<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
February 27, 1998
-----------------
Date of Report (Date of earliest event reported)
TRANSACTION NETWORK SERVICES, INC.
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23856 54-1555332
-------- ------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File No.) Identification No.)
1939 Roland Clarke Place, Reston, Virginia 20191
------------------------------------------------
(Address of principal executive offices and zip code)
(703) 453-8300
--------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The undersigned registrant, in order to provide the financial
statements required to be included in the Current Report on Form 8-K dated
March 9, 1998 in connection with the acquisition of certain assets and the
assumption of certain liabilities of SunTech Processing Systems, LLC, hereby
amends the following items, as set forth in the pages attached hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Report of Independent Certified Public Accountants
SunTech Processing Systems, LLC balance sheet as of December 31, 1997
SunTech Processing Systems, LLC statement of operations for the year
ended December 31, 1997
SunTech Processing Systems, LLC statement of changes in members'
equity for the year ended December 31, 1997
SunTech Processing Systems, LLC statement of cash flows for the year
ended December 31, 1997
SunTech Processing Systems, LLC notes to financial statements
(b) Pro Forma Financial Information.
Transaction Network Services, Inc. pro forma balance sheet as of
December 31, 1997 (unaudited)
Transaction Network Services, Inc. pro forma statement of operations
for the year ended December 31, 1997 (unaudited)
Explanatory notes to pro forma financial statements
(c) Exhibits
23.1 Consent of Independent Certified Public Accountants
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Members
of SunTech Processing Systems, LLC
We have audited the accompanying balance sheet of SunTech Processing Systems,
LLC (a Texas Limited Liability Company) as of December 31, 1997, and the
related statements of income, retained earnings, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SunTech Processing Systems,
LLC as of December 31, 1997, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
/s/ _____________________
CHESHIER & FULLER, L.L.P.
Dallas, Texas
April 24, 1998
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
BALANCE SHEET
DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 323,104
Cash segregated for benefit of customers 470,933
Accounts receivable, net of allowance for
doubtful accounts of $40,471 465,181
Inventory 160,053
Other current assets 24,563
--------------
Total current assets 1,443,834
--------------
PROPERTY AND EQUIPMENT, NET 977,235
COMPUTER SOFTWARE, NET 500,435
OTHER ASSETS 4,224
--------------
Total assets $ 2,925,728
--------------
--------------
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 211,286
Due to customers 405,950
Accrued payroll due to related party 53,865
Accrued expenses 297,590
--------------
Total current liabilities 968,691
--------------
COMMITMENTS AND CONTINGENCIES
MEMBERS' EQUITY:
Class A member 2,000,000
Class B members 657,037
Loan to member (700,000)
--------------
Total members' equity 1,957,037
--------------
Total Liabilities and Members' Equity $ 2,925,728
--------------
--------------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
Revenues (including $936,258 from a related party - Note 3) $ 4,668,763
Cost of processing services 981,957
--------------
Gross Profit 3,686,806
--------------
Other operating expenses:
Engineering, research and development 369,663
Selling, general and administrative (including leased
workforce costs of $1,992,733 to a related party - Note 3) 3,325,278
Depreciation 139,060
Amortization of software 157,048
--------------
Total other operating expenses 3,991,049
--------------
Loss from operations (304,243)
Other income (expenses)
Loss on sale of assets (158,761)
Other expenses (21,755)
Interest income 44,363
--------------
Total other income (expenses) (136,153)
--------------
Net Loss $ (440,396)
--------------
--------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Class A Class B Note
Member Members Receivable Total
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 $ -- $ -- $ -- $ --
Transfer of net assets,
January 1, 1997 1,097,433 1,097,433
Cash contributed,
March 31, 1997 2,000,000 2,000,000
Loan to member,
September 3, 1997 (700,000) (700,000)
Net loss -- (440,396) -- (440,396)
---------- ---------- ---------- -----------
Balance,
December 31, 1997 $ 2,000,000 $ 657,037 $(700,000) $1,957,037
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (440,396)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization 296,108
Bad debt expense 40,471
Loss on disposal of assets 158,761
Changes in operating assets and liabilities:
Accounts receivable (276,287)
Inventory (339,259)
Other current assets (31,836)
Other assets 1,460
Accounts payable 191,110
Accrued payroll due to related party 53,865
Accrued expenses 297,590
Due to customers (228,469)
--------------
Net cash used by operating activities (276,882)
--------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (661,635)
Computer software costs (447,116)
Issuance of note receivable to member (700,000)
--------------
Net cash used in investing activities (1,808,751)
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Class A member contributions 2,000,000
Proceeds from Class B members' contributions 879,670
--------------
Net cash provided by financing activities 2,879,670
-------------
Net increase in cash and cash equivalents 794,037
Cash and cash equivalents, beginning of period --
--------------
Cash and cash equivalents, end of period $ 794,037
--------------
--------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
There was no cash paid for interest or income taxes during the year.
