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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): February 17, 1999
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PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 0-27778 59-3074176
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building, Suite 600
Atlanta, Georgia 30326
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
Announcement that Premiere is Required to Discontinue Accounting for its
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February 1998 Merger with Xpedite Systems, Inc. as a Pooling-of-Interests.
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On February 17, 1999, Premiere Technologies, Inc. (the "Company") announced
that as a result of discussions with the Office of the Chief Accountant of the
Securities and Exchange Commission (the "Commission"), the Company is required
to discontinue accounting for its February 1998 acquisition of Xpedite Systems,
Inc. as a pooling-of-interests and to account for such acquisition under the
purchase method of accounting. The Office of the Chief Accountant of the
Commission determined that the Company's post-merger share repurchase program,
completed in September 1998, was not implemented in accordance with pooling
requirements, although no questions were raised regarding the propriety of the
original accounting of the merger with Xpedite Systems. The Company's
announcement was made in a press release filed herewith as Exhibit 99.1 and
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incorporated herein by reference.
Restatement of Premiere's 1998 Interim Unaudited Financial Statements.
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The Company will restate its 1998 interim unaudited financial statements
included in its Quarterly Reports on Form 10-Q, previously filed with the
Commission on May 15, August 14, and November 16, 1998, respectively.
Audited Historical Financial Statements.
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The Company's audited historical financial statements filed by the Company
as part of its Annual Report on Form 10-K on March 31, 1998, were not restated
to account for the merger with Xpedite Systems as a pooling-of-interests and may
continue to be relied upon.
Earlier Supplemental Financial Statements filed with the Commission on Form 8-
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K/A on April 13, 1998 Should Not Be Relied Upon.
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The following supplemental financial statements, management's discussion
and analysis of supplemental financial condition and results of operations and
selected supplemental consolidated financial data should no longer be relied
upon:
(a) the Supplemental Consolidated Financial Statements of Premiere
Technologies, Inc. filed by the Company as Exhibit 99.1 to its Current Report on
Form 8-K/A filed with the Commission on April 13, 1998, which reflect the merger
with Xpedite Systems on a pooled basis for the periods presented;
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(b) Management's Discussion and Analysis of Supplemental Financial
Condition and Supplemental Results of Operations of Premiere Technologies, Inc.,
filed by the Company as Exhibit 99.2 to its Current Report on Form 8-K/A filed
with the Commission on April 13, 1998, which reflect the merger with Xpedite
Systems on a pooled basis for the periods presented; and
(c) Selected Supplemental Consolidated Financial Data of Premiere
Technologies, Inc., filed by the Company as Exhibit 99.3 to its Current Report
on Form 8-K/A filed with the Commission on April 13, 1998 which reflects the
merger with Xpedite Systems on a pooled basis for the periods presented.
Prior Reports on Form 8-K Related to Consummation of the Merger with Xpedite
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Systems.
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The Company previously reported the merger with Xpedite Systems under Item
2 in its Current Report on Form 8-K filed with the Commission on March 13, 1998.
Subsequently, the Company filed a Current Report on Form 8-K/A with the
Commission on April 13, 1998 to include (a) the Consolidated Financial
Statements of Xpedite Systems for the years ended December 31, 1997, 1996 and
1995 as Exhibit 99.4 in satisfaction of Item 7(a) of Form 8-K-"Financial
Statements of the Business Acquired" and (b) the Company's Supplemental
Consolidated Financial Statements as Exhibit 99.1 in satisfaction of Item 7(b)
of Form 8-K-"Pro Forma Financial Information."
In connection with this Current Report on Form 8-K, the Company has
determined to comply with Item 7 of the Form 8-K and refers to the financial
statements of Xpedite Systems previously filed and undertakes to file the pro
forma financial information required by Item 7(b) of Form 8-K not later than 60
days after the date this initial report on Form 8-K must be filed.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
The Consolidated Financial Statements of Xpedite for the years ended
December 31, 1997, 1996 and 1995 were previously filed as Exhibit 99.4 to the
Company's Current Report on Form 8-K/A filed with the Commission on April 13,
1998.
(b) Pro Forma Financial Information
The pro forma financial information required by this item will be filed by
amendment not later than 60 days after the date this initial report on Form 8-K
must be filed.
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of November 13, 1997,
including exhibits thereto, by and among Premiere Technologies,
Inc., Nets Acquisition Corp. and Xpedite Systems, Inc. (filed as
Annex A to the Joint Proxy Statement/Prospectus filed as part of
the Company's Form S-4 Registration Statement (No. 333-41675)
filed December 8, 1997, and amended January 28, 1998, and
incorporated herein by reference).
99.1 Press Release dated February 17, 1999.
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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/ Harvey A. Wagner
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Harvey A. Wagner
Executive Vice President of
Finance and Administration and
Chief Financial Officer
Dated: March 4, 1999
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger dated as of November 13, 1997, including
exhibits thereto, by and among Premiere Technologies, Inc., Nets
Acquisition Corp. and Xpedite Systems, Inc. (filed as Annex A to the
Joint Proxy Statement/Prospectus filed as part of the Company's Form
S-4 Registration Statement (No. 333-41675) filed December 8, 1997, and
amended January 28, 1998, and incorporated herein by reference).
