring and
related costs (including severance costs, charges for asset impairment and costs
related to exiting the franchise business and closing certain facilities)
attributable to the Voice-Tel Acquisitions. This charge is not reflected in the
unaudited pro forma combined financial information.
The unaudited pro forma combined financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or results of operations that would have actually been reported had
the Significant Acquisitions occurred at the beginning of the periods
presented nor is it necessarily indicative of future financial position or
results of operations. These unaudited pro forma combined condensed financial
statements are based on the respective historical financial statements for
Premiere, VTE, VTN, the Significant Franchisees and TeleT and should be read
in conjunction with the respective historical financial statements
incorporated by reference herein.
-4-
<PAGE>
PREMIERE TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------------------------
PREMIERE DMG SHAMLIN PBS SANDS VTO
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 74,133,745 $ 1,238,943 $ 221,053 $ 26,023 $ 280,966 $ 2,849
Accounts receivable 4,870,748 250,632 133,498 244,552 273,037 284,261
Deferred tax assets, net 3,571,938 - - - - -
Prepaid expenses and other current assets 2,283,944 11,289 7,873 - - 4,975
-----------------------------------------------------------------------------------------
Total current assets 84,860,375 1,500,864 362,424 270,575 554,003 292,085
-----------------------------------------------------------------------------------------
Property and equipment, net 16,773,200 403,043 447,014 460,265 881,760 449,127
Other assets: 38,417,534 118,651 95,767 216,096 403,525 975,040
-----------------------------------------------------------------------------------------
Total assets: 140,051,109 2,022,558 905,205 946,936 1,839,288 1,716,252
=========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 2,847,142 147,594 407,417 69,896 289,122 388,958
Accounts payable and accrued expenses 11,870,434 1,075,479 126,283 29,580 106,668 392,538
Accrued payroll and related taxes 138,671 - - - - -
Unearned revenue 452,618 254,639 47,677 348,962 79,440 205,718
-----------------------------------------------------------------------------------------
Total current liabilities 15,308,865 1,477,712 581,377 448,438 475,230 987,214
-----------------------------------------------------------------------------------------
Long-term liabilities:
Long-term debt 249,235 271,526 673,862 71,092 242,692 1,048,279
Subordinated debt - - - - - -
Deferred taxes 334,520 - - - - -
Other accrued liabilities - - - - - (200,832)
-----------------------------------------------------------------------------------------
Total long-term liabilities 583,755 271,526 673,862 71,092 242,692 847,447
-----------------------------------------------------------------------------------------
Total Liabilities 15,892,620 1,749,238 1,255,239 519,530 717,922 1,834,661
-----------------------------------------------------------------------------------------
Shareholders' equity:
Common stock 240,118 299,898 13,000 47,500 30,000 -
Treasury stock (660,000) - - - -
Additional paid in capital 125,785,798 60,046 - - 943,742 -
Stock subscription receivable - - - - -
Retained earnings (1,867,427) 573,376 (363,034) 379,906 147,624 (118,409)
-----------------------------------------------------------------------------------------
Total equity 124,158,489 273,320 (350,034) 427,406 1,121,366 (118,402)
-----------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 140,051,109 $ 2,022,558 $ 905,205 $ 946,936 $ 1,839,288 $ 1,716,252
=========================================================================================
<PAGE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------------------------
SDVT CONTINUUM PENTA CAR ZEE FLANAGAN/ALLAN(L) VTEC(L)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 46,089 $ 19,708 $ 235,390 $ 50,532 $ 90,998 $ 42,770
Accounts receivable 278,278 118,347 613,917 110,551 129,627 3,796
Deferred tax assets, net - - - - - -
Prepaid expenses and other current assets 12,482 7,412 1,509,481 513,968 3,717 -
-----------------------------------------------------------------------------------------
Total current assets 336,849 145,467 2,358,788 675,051 224,342 46,566
-----------------------------------------------------------------------------------------
Property and equipment, net 267,568 171,015 924,631 380,712 798,239 168,413
Other assets 65,594 62,333 212,571 335,732 153,875 132,101
-----------------------------------------------------------------------------------------
Total assets 670,011 378,815 3,495,990 1,391,495 1,176,456 347,080
=========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 109,756 140,854 1,438,802 83,235 234,875 67,041
Accounts payable and accrued expenses 101,728 85,700 225,208 42,064 514,665 69,313
Accrued payroll and related taxes - 26,312 - - 4,292 8,423
Unearned revenue 61,124 92,310 59,525 27,544 40,664 5,562
-----------------------------------------------------------------------------------------