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Class B members contributed net assets of $217,763 in addition to cash.
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
SunTech Processing Systems, L.L.C. (the "Company"), was organized as a
Texas Limited Liability Company on June 19, 1996 under the original
name of Sun Network Acquisitions, L.L.C. The Company was dormant until
January 1, 1997 when the electronic funds transfer ("EFT") processing
segment assets and liabilities of Sun Network Technologies, L.L.C. were
transferred to Sun Network Acquisitions, L.L.C. On March 27, 1997 Sun
Network Acquisitions, L.L.C. changed its name to SunTech Processing
Systems, L.L.C. The Company is engaged in providing EFT processing
services in the United States. It also sells, leases and licenses
equipment and computer software that supports the automated teller
machine ("ATM") services offered by banks and other EFT processors.
ALLOCATIONS AND DISTRIBUTIONS
According to the Second Memorandum of Understanding ("Memorandum")
between the Company, Cash Delivery Systems, LLC ("CDS") (formerly Sun
Network Technologies, L.L.C.) and their members, cumulative net losses
are first allocated to the Class B member owning 80% of the Company as
long as such member has an economic interest greater than the net
cumulative losses. At such time that cumulative net losses are zero;
then and thereafter, profit and losses will be allocated to members in
accordance with the relative relationship of their capital
contributions.
Also, according to the Memorandum, no distributions will be made to
Class B members until all Class A preferred interests in both the
Company and CDS have been paid or redeemed in full. No monies were
available for distribution at December 31, 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from
those estimates.
CASH AND CASH EQUIVALENTS
The Company considers highly liquid investments with original
maturities of three months or less to cas equivalents.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk include cash, cash equivalents and
accounts receivable. The Company maintains a significant portion of its
cash and cash equivalents in two large financial institutions which
management considers of high credit quality. Management believes
concentration of credit risk with respect to accounts receivable is
limited due to the high credit quality of the Company's primary
customers, as well as the contractual right granted to the Company to
access certain bank accounts owned by each customer to offset amounts
owed by customer to Company. Trade accounts receivable from the
Company's two largest customers aggregated $362,585 at December 31,
1997.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, accounts receivable,
accounts payable, accrued expenses and due to customers approximate
fair value because of the short-term nature of the items. The carrying
value of the note receivable approximates fair value due to the
floating interest rate associated with the note.
INVENTORY
Inventory consists primarily of finished modems held for lease or sale,
and modem parts and supplies used to build modems used to deliver EFT
services over dial-up ATMs. Inventory is recorded at the lower of cost,
as determined on a first in first out basis, or market.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets of five years.
COMPUTER SOFTWARE
Purchased computer software and internally developed computer software
are amortized using the straight-line method over expected useful lives
of five years.
