SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported): May 20, 1998
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-22046 38-3114641
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
50 Spring Street, Ramsey, New Jersey 07446
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(Address of principal executive offices) (Zip Code)
(201) 934-8500
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if changed since
last report.)
<PAGE>
Item 2. Acquisitions and Dispositions
On May 20, 1998, Bogen Communications International, Inc., a Delaware
corporation (the "Company"), consummated the acquisition of the remaining 33%
equity interest in Speech Design GmbH, a German corporation ("Speech Design"),
not previously owned by the Company held by Mr. Kasimir Arciszewski and Mr. Hans
Meiler, the founders and managing directors of Speech Design. As a result of
such acquisition, Speech Design became a wholly owned subsidiary of the Company.
Pursuant to the Share Transfer Agreement, dated May 20, 1998 (the "Share
Transfer Agreement"), by and among the Company and Messrs. Arciszewski and
Meiler, the consideration paid by the Company for the 33% equity interest
consisted of DM 7,570,000 (approximately U.S. $4.3 million) in cash (excluding
direct acquisition costs) and 458,000 restricted shares of the Company's common
stock, par value $.001 per share (the "Common Stock"). The sellers obtained
certain registration rights with respect to such restricted shares.
In connection with the acquisition, each of Messrs. Arciszewski and Meiler
entered into three-year management agreements with Speech Design (the
"Management Agreements"). Under the terms of these Management Agreements,
Messrs. Arciszewski and Meiler will continue to serve as the managing directors
of Speech Design. In addition, each of Messrs. Arciszewski and Meiler were
issued an option, dated June 1, 1998, to purchase 100,000 shares of Common
Stock, which options have an exercise price of $8.50 per share and vest in equal
annual installments on the first five anniversary dates of the date of the
issuance of the options.
The cash portion of the purchase price was financed by drawings against the
Company's $20 million revolving line for acquisitions, which is part of the $27
million bank credit facility (the "New Credit Facility") with KeyBank National
Association.
Pursuant to the Mergers & Acquisition Engagement Agreement, dated August,
1997, as amended on November 29, 1997, between the Company and Helix Capital
Services, LLC ("Helix"), the Company paid Helix approximately $164,000 for
services rendered in connection with the Speech Design Acquisition. Messrs. Yoav
Stern and Zivi R. Nedivi, directors of the Company, are principals of Helix.
<PAGE>
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Statements
The following unaudited pro forma consolidated financial statements are
based on the historical financial statements of the Company (audited for the
year ended December 31, 1997 and unaudited for the three months ended March 31,
1998). The pro forma consolidated balance sheet assumes that acquisition of the
remaining 33% equity interest in Speech Design not previously owned by the
Company was consummated on March 31, 1998. The pro forma consolidated statements
of operations give effect to the acquisition assuming it was consummated as of
January 1, 1997.
In the opinion of the Company's management, all adjustments necessary to
present fairly such unaudited pro forma consolidated financial statements have
been made based on the terms and structure of the acquisition. These unaudited
pro forma consolidated financial statements are not necessarily indicative of
what actual results would have been had this transaction occurred at the
beginning of the respective period and should not be construed as representative
of future operations.
The unaudited pro forma consolidated financial statements are subject to
adjustments based on actual costs to complete the transaction.
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
(In Thousands of Dollars, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
Historical Pro Forma
Consolidated Pro Forma Adjustments Consolidated
1997 Debit Credit 1997
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net sales $ 49,779 $ 49,779
Cost of goods sold 26,685 26,685
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Gross profit 23,094 23,094
Operating expenses:
Research and development 2,591 2,591
Selling, general and administrative 14,939 400 (1) 14,539
Amortization of goodwill and intangible assets 471 233 (2) 704
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Income from operations 5,093 5,260
Other (income) expenses:
Interest expense, net 414 359 (3) 773
Interest expense to related parties 15 15
Minority interest of consolidated subsidiaries 537 537 (4) --
Other income (32) (32)
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Income before provision for income taxes 4,159 4,505
Provision for income taxes 1,494 86 (5) 1,580
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Net income $ 2,665 $ 2,924
Preferred dividends 178 178
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Net Income available to common shareholders $ 2,487 $ 2,746
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Basic Net Income per Common Share $ 0.46 $ 0.47
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Diluted Net Income per Common Share $ 0.46 $ 0.47
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Weighted average number of common
shares outstanding-Basic and Diluted 5,399,199 458,000 (6) 5,857,199
========== ==========
</TABLE>
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(Unaudited)
(In Thousands of Dollars, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
Historical Pro Forma
Consolidated Consolidated
March 31, Pro Forma Adjustments March 31,
1998 Debit Credit 1998
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net sales $ 11,432 $ 11,432
Cost of goods sold 6,087 6,087
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Gross profit 5,345 5,345
Operating expenses:
Research and development 626 626
Selling, general and administrative 3,655 100 (1) 3,555
Amortization of goodwill and intangible assets 112 58 (2) 170
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Income from operations 952 994
Other (income) expenses:
Interest expense, net 42 90 (3) 132
Minority interest of consolidated subsidiaries 157 157 (4) --
Other income (41) (41)
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Income before provision for income taxes 794 903