99.1 Press Release dated February 17, 1999.
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Premiere Required To Account For Xpedite Merger as Purchase, Not Pooling
ATLANTA, February 17,1999 - Premiere Technologies, Inc. (NASDAQ: PTEK;
www.premtec.com) ("Premiere" or the "Company") announced that as a result of the
conclusion of discussions with the Office of the Chief Accountant of the
Securities and Exchange Commission (the "SEC" or the "Commission"), Premiere is
required to discontinue accounting for its February 1998 acquisition of Xpedite
Systems, Inc. ("Xpedite") as a pooling-of-interests and instead will be
required to account for the acquisition under the purchase method of accounting.
Premiere understands that the Office of the Chief Accountant of the SEC has
determined that Premiere's post-merger share repurchase program completed in
September 1998 was not implemented in accordance with the pooling limitations.
No question was raised concerning the propriety of the original accounting of
the Xpedite merger.
Harvey A. Wagner, Premiere's Executive Vice President, Finance and
Administration and Chief Financial Officer, said: "We are surprised and
disappointed by the position of the Office of the Chief Accountant. We believe
that the Company's formulation and implementation of the share repurchase
program complies with the pooling rules. The board of directors of Premiere
authorized management to repurchase shares of Premiere stock up to the maximum
allowable under the pooling rules. The inadvertent repurchase represents an
immaterial number of shares, only about three-thousandths of one percent of a
total of 45,786,434 outstanding shares. Those shares represented a value at
that time of less than $10,000. Once we became aware of the inadvertent
repurchase, we sold shares to cure the oversight. We believe that the
underlying value of our Company is not affected by this action, as there will be
no impact on cash flow but merely on reported non-cash earnings. It is our hope
that our shareholders recognize this important element."
Premiere completed the acquisition of Xpedite on February 27, 1998, in a
transaction, valued at approximately $450 million, under which each share of
Xpedite common stock was exchanged for 1.165 shares of Premiere common stock.
In connection with the Xpedite merger, 10,988,896 shares of Premiere common
stock were issued and Premiere paid cash for approximately 53 fractional shares.
On October 29, 1998, the Company announced that it had voluntarily initiated
discussions with the SEC concerning the impact of the Company's post-merger
stock repurchase program announced in May 1998 and completed in September 1998,
on the continued accounting for the merger with Xpedite as a pooling-of-
interests. At that time, Premiere announced that it believed that pooling-of-
interests accounting remained the appropriate accounting treatment for the
merger. Premiere indicated, however, that if it were finally determined that
the Company must account for the merger under the purchase method, material
effects on its future operating results, attributed to increased amortization
expense, would result, and that the Company might be required to republish its
results of operations and amend its periodic and other filings with the SEC to
reflect any adjustments related to the transaction. By accounting for the
acquisition of Xpedite under the purchase method, the Company would have to
amortize intangible assets estimated at between $350 million and $375
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million, and republish certain of the Company's previously filed financial
statements reflecting the Xpedite merger as a purchase.
As a result of the Company's discussions with the Office of the Chief Accountant
of the SEC, Premiere understands that the Chief Accountant's view is that the
Company formulated a share repurchase program that did not meet the requirements
of the pooling rules and that the Company repurchased a number of shares that
exceeded the maximum permitted under the pooling rules. In May 1998, the board
of directors of Premiere authorized management to implement a share repurchase
program. In September 1998, following the six-month anniversary of the Xpedite
merger, Premiere inadvertently purchased approximately 1,400 shares beyond the
established limits of the announced buy-back program. After the discovery of
the inadvertent repurchase, the Company sold shares to cure the inadvertent
repurchase and initiated discussions in October 1998 with the Office of the
Chief Accountant of the SEC. Over the course of the program, 1.1 million shares
were purchased (including the approximate 1,400 shares that the Company
inadvertently purchased). Premiere understands that the SEC's position is that
the board action did not appropriately take into account the adjustments
required for the approximately 53 fractional shares acquired for cash in the
Xpedite merger, and that the inadvertent purchase cannot be cured. The Company
continues to believe that the post-merger share repurchase program complied with
all published SEC guidelines and neither the original formulation of the share
repurchase program nor the inadvertent repurchase of an immaterial number of
shares outside of the six-month period following the Xpedite merger, should
invalidate the pooling-ofinterests treatment. Prior to receiving today's SEC
determination, the Company's independent auditors concurred with the Company's
conclusion.
Given this development, the Company does not expect to be releasing its fourth
quarter and fiscal year-end earnings performance until mid-March, after the
Company works with its independent auditors to republish its previously filed
financials on file with the SEC.
Atlanta-based Premiere Technologies, Inc. is a leading provider of the
integrated communications solutions that individuals and businesses rely on
every day. The Company does this by integrating the Internet with voice mail,
fax, e-mail, conference calling and mobile communications. Premiere is the
first single-source provider and integrator of all these communications services
through both the Internet and the telephone. The Company was founded in 1991
and has operations in approximately 30 countries.
Statements made in this press release, other than those concerning historical
information, should be considered forward-looking and subject to various risks
and uncertainties. Such forward-looking statements are made based on
management's belief as well as assumptions made by, and information currently
available to, management pursuant to the `safe harbor' provisions of the Private
Securities Litigation Reform Act of 1995. Premiere's actual results may differ
materially from the results anticipated in these forward-looking statements as a
result of a variety of factors, including those identified in
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Premiere's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, and its Quarterly Reports on Form 10-Q and subsequent filings filed with
the Securities and Exchange Commission.
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