The Company's policy is to capitalize costs for internally developed
software only after technological feasibility has been established. The
Company expenses as research and development all costs associated with
establishing technological feasibility.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
DUE TO CUSTOMERS
Cash dispensed from ATMs, along with applicable surcharge and
interchange amounts connected with each ATM transaction, settle on a
daily basis into a Company bank account. These funds belong to owners
of each ATM and, as such, create a liability to the Company. Due to
Customers is shown as an offsetting liability to certain cash in the
Company's bank accounts. Dispense cash and surcharge fees are returned
to the customer on a daily basis using the automated clearing house
(ACH) network. Interchange fees accumulate in the due to customers
account and are returned to customers at the end of each month.
REVENUE RECOGNITION
EFT processing revenues are recorded as services are performed. Lease
revenues are earned under month to month agreements. Licensing revenues
are earned monthly according to terms of licensing agreements. Revenues
earned from the Company's two largest customers comprise 84% of
revenues for the year ended December 31, 1997.
ADVERTISING COSTS
All nondirect-response advertising costs are expensed as incurred.
Advertising costs were $162,619 for 1997.
INCOME TAXES
Under present income tax laws, the Company is not subject to Federal
income taxes; therefore, no Federal taxes have been provided in the
accompanying financial statements. The members include their respective
share of Company income or losses in their individual Federal income
tax returns.
3. RELATED PARTY TRANSACTIONS
The Company has a note receivable from the majority member in the
amount of $700,000. This note bears interest at Libor plus 1% and is
payable on demand. The Company considers the note receivable a
short-term investment vehicle for its excess operating funds.
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
3. RELATED PARTY TRANSACTIONS, CONTINUED
The Company leases its workforce from its majority member. The Company
reimburses the member for the exact amount of salaries, wages, benefit
costs, and payroll taxes incurred bi-weekly. The Company's leased
workforce also participate in the member's Employee Stock Ownership and
Savings Plan ("Plan"). The Plan requires the Company to contribute 3%
of the participants' compensation and match one-half of the
participants' contributions up to 6% of the participant's compensation.
Contributions by the Company for 1997 totaled $53,711.
The Company also provided ATM processing services for CDS through July
1997.
4. PROPERTY AND EQUIPMENT
The major categories of property and equipment are summarized as
follows:
<TABLE>
<CAPTION>
December 31, 1997
-----------------
<S> <C>
Office and computer equipment, furniture
and fixtures $ 712,540
Automated teller equipment 93,057
Equipment leased to customers 489,181
Leasehold Improvements 74,553
-----------
1,369,331
Less accumulated depreciation and amortization (392,096)
-----------
$ 977,235
-----------
-----------
</TABLE>
5. COMPUTER SOFTWARE DEVELOPMENT
As of December 31, 1997, the Company had capitalized $641,281 of costs
associated with the development of software and hardware that had been
determined to be technologically feasible. Accumulated amortization as
of December 31, 1997 was $140,846.
6. COMMITMENTS
OPERATING LEASE
The Company has entered into operating lease agreements for its office
facility and office equipment. Rent expense was $105,559 for the year
ended December 31, 1997. A summary of the lease commitments under
noncancelable operating leases at December 31, 1997, is as follows:
<PAGE>
SUNTECH PROCESSING SYSTEMS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
6. COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
Year Ending
December 31,
------------
<S> <C>
1998 $ 125,737
1999 130,245
2000 97,557
2001 23,165
2002 9,652
--------------
$ 386,356
--------------
--------------
</TABLE>
COMPENSATION AGREEMENT
The Company has an obligation for $182,500 under a consulting agreement
with its former president. This liability is included in accrued
expenses at December 31, 1997 and is due in equal monthly installments
through October 1998.
7. SUBSEQUENT EVENTS
On February 27, 1998, the Company sold certain assets and related
liabilities to Transaction Network Services, Inc. ("TNS") for
$17,500,000 composed of $12,250,000 in cash and 287,474 shares of TNS
common stock.
