-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TaObpDpuPiMca0y3RcN84xwOAb4C6GysKveHsuIgzqJnPGiMVfmyi2ANvPvvaBo5 PzFM3/B/UVMhUHFtTvDIog== 0000930661-01-000880.txt : 20010409 0000930661-01-000880.hdr.sgml : 20010409 ACCESSION NUMBER: 0000930661-01-000880 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010316 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EDGEWATER TECHNOLOGY INC/DE/ CENTRAL INDEX KEY: 0001017968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 710788538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20971 FILM NUMBER: 1588800 BUSINESS ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVILLE STATE: AR ZIP: 72703 BUSINESS PHONE: 5019736000 MAIL ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVETTE STATE: AR ZIP: 72703 FORMER COMPANY: FORMER CONFORMED NAME: STAFFMARK INC DATE OF NAME CHANGE: 19960702 8-K 1 0001.txt FORM 8-K UNITED STATES 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 Date of Report (Date of earliest event reported): March 16, 2001 EDGEWATER TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 0-20971 71-0788538 (State of other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification No.) 302 East Millsap Road Fayetteville, Arkansas 72703 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (501) 973-6000 Item 2. Acquisition or Disposition of Assets On March 16, 2001, Edgewater Technology, Inc. (the "Company") sold all of the outstanding shares of stock of its wholly-owned subsidiaries, ClinForce, Inc. and CFRC, Inc., that comprised its clinical trials support services staffing division, to Cross Country TravCorps, Inc. for $31 million in cash before fees and expenses, subject to potential upward or downward post-closing adjustments (collectively, the "Transaction"). Item 7. Financial Statements and Exhibits (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. See Item 99.2 below. (c) Exhibits. 2.1 Stock Purchase Agreement, dated as of December 15, 2000, by and between the Company and Cross Country TravCorps, Inc. (Incorporated by reference from Appendix A to the Company's Definitive Proxy Statement (DEFM 14A) filed with the Securities Exchange Commission on February 6, 2001). 99.1 Edgewater Technology, Inc. Press Release dated March 19, 2001. 99.2 The following Unaudited Pro Forma Financial Statements of the Company: Unaudited Pro Forma Balance Sheet as of December 31, 2000. Unaudited Pro Forma Statement of Operations for the Twelve Months Ended December 31, 2000. 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. EDGEWATER TECHNOLOGY, INC. (Registrant) Dated: April 2, 2001 By: /s/ Clete T. Brewer ------------------- Clete T. Brewer Chairman and Chief Executive Officer INDEX TO EXHIBITS Exhibit Number Description ------ ----------- 2.1 Stock Purchase Agreement, dated as of December 15, 2000, by and between the Company and Cross Country TravCorps, Inc. (Incorporated by reference from Appendix A to the Company's Definitive Proxy Statement (DEFM 14A) filed with the Securities Exchange Commission on February 6, 2001). 99.1 Edgewater Technology, Inc. Press Release dated March 19, 2001. 99.2 The following Unaudited Pro Forma Financial Statements of the Company: Unaudited Pro Forma Balance Sheet as of December 31, 2000. Unaudited Pro Forma Statement of Operations for the Twelve Months Ended December 31, 2000. EX-99.1 2 0002.txt PRESS RELEASE Exhibit 99.1 Contact: Edgewater Technology, Inc. Citigate Sard Verbinnen Clete T. Brewer, Chairman and CEO Kim Polan/Susan Burns Terry C. Bellora, CFO 212-687-8080 501-973-6084 Edgewater Technology completes SALE OF REMAINING NON-CORE BUSINESSES Sale of ClinForce and CFRC Will Enable Exclusive Focus on eSolutions -------------------------------------------------------------------- Fayetteville, Arkansas. - March 19, 2001 - Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com) today announced the completion of the sale of ----------------- its wholly-owned subsidiaries, ClinForce, Inc. and CFRC, Inc. to Cross Country TravCorps, Inc. for $31 million in cash. The sale was approved by stockholders at a Special Meeting on March 14, 2001, with 96.3% of the 7.2 million votes cast at the meeting supporting the transaction. The sale of ClinForce and CFRC, which specialize in providing clinical trial staffing services, is part of a strategic plan announced last year to focus solely on Edgewater's eSolutions business, which provides e-business solutions that assist enterprises in increasing market competitiveness, improving productivity and reducing operational costs through the implementation of Internet-centric technologies. As part of this focus, the Company completed the disposition of all of its other non-eSolutions businesses during 2000. "We are very pleased by