Total current liabilities 272,608 345,176 1,723,535 152,843 794,496 150,339
-----------------------------------------------------------------------------------------
Long-term liabilities:
Long-term debt 52,563 91,082 1,242,228 797,244 281,306 120,264
Subordinated debt - - 462,901 - - -
Deferred taxes - - - - 71,591 36,899
Other accrued liabilities 178,218 - - 239,251 - -
-----------------------------------------------------------------------------------------
Total long-term liabilities 230,781 91,082 1,705,129 1,036,495 352,896 157,163
-----------------------------------------------------------------------------------------
Total liabilities 503,389 436,258 3,428,664 1,189,338 1,147,392 307,502
-----------------------------------------------------------------------------------------
Shareholders' equity:
Common stock - 4,000 102,891 - 93 75
Treasury stock - - - (240,000) - -
Additional paid in capital 128,000 - - 801,436 30 -
Stock subscription receivable - - (43,770) - - -
Retained earnings 38,622 (61,443) 8,205 (359,279) 28,941 39,503
-----------------------------------------------------------------------------------------
Total equity 166,622 (57,443) 67,326 202,157 29,064 39,578
-----------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 670,011 $ 378,815 $3,495,990 $1,391,495 $ 1,176,456 $ 347,080
=========================================================================================
<PAGE>
<CAPTION>
HISTORICAL
------------------------------
PRO FORMA
VTN VTE ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 17,477 $ 354,063 $ (9,678,000) (C) $ 67,082,606
Accounts receivable 210,541 7,194,057 (7,199,601) (A) 7,516,241
Deferred tax assets, net - 425,000 682,857 (D) 4,679,795
Prepaid expenses and other current assets - 3,404,836 (70,000) (B) 7,689,977
-----------------------------------------------------------------------
Total current assets 228,018 11,377,956 (16,264,744) - 86,968,619
-----------------------------------------------------------------------
Property and equipment, net 2,811,198 4,492,431 8,740,000 (C) 37,570,654
(597,962) (A)
Other assets: 2,189,184 3,843,494 (885,000) (A)
(1,506,000) (B) 46,212,598
1,382,101 (D)
-----------------------------------------------------------------------
Total assets: 5,228,400 19,713,881 (9,131,605) - 170,751,871
=======================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 2,360,863 4,788,189 (6,551,000) (A) 6,822,744
Accounts payable and accrued expenses 5,384,218 6,485,326 (648,601) (A) 26,846,383
985,780 (D)
Accrued payroll and related taxes - 161,180 338,878
Unearned revenue - 1,710,962 - 3,386,745
-----------------------------------------------------------------------
Total current liabilities 7,745,081 13,145,657 (6,213,821) 37,394,750
-----------------------------------------------------------------------
Long-term liabilities:
Long-term debt 395,742 3,410,547 - 8,947,662
Subordinated debt - 5,000,000 - 5,462,901
Deferred taxes - 725,000 1,971,560 (D) 3,139,569
Other accrued liabilities - - 216,637
-----------------------------------------------------------------------
Total long-term liabilities 395,742 9,135,547 1,971,560 17,766,769
-----------------------------------------------------------------------
Total liabilities 8,140,823 22,281,204 (4,242,261) 55,161,519
-----------------------------------------------------------------------
Shareholders' equity:
Common stock 82,761 3,861,750 (4,407,505) (E) 274,581
Treasury stock (803,645) (1,477,141) 3,180,786 (E) -
Additional paid in capital - - (5,652,366) (E) 122,066,686
Stock subscription receivable - - 43,770 (E) -
Retained earnings (2,191,539) (4,951,932) 1,945,971 (6,750,915)
-----------------------------------------------------------------------
Total equity (2,912,423) (2,567,323) (4,889,344) 115,590,352
-----------------------------------------------------------------------
Total liabilities and shareholders' equity $ 5,228,400 $19,713,881 $ (9,131,605) $ 170,751,871
=======================================================================
</TABLE>
-5-
<PAGE>
PREMIERE TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
(1) (2) PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
PREMIERE TELET TELET PREMIERE
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues........ $52,079,338 $ 250,603 -- $52,329,941
Cost of
services........ 16,710,820 -- -- 16,710,820
----------- --------- ----------- -----------
Gross margin.... 35,368,518 250,603 -- 35,619,121
Operating
expenses:
Selling, general
and
administrative.. 25,765,839 884,576 -- 26,650,415
Depreciation and
amortization.... 2,255,253 -- 53,571 (H) 2,308,824
Charge for
purchased
R & D........... 11,030,000 -- (11,030,000)(I) --
Accrued
litigation...... 1,250,000 -- -- 1,250,000
----------- --------- ----------- -----------
Total operating
expenses........ 40,301,092 884,576 (10,976,429) 30,209,239
----------- --------- ----------- -----------
Operating income
(loss).......... (4,932,574) (633,973) 10,976,429 5,409,882
Other income
(expense):
Interest
income.......... 2,529,197 -- (111,930)(J) 2,417,267
Interest (188,340) -- -- (188,340)
expense.........
