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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DECEMBER 13, 1999
(DATE OF EARLIEST EVENT REPORTED)
TECH-SYM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 74-1509818
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION)
1-4371
(COMMISSION FILE NUMBER)
10500 WESTOFFICE DRIVE
HOUSTON, TEXAS 77042
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(713) 785-7790
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective December 13, 1999, Tech-Sym Corporation (the "Company")
completed the sale of its interest in GeoScience Corporation of approximately
80% to Sercel, Inc., a wholly-owned subsidiary of Compagnie Generale de
Geophysique ("CGG"). Under the terms of the previously filed agreement, Tech-Sym
received $53.6 million in cash for its 7,995,000 shares. Additionally, CGG
assumed approximately $30 million in GeoScience debt. Approximately $25 million
of the proceeds from the sale were used to repay debt of the Company, and the
balance will be used for working capital purposes and purchases of Tech-Sym
stock under its repurchase program.
A copy of the press release dated December 13, 1999 issued by the Company
announcing the completion of the sale of its interests in GeoScience Corporation
is attached as Exhibit 99(a) hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
The Company's historical consolidated financial statements for the year
ended December 31, 1998 and for the nine months ended September 30, 1999 reflect
the Company's investment in GeoScience Corporation as a discontinued operation.
The following unaudited pro forma consolidated financial statements set forth
the results of continuing operations of the Company for the year ended December
31, 1998, and the nine months ended September 30, 1999, as if the sale of
GeoScience Corporation and the related debt repayments had occurred at the
beginning of the respective periods presented. The following unaudited pro forma
consolidated balance sheet sets forth the financial position of the Company as
if the sale of GeoScience Corporation and related debt repayments had occurred
on September 30, 1999.
The pro forma information is based upon the historical consolidated
financial statements of the Company and all material adjustments necessary to
the historical financial statements to reflect the sale of GeoScience
Corporation and related debt repayments.
The pro forma financial information is not necessarily indicative of the
results that actually would have occurred had the sale of GeoScience and related
debt repayments been in effect on the dates and for the periods indicated or
that may be obtained in the future. The pro forma financial information should
be read in connection with the Financial Statements included in Item 8 -- of the
Company's Form 10-K for the fiscal year 1998 and in Item 1 -- of the Company's
Form 10-Q for the quarter ended September 30, 1999.
(c) EXHIBITS
Press release dated December 13, 1999, announcing the completion of the
sale of the Company's interests in GeoScience Corporation.
<PAGE>
TECH-SYM CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1999
(in thousands except par value
and number of shares)
Pro Forma
Historical Adjustments Pro Forma
-------------- ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,674 $ 34,172 a,b,c $37,846
Short-term investments 100 100
Receivables, net 32,044 32,044
Unbilled revenue 38,806 38,806
Inventories, net 21,448 21,448
Net assets of discontinued
operations 61,527 (52,875)a,b,c 8,652
Other 1,105 1,105
-------------- ------------ ------------
Total current assets 158,704 (18,703) 140,001
Property, plant and equipment, net 30,263 30,263
Long-term deferred tax asset 4,735 4,735
Other assets 17,551 17,551
-------------- ------------ ------------
Total assets $ 211,253 $ (18,703) $ 192,550
============== ============ ============
LIABILITIES
Current liabilties:
Notes payable $ 20,999 $ (11,768)c $ 9,231
Current maturities of
long-term debt 1,237 1,237
Accounts payable 9,709 9,709
Billings in excess of cost
and estimated earnings on
uncompleted contracts 6,704 6,704
Other accrued liabilities 11,439 (5,713)a,c 5,726
-------------- ------------ ------------
Total current liabilities 50,088 (17,481) 32,607
Minority interest (1,222) (1,222)
Long-term debt 1,641 1,641
Deferred taxes on income 9,452 9,452
Other liabilities and deferred
credits 8,433 8,433
-------------- ------------ ------------
Total liabilities 68,392 (17,481) 50,911
SHAREHOLDERS' INVESTMENT
Preferred stock - authorized
2,000,000 shares, without par value;
none issued
Common stock - authorized 20,000,000
shares, $.10 par value; issued
8,090,381 809 809
Additional capital 41,985 41,985
Accumulated earnings 133,999 (1,222)a 132,777
Accumulated other comprehensive loss (3,631) (3,631)
Common stock held in treasury
at cost (2,055,100 shares) (30,301) (30,301)
-------------- ------------ ------------
Total shareholders' investment 142,861 (1,222) 141,639
-------------- ------------ ------------
Total liabilities, minority
interest and shareholders'
investment $ 211,253 $ (18,703) $ 192,550
============== ============ ============
The accompanying notes are an integral part
of these pro forma financial statements.
