<PAGE> 1
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
JUNE 29, 1996
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
PRECISION SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-20068 41-1425909
(STATE OR OTHER JURIS. (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
11800 30TH COURT NORTH
ST. PETERSBURG, FLORIDA 33716
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
(813) 572-9300
(REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE)
<PAGE> 2
Vicorp Group
Page 1
VICORP GROUP
CONSOLIDATED FINANCIAL STATEMENTS
1995 AND 1994
<PAGE> 3
Vicorp Group
Page 2
CONTENTS
VICORP GROUP
INDEPENDENT AUDITORS' REPORT 4
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets as of 31
December 1995 and 1994 6
Consolidated statements of earnings for years
ended 31 December 1995, 1994 and 1993 7
Consolidated statements of cash flows for years
ended 31 December 1995, 1994 and 1993 8
Notes to the consolidated financial statements 9
<PAGE> 4
Vicorp Group
Page 3
VICORP GROUP
INDEPENDENT AUDITORS' REPORT
<PAGE> 5
Page 4
INDEPENDENT AUDITORS' REPORT
To the shareholders and Board of Directors of Vicorp N.V.
We have audited the accompanying consolidated balance sheets of Vicorp N.V. and
its subsidiary companies (the "Vicorp Group") as at 31 December 1995 and 1994
and the related consolidated statements of earnings and cash flows for the three
years in the period ended 31 December 1995. These financial statements are the
responsibility of Vicorp Group management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with International Standards on Auditing,
issued by the International Federation of Accountants, which are substantially
similar to those followed in the United States. 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 financial statements give a true and fair view, in all
material respects, of the financial position of the Vicorp Group as at 31
December 1995 and 1994 and of the results of its operations and changes in the
financial position for each of the three years in the period ended 31 December
1995 in accordance with International Accounting Standards (I.A.S.) issued by
the International Accounting Standards Committee and the Fourth and Seventh
European Union (EU) Directives.
Accounting principles promulgated under International Accounting Standards
(I.A.S.) vary in certain respects from accounting principles generally accepted
in the United States. The application of the latter would have affected the
determination of net income for each of the three years in the period ended 31
December 1995 and shareholder's equity as of 31 December 1995 and 1994 to the
extent summarised in Note 24 to the consolidated financial statements.
COOPERS & LYBRAND
11 April 1996
Utrecht, The Netherlands
<PAGE> 6
Vicorp Group
Page 5
Vicorp Group
VICORP GROUP
CONSOLIDATED FINANCIAL STATEMENTS
1995 AND 1994
<PAGE> 7
Vicorp Group
Page 6
VICORP GROUP
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOTES 31 DECEMBER 1995 31 DECEMBER 1994
----- ------------------------- ------------------------
USD USD USD USD
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible fixed assets 6
- - Goodwill 3,125,658 3,635,042
- - Purchased software licences 207,327 220,479
Tangible fixed assets 7 2,459,611 1,938,368
Financial fixed asset 8 0 0
---------- ----------
5,792,596 5,793,889
CURRENT ASSETS
Work in progress 9 1,645,200 4,179,007
Receivables 10 10,323,399 6,580,513
Cash 4,478,336 4,215,146
---------- ----------
16,446,935 14,974,666
CURRENT LIABILITIES 11 14,585,873 11,692,601
---------- ----------
WORKING CAPITAL 1,861,062 3,282,065
--------- ---------
TOTAL ASSETS LESS CURRENT
LIABILITIES 7,653,658 9,075,954
--------- ---------
LONG-TERM LIABILITIES 12 3,329,128 4,949,793
PROVISIONS 13 2,597,985 1,661,587
MINORITY INTERESTS 166,224 (8,068)
SHAREHOLDERS' EQUITY 14 1,560,321 2,472,642
--------- ---------
7,653,658 9,075,954
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
APPROVED AND SIGNED ON BEHALF OF VICORP GROUP MANAGEMENT
on 11 April 1996
EQUITY TRUST (CURACAO) N.V. ROBERT W. DAVIDSON
MANAGING DIRECTOR VICE PRESIDENT F&A
<PAGE> 8
Vicorp Group
Page 7
VICORP GROUP
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
NOTES 1995 1994 1993
----- --------------------------- ---------------------------- -------------------------
USD USD USD USD USD USD
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue 15 35,434,550 26,297,787 10,408,886
Change in work in
progress (2,533,807) 3,542,522 473,553
Other operating income 16 227,603 178,222 27,595
----------- ---------- ----------
TOTAL OPERATING
INCOME 33,128,346 30,018,531 10,910,034
---------- ---------- ----------
Services and goods
supplied by third parties 8,496,890 10,782,390 1,344,200
Salaries and wages 13,290,745 9,237,780 5,723,390
Pension charges 292,363 141,148 68,184
Other social charges 1,804,823 945,228 672,592
----------- ---------- ----------
15,387,931 10,324,156 6,464,166
Amortisation of goodwill 992,749 824,977 0
Amortisation of
purchased software licences 50,869 26,887 15,493
Depreciation tangible
fixed assets 1,056,791 723,683 510,800
Other operating expenses 8,853,256 6,357,290 4,367,774
---------- ---------- ----------
TOTAL OPERATING
EXPENSES 17 34,838,486 29,039,383 12,702,433
---------- ---------- ----------
OPERATING RESULT (1,710,140) 979,148 (1,792,399)
Financial expenses, net 18 454,650 358,398 328,510
---------- ---------- ----------
RESULT BEFORE TAXATION (2,164,790) 620,750 (2,120,909)
Taxation 19 301,612 2,280 180,342
---------- ---------- ----------
RESULT AFTER TAXATION (2,466,402) 618,470 (2,301,251)
Minority interests 189,839 78,170 22,790
---------- ---------- ----------
NET (LOSS) INCOME FOR
THE YEAR (2,656,241) 540,300 (2,324,041)
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Vicorp Group
Page 8
VICORP GROUP
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
1995 1994 1993
--------- ---------- ----------
USD USD USD
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Operating (loss) income (1,710,140) 979,148 (1,792,399)
Items not effecting cash funds:
- - Depreciation and amortisation 2,100,409 1,575,547 526,293
- - Increase/(decrease) provisions, excluding
deferred tax 935,600 1,010,067 (104,742)
---------- ---------- ----------
Operating profit before working capital changes 1,325,869 3,564,762 (1,370,848)
Changes in current assets and liabilities:
Decrease/(increase) in work in progress 2,533,807 (3,542,522) (473,979)
Increase in trade and other receivables (3,742,886) (2,227,521) (1,360,406)
(Decrease)/increase in trade payables (1,611,075) 2,777,492 142,087
Increase other liabilities 1,201,867 2,506,299 2,067,818
---------- ---------- ----------