Other, net...... 68,641 (13,007) -- 55,634
----------- --------- ----------- -----------
Net income
(loss) before
income taxes.... (2,523,076) (646,980) 10,864,499 7,694,443
Provision
(benefit) for
income taxes.... (1,626,541) (252,322) 4,236,972 (K) 2,358,109
----------- --------- ----------- -----------
Net income
(loss).......... $ (896,535) $(394,658) $ 6,627,527 $ 5,336,334
Preferred stock
dividends....... 29,337 -- -- 29,337
----------- --------- ----------- -----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ (925,872) (394,658) $ 6,627,527 $ 5,306,997
=========== ========= =========== ===========
Earnings per
share........... $ (0.05) $ 0.26
=========== ===========
Weighted average
number of common
shares and
common share
equivalents
outstanding..... 20,170,000 498,187 (L) 20,668,187
=========== =========== ===========
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------------------------------------------
DMG SHAMLIN PBS SANDS VTO SDVT CONTINUUM PENTA CAR ZEE
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........ $6,078,478 $1,603,047 $2,822,497 $3,838,770 $2,065,093 $1,364,088 $1,094,447 $3,610,885 $1,521,386
Cost of
services........ 2,015,847 299,560 366,864 844,484 746,339 183,401 187,676 561,619 261,905
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Gross margin.... 4,062,631 1,303,487 2,455,633 2,994,286 1,318,754 1,180,687 906,771 3,049,266 1,259,481
Operating
expenses:
Selling, general
and
administrative.. 2,999,113 591,582 1,622,252 1,708,938 895,304 1,073,789 663,351 1,967,919 597,578
Depreciation and
amortization.... 182,380 410,807 270,015 461,104 199,630 130,698 100,248 371,256 317,914
Charge for
purchased
R & D........... -- -- -- -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total operating
expenses........ 3,181,493 1,002,389 1,892,267 2,170,042 1,094,934 1,204,487 763,599 2,339,175 915,492
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating income
(loss).......... 881,138 301,098 563,366 824,244 223,820 (23,800) 143,172 710,091 343,989
Other income
(expense):
Interest
income.......... -- -- -- -- -- -- -- -- --
Interest (38,412) (90,680) (13,376) (81,449) (150,673) (12,443) (28,093) (259,516) (125,232)
expense.........
Other, net...... -- 4,929 (16,226) -- 388,133 4,507 -- 9,800 65,780
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income
(loss) before
income taxes.... 842,726 215,347 533,764 742,795 461,280 (31,736) 115,079 460,375 284,537
Provision
(benefit) for
income taxes.... -- -- -- -- 28,561 -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income
(loss).......... $ 842,726 $ 215,347 $ 533,764 $ 742,795 $ 432,719 $ (31,736) $ 115,079 $ 460,375 $ 284,537
Preferred stock
dividends....... -- -- -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ 842,726 $ 215,347 $ 533,764 $ 742,795 $ 432,719 $ (31,736) $ 115,079 $ 460,375 $ 284,537
=========== =========== =========== =========== =========== =========== =========== =========== ===========
Earnings per
share...........