<PAGE>
TECH-SYM CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Nine Months Ended September 30, 1999
(in thousands except per share amounts)
Pro Forma
Historical Adjustments Pro Forma
------------- ------------- ------------
Revenue $ 115,524 $ 115,524
Cost of revenue 83,808 83,808
------------- ------------- ------------
Gross profit 31,716 31,716
Company-sponsored product
development 2,575 2,575
Selling, general and
administrative expense 27,560 27,560
Interest expense 1,145 (695)d 450
Other expense, net 588 588
------------- ------------- ------------
(Loss) income from continuing
operations before income taxes,
minority interest and other
nonrecurring items (152) 695 543
(Benefit) provision for
income taxes (49) 243 d 194
Minority interest (106) (106)
------------- ------------- ------------
Income from continuing operations
before nonrecurring items $ 3 $ 452 $ 455
============= ============= ============
Earnings per common share-basic $ 0.00 $ 0.08 $ 0.08
Earnings per common share-diluted 0.00 0.08 0.08
Average shares outstanding-basic
and diluted 6,025 6,025 6,025
The accompanying notes are an integral part
of these pro forma financial statements.
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TECH-SYM CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1998
(in thousands except per share amounts)
Pro Forma
Historical Adjustments Pro Forma
------------- ------------- ------------
Revenue $ 140,479 $ 140,479
Cost of revenue 100,606 100,606
------------- ------------- ------------
Gross profit 39,873 39,873
Company-sponsored product
development 3,505 3,505
Selling, general and
administrative expense 31,663 31,663
Interest expense 1,305 (997) d 308
Other expense (income), net (2,247) (2,247)
------------- ------------- ------------
Income from continuing operations
before income taxes and other
nonrecurring items 5,647 997 6,644
Provision for income taxes 1,861 349 d 2,210
------------- ------------- ------------
Income from continuing operations
before nonrecurring items $ 3,786 $ 648 $ 4,434
============= ============= ============
Earnings per common share-basic $ 0.63 $ 0.11 $ 0.73
Earnings per common share-diluted 0.61 0.10 0.72
Average shares outstanding-basic 6,049 6,049 6,049
Average shares outstanding-diluted 6,175 6,175 6,175
The accompanying notes are an integral part
of these pro forma financial statements.
<PAGE>
Tech-Sym Corporation
Notes to Unaudited Pro Forma Financial Information
(a) Adjustment to record the proceeds collected from the sale of GeoScience
Corporation and to eliminate the net assets of GeoScience Corporation held
for sale and other related amounts in the Company's consolidated balance
sheet as of September 30, 1999.
(b) Adjustment to reflect the collection of $4,055,000 from GeoScience
Corporation related to the settlement of intercompany balances.
(c) Adjustment to reflect the use of proceeds from the sale of GeoScience
Corporation to pay down debt of $11,768,000 and related accrued interest
related to the Company's continuing operations and debt of $11,654,000 and
related accrued interest related to Continental Electronics Corporation, a
wholly owned subsidiary of the Company that is reported as a discontinued
operation.
(d) Adjustment to reflect the reduction in interest expense related to the
repayment of debt related to continuing operations as if the debt was paid
off at the beginning of the period.
EXHIBIT INDEX
EXHIBIT NO.
Exhibit 99(a) -- Press release issued by the registrant dated
December 13, 1999.
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.
TECH-SYM CORPORATION
Date: December 28, 1999
By: /S/ J. RANKIN TIPPINS
J. Rankin Tippins
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