Cash (used) generated from operations (292,418) 3,078,510 (995,328)
Other operating cash flows:
Financial income 172,483 39,203 28,407
Financial expense (627,133) (397,601) (356,917)
Income taxes paid (199,931) (240,232) (115,477)
---------- ---------- ----------
Net cash from operating activities (946,999) 2,479,880 (1,439,315)
---------- ---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Acquisitions of subsidiaries net of cash acquired (16,289) (4,786,565) 0
Purchase of tangible and intangible fixed assets (1,619,852) (1,290,501) (499,072)
Foreign exchange on tangible and intangible
fixed assets (587,568) (984) 20,066
Proceeds from sale of fixed assets 108,304 68,611 116,507
---------- ---------- ----------
Net cash used in investing activities (2,115,405) (6,009,439) (362,499)
---------- ---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Payment to former owners (1,610,488) 0 0
Payable to former owners 0 3,010,795 0
Proceeds from issuance of share capital 1,658,540 3,929,711 3,748,667
Conversion of loans into share capital 0 (1,868,503) (3,748,667)
Foreign exchange in equity 85,380 45,639 149,190
Foreign exchange in minority interest 742 38,326 7,438
Proceeds from long-terms loans (132,561) 1,676,677 1,573,598
---------- ---------- ----------
Net cash used in financing activities 1,613 6,832,645 1,730,226
---------- ---------- ----------
Net (decrease)/increase in cash and cash equivalents (3,060,791) 3,303,086 (71,588)
Cash and cash equivalents at beginning of year 4,215,146 912,060 983,648
---------- ---------- ----------
Cash and cash equivalents at end of year 1,154,355 4,215,146 912,060
Bank overdrafts under current liabilities 3,323,981 0 0
---------- ---------- ----------
Cash per consolidated balance sheet 4,478,336 4,215,146 912,060
</TABLE>
<PAGE> 10
Vicorp Group
Page 9
VICORP GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 GENERAL
PURPOSE OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared for the purpose of
informing shareholders, employees and selected third parties on the results and
financial position of the group. The company's legal financial statements
prepared in accordance with the Netherlands Antilles commercial law are held at
the company's offices in Willemstad, Curacao, Netherlands Antilles.
GROUP STRUCTURE
Vicorp N.V. (the company) was incorporated on 3 November 1980 in Zug,
Switzerland. For international commercial and fiscal reasons the company's
statutory seat was transferred to Willemstad, Curacao Netherlands Antilles, on
10 December 1992.
The company maintains a branch office in Zug, Switzerland.
The Vicorp Group (the Group) operates through subsidiaries located in Europe,
North America and South East Asia.
ACTIVITIES
The Vicorp Group's objective is to help customers conceive, implement and
operate intelligent call processing and interactive customer services based on
open, flexible tools and a reliable platform architecture integrating leading
technologies.
2 ACCOUNTING POLICIES
GENERAL
The financial statements of the group have been prepared in accordance with the
International Accounting Standards (I.A.S.) as issued by the International
Accounting Standards Committee. They are also in conformity with Fourth and
Seventh European Union (EU) Directives.
REPORTING CURRENCY
Prior to and after its transfer to the Netherlands Antilles the company's
reporting currency was and is the Swiss Franc as significant intercompany and
third party transactions continue to be denominated in this currency. For this
reason, the Swiss Franc has been used as the reporting currency of the 1995
consolidated financial statements, approved and signed on behalf of Vicorp Group
Management on 11 April 1996. The Swiss Franc reported financial statements have
been translated to US Dollars to facilitate use in the United States of America.
<PAGE> 11
Vicorp Group
Page 10
2 ACCOUNTING POLICIES (CONTINUED)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the
company and all of its wholly or majority owned subsidiaries as follows:
- - Vicorp Europe Holding B.V., Utrecht, The Netherlands (100%).
- - Vicorp Benelux B.V., Utrecht, The Netherlands (100%).
- - Vicorp International Services Nederland B.V., Utrecht,
The Netherlands (100%).
- - Vicorp International Services S.A., Brussels, Belgium (100%).
- - Vicorp France S.A., Paris, France (100%).
- - Vicorp Systems Espana S.A., Mardid, Spain (100%).
- - Vicorp Danmark A/S, Brondby, Denmark (100%).
- - Vicorp Scandinavia A.B., Stockholm, Sweden (100%).
- - Vicorp U.K. Holding Limited, London, England (100%).
- - Vicorp U.K. Limited, London, England (100%).
- - Vicorp Finland OY, Helsinki, Finland (100%).
- - Vicorp Interactive Systems Inc., Boston, Massachusetts, U.S.A. (100%).
- - Vicorp Deutschland GmbH, Ratingen, Germany (100%).
- - Vicorp Asia Holding Limited, Hong Kong (100%).
- - Vicorp Asia-Pacific Services Pte Ltd., Singapore (80%).
- - Vicorp Geminus GmbH, Ratingen, Germany (51%).
- - Belle System Networking ApS, Kastrup, Denmark (51%).
METHOD OF CONSOLIDATION
Acquisitions are recorded by the use of the purchase method of accounting. The
company's interest in the individual assets and liabilities acquired is
recognised separately at the date of acquisition, and measured at their fair
value as at that date. For subsidiaries that are not wholly owned, the
minority's interest is measured at the proportion of the pre-acquisition
carrying amounts of the assets and liabilities of the subsidiary. The total
assets, liabilities and results of operations of subsidiaries are included in
the consolidation. Intercompany profit resulting from transactions between
consolidated companies has been eliminated.
CURRENCY CONVERSION
Individual companies
Transactions denominated in foreign currencies are translated into the
functional currency at rates prevailing at the time the transactions took place.
Assets and liabilities denominated in foreign currency are translated at the
rates prevailing at the balance sheet date.
Exchange rate differences on completed foreign currency transactions, as well as
on assets and liabilities denominated in foreign currencies, are added to or
charged against earnings.
<PAGE> 12
Vicorp Group
Page 11
2 ACCOUNTING POLICIES (CONTINUED)
Conversion of financial statements of foreign subsidiaries
The balance sheets of the foreign subsidiary companies are converted into US
Dollars using the year end rates. The profit and loss accounts are converted at
the average rate for the year.
The resulting conversion differences are credited or charged directly to
shareholders' equity.
3 PRINCIPLES OF VALUATION AND DETERMINATION OF RESULT
GENERAL
The accounts are prepared under the historical cost convention.