Weighted average
number of common
shares and
common share
equivalents
outstanding.....
<CAPTION>
HISTORICAL
---------------------------------------------
FLANAGAN/ PRO FORMA
ALLAN(H) VTEC(H) VTN VTE ADJUSTMENTS PRO FORMAA
---------- -------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues........ $2,566,693 $511,641 $8,362,566 $18,222,983 $(4,398,345)(A) $101,594,170
Cost of
services........ 808,472 63,345 2,427,595 2,581,903 (307,000)(A) 27,752,830
---------- -------- ---------- ----------- ----------- ------------
Gross margin.... 1,758,221 448,296 5,934,971 15,641,080 (4,091,345) 73,841,340
Operating
expenses:
Selling, general
and
administrative.. 1,261,883 264,416 2,652,687 12,272,495 (3,853,000)(A) 51,368,722
Depreciation and
amortization.... 237,952 60,204 1,643,543 1,942,840 (214,032)(A) 8,212,383
(441,000)(B)
230,000 (C)
Charge for
purchased
R & D........... -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- -- 1,250,000
---------- -------- ---------- ----------- ----------- ------------
Total operating
expenses........ 1,499,835 324,620 4,296,230 14,215,335 (4,278,032) 60,831,105
---------- -------- ---------- ----------- ----------- ------------
Operating income
(loss).......... 258,386 123,676 1,638,741 1,425,745 186,687 13,010,235
Other income
(expense):
Interest
income.......... -- -- -- 680,477 (325,131)(A) 2,294,613
(478,000)(C)
Interest (29,888) (9,268) (662,646) (1,566,502) 325,131 (A) (2,931,387)
expense.........
Other, net...... (24,594) (3,579) -- -- -- 484,384
---------- -------- ---------- ----------- ----------- ------------
Net income
(loss) before
income taxes.... 203,904 110,829 976,095 539,720 (291,313) 12,857,845
Provision
(benefit) for
income taxes.... 65,239 1,997 -- 2,098,176 1,493,099 (D) 6,045,181
---------- -------- ---------- ----------- ----------- ------------
Net income
(loss).......... $ 138,665 $108,832 $ 976,095 $(1,558,456) $(1,784,412) $ 6,812,664
Preferred stock
dividends....... -- -- -- -- -- 29,337
---------- -------- ---------- ----------- ----------- ------------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ 138,665 $108,832 $ 976,095 $(1,558,456) $(1,784,412) $ 6,783,327
========== ======== ========== =========== =========== ============
Earnings per
share........... $ 0.29
============
Weighted average
number of common
shares and
common share
equivalents
outstanding..... 2,953,813 (F) 23,622,000
=========== ============
</TABLE>
- - ---------------
(1) Excludes effect of extraordinary items of $59,000, net of tax effect.
(2) Derived from the historical statements of operations of the Company and
Connect, Inc. (incorporated by reference herein), Leitess Information
Solutions, LLC and Planet Communications LLC (collectively, "Telet
Communications LLC").
