-----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, M9bBJ6BBYvCRr/bDpl6R6hPAanxELIJZlEKD3OFFDZVBgMRJIGg5H6tEWgd8BWOt qW7/ECsUAliLn0zQSGysBw== 0001042910-98-000660.txt : 19980803 0001042910-98-000660.hdr.sgml : 19980803 ACCESSION NUMBER: 0001042910-98-000660 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980515 ITEM INFORMATION: FILED AS OF DATE: 19980729 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFORMATION MANAGEMENT RESOURCES INC CENTRAL INDEX KEY: 0001021772 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 592911475 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-28840 FILM NUMBER: 98672938 BUSINESS ADDRESS: STREET 1: 26750 U.S. HGWY 19 N, STE 500 CITY: CLEARWATER STATE: FL ZIP: 3462133761 BUSINESS PHONE: 8137977080 MAIL ADDRESS: STREET 1: 26750 U S HIGHWAY STREET 2: 19 NORTH SUITE 500 CITY: CLEARWATER STATE: FL ZIP: 33761 8-K/A 1 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 Date of Report (Date of earliest event reported:) May 15, 1998 Commission File Number 0-28840 Information Management Resources, Inc. (Exact Name of Registrant as Specified in its Charter) Florida 59-2911475 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 26750 U.S. Highway 19 North Suite 500 Clearwater, Florida 33761 (Address of Principal Executive Offices and Zip Code) (813)797-7080 (Registrant's Telephone Number, Including Area Code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired: December 31, 1997 Audited Financial Statements of Lyon Consultants, S.A. are attached hereto. (b) Pro Forma Financial Information: December 31, 1997 and March 31, 1998 Pro Forma Consolidated Financial Statements (Unaudited) of Information Management Resources, Inc. are attached hereto. 2 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. INFORMATION MANAGEMENT RESOURCES, INC. Date July 29, 1998 /s/ Satish K. Sanan ------------------------------- ------------------- Satish K. Sanan Chief Executive Officer Date July 29, 1998 /s/ Robert M. Molsick ------------------------------- --------------------- Robert M. Molsick Chief Financial Officer 3 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS
December 31, 1997 Audited Financial Statements of Lyon Consultants, S.A. and Subsidiary Report of Independent Statutory Auditor (France)....................................... F-3 Accounting Rules and Methods........................................................... F-4 Consolidated Balance Sheets............................................................ F-6 Consolidated Statements of Income...................................................... F-7 Notes to Financial Statements.......................................................... F-8 December 31, 1997 Information Management Resources, Inc. and Subsidiaries Pro Forma Consolidated Financial Statements (Unaudited) Pro Forma Consolidated Balance Sheets.................................................. F-18 Pro Forma Consolidated Statements of Income............................................ F-19 March 31, 1998 Information Management Resources, Inc. and Subsidiaries Pro Forma Consolidated Financial Statements (Unaudited) Pro Forma Consolidated Balance Sheets.................................................. F-20 Pro Forma Consolidated Statements of Income............................................ F-21 Notes to Pro Forma Consolidated Financial Statements......................................... F-22
F-1 LYON CONSULTANTS SA -------- CONSOLIDATED FINANCIAL STATEMENTS FISCAL YEAR ENDED AS AT DECEMBER 31, 1997 LYON CONSULTANTS SA 20, Avenue de l'Opera 75001 PARIS F-2 LYON CONSULTANTS GROUP June 22nd, 1998 DECEMBER 31st, 1997 AUDITOR'S REPORT to the shareholders of LYON CONSULTANTS SA We have audited the consolidated financial statements of the Group formed by LYON CONSULTANTS (FRANCE) SA and LYON CONSULTANTS (UK) LIMITED. Respective responsibilities of directors and auditors The directors of LYON CONSULTANT SA are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with Auditing Standards. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures of the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the consolidated financial statements give a true and fair view of the state of affairs of the group LYON CONSULTANTS as at December 31, 1997 and of its profit for the period then ended. /s/ Cyrille Brouard et Associes - ------------------------------- Cyrille Brouard et Associes Statutory Auditor June 22, 1998 Paris, France F-3 LYON CONSULTANTS GROUP DECEMBER 31, 1997 June 22nd, 1998 - -------------------------------- 1 - ACCOUNTING RULES AND METHODS - -------------------------------- The Group books its operations and prepares its financial statements, according to the generally accepted accounting principles in France, for the Mother Company, in the UK, for its recently incorporated fully-owned subsidiary : - going concern, - consistency, - carefulness, - independence of the fiscal years, - valuation at cost. The financial statements of the French Company have been adjusted