COMPARISON WITH PREVIOUS YEAR
The principles of valuation and determination of result have been consistently
applied.
INTANGIBLE FIXED ASSETS
Software licences
Purchased software licences are capitalised. These licences are amortised using
the straight-line method at percentages of cost based on expected useful lives
of the assets, varying between three to five years.
Goodwill
Goodwill is the difference between the purchase price and the aggregate of the
fair market values of the identifiable assets and liabilities acquired. Goodwill
is capitalised at the date of acquisition and amortised on a straight-line basis
over the expected period of benefit, normally five years.
TANGIBLE FIXED ASSETS
Tangible fixed assets are stated at historical cost less accumulated
depreciation. Depreciation is provided on a straight-line method at percentages
of cost based on the expected average useful lives of the assets.
Estimated useful lives by major asset class are:
- - leasehold improvements 10 years
- - EDP-equipment 3 - 4 years
- - other plant and machinery 5 years
- - other fixed assets 5 - 10 years
<PAGE> 13
Vicorp Group
Page 12
3 PRINCIPLES OF VALUATION AND DETERMINATION OF RESULT (CONTINUED)
TANGIBLE FIXED ASSETS (CONTINUED)
Depreciation charges reflect the estimated useful life of the underlying asset.
Fixed assets acquired through finance lease arrangements are shown as assets at
their fair value and depreciated over the shorter of the useful life of the
asset and the lease term. The corresponding obligation is shown as a liability
in the balance sheet.
LEASED ASSETS
Assets leased under arrangements that transfer to the group substantially all
the risks and rewards incident to ownership (finance leases) are treated as if
they had been purchased outright. At the inception of a financial lease
agreement the asset is recorded in property, plant and equipment and a liability
is recorded for the capital element of the leasing commitments. Lease payments
are treated as comprising a capital element, which is applied to reduce the
liability outstanding, and an interest element, which is charged to income.
Payments under lease agreements other than finance leases (operating leases) are
charged to income over the period of the lease on a straight line basis.
FINANCIAL FIXED ASSETS
Investments held for the long term are stated at cost, unless there has been an
impairment in value below cost that is other than temporary. In that case, the
investment is written down to its realisable value and the decrease is charged
to the profit and loss account. Dividends from investments are accounted for
when received.
WORK IN PROGRESS
Work in progress under contracts for the provision of services and related
products is valued using the percentage of completion method except where the
outcome of a contract can not be reliably measured or where a loss is
anticipated.
Where the outcome of a contract still in progress at year end cannot be measured
reliably it is valued at cost. Cost includes the cost of direct labour with an
uplift for indirect costs.
When losses are anticipated, the total expected loss is provided by deduction
from work in progress carried at cost.
RECEIVABLES
Receivables are stated at their net realisable value after deducting provisions
for uncollectable amounts. Such deductions reflect specific cases or estimates
based on evidence of collectability.
<PAGE> 14
Vicorp Group
Page 13
3 PRINCIPLES OF VALUATION AND DETERMINATION OF RESULT (CONTINUED)
RETIREMENT BENEFITS
In general the company does not provide retirement benefits for employees except
as required by law.
A group subsidiary company provides a defined benefit pension plan for certain
employees. The cost of retirement benefits is valued at year end by
professionally qualified independent actuaries. Retirement benefit costs are
determined using an actuarial valuation method based on the employees' service
to the date of the actuarial valuation. Experience adjustments, effects of
changes in actuarial assumptions and amendments to pension plans are immediately
charged or credited to the statement of income. An interest rate of 6% is used
for the actuarial valuation.
WARRANTY COSTS
Provision is made for the estimated costs of warranties given to third parties
in respect of services delivered where the warranty period extends past the
balance sheet date.
DEFERRED AND CURRENT TAXATION
Taxation on income is accounted for using the liability method. Under this
method the expected effects of timing differences for financial reporting and
income tax reporting purposes are recorded as deferred taxation at the tax rates
that are expected to apply when the timing differences reverse. Deferred
taxation is accrued for all timing differences, except that deferred tax
benefits are carried forward only where there is a reasonable expectation of
realisation.
OTHER ASSETS AND LIABILITIES
All other assets and liabilities are stated at the values at which they were
acquired or incurred, except as stated otherwise.
REVENUE RECOGNITION
Revenue arising under contracts for the provision of services and related
products is recognised using the percentage of completion method, provided the
outcome of the transaction can be measured reliably. The percentage of
completion is measured by reference to the costs of services rendered to date in
relation to the estimated total cost for each contract. Where the outcome of a
contract cannot be reliably measured it is accounted for at cost. Provision for
losses are made at the time the losses are anticipated. All contracts are
carried under work in progress until complete, at which time they are
transferred to net revenue.
<PAGE> 15
Vicorp Group
Page 14
3 PRINCIPLES OF VALUATION AND DETERMINATION OF RESULT (CONTINUED)
RESEARCH AND DEVELOPMENT COSTS
Research and development costs to date have been expensed as incurred because
the expenditure did not meet the criteria for capitalisation. Future development
costs will be capitalised and amortised on a straight-line basis over the period
of expected future benefits where it is expected that the product under
development will be profitable, will be produced and the technical feasibility
has been demonstrated. The period of amortisation normally will not exceed five
years. The unamortised balance of development costs will be written off when any
of the criteria for recognition of the development costs as an asset ceases to
be met.
FINANCIAL COSTS
Interest and other costs incurred in connection with the borrowing of funds are
recognised as an expense in the period in which they are incurred.
GOVERNMENT GRANTS
Government grants are deferred and recognised in the statement of income over
the period necessary to match them with the related costs which they are
intended to compensate. The release to the statement of income is accounted for
under other operating income.
<PAGE> 16
Vicorp Group
Page 15
4 ACQUISITIONS OF SUBSIDIARIES DURING THE YEAR
In February 1994, Vicorp N.V. purchased the remaining 47% minority shareholding
in Vicorp Interactive Inc. to obtain 100% ownership.
In June 1994, a 51% shareholding was acquired by a subsidiary company in Geminus
GmbH.
In June 1994, a 51% shareholding was acquired by a subsidiary company in Belle
System Networking ApS.
Summary of the 1994 acquisitions:
<TABLE>
<CAPTION>
Acquisition Goodwill 1994 cash
price outflow
----------- --------- ---------
USD '000 USD '000 USD '000
<S> <C> <C> <C>
Vicorp Interactive Systems Inc. 4,354 3,921 1,465
Geminus GmbH 389 553 266
Belle System Networking ApS 78 21 78
</TABLE>
The Vicorp group also established the following subsidiaries during 1994:
Vicorp Asia Holding Limited, Hong Kong, 100% owned by Vicorp.