-6-
<PAGE>
PREMIERE TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------------------------------------------------------------------
PREMIERE DMG SHAMLIN PBS SANDS VTO SDVT CONTINUUM PENTA
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........ $22,325,938 $2,951,772 $1,446,958 $1,326,722 $3,268,203 $1,794,274 $1,076,185 $638,318 $3,338,157
Cost of
services........ 7,602,511 560,061 246,050 321,735 601,879 480,393 109,339 140,269 992,298
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Gross margin.... 14,723,427 2,391,711 1,200,908 1,004,987 2,666,324 1,313,881 966,846 498,049 2,345,859
Operating
expenses:
Selling, general
and
administrative.. 11,727,559 1,637,542 531,011 818,031 1,815,067 973,655 658,529 373,644 1,722,636
Depreciation and
amortization.... 696,898 181,490 212,334 88,932 412,821 192,604 159,298 57,923 430,080
Charge for
purchased R &
D............... -- -- -- -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Total operating
expenses........ 12,424,457 1,819,032 743,345 906,963 2,227,888 1,166,259 817,827 431,567 2,152,716
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Operating income
(loss).......... 2,298,970 572,679 457,563 98,024 438,436 147,622 149,019 66,482 193,143
Other income
(expense):
Interest
income.......... 283,082 556 13,251 -- -- -- (46,591) -- --
Interest
expense......... (366,034) (14,911) (101,245) (8,238) (103,461) (88,797) (9,242) -- (215,815)
Other, net...... 32,062 77,308 8 180,694 -- (13,548) -- -- 5,000
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Net income
(loss) before
income taxes.... 2,248,080 635,632 369,577 270,480 334,975 45,277 93,186 66,482 (17,672)
Provision
(benefit) for
income taxes.... 330,486 -- -- -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Net income
(loss).......... $ 1,917,594 $ 635,632 $ 369,577 $ 270,480 $ 334,975 $ 45,277 $ 93,186 $ 66,482 $ (17,672)
Preferred stock
dividends....... 308,419 -- -- -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ 1,807,382 (1) $ 635,632 $ 369,577 $ 270,480 $ 334,975 $ 45,277 $ 93,186 $ 66,482 $ (17,672)
=========== ========== ========== ========== ========== ========== ========== ======== ==========
Earnings per
share........... $ 0.10
===========
Weighted average
number of common
shares and
common share
equivalents
outstanding..... 17,529,000
===========
<CAPTION>
HISTORICAL
------------------------------------------------------------------------------------
FLANAGAN/ PRO FORMA
CAR ZEE ALLAN(H) VTEC(H) VTN VTE ADJUSTMENTS PRO FORMA
---------- ---------- -------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........ $1,437,385 $1,977,726 $337,322 $6,201,887 $17,373,001 $(4,786,060)(A) $60,707,788
Cost of
services........ 226,183 305,767 22,519 2,005,476 2,548,522 1,115,000 (B) 17,278,002
---------- ---------- -------- ---------- ----------- ----------- -----------
Gross margin.... 1,211,202 1,671,959 314,803 4,196,411 14,824,479 (5,901,060) 43,429,786
Operating
expenses:
Selling, general
and
administrative.. 594,695 1,355,186 228,078 3,309,633 12,228,732 (4,563,776)(A) 33,410,222
Depreciation and
amortization.... 276,818 151,790 47,188 863,829 1,748,822 (168,969)(A) 5,144,858
(207,000)(B)
Charge for
purchased R &
D............... -- -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- 2,500,000 -- 2,500,000
---------- ---------- -------- ---------- ----------- ----------- -----------
Total operating
expenses........ 871,513 1,506,976 275,266 4,173,462 16,477,554 (4,939,745) 41,055,080
---------- ---------- -------- ---------- ----------- ----------- -----------
Operating income
(loss).......... 339,689 164,983 39,537 22,949 (1,653,075) (961,315) 2,374,706
Other income
(expense):
Interest
income.......... 57,078 -- -- -- 790,803 (345,049)(A) 753,130
Interest
expense......... (116,428) (29,894) (8,906) (776,279) (1,633,476) 345,049 (A) (3,127,677)
Other, net...... -- -- -- -- -- -- 281,524
---------- ---------- -------- ---------- ----------- ----------- -----------
Net income
(loss) before
income taxes.... 280,339 135,089 30,631 (753,330) (2,495,748) (961,315) 281,683
Provision
(benefit) for
income taxes.... -- 38,194 -- -- (724,007) 149,089 (D) (206,238)
---------- ---------- -------- ---------- ----------- ----------- -----------
Net income
(loss).......... $ 280,339 $ 96,895 $ 30,631 $ (753,330) $(1,771,741) $(1,110,404) $ 487,921
Preferred stock
dividends....... -- -- -- -- -- -- 308,419
---------- ---------- -------- ---------- ----------- ----------- -----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ 280,339 $ 96,895 $ 30,631 $ (753,330) $(1,771,741) $(1,308,611)(F) $ 179,502
========== ========== ======== ========== =========== =========== ===========
Earnings per
share........... $ 0.01
===========
Weighted average
number of common
shares and
common share
equivalents
outstanding..... (3,264,108)(F) 14,264,892
=========== ===========
</TABLE>
- - -----
(1) Amount includes the pro forma net interest adjustment of $198,207 assumed
under the treasury stock method.