The Company, after the sale of net assets to TNS, has funds available
to retire both its and CDS' Class A preferred interests. The total
amounts necessary for the Company and CDS to pay off their Class A
preferred interest holders under the Memorandum discussed in Note 1 at
March 31, 1998, were approximately $2,000,000 and $9,700,000,
respectively. The Company's minority owner, however, has filed suit
against the Company, its majority owner and another related party over
how sales proceeds are to be distributed and whether any sales proceeds
are to be available to CDS. The Company intends to vigorously contest
allegations made by its minority owner. Part of the Company's defense
may include allegations of fraud against the minority owner for actions
it took while managing the Company from January to October 1997. Legal
counsel is unable to express an opinion regarding the outcome of this
case. Accordingly, no sales proceeds have been distributed by the
Company.
CDS also reserves the right to claim up to $800,000 against the Company
for cash dispensed from ATMs plus applicable surcharge and intercharge
amounts connected with ATM transactions. CDS has not asserted a claim,
but may do so if CDS and the Company are unsuccessful at defending the
claims made by their minority member.
At December 31, 1997, the Company did not reflect any assets or
liabilities relative to liquidating distributions in dispute.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma financial statements gives effect to
the SunTech Processing Systems LLC ("SunTech") acquisition for consideration of
cash of $12,250,000 and the issuance of 287,474 shares of the Company's common
stock (including 211,500 shares from treasury) valued at $5,250,000. The
unaudited pro forma balance sheet gives effect to the acquisition as if it had
occurred on December 31, 1997. The unaudited pro forma statement of operations
gives effect to the acquisition as if it had occurred on January 1, 1997.
Prior to the acquisition, SunTech primarily was engaged in the
business of providing transaction processing services for automated teller
machines ("ATMs") and developing additional communications technologies for
ATMs. The Company acquired the dial-up ATM transaction processing segment of
SunTech and SunTech's proprietary host-interface processing ("HIP")
technology segment which allows for leased line ATMs to be converted into
dial-up ATMs. The Company is in the process of negotiations for the potential
disposition of Suntech's processing segment. As a result, the net assets of
the processing segment are segregated as "Assets Held for Sale" in the
accompanying pro forma financial statements. The fair value allocated to the
assets held for sale includes the anticipated net operating results to be
derived from these operations while owned by the Company. Amounts allocated
to intangible assets (including customer contracts, non-compete agreements,
software and goodwill) in the purchase accounting are being amortized on a
straight-line basis over periods ranging from 2 to 10 years. The results of
the HIP technology segment are included in the consolidated financial
statements since the date of acquisition.
The acquisition has been accounted for by the purchase method of
accounting. The purchase price has been allocated on a preliminary basis to
the assets to be acquired based upon the estimated value of such assets. The
unaudited pro forma financial statements do not purport to represent what the
Company's results of operations or financial position actually would have
been had the acquisition occurred on the dates specified, or to project the
Company's results of operations or financial position for any future period
or date. The pro forma adjustments are based upon available information. In
the opinion of management all adjustments have been made that are necessary
to present fairly the unaudited pro forma financial statements.