Vicorp Asia Pacific Services Pte. Limited, Singapore, 80% owned by Vicorp.
Vicorp Finland OY, Helsinki, Finland, 100% owned by Vicorp.
In June 1995, Vicorp N.V. completed the purchase of the remaining 20% minority
shareholding in Vicorp Asia Pacific Services Pte. Ltd. Singapore, to obtain 100%
ownership.
Summary of 1995 acquisition:
<TABLE>
<CAPTION>
Acquisition Goodwill 1995 cash
price outflow
----------- -------- --------
USD '000 USD '000 USD '000
<S> <C> <C> <C>
Vicorp Asia Pacific Services
Pte. Ltd. 17 17
</TABLE>
The Vicorp group also established the following subsidiaries during 1995:
- - Vicorp Systems Espana S.A., Madrid, Spain, 100% owned by Vicorp
- - Vicorp UK Holding Limited, London, England, 100% owned by Vicorp
<PAGE> 17
Vicorp Group
Page 16
5 EXCHANGE RATES OF PRINCIPAL CURRENCIES
<TABLE>
<CAPTION>
Statement of income Balance sheet year-end
average rates rates
------------------- ----------------------
1995 1994 1995 1994
---- ----- ----- -----
USD USD USD USD
<C> <C> <C> <C> <C>
1 Swiss Franc 0.85 0.73 0.87 0.76
1 Pound Sterling 1.58 1.53 1.55 1.56
1 Deutsche Mark 0.69 0.61 0.70 0.65
100 French Frances 20.02 17.99 20.44 18.70
1 Dutch Guilder 0.63 0.55 0.63 0.58
100 Danish Kroner 17.83 15.70 18.04 16.44
100 Swedish Kroner 14.04 12.94 15.04 13.40
100 Belgium Francs 3.39 2.99 3.40 3.14
100 Hong Kong Dollar 12.93 12.92 12.93 12.92
1 Singapore Dollar 0.70 0.66 0.70 0.69
100 Fin Mark 22.90 - 22.97 -
1,000 Spanish Peseta 8.03 - 8.24 -
</TABLE>
<PAGE> 18
Vicorp Group
Page 17
6 INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Goodwill Purchased Total
software
licences
---------- ---------- ----------
USD USD USD
<S> <C> <C> <C>
COST
At 1 January 1994 0 98,766 98,766
Subsidiary acquired in 1994 0 110,939 110,939
Additions 4,496,013 108,886 4,604,899
Disposals 0 (2,978) (2,978)
Foreign currency translation 0 6,741 6,741
At 31 December 1994 4,496,013 322,354 4,818,367
---------- ---------- ----------
AMORTISATION
At 1 January 1994 0 69,754 69,754
Amortisation in year 824,977 26,887 851,864
Disposals 0 (1,687) (1,687)
Foreign currency translation 35,994 6,921 42,915
---------- ---------- ----------
At 31 December 860,971 101,875 962,846
---------- ---------- ----------
NET BOOK VALUES AT 31 DECEMBER 1994 3,635,042 220,479 3,855,521
---------- ---------- ----------
AMORTISATION RATES 20% 20-33%
---------- ----------
</TABLE>
<PAGE> 19
Vicorp Group
Page 18
6 INTANGIBLE FIXED ASSETS (CONTINUED)
<TABLE>
<CAPTION>
Goodwill Purchased Total
software
licences
---------- ---------- ----------
USD USD USD
COST
<S> <C> <C> <C>
At 1 January 1995 4,496,013 322,354 4,818,367
Additions 0 27,001 27,001
Disposals 0 (68,150) (68,150)
Foreign currency translation 632,616 18,327 650,943
---------- ---------- ----------
At 31 December 1995 5,128,629 299,532 5,428,161
---------- ---------- ----------
AMORTISATION
At 1 January 1995 860,971 101,875 962,846
Amortisation in year 992,749 50,869 1,043,618
Disposals 0 (68,204) (68,204)
Foreign currency translation 149,251 7,665 156,916
---------- ---------- ----------
At 31 December 2,002,971 92,205 2,095,176
---------- ---------- ----------
NET BOOK VALUES AT 31 DECEMBER 1995 3,125,658 207,327 3,332,985
---------- ---------- ----------
AMORTISATION RATES 20% 20-33%
---------- ----------
</TABLE>
<PAGE> 20
Vicorp Group
Page 19
7 TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
LEASEHOLD COMPUTER OFFICE OTHER TOTAL
IMPROVE- HARDWARE EQUIPMENT
1994 MENTS
- ------------------------- -------- --------- --------- ------- ---------
USD USD USD USD USD
<C> <C> <C> <C> <C> <C>
COST
1 January 1994 43,190 2,459,866 459,114 284,471 3,246,641
Subsidiaries acquired
in 1994 0 1,279,289 54,657 66,287 1,400,233
Additions 111,454 837,522 65,074 167,565 1,181,615
Disposals 0 (212,082) (81,148) (48,879) (342,109)
Foreign currency
translation 3,728 256,925 49,757 35,310 345,720
-------- --------- --------- ------- ---------
31 December 1994 158,372 4,621,520 547,454 504,754 5,832,100
-------- --------- --------- ------- ---------
DEPRECIATION
1 January 1994 18,998 1,753,473 306,398 170,631 2,249,490
Subsidiaries acquired
in 1994 0 770,209 47,124 69,453 886,786
Depreciation in year 13,491 597,764 56,929 55,499 723,683
Disposals 0 (218,118) (41,021) (15,650) (274,789)
Foreign currency
translation 2,685 241,054 40,576 24,247 308,562
-------- --------- --------- ------- ---------
31 December 1994 35,174 3,144,382 410,006 304,180 3,893,732
-------- --------- --------- ------- ---------
NET BOOK VALUES
December 31 1994 123,198 1,477,138 137,448 200,574 1,938,368
-------- --------- --------- ------- ---------
DEPRECIATION RATES 10% 20 - 33% 20% 10 - 20%
-------- --------- --------- -------
</TABLE>
Leased assets included in the net book value as at 31 December 1994 amounted to
USD 891,910.