-7-
<PAGE>
PREMIERE TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------------------------------------------------------------------------------
PREMIERE DMG SHAMLIN PBS SANDS VTO SDVT CONTINUUM PENTA CAR ZEE
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........ $9,995,000 $2,642,709 $1,101,698 $1,106,987 $2,715,791 $1,825,062 $ 852,732 $ 400,912 $2,866,373 $1,407,743
Cost of
services........ 3,516,000 466,638 166,588 311,542 477,539 371,363 128,752 99,251 891,036 335,979
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Gross margin.... 6,479,000 2,176,071 935,110 795,445 2,238,252 1,453,699 723,980 301,661 1,975,337 1,071,764
Operating
expenses:
Selling, general
and
administrative.. 6,092,000 1,229,526 376,408 727,227 1,471,503 952,642 413,186 276,073 1,286,442 527,090
Depreciation and
amortization.... 420,000 197,824 174,831 95,249 638,498 197,903 187,281 46,978 359,371 261,601
Charge for
purchased
R & D........... -- -- -- -- -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Total operating
expenses........ 6,512,000 1,427,350 551,239 822,476 2,110,001 1,150,545 600,467 323,051 1,645,813 788,691
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Operating income
(loss).......... (33,000) 748,721 383,871 (27,031) 128,251 303,154 123,513 (21,390) 329,524 283,073
Other income
(expense):
Interest
income.......... 149,000 1,144 21,602 -- -- -- 929 53 -- 33,328
Interest
expense......... (291,000) (55,913) (102,214) (8,875) (137,158) (90,086) -- -- (133,648) (130,270)
Other, net...... 43,000 12,808 -- 219,475 -- 5,296 -- -- 60,000 (333)
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Net income
(loss) before
income taxes.... (132,000) 706,760 303,259 183,569 (8,907) 218,364 124,442 (21,337) 255,876 185,798
Provision
(benefit) for
income taxes.... 48,000 -- -- -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Net income
(loss).......... $ (180,000) $ 706,760 $ 303,259 $ 183,569 $ (8,907) $ 218,364 $ 124,442 $ (21,337) $ 255,876 $ 185,798
Preferred stock
dividends....... 320,000 -- -- -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------- ----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ (500,000) $ 706,760 $ 303,259 $ 183,569 $ (8,907) $ 218,364 $ 124,442 $ (21,337) $ 255,876 $ 185,798
========== ========== ========== ========== ========== ========== ========= ========= ========== ==========
Earnings per
share........... $ (0.05)
==========
Weighted average
number of common
shares and
common share
equivalents
outstanding..... 10,804,000
==========
<CAPTION>
HISTORICAL
------------------------------------------------------------------------------
FLANAGAN/ PRO FORMA
ALLAN(H) VTEC(H) VTN VTE ADJUSTMENTS PRO FORMA
---------- -------- ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues........ $1,118,191 $ 83,828 $ 4,196,546 $12,419,847 $(3,967,704)(A) $38,765,715
Cost of
services........ 121,452 5,771 1,395,169 2,266,491 856,000 (B) 11,409,571
---------- -------- ----------- ----------- ----------- -----------
Gross margin.... 996,739 78,057 2,801,377 10,153,356 (4,823,704) 27,356,144
Operating
expenses:
Selling, general
and
administrative.. 747,955 93,672 3,352,841 13,330,090 (3,494,000)(A) 27,382,655
Depreciation and
amortization.... 101,491 20,901 303,447 1,141,722 (99,370)(A) 3,997,727
(50,000)(B)
Charge for
purchased
R & D........... -- -- -- -- -- --
Accrued
litigation...... -- -- -- -- -- --
---------- -------- ----------- ----------- ----------- -----------
Total operating
expenses........ 849,446 114,573 3,656,288 14,471,812 (3,643,370) 31,380,382
---------- -------- ----------- ----------- ----------- -----------
Operating income
(loss).......... 147,293 (36,516) (854,911) (4,318,456) (1,180,334) (4,024,238)
Other income
(expense):
Interest
income.......... -- -- -- 341,345 (121,131)(A) 426,270
Interest
expense......... (27,635) (3,909) (407,377) (915,712) 121,131 (A) (2,182,666)
Other, net...... -- -- -- -- -- 340,246
---------- -------- ----------- ----------- ----------- -----------
Net income
(loss) before
income taxes.... 119,658 (40,425) (1,262,288) (4,892,823) (1,180,334) (5,440,388)
Provision
(benefit) for
income taxes.... 16,399 17,170 -- (1,446,810) (202,867)(D) (1,568,108)
---------- -------- ----------- ----------- ----------- -----------
Net income