our stockholders' support for the ClinForce/CFRC sale. This transaction represents the final step in Edgewater's evolution to a pure play e-business solutions provider," said Clete T. Brewer, Chairman and CEO of Edgewater Technology. "Now that we have successfully completed the divestiture of our remaining non-core divisions, we will focus all of our efforts on growth prospects for our eSolutions business." About Edgewater Technology - -------------------------- Founded in 1992, Edgewater Technology is an award-winning e-business consulting and systems integration firm that specializes in providing middle- market companies with tailored solutions for today's Internet-centric environment. Headquartered in Wakefield, Massachusetts, Edgewater has taken a partnership approach with its clients, targeting strategic, mission-critical applications. Edgewater Technology services its client base by leveraging a combination of leading-edge technologies and proven reengineering techniques provided by its network of national solutions centers strategically positioned across the United States. For further information, visit our Web site at www.edgewater.com or call 781-246-3343. - ----------------- This Press Release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements made with respect to the amount of proceeds from the ClinForce sale transaction and planned eSolutions unit positioning and focus initiatives. The forward looking statements included in the Press Release relate to future events or our future financial condition or performance. Words such as "plan," "will," "anticipate," "intend," "increasing," "pursue," "provide," "begin," "should," "would," "focus," "believe," "expect," "continue," and "plan," or the negative thereof or variations thereon and similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments that are believed to be reasonable as of the date of this Press Release. Factors that may cause actual results, goals, targets or objectives to differ materially from those contemplated, projected, forecast, estimated, anticipated, planned or budgeted in such forward-looking statements include, among others, the following possibilities: (1) post-closing adjustments under the ClinForce sale agreement which would have the effect of reducing the $31 million purchase price received at closing; (2) changes in industry trends, such as decline in the demand for or supply of eSolutions services; (3) failure to obtain new customers or retain significant existing customers; (4) loss of key executives; (5) general economic and business conditions (whether foreign, national, state or local) which include but are not limited to changes in interest or currently exchange rates; (6) failure of the middle market and the needs of middle market enterprises for e-business services to develop as anticipated; (7) inability to recruit and retain professionals with the high level of information technology skills and experience needed to provide our services. Actual events or results may differ materially from those discussed, contemplated, forecasted, estimated, anticipated, planned or implied in the forward-looking statements as a result of the various factors described above and those further set forth (A) under the headings "Summary -- Risks of Not Approving the Transaction", "Summary -- Recent Events", "Edgewater Following Completion of the Transaction", "Factors Affecting Edgewater Following the Transaction" and "Forward looking Statements" in the Company's Proxy Statement filed with the Securities and Exchange Commission on February 6, 2001 and (B) under the heading "Business-Factors Affecting Finances, Business Prospects and Stock Volatility" in the Company's Form 10-K filed with the Securities and Exchange Commission on March 20, 2000. # # # EX-99.2 3 0003.txt FINANCIAL STATEMENTS Exhibit 99.2 EDGEWATER TECHNOLOGY, INC. UNAUDITED PRO FORMA FINANCIAL STATEMENTS INTRODUCTION We (Edgewater Technology, Inc. and our subsidiaries, or the "Company") provide business solutions through our eSolutions segment, Edgewater Technology (Delaware), Inc. (the "Edgewater Subsidiary"), which was acquired effective April 1, 1999. We have sold our interests in our Commercial staffing segment, Robert Walters plc (finance and accounting staffing services), Strategic Legal Resources (legal staffing) and IntelliMark (information technology staffing and solutions). As a result of the above, the operating results for these segments and divisions were included in discontinued operations in the financial statements as of and for the twelve months ended December 31, 2000. On December 21, 2000, we commenced an issuer tender offer (the "Tender Offer"), which expired on January 23, 2001, and we acquired (effective