<PAGE> 21
Vicorp Group
Page 20
7 TANGIBLE FIXED ASSETS (CONTINUED)
<TABLE>
<CAPTION>
LEASEHOLD COMPUTER OFFICE OTHER TOTAL
IMPROVE- HARDWARE EQUIPMENT
1995 MENTS
- ---------------------- --------- --------- --------- ------- ---------
USD USD USD USD USD
<S> <C> <C> <C> <C> <C>
COST
1 January 1995 158,372 4,621,520 547,454 504,754 5,832,100
Additions 38,454 1,140,596 34,171 379,630 1,592,851
Disposals 0 (521,287) (111,363) (53,342) (685,992)
Foreign currency
translation 9,189 194,278 24,143 30,677 258,287
31 December 1995 206,015 5,435,107 494,405 861,719 6,997,246
------- --------- ------- ------- ---------
DEPRECIATION
1 January 1995 35,164 3,144,382 410,006 304,180 3,893,732
Depreciation in year 29,639 868,011 40,387 118,754 1,056,791
Disposals 0 (515,326) (98,462) 36,154 (577,634)
Foreign currency
translation 1,474 127,714 21,276 14,282 164,746
------- --------- ------- ------- ---------
31 December 1995 66,277 3,624,781 373,207 473,370 4,537,635
------- --------- ------- ------- ---------
NET BOOK VALUES
31 December 1995 139,738 1,810,326 121,198 388,349 2,459,611
------- --------- ------- ------- ---------
DEPRECIATION RATES 10% 20 - 33% 20% 10 - 20%
------- --------- ------- -------
</TABLE>
Leased assets included in the net book value as at 31 December 1995 amounted to
USD 971.734.
<PAGE> 22
Vicorp Group
Page 21
8 FINANCIAL FIXED ASSET
The financial fixed asset represents an investment of 8.9% (1994: 9.0%) in XCOM
Multimedia Communications SA with an original cost of USD 92,998 which was fully
provided against in 1993.
9 WORK IN PROGRESS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
USD USD
<S> <C> <C>
Contract costs incurred 1,020,520 3,146,068
Recognised profit less losses 624,680 1,032,939
---------- ----------
Work in progress as per balance sheets 1,645,200 4,179,007
---------- ----------
Revenue billed in advance as disclosed
under current liabilities (4,667,994) (4,846,811)
---------- ----------
Net amount due to customers (3,022,794) (667,804)
---------- ----------
The net amount due to customers comprises:
- - Amount due from customers 0 521,900
- - Amount due to customers (3,022,794) (1,189,704)
---------- ----------
(3,022,794) (667,804)
========== ========
10 RECEIVABLES
1995 1994
---------- ----------
USD USD
Trade receivables 7,543,021 4,494,177
Allowance for doubtful accounts (424,433) (527,045)
---------- ----------
7,118,588 3,967,132
Other receivables 1,391,348 921,201
Prepayments 1,813,463 1,692,180
---------- ----------
10,323,399 6,580,513
---------- ----------
</TABLE>
Other receivables include approximately USD 26,957 (1994: USD 93,003) owing by
directors.
<PAGE> 23
Vicorp Group
Page 22
11 CURRENT LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------- ----------
USD USD
<S> <C> <C>
Short-term portion of
long-term loans 33,503 136,076
Short-term portion of
financial lease obligations 540,550 478,866
Bank overdrafts 3,323,981 0
Due to former owners 0 122,384
Trade creditors 2,147,468 3,758,543
Revenue billed in advance 4,667,994 5,026,680
Taxes, social securities and
pensions 1,358,579 891,087
Other liabilities and
accrued expenses 2,513,798 1,278,965
---------- ----------
14,585,873 11,692,601
========== ==========
</TABLE>
12 LONG-TERM LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------- ----------
USD USD
<S> <C> <C>
Due to former owners 1,400,307 2,888,411
Bank loans 222,839 263,439
Shareholders' loans 1,196,540 1,248,506
Other loans 97,203 163,719
Financial lease obligations 412,239 385,718
---------- ----------
3,329,128 4,949,793
---------- ----------
</TABLE>
Redemptions due within 12 months of the financial year end have been included
under current liabilities, except as stated below.
Due to former owners
Amounts due to former owners of the 47% minority interest in Vicorp Interactive
Systems Inc. (acquired in 1994) will be funded by the share capital increases
set out in note 14 and have therefore been classified as long-term liabilities.
<PAGE> 24
Vicorp Group
Page 23
12 LONG-TERM LIABILITIES (CONTINUED)
Bank loans
At year end 1994 the bank loans bear interest at rates approximating 7% per
annum and are repayable within three years.
At year end 1995 the bank loans bear interest at rates approximating 7% per
annum and are repayable within two years.
Shareholders' loans
Loans provided by shareholders at 31 December 1994 comprise:
- - Loan of USD 762,316 (CHF 1,000,000), bearing interest of 5% per annum, with
an indefinite term of repayment.
- - Loan of USD 598,388 (FFR 3,200,000) bearing interest at PIBOR + 2%
(effectively 7.95%). The company can opt to repay this loan in instalments
during the next two years. An amount of USD 112,198 (FFR 600,000) has been
repaid during 1995 and accounted under short term liabilities.
Loans provided by shareholders at 31 December 1995 year end comprise:
- - Loan of USD 326,962 (FFR 1,600,000) bearing interest at PIBOR + 2%
(effectively 5.91%), Terms of repayment of the loan is currently under
negotiation with the shareholder. An amount of USD 326,962 (FFR 1,600,000)
has been repaid during 1995.
Other loans
Comprises 3 loans (1994: 3) which bear interest between 7.5% and 8.5% and have
indefinite terms of repayment.