(loss).......... $ 103,259 $(57,595) $(1,262,288) $(3,446,013) $ (977,467) (3,872,280)
Preferred stock
dividends....... -- -- -- -- -- 320,000
---------- -------- ----------- ----------- ----------- -----------
Pro forma income
(loss)
attributable to
common
shareholders for
primary earnings
per share....... $ 103,259 $(57,595) $(1,262,288) $(3,446,013) $ (977,467) $(4,192,280)
========== ======== =========== =========== =========== ===========
Earnings per
share........... $ (.29)
===========
Weighted average
number of common
shares and
common share
equivalents
outstanding..... 3,460,892 (F) 14,264,892
=========== ===========
</TABLE>
-8-
<PAGE>
PREMIERE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS
PRO FORMA ADJUSTMENTS--VTE, VTN AND THE SIGNIFICANT FRANCHISEES
Pro forma adjustments have been made to:
(A) Eliminate intercompany transactions between VTE, VTN and the
Significant Franchisees. These transactions include royalties, transaction
fees for network usage, management fees and equipment sales. All sales and
cost of sales associated with such transactions, including intercompany
profit included in equipment cost and depreciation, are eliminated in the
pro forma combined condensed financial statements. Also, adjustments have
been made to eliminate intercompany accounts receivable and payable.
(B) Conform VTE and VTN accounting treatment for certain preoperating
costs with policies followed by Premiere. Adjustments have been made to
charge to expense during the period incurred preoperating cost capitalized
by VTE and VTN which would have been expensed under policies followed by
Premiere. Associated amortization expense has been reduced to reflect such
adjustments.
(C) Give effect to purchase of the limited partner interest in VTN as
though the purchase occurred on March 31, 1997 for pro forma balance sheet
purposes, and on January 1, 1996 for pro forma statement of income
purposes. These adjustments consist of allocation of the $9.2 million cash
purchase price to VTN assets and liabilities and, for pro forma statement
of income purposes, additional depreciation and amortization resulting from
increased basis of property and equipment over an estimated useful life of
40 years and a reduction in interest income resulting from the reduction of
cash.
(D) Provide for income taxes for entities which operated as S
corporations or partners prior to the Significant Acquisitions as if they
were combined with Premiere and subject to taxation for all periods
presented. Such entities include the Significant Franchisees, except for
VTEC, Flanagan/Allan and VTE. In addition, adjustments have been made for
the income tax effect of all of the foregoing pro forma adjustments.
(E) Reflect the issuance of shares of Premiere common stock in exchange
for all of the outstanding common shares of VTE, VTN and the Significant
Franchisees. The excess of the par value of Premiere common stock over
those received in exchange for VTE, VTN and the Significant Franchisees is
reflected as a reduction of additional paid in capital of the combined
company.
(F) Give effect to additional shares issued to Significant Franchisees as
though such shares were issued January 1, 1994 and adjust for change in
shares computed under the modified treasury stock method except for 1995
which reflects the adjustment to show the conversion from the modified
treasury stock method to the primary method of computing earnings per
share.
Adjustments have been made to:
(G) Translate financial information from Canadian dollars to U.S. dollars
using an average exchange rate of .75 U.S. dollars per one Canadian dollar.
-9-
<PAGE>
PRO FORMA STATEMENT OF INCOME ADJUSTMENTS--TELET
Pro forma adjustments necessary to reflect the purchase of TeleT as though
such transaction occurred effective January 1, 1996 have been made to:
(H) Reflect additional depreciation and amortization expense associated
with the increase in the basis of the acquired assets to fair market value
at the date of acquisition.
(I) Reverse the nonrecurring charge for in process research and
development.
(J) Reflect reduction in interest income resulting form cash paid in
acquisition.
(K) Reflect income tax effect of pro forma adjustments.
(L) Give effect to additional shares issued in connection with the
acquisition as though such shares were issued January 1, 1996.
-10-
