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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1
*****
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 30, 1996
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STECK-VAUGHN PUBLISHING CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-21730 33-0556929
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(State of Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
8701 North MoPac Expressway, Suite 200, Austin, Texas 78759-8365
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (512) 343-8227
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. Previously provided in
original 8-K.
(b) Pro Forma Financial Information. The following pro forma financial
statements are provided herein:
<TABLE>
<CAPTION>
Item Page No.
---- --------
<S> <C>
Explanatory Note F-1
Unaudited Pro Forma Condensed
Balance Sheet F-2
Unaudited Pro Forma Statement
of Operations F-3
</TABLE>
(c) Exhibits. Previously provided in original Form 8-K.
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.
STECK-VAUGHN PUBLISHING CORPORATION
(Registrant)
Date: July 9, 1996 By: /s/ Floyd D. Rogers
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Floyd D. Rogers
Vice President and Chief Financial Officer
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STECK-VAUGHN PUBLISHING CORPORATION
AMENDMENT TO FORM 8-K
JULY 14, 1996
Attached are an Unaudited Pro Forma Condensed Balance Sheet at December 31,
1995, and Unaudited Pro Forma Statement of Operations for Steck-Vaughn
Publishing Corporation for the year ended December 31, 1995. These statements
represent the pro forma combination of the financial positions and results of
operations of Steck-Vaughn Publishing Corporation and Edunetics Ltd.,
reflecting the acquisition by Steck-Vaughn of all of the stock of Edunetics on
April 30, 1996.
The balance sheet reflects the acquisition as if it were made on December 31,
1995, with the purchase price of $12,000,000 allocated among the net assets of
Edunetics based on their fair value at the date of acquisition. (The
allocation of the purchase price is preliminary pending final reviews by
management.) The excess of the total acquisition costs over the net assets
acquired was charged to acquired intangible assets. Total assets and retained
earnings were reduced by a $4,100,000 charge to earnings for in-process
research and development costs which was recorded after the acquisition date.
The statement of operations reflects the acquisition as if it were made on
January 1, 1995, with the inclusion of an adjustment to the depreciation of
fixed assets, amortization of the acquired intangible assets, and interest on
the acquisition debt. An adjustment was also made to income tax expense to
reflect the effect of these pro forma adjustments on income and to reflect the
assumed income tax benefit of utilizing Edunetics' U.S. operating loss to
offset Steck-Vaughn's pre-tax income.
The pro forma statements are not indicative of the combined entity's operations
had the acquisition actually occurred on the dates indicated, nor are they
indicative of future operations.
F-1
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STECK-VAUGHN PUBLISHING CORPORATION
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
DECEMBER 31,1995
<TABLE>
<CAPTION>
Pro Forma Pro Forma
(amounts in thousands) SVPC Edunetics Adjustments Combined
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Total currrent assets $ 50,774 $ 6,630 $(3,421)a,c $ 53,983
Land, buildings, and equipment, net 6,741 1,477 (582)c 7,636
Acquired intangible assets, net 8,998 -- 4,781 d,e 13,779
Other noncurrent assets 3,015 2,392 (1,373)c 4,034
-------- -------- ------- --------
$ 69,528 $ 10,499 (595) $ 79,432
======== ======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 9,701 $ 3,244 $ 1,088 c $ 14,033
Total noncurrent liabilities 3,533 672 9,000 a 13,205
Stockholders' equity
Common stock & paid-in capital, SVPC 36,974 -- 36,974
Common stock & paid-in capital, Edunetics 15,986 (15,986)b --
Retained earnings 21,143 (9,403) 5,303 b,e 17,043
Other (1,823) -- -- (1,823)
-------- -------- ------- --------
Total stockholders' equity 56,294 6,583 (10,683) 52,194
-------- -------- ------- --------
$ 69,528 $ 10,499 $ (595) $ 79,432
======== ======== ======= ========
</TABLE>
NOTE 1 - The Unaudited Pro Forma Condensed Balance Sheet above has been
prepared to reflect the acquisition of Edunetics Ltd. by Steck-Vaughn
Publishing Corporation as if it occurred on December 31, 1995. The aggregate
purchase price was $12,000,000 plus associated out-of-pocket expenses. Pro
forma adjustments were made to reflect:
(a) The payment of $3,400,000 cash and the incurrence of bank debt of
$9,000,000 to complete the acquisition.
(b) The elimination of the common stockholders' equity accounts of
Edunetics.
(c) The valuation of the net assets of Edunetics at estimated fair value,
including a reduction of current assets of $21,000, an increase in
noncurrent assets of $2,727,000, and an increase in current
liabilities of $1,088,000.
(d) The excess of acquisition cost over the fair value of the net assets
acquired.
(e) The inclusion of a nonrecurring write-off of in-process research and
development of $4,100,000.
NOTE 2 - The above balance sheet assumes the acquisition occurred on December
31, 1995, with cumulative net operating losses of Edunetics through that date
carried forward and recorded as a deferred tax asset of $1,200,000. Edunetics'
net operating loss carryforward from prior years can only be applied against
the future profitable operations of Edunetics and is limited under the Internal
Revenue Code to approximately $200,000 per year.
F-2
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STECK-VAUGHN PUBLISHING CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1995
<TABLE>
<CAPTION>
(amounts in thousands except per Pro Forma Pro Forma
share amounts) SVPC Edunetics Adjustments Combined
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
NET REVENUES $ 58,226 $ 5,565 $ 63,791
Publication costs and materials 14,714 2,360 17,074
-------- -------- -------- --------
GROSS PROFIT 43,512 3,205 46,717
Product development 8,901 2,217 13a 11,131
Sales and marketing expenses 18,738 3,671 22,409
General and administrative expenses 4,451 1,922 6,373
Provision for doubtful accounts 153 -- 153
Amortization of acquired intangible assets 800 -- 746b 1,546
Unusual item - litigation settlement 970 -- 970
-------- -------- -------- --------
OPERATING INCOME 9,499 (4,605) 4,135
Interest (income) expense, net (1,545) (105) 630c (1,020)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 11,044 (4,500) 5,155
Income taxes 4,197 221 (1,712)d 2,706
-------- -------- -------- --------
NET INCOME $ 6,847 $ (4,721) $ 323 $ 2,449
======== ======== ======== ========
EARNINGS PER SHARE $ 0.48 $ 0.17
======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 14,351 14,351
</TABLE>
NOTE 1 - The Unaudited Pro Forma Statement of Operations above has been
prepared to reflect the acquisition of Edunetics Ltd. by Steck-Vaughn
Publishing Corporation as if it occurred on January 1, 1995. Pro forma
adjustments were made to reflect:
a) Additional annual depreciation resulting from decreased property
lives of 3-5 years on equipment acquired.
b) Amortization of intangibles acquired, with a weighted average
estimated life of approximately 10 years.
c) Annual interest expense at 7% on debt of $9,000,000 issued in
conjunction with the acquisition.
d) Decrease in income taxes resulting from the above increases in
expenses and the utilization of net operating losses (see Note 3).
NOTE 2 - The above Statement of Operations does not reflect a $4,100,000
nonrecurring write-off of in-process research and development costs which will
occur after the acquisition.
NOTE 3 - The above Statement of Operations reflects an adjustment to income
taxes assuming that the acquisition occurred on January 1, 1995, and that
Edunetics' 1995 U.S. operating loss could be used to offset Steck-Vaughn's
pre-tax income.
F-3