<PAGE> 25
Vicorp Group
Page 24
12 LONG-TERM LIABILITIES (CONTINUED)
Financial lease obligations
Financial lease obligations represent the principal amounts of leases for assets
which have been included under tangible fixed assets, exclude future interest
and are analysed as follows:
<TABLE>
<CAPTION>
1995 1994
------- -------
USD USD
<S> <C> <C>
Payable more than 1 year 412,239 385,718
Payable within 1 year 540,550 478,866
------- -------
952,789 864,584
======= =======
</TABLE>
Operating lease commitments not included in balance sheets
Commitments under operating leases relate to noncancelable operating leases in
respect of vehicles, premises and other assets not included in the balance
sheets are analysed as follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
USD USD
<S> <C> <C>
Payable more than 1 year 1,769,166 1,808,492
Payable within 1 year 1,625,243 1,401,421
--------- ---------
3,394,409 3,209,913
========= =========
</TABLE>
13 PROVISIONS
<TABLE>
<CAPTION>
1995 1994
--------- ---------
USD USD
<S> <C> <C>
Incentive scheme 1,306,932 1,003,489
Pensions 422,049 337,526
Warranty 287,131 116,003
Reorganisation 0 78,519
Deferred taxation 68,514 67,716
Other 513,359 58,334
--------- ---------
2,597,985 1,661,587
--------- ---------
</TABLE>
<PAGE> 26
Vicorp Group
Page 25
14 SHAREHOLDERS' EQUITY
Movements in shareholders' equity were as follows:
<TABLE>
<CAPTION>
ISSUED ADDITIONAL FOREIGN RETAINED TOTAL
SHARE PAID-IN CURRENCY EARNINGS EQUITY
CAPITAL CAPITAL RESERVE
--------- --------- ------- --------- ----------
USD USD USD USD USD
<S> <C> <C> <C> <C> <C>
At 1 January 1993 3,783,592 0 249,133 (7,646,549) (3,613,824)
Net loss for 1993 0 0 0 (2,324,041) (2,324,041)
Translation adjustments 0 0 146,190 0 146,190
Issue of shares 1,095,113 2,653,554 0 0 3,748,667
--------- --------- ------- ---------
At 1 January 1994 4,878,705 2,653,554 395,323 (9,970,590) (2,043,008)
Net profit for 1994 0 0 0 540,300 540,300
Translation adjustments 0 0 45,639 0 45,639
Issue of shares 1,762,202 2,167,509 0 0 3,929,711
--------- --------- ------- ---------
At 1 January 1995 6,640,907 4,821,063 440,962 (9,430,290) 2,472,642
Net income for 1995 0 0 0 (2,656,241) (2,656,241)
Translation adjustments 0 0 85,380 0 85,380
Issue of shares 743,740 914,800 0 0 1,658,540
--------- --------- ------- ---------
At 31 December 1995 7,384,647 5,735,863 526,342 (12,086,531) 1,560,321
========= ========= ======= =========== =========
</TABLE>
Share capital
Authorised
The authorised share capital of the company comprises 200,000 shares of CHF 100
each.
Issued and fully paid
<TABLE>
<CAPTION>
1995 1994
------------------------- ---------------------
Number USD Number USD
<S> <C> <C> <C> <C>
At January 1 96,479 6,640,907 71,281 4,878,705
Issued and fully paid during year 8,897 743,740 25,198 1,762,202
--------- --------- ------- ---------
At December 31 105,376 7,384,647 96,479 6,640,907
--------- --------- ------- ---------
</TABLE>
<PAGE> 27
Vicorp Group
Page 26
On 31 March 1994 25,198 shares were issued at a premium of USD 2,167,509 against
the cancellation of subordinated shareholders' loans totalling USD 1,868,503 and
payment of USD 2,061,208 in cash.
On 15 August 1995, 8,897 new shares of nominal CHF 100 (USD 84) at a price of
CHF 223 (USD 186).
The majority shareholder Alta Investissements S.A. has irrevocably committed to:
(i) subscribe on 15 February 1997 to 8,094 new shares of nominal CHF 100 at a
price of CHF 223 each.
Options
The majority shareholder has approved the company's stock option plan and
thereby undertaken to cause the company to issue options for the purchase of
29,633 new shares of nominal CHF 100 at a price of CHF 265 each to satisfy the
requirements of the company's stock option plan including the satisfaction of
the conversion rights held by employees with option rights or actual interests
in the share capital of certain of the company's subsidiaries. Of the 23.705
share options that have been allocated, 11,050 had been issued to a former
employee whose employment the company terminated for cause in December 1995. The
company believes that, as a result of the termination for cause the former
employee's options were cancelled under the terms of the stock option plan.
However, such former employee has commerced litigation, asserting that such
options are still valid.
15 SEGMENT INFORMATION
Intersegment transactions are made on normal commercial terms. The parent
company sales, and result has been allocated to the European area except for
amortisation of goodwill, which has been allocated to the segments of the
companies acquired.
<TABLE>
<CAPTION>
Geographical Europe North South- Elimina- Total
segments (see below) America East Asia tions
---------- --------- --------- -------- ----------
1995
<S> <C> <C> <C> <C> <C>
Sales to customers
outside the group 27,662,023 7,227,745 544,782 0 35,434,550
Intersegment sales 369,703 155,095 0 (524,798) 0
---------- --------- ------- -------- ----------
Total sales 28,031,726 7,382,840 544,782 (524,798) 35,434,550
---------- --------- ------- -------- ----------
Segment result before
allocation of goodwill (1,349,202) 89,688 (403,978) 0 (1,663,492)
Goodwill allocation
(see below) 122,710 870,039 0 0 992,749
---------- --------- ------- -------- ----------
Segment result after
allocation of goodwill (1,471,912) (780,351) (403,978) 0 (2,656,241)
---------- --------- ------- -------- ----------
Segment assets 17,167,421 4,238,262 833,848 0 22,239,531
---------- --------- ------- -------- ----------
</TABLE>
<PAGE> 28
Vicorp Group
Page 27
15 SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
Geographical Europe North South- Elimina- Total
segments America East Asia tions
---------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
1994
Sales to customers
outside the group 18,162,865 7,538,222 596,700 0 26,629,787
Intersegment sales 32,352 606,533 0 (63,885) 0
---------- --------- ------- ------- ----------
Total sales 18,195,217 8,144,755 596,700 (63,885) 26,297,787
========== ========= ======= ======= ==========
Segment result before
allocation of goodwill 1,202,372 185,867 57,488 0 1,445,727
Goodwill allocation
(see below) 73,451 751,526 0 0 824,977
---------- --------- ------- ------- ----------
Segment result after
allocation of goodwill 1,128,921 (565,659) 57,488 0 620,750
---------- --------- ------- ------- ----------
Segment assets 16,876,532 3,285,649 606,374 0 20,768,555
---------- --------- ------- ------- ----------
Geographical Europe North South- Elimina- Total
segments America East Asia tions
---------- --------- ------- ------- ---------
1993
Sales to customers
outside the group 5,572,282 4,836,604 0 0 10,408,886
Intersegment sales 0 77,324 0 (77,324) 0
---------- --------- ------- ------- ----------
Total sales 5,572,282 4,913,928 0 (77,324) 10,408,886
---------- --------- ------- ------- ----------
Segment result
before and after
allocation of goodwill (2,228,570) 107,661 0 0 (2,120,909)
---------- --------- ------- ------- ----------
Segment assets 4,295,285 2,632,413 0 0 6,927,698
---------- --------- ------- ------- ----------
</TABLE>
<PAGE> 29
Vicorp Group
Page 28
16 GOVERNMENT GRANTS
Income from government operating grants amounts to USD 52,776 (1994: USD 58,665,
1993: nil) and is included under other operating income.
17 RESEARCH AND DEVELOPMENT COSTS
Included in the statement of income are costs incurred for research and
development activities amounting to some USD 5,5 millions (1994: USD 3,5
millions, 1993: USD 2,5 millions).