January 30, 2001) 16.25 million shares of our common stock at $8.00 per share for aggregate consideration of $130 million, and common stock subject to certain vested in-the-money stock options for aggregate consideration of $0.2 million. On March 16, 2001, we sold all of the outstanding shares of stock of our wholly-owned subsidiaries, ClinForce, Inc. and CFRC, Inc. (collectively, "ClinForce"), that comprised our clinical trials support services staffing division, to Cross Country TravCorps, Inc. for $31 million in cash before fees and expenses, subject to potential upward or downward post-closing adjustments (collectively, the "Transaction"). The following unaudited pro forma consolidated statements of operation set forth the results of operations for the twelve months ended December 31, 2000 as if the Transaction and the Tender Offer had occurred at the beginning of fiscal 2000. The unaudited pro forma consolidated balance sheet sets forth the financial position as of December 31, 2000, as if the Transaction and Tender Offer had occurred as of that date. The Edgewater Subsidiary had selling, general and administrative expenses ("SG&A") of $11.3 million for the twelve months ended December 31, 2000. In addition to these segment costs, the accompanying pro forma statements of operations include the costs that remain after the allocation of corporate costs to the respective discontinued divisions. As these remaining corporate costs were incurred in historical periods based on a larger public company and a different corporate structure, these costs are not necessarily indicative of the future corporate costs that will be necessary to operate the Edgewater Subsidiary as a stand-alone public company. The pro forma results of operations are not necessarily indicative of future operations or the actual results that would have occurred had the Transaction and Tender Offer been completed at the beginning of fiscal 2000. These statements should be read in conjunction with the accompanying notes herein and the audited consolidated financial statements and related notes included in our 2000 Annual Report of Form 10-K filed with the Securities and Exchange Commission on March 28, 2001. EDGEWATER TECHNOLOGY, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31, 2000 (In Thousands)
Tender Offer ClinForce and Other Edgewater Pro Forma Pro Forma Technology, Inc. Adjustments Adjustments Pro Forma ---------------- ---------------- ---------------- ---------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 145,326 $ 255 (a) $ (130,000) (f) $ 36,764 31,000 (b) (1,383) (g) (1,614) (c) (11,070) (h) 4,250 (i) Accounts receivable, net 10,819 (4,944) (a) - 5,875 Prepaid expenses and other 5,984 857 (a) (4,250) (i) 2,591 Income tax receivable 16,121 - - 16,121 Deferred income taxes 900 - - 900 ---------------- ---------------- ---------------- ---------------- Total current assets 179,150 25,554 (142,453) 62,251 PROPERTY AND EQUIPMENT, net 2,578 (404) (a) - 2,174 INTANGIBLE ASSETS, net 48,310 (11,779) (a) - 36,531 DEFERRED INCOME TAXES 25,728 (6,033) (d) - 19,695 OTHER ASSETS 148 (30) (a) - 118 ---------------- ---------------- ---------------- ---------------- $ 255,914 $ 7,308 $ (142,453) $ 120,769 ================ ================ ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and other accrued liabilities $ 14,037 $ (67) (a) $ (11,070) (h) $ 2,900 Payroll and related liabilities 4,342 (1,147) (a) - 3,195 ---------------- ---------------- ---------------- ---------------- Total current liabilities 18,379 (1,214) (11,070) 6,095 OTHER LONG-TERM LIABILITIES 290 - - 290 STOCKHOLDERS' EQUITY: Common stock 296 - - 296 Treasury stock (6,158) - (130,000) (f) (136,158) Paid-in capital 217,838 - - 217,838 Retained earnings 25,269 8,522 (e) (1,383) (g) 32,408 ---------------- ---------------- ---------------- ---------------- Total stockholders' equity 237,245 8,522 (131,383) 114,384 ---------------- ---------------- ---------------- ---------------- Total Liabilities and Stockholders' Equity $ 255,914 $ 7,308 $ (142,453) $ 120,769 ================ ================ ================ ================