<PAGE>
TRANSACTION NETWORK SERVICES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
TNS SUNTECH ADJUSTMENTS PRO FORMA
----------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 18,516 $ 794 ($12,250) (B) $ 6,273
(787) (I)
Short-term investments 9,899 9,899
Accounts receivable, net 10,618 465 (305) (I) 10,778
Other current assets 1,453 184 1,637
----------------------------------- ----------------
Total current assets 40,486 1,443 28,587
----------------------------------- ----------------
EQUIPMENT, at cost:
Equipment, net 20,589 977 (811) (I) 20,755
INTANGIBLE ASSETS:
Software and intangibles,net 9,377 501 9,042 (D) 18,505
(415) (I)
OTHER ASSETS 1,327 4 (24) (I) 1,307
ASSETS HELD FOR SALE -- 8,250 (I) 8,250
LONG-TERM INVESTMENTS 4,330 4,330
----------------------------------- ----------------
Total Assets $76,109 $2,925 $81,734
----------------------------------- ----------------
----------------------------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $7,256 $968 ($593) (I) $ 7,631
OTHER 378 378
----------------------------------- ----------------
Total Liabilities 7,634 968 8,009
----------------------------------- ----------------
EQUITY:
Common stock $ 125 1 (C) 126
Additional paid-in capital 51,292 2,758 (C) 54,050
Treasury stock (2,491) 2,491 (C) --
Unearned compensation (46) (46)
Retained earnings 19,658 19,658
Members' equity -- 1,957 (1,957)(E) --
Foreign currency translation (63) (63)
----------------------------------- -----------------
Total equity 68,475 1,957 73,725
----------------------------------- ----------------
Total liabilities and equity $76,109 $2,925 $81,734
----------------------------------- ----------------
----------------------------------- ----------------
</TABLE>
Page 1
<PAGE>
TRANSACTION NETWORK SERVICES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
TNS SUNTECH ADJUSTMENTS PRO FORMA
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $63,344 $4,668 ($780) (A) $ 62,885
(4,347) (I)
Cost of network services 35,322 982 (780) (A) 34,661
(863) (I)
----------------------------------- -----------------
Gross profit 28,022 3,686 28,224
----------------------------------- -----------------
Other operating expenses:
Engineering & development 3,431 370 (321) (I) 3,480
Selling, general & administrative 7,941 3,325 (2,888) (I) 8,378
Depreciation 4,793 139 (121) (I) 4,811
Amortization of intangibles 1,570 157 1,134 (F) 2,725
(136) (I)
----------------------------------- -----------------
Total other operating expenses 17,735 3,991 19,394
----------------------------------- -----------------
Income (loss) from operations 10,287 (305) 8,830
Interest income & other 1,939 (136) (674) (G) 1,247
118 (I)
----------------------------------- -----------------
Income (loss) before provision for income taxes 12,226 (441) 10,077
Provision for income taxes 4,840 (849) (H) 3,991
----------------------------------- -----------------
Net (loss) income $7,386 ($441) $6,086
----------------------------------- -----------------
----------------------------------- -----------------
Diluted earnings per common share $0.59 $0.47
Basic earnings per common share $0.60 $0.49
</TABLE>
Page 2
<PAGE>
EXPLANATORY NOTES TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------------------------------
(A) Represents the elimination of inter company sales from TNS to Suntech
(B) Represents the reduction in cash to complete the transaction
(C) Represents the issuance of stock to complete the transaction
(D) Represents the excess of cost over net assets of the HIP segment of Suntech
Processing Systems LLC
(E) Represents elimination of the historical equity balances of Suntech
Processing Systems LLC
(F) Represents amortization of the excess of cost over the net assets of the HIP
segment
(G) Represents the reduction in interest income from the reduction in cash to
complete the transaction
(H) Represents an adjustment to reflect the appropriate effective tax rate
(I) Represents the classification of the Processing segment of Suntech
Processing Systems, LLC as an Asset Held for Sale
Page 3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TRANSACTION NETWORK SERVICES, INC.
Dated: May 12, 1998 By: /s/ Thaddeus G. Weed
--------------------
Thaddeus G. Weed
Chief Financial Officer and Treasurer
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report dated April 24, 1998 on the financial
statements of SunTech Processing Systems, LLC, included in the Form 8-K
Amendment No. 1 filed by Transaction Network Services, Inc. with the Securities
and Exchange Commission, into the Form S-8 registration statements
(registration nos. 33-85432, 33-85434 and 333-27159) and the Form S-3
registration statement (registration no. 333-52221) filed by Transaction
Network Services, Inc.
/s/ Cheshier & Fuller, L.L.P.
-----------------------------
Cheshier & Fuller, L.L.P.
Dallas, Texas
May 12, 1998