18 FINANCIAL EXPENSE, NET
Financial expense, net includes interest expenses of USD 83,425 (1994: USD
318,633, 1993: USD 256,384) and interest income of USD 172,483 (1994: USD
39,203, 1993: USD 28,407). The remaining balance mainly relates to foreign
exchange gains and losses and a provision (1993) of USD 72,354 against an
investment (see note 8).
<PAGE> 30
Vicorp Group
Page 29
19 TAXATION
At 31 December 1995 Vicorp Group companies had tax losses amounting to some USD
10 million (1994: USD 11 million, 1993: USD 11 million). The estimated tax
benefit of some USD 2.5 million (1994: USD 1,1 million, 1993: USD 1.1 million)
has not been recognised. Of these tax losses USD 4 million (1994: 3 million) may
be carried forward indefinitely, the remaining USD 6 million (1994: 8 million)
expire at various dates during the next five years.
20 EMPLOYEES
The company and its subsidiaries had on average 171 employees in 1995, 134
employees in 1994 and 84 employees in 1993, analysed as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sales and marketing 26 18 11
Customer support 29 27 14
Product development 86 63 37
General and administration 30 26 22
--- --- --
171 134 84
--- --- --
</TABLE>
<PAGE> 31
Vicorp Group
Page 30
21 SUBSEQUENT EVENTS
Establishment of Vicorp Italia Srl.
During the last quarter of 1995 it was decided to create a new wholly owned
operating company in Milano, Italy, Vicorp Italia Srl. The company was
officially established in February 1996.
Pending Acquisition of Group
On 4th April 1996 it was announced that Vicorp was in discussions with Precision
Systems inc. (PSI), a US corporation based in St. Petersburg, Florida, with a
view to PSI acquiring all of the share capital of Vicorp N.V. at the date of
approval of these 1995 financial statements of Vicorp Group, substantive
discussions are continuing with definite conclusion expected shortly.
22 RESTRICTED ASSETS
In various Group companies, local assets have been pledged as collaterial for
short and long term debt. The book value at the assets pledged at year end 1995
was USD 3,040,000.
23 GUARANTEES
In the normal course of business, the Group has given guarantees totalling USD
116,524 to third parties.
24 DIFFERENCES BETWEEN INTERNATIONAL ACCOUNTING STANDARDS AND U.S. GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
The group's consolidated financial statements are prepared in accordance with
International Accounting Standards, which differ in certain respects from
accounting principles generally accepted in the United States (U.S. GAAP).
The principle differences between IAS and US GAAP that affect consolidated net
earnings and total shareholders' equity as of and for the years ended 31
December are presented below:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
USD USD USD
<S> <C> <C> <C>
RECONCILIATION OF NET (LOSS) INCOME
Net (loss) income reported under IAS (2,656,241) 540,300 (2,324,041)
US GAAP adjustments:
Deferred tax asset:
Tax loss carry forwards 2,400,000 1,100,000 1,100,000
Less: valuation allowance (2,400,000) (1,100,000) (1,100,000)
---------- ---------- ----------
Net (loss) income under US GAAP (2,656,241) 540,300 (2,324,041)
========== ======= ==========
</TABLE>
<PAGE> 32
Vicorp Group
Page 31
NOTE 24 (CONTINUED)
<TABLE>
<CAPTION>
USD USD USD
RECONCILIATION OF SHAREHOLDERS' EQUITY:
<S> <C> <C> <C>
Total shareholders equity reported under IAS 1,560,321 2,472,642 (2,043,008)
US GAAP adjustments 0 0 0
--------- --------- ----------
Total shareholders' equity under US GAAP 1,560,321 2,472,642 (2,043,008)
========= ========= ==========
</TABLE>
<PAGE> 33
PRECISION SYSTEMS, INC. AND THE VICORP GROUP
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined statements of operations and the
unaudited pro forma combined balance sheet (together the "pro forma financial
information") are based on the historical financial statements of Precision
Systems, Inc. (the "Company") and The Vicorp Group adjusted to give effect to
the acquisition of The Vicorp Group. The unaudited pro forma combined statements
of operations assume that the Vicorp Group acquisition occurred as of September
1, 1994, and the unaudited pro forma balance sheet data assumes that the Vicorp
Group acquisition occurred on February 29, 1996.
The pro forma financial information reflects the purchase method of accounting
for The Vicorp Group acquisition using estimated purchase accounting
adjustments, and is subject to post-closing adjustments and to further revision
once studies of the fair value of The Vicorp Group's net assets are completed.
The pro forma data does not give effect to any cost savings that may be
realized as a result of the integration of the Company's and The Vicorp Group's
businesses or to any changes in revenues of The Vicorp Group, resulting from
such integration.
The pro forma financial information should be read in conjunction with the
Company's historical financial statements and notes thereto included in its 1995
Annual Report on Form 10-K and the Vicorp Group's historical financial
statements and notes thereto included herein. The pro forma financial data is
provided for comparative purposes only. The pro forma financial data does not
purport to be indicative of the results of the Company in the future or what the
financial position and results of operations would have been had the acquisition
occurred at the dates indicated above.
<PAGE> 34
PRECISION SYSTEMS, INC. AND THE VICORP GROUP
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
(000s, EXCEPT FOR PER SHARE AMOUNTS)
FOR THE SIX MONTHS ENDED FEBRUARY 29, 1996 AND MARCH 31, 1996, RESPECTIVELY
<TABLE>
<CAPTION>
HISTORICAL
HISTORICAL THE VICORP
THE COMPANY-SIX GROUP-SIX
MONTHS ENDED MONTHS ENDED PRO FORMA COMBINED
FEBRUARY 29, 1996 MARCH 31, 1996 ADJUSTMENTS PRO FORMA
----------------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $10,157 $22,924 $ $33,081
------- ------- ------- -------
COST AND EXPENSES:
Cost of revenues 3,377 8,384 11,761
Selling, general and administrative 6,733 10,569 1,172(2) 18,474
Research and development 1,929 3,439 5,368
------- ------- ------- -------
12,039 22,392 1,172 35,603
------- ------- ------- -------
OPERATING INCOME (LOSS) (1,882) 532 (1,172) (2,522)
------- ------- ------- -------
GAIN ON MARKETABLE EQUITY SECURITIES 1,262 -- -- 1,262
INTEREST INCOME (EXPENSE) 156 (88) (36)(4) 32
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES (464) 444 (1,208) (1,228)
INCOME TAXES -- (277) -- (277)
------- ------- ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ (464) $ 167 $(1,208) $(1,505)
======= ======= ======= =======
INCOME (LOSS) FROM CONTINUING
OPERATIONS PER COMMON SHARE $ (.04) $ 1.59 $ (.09)
======= ======= =======
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 13,069 105 3,135 16,204
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these pro forma financial
statements.