EDGEWATER TECHNOLOGY, INC. NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31, 2000 (a) Represents the assets and liabilities of ClinForce that were sold by the Company as part of the Transaction. (b) Records the proceeds of $31 million received by the Company for the Transaction. (c) Records the payment of estimated transaction fees associated with the Transaction. (d) Records the income tax effects of the Transaction, which resulted in a reduction of our deferred tax asset. (e) Records the book gain generated from the Transaction. (f) Records the use of $130 million to repurchase shares of our common stock via the Tender Offer. (g) Records the payment of estimated transaction fees, including the purchase of shares subject to certain vested in-the-money stock options associated with the Tender Offer. (h) Adjustment to reflect payment of the accrued liabilities for certain nonrecurring corporate charges and liabilities, costs related to the sale of our non-eSolutions divisions and costs related to restructuring and transition of our Fayetteville, Arkansas corporate headquarters and movement to our Wakefield, Massachusetts office. (i) Adjustment to record the January 2001 collection of the note receivable from the sale of Strategic Legal Resources. EDGEWATER TECHNOLOGY, INC. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2000 (In Thousands, Except Per Share Data)
Edgewater Previous Pro Forma Technology, Inc. Dispositions (a) ClinForce (b) Adjustments Pro Forma ---------------- ---------------- ------------- ----------- ------------ SERVICE REVENUES $ 60,236 $ - $ (28,694) $ - $31,542 COST OF SERVICES 35,518 - (19,941) - 15,577 ---------------- ---------------- ------------- ----------- ------------ Gross profit 24,718 - (8,753) - 15,965 OPERATING EXPENSES: Selling, general and administrative 20,282 - (4,866) (1,005)(c) 14,411 (g) Depreciation and amortization 5,762 - (684) - 5,078 Nonrecurring restructure charge 4,289 - - (4,289)(d) - ---------------- ---------------- ------------- ----------- ------------ Operating loss (5,615) - (3,203) 5,294 (3,524) ---------------- ---------------- ------------- ----------- ------------ OTHER INCOME (EXPENSE): Interest income 1,975 - 286 2,120 (e) 4,381 Other, net 817 - - - 817 ---------------- ---------------- ------------- ----------- ------------ (LOSS) INCOME BEFORE INCOME TAXES (2,823) - (2,917) 7,414 1,674 INCOME TAX PROVISION 477 - (1,050) 2,669 (f) 2,096 (h) ---------------- ---------------- ------------- ----------- ------------ (Loss) income from continuing operations (3,300) - (1,867) 4,745 (422) DISCONTINUED OPERATIONS: Loss from operations of discontinued divisions (112,275) 112,275 - - - Gain on sale of divisions 64,368 (64,368) - - - ---------------- ---------------- ------------- ----------- ------------ Net loss $ (51,207) $ 47,907 $ (1,867) $ 4,745 $ (422) ================ ================ ============= =========== ============ EARNINGS PER COMMON SHARE BASIC $ (1.75) $ (0.03) =============== ============ DILUTED $ (1.75) $ (0.03) =============== ============ WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 29,212 12,962 (i) =============== ============ DILUTED 29,212 12,962 (i) =============== ============
EDGEWATER TECHNOLOGY, INC. NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2000 (a) Adjustment to remove discontinued operations, which include results from our Commercial staffing segment, Robert Walters, Strategic Legal Resources and IntelliMark. (b) Represents the unaudited financial results of ClinForce which was sold as part of the Transaction. (c) Represents an allocation of our corporate costs that relate to ClinForce. (d) Adjustment to remove nonrecurring corporate charges that relate to our restructuring, the sale of various divisions and costs incurred related to the Wakefield tragedy in December 2000 where seven of our employees were murdered. (e) Adjustment to reflect interest income that would have resulted if the Tender Offer and sale of the Commercial staffing segment, Robert Walters, Strategic Legal Resources, IntelliMark and ClinForce had occurred effective January 1, 2000. (f) Records the provision for federal and state income taxes at an effective combined tax rate of approximately 36%. (g) This amount includes (i) SG&A of $11.3 million for the Edgewater Subsidiary and (ii) other SG&A of $3.1 million, including costs that remain after the allocation of corporate costs to the respective non- eSolutions discontinued divisions. As the remaining corporate costs referred to in clause (ii) above were incurred in historical periods based on a larger public company and a different corporate structure, these costs are not necessarily indicative of the future corporate costs that will be necessary to operate the Edgewater Subsidiary as a stand-alone public company. (h) The income tax provision includes $1.4 million of nondeductible goodwill amortization. These taxes will not be paid out in cash as we will utilize net operating losses to offset these taxes. (i) Reflects the actual weighted average basic shares outstanding for the twelve months ended December 31, 2000 of 29.2 million adjusted to reflect the repurchase as of January 1, 2000 of 16.25 million shares of our common stock through the $130 million Tender Offer priced at $8.00 per share. -----END PRIVACY-ENHANCED MESSAGE-----