Provision for income taxes 337 27 (5) 364
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Net income $ 457 $ 539
Preferred dividends 450 450
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Net income available to common shareholders $ 7 $ 89
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Basic Net Income per Common Share $ 0.00 $ 0.03
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Diluted Net Income per Common Share 0.00 $ 0.02
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Weighted average number of common
shares outstanding-Basic 2,151,023 458,000 (6) 2,609,023
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Weighted average number of common
shares outstanding-Diluted 3,618,860 458,000 (6) 4,076,860
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</TABLE>
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(Unaudited)
(In Thousands of Dollars, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
Historical Pro Forma
Consolidated Consolidated
March 31, Pro Forma Adjustments March 31,
1998 Debit Credit 1998
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,004 $ 1,004
Accounts receivable (less allowance for doubtful
accounts of $359 at March 31, 1998) 5,352 5,352
Inventories, net 8,355 8,355
Prepaid expenses and other current assets 491 491
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TOTAL CURRENT ASSETS 15,202 15,202
Property, equipment and leasehold improvements, net 2,131 2,131
Goodwill and intangible assets, net 13,374 4,653 (a) 18,027
Other assets 278 278
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TOTAL ASSETS $ 30,985 $ 35,638
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Amounts outstanding under revolving credit agreement $ 1,179 4,780 (b) $ 5,959
Accounts payable 2,208 2,208
Accrued expenses 2,757 2,757
Income taxes payable 383 383
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TOTAL CURRENT LIABILITIES 6,527 11,307
Advances and notes payable to related parties 203 203
Preferred dividends payable 628 628
Other liabilities 365 365
Minority interest 1,287 1,287 (c) --
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TOTAL LIABILITIES 9,010 12,503
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STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value; 1,000,000 shares
authorized; 200,000 shares issued and outstanding at
March 31, 1998 (Liquidation preference of $100
per share plus accrued dividends - $20,628) -- --
Common stock - $ .001 par value; 50,000,000 shares
authorized; 2,240,894 (2,698,894 pro forma)
shares issued and outstanding at March 31, 1998. 2 2
Additional paid-in-capital 24,113 4,065 (d) 28,178
Accumulated deficit (1,683) 2,905 (e) (4,588)
Currency translation adjustments (457) (457)
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TOTAL STOCKHOLDERS' EQUITY 21,975 23,135
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,985 $ 35,638
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</TABLE>
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
Notes to Unaudited Pro Forma Consolidated Financial Statements
(In Thousands of Dollars, Except Share and Per Share Amounts)
1. ACQUISITION
On May 20, 1998, the Company acquired the remaining 33% equity interest in
Speech Design not previously owned by the Company. As a result of this
acquisition, Speech Design became a wholly owned subsidiary of the Company.
The aggregate purchase price of $8,845, including direct acquisition costs
(estimated at $482), consisted of approximately $4,780 in cash and 458,000
shares of common stock of the Company valued at approximately $4,065
($8.875 per share).
The acquisition has been accounted for by the purchase method of accounting
and accordingly, the purchase price has been allocated to the assets
acquired and liabilities assumed based on estimates of fair values at the
date of acquisition. The allocation of purchase price among the
identifiable intangible assets was based on an independent appraisal of the
fair market value of those assets. Such appraisal allocated $2,905 (for
which no tax benefit has been provided) to purchase in-process research and
development. This amount has been reflected as a deduction from
stockholders' equity, in the accompanying pro forma consolidated balance
sheet and has not been included in the accompanying pro forma consolidated
statement of operations due to its non-recurring nature. Other intangible
assets acquired include existing technology, tradenames, workforce and
goodwill totaling approximately $4,653.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the historical financial statements of the Company.
2. PRO FORMA ADJUSTMENTS
The following adjustments have been made to the pro forma consolidated
financial statements:
Balance Sheet
(a) To record estimated fair value of acquired intangible assets
(excluding purchased in-process research and development).
(b) To record issuance of debt(under the New Credit Facility) to fund
cash portion of acquisition and estimated direct acquisition costs.
(c) To eliminate minority interest in Speech Design.
(d) To record issuance of 458,000 shares of common stock, $.001 par value,
with an aggregate value of $4,065.
(e) To record adjustment to retained earnings for a charge for purchased
in-process research and development.
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
Notes to Unaudited Pro Forma Consolidated Financial Statements
(In Thousands of Dollars, Except Share and Per Share Amounts)
Statement of Operations
1) To record the reduction in contracted salaries of the selling parties
of Speech Design pursuant to the Management Agreements.
2) To record amortization of the acquired intangible assets (excluding
purchased in-process research and development) and will be amortized
ratably over a period of twenty (20) years.
3) To record interest expense on debt issued under the New Credit
Facility using an interest rate of 7.50% per anum.
4) To eliminate the minority interest in Speech Design.
5) To record the tax effect of the pro forma adjustments using the
Company's domestic statutory effective tax rate of 25%.
6) To record the issuance of 458,000 shares of common stock, assuming
such shares were outstanding since January 1, 1997 for purposes of
computing pro forma basic and diluted earnings per share.
<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 thereunto duly authorized.
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
(Registrant)
/s/ Michael P. Fleischer
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Name: Michael P. Fleischer
Date: August 3, 1998 Title: President