<PAGE> 35
PRECISION SYSTEMS, INC. AND THE VICORP GROUP
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
(000s, EXCEPT PER SHARE AMOUNTS)
FOR THE TWELVE MONTHS ENDED AUGUST 31, 1995 AND SEPTEMBER 30, 1995, RESPECTIVELY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL THE VICORP
THE COMPANY-TWELVE GROUP-TWELVE
MONTHS ENDED MONTHS ENDED PRO FORMA COMBINED
AUGUST 31, 1995 SEPTEMBER 30, 1995 ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES ........................ $21,522 $34,408 $ $55,930
------- ------- ------- -------
COST AND EXPENSES:
Cost of revenues .............. 7,825 12,292 20,117
Selling, general and
administrative .............. 13,042 18,609 2,344(2) 33,995
Research and development ...... 3,172 5,161 8,333
------- ------- ------- -------
24,039 36,062 (2,344) 62,445
------- ------- ------- -------
OPERATING LOSS .................. (2,517) (1,654) (2,344) (6,515)
------- ------- ------- -------
INTEREST INCOME (EXPENSE) ....... 1 (3) (72)(4) (74)
------- ------- ------- -------
LOSS BEFORE INCOME TAXES ........ (2,516) (1,657) (2,416) (6,589)
INCOME TAXES .................... -- (238) (238)
------- ------- ------- -------
LOSS FROM CONTINUING OPERATIONS . $(2,516) $(1,895) $(2,416) $(6,827)
======= ======= ======= =======
LOSS FROM CONTINUING OPERATIONS
PER COMMON SHARE .............. $ (.23) $(19.34) $ (.48)
======= ======= =======
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING ............ 10,966 98 3,135 14,101
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these pro forma financial
statements.
<PAGE> 36
PRECISION SYSTEMS, INC. AND THE VICORP GROUP
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
(000s)
AS OF FEBRUARY 29, 1996 AND MARCH 31, 1996, RESPECTIVELY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
HISTORICAL THE VICORP
THE COMPANY AS OF GROUP AS OF PRO FORMA COMBINED
FEBRUARY 29, 1996 MARCH 31, 1996 ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 13,207 $ 7,314 $ $ 20,521
Accounts and contracts receivable, net 7,275 10,766 18,041
Supplies and other current assets 2,072 846 2,918
-------- -------- -------- --------
Total current assets 22,554 18,926 41,480
-------- -------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, NET 6,148 2,419 8,567
-------- -------- --------
INTANGIBLE ASSETS 6,254 2,967 11,931 21,152
-------- -------- -------- --------
TOTAL $ 34,956 $ 24,312 $ 11,931 $ 71,199
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 980 $ 9,547 $ 1,444(1) $ 11,971
Accrued expenses 1,003 6,514 1,469(3) 8,986
Deferred revenue 1,252 5,240 - 6,492
-------- -------- -------- --------
Total current liabilities 3,235 21,301 2,913 27,449
-------- -------- -------- --------
Long-term liabilities - 2,007 2,007
STOCKHOLDERS' EQUITY
Preferred stock - - - -
Common stock 115 7,385 (7,354)(1) 146
Class B - convertible common stock 24 24
Additional paid-in capital 76,775 6,209 23,282 106,266
Retained (deficit) earnings (45,538) (12,590) (6,910) (65,038)
Treasury stock - at cost (422) (422)
Accumulated preferred stock dividend 767 767
-------- -------- -------- --------
31,721 1,004 9,018 41,743
-------- -------- -------- --------
TOTAL $ 34,956 $ 24,312 $ 11,931 $ 71,199
======== ======== ======== =========
</TABLE>
The accompanying notes are an integral part of these pro forma financial
statements.
<PAGE> 37
PRECISION SYSTEMS, INC. AND THE VICORP GROUP
NOTES TO PRO FORMA FINANCIAL INFORMATION
(1) To record the purchase accounting for the acquisition of The Vicorp Group.
The Company acquired The Vicorp Group, in April 1996 in exchange for
3,135,467 shares of the Company's common stock with a discounted market
value of approximately $29,520,000, options to acquire 114,122 shares
of the Company's common stock for $.01 per share and incurred direct
acquisition costs of approximately $1,445,000, which collectively is a
purchase price of approximately $32,434,000. The common stock and options
issued were valued based on the discounted closing price (NASDAQ stock
market) of the Company's common stock on the day of the acquisition. The
purchase price was allocated to the assets acquired (approximately
$24,312,000) and the liabilities assumed (approximately $23,308,000)
based upon the fair values at the date of the acquisition. In addition,
the Company recorded a one-time write off of $19,500,000 relating to
purchased in-process technology acquired during the acquisition.
Intangible assets of approximately $11,931,000 were recorded as a result
of the acquisition.
(2) To record the amortization of intangible assets, resulting from Note (1)
herein, for the period presented. Intangible assets are being amortized
over 3 to 7 year periods.
(3) To record the accrued compensation associated with the stock options
issued during the acquisition of The Vicorp Group.
(4) To record an adjustment to reduce interest income on the approximately
$1,455,000 of direct costs incurred by the Company to purchase The
Vicorp Group.
<PAGE> 38
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business acquired.
i) Auditied historical financial statements of the Vicorp Group
ii) Unaudited pro-forma financial information of the Company and
the Vicorp Group
(c) Exhibits
The Exhibits to this report are listed in the Exhibit Index
set forth elsehwere herein
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 thereunto duly authorized.
PRECISION SYSTEMS, INC.
Date: June 29, 1996 /s/ John R. Hindman
--------------------------------------
John R. Hindman, Senior Vice President
Chief Financial Officer
<PAGE> 39
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
- ------- ------- -------------
23 Consent of experts
<PAGE> 1
EXHIBIT 23
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the shareholders and
Board of Directors of Vicorp N.V.
We consent to the incorporation by reference in the registration statement of
Vicorp N.V. and its subsidiary companies (the "Vicorp Group") on Form 8K of our
report dated April 11, 1996, on our audits of the consolidated financial
statements and financial statement schedules of the Vicorp Group as of December
31, 1995 and 1994 and for the years ended December 31, 1995, 1994 and 1993,
which report is included (or incorporated by reference) in the annual report on
Form 8 -K.
COOPERS & LYBRAND N.V.
26 June, 1996
Utrecht, The Netherlands