in order to comply with the US GAAPS in the following fields: - correction of accelerated depreciation of certain fixed assets, - reevaluation of negociable securities according to their year-end market value, - record of the potential exchange gains according to the currency exchange rate year-end, - deferred taxation. The capital leases contracts have not been adjusted because they are not significant. The proportion of the future rights acquired by the employees, according to their age and seniority in the Company at year-end, for retirement allowances, has been valuated at 264,928 USD. Nevertheless the chance for the Company to pay part of this amount can be considered as nil. Therefore no liability has been recorded. The main methods are: - --------------------- - Intangible fixed assets The Research and development costs are never activated. The Softwares purchased by the Company are depreciated on a two-year basis. - Tangible fixed assets The premises are depreciated over a eight-year period. The computers and other hardwares on a three-year basis with the maximum acceleration authorized by the tax authorities which has allowed the Company to use rates of 50 and 83,33% on the net book value according to the period of acquisition. The cumulative anticipated depreciation has been estimated at: - USD 8,200 at december 1995; - USD 68,670 at december 1996; - USD 81,148 at december 1997. F-4 LYON CONSULTANT SA December 31, 1997 - - Consolidated subsidiary In the course of 1997 a fully-owned subsidiary has been incorporated in the United Kingdom. All the balances and transactions have been translated at the official year-end exchange rate of 1 Pound for 9,92 Ff. The intercompany transactions do match. - - Exchange rates used for the conversion of French francs into US dollars Retained earnings of 1992: weighted average rate of 5,2838 ff for 1 usd 1993 5,6623 1994 5,5483 1995 4,9802 1996 5,107 1997 5,7964 Closing exchange rates at December 31, 1996 5,2370 December 31, 1997 5,9881 - - Tax pooling We must precise that there is no tax pooling within the frame of the Group Lyon Consultants. F-5
- --------------------------------------------------------------------------------------------------------------------------------- LYON CONSULTANTS Currency: USD December, 31 December, 31 1996 % 1997 % - --------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS Current assets Cash and cash equivalents ....................... 658 238 5,95 721 024 6,23 Short-term investments Marketable securities........................ 2 263 908 20,47 5 221 002 45,10 Deposits ................................ 0 0,00 Accounts receivable: Trade.................................... 6 045 320 54,66 3 757 905 32,46 Related parties............................ Other and prepaid expenses.................... 1 700 857 15,38 1 509 361 13,04 ------------------------------------------------------------------- 10 668 323 96,47 11 209 293 96,83 ------------------------------------------------------------------- Net assets from discontinued operations Long-term loans and investments Investment in securities Long-term loans Fixed assets (Intangible, tangible ss Financial) Cost ............................................ 551 468 4,99 598 587 5,17 Accumulated depreciation ........................ 160 734 1,45 231 651 2,00 390 734 3,53 366 936 3,17 - -------------------------------------------------------------------------------------------------------------------------------- Balance-sheet total 11 059 057 100,00 11 576229 100,00 - -------------------------------------------------------------------------------------------------------------------------------- Current liabilities ----------------------------------- Short-term credits 2 956 0,03 ----------------------------------- Accounts payable: Trade ................................... 376 213 3,40 749 536 6,47 Related parties........................... Other and accrued liabilities................. 3 870 252 35,00 2 943 960 25,43 ------------------------------------------------------------------- 4 246 465 38,40 3 693 497 31,91 ------------------------------------------------------------------- Long-term debt ----------------------- 359 546 3,11 ----------------------- Accrued severance pay, net Minority interest ------------------------------------------------------------------- Commitments, contingent liabilities and charges 85 927 0,78 33 400 0,29 ------------------------------------------------------------------- Shareholders' equity Share capital Ordinary shares of FF.250 par value Authorized, issued and outstanding: 1,000 shares december 31, 1996 47 737 0,43 16,900 shares December 31,1997 705 566 6,09 Additional paid-in capital Foreign currency translation adjustment -2 419 -0,02 -892 613 Retained earnings................................. 6 678 390 60,39 7 676 833 66,32 ------------------------------------------------------------------- 6 723 708 60,80 7 489 786 64,70 - -------------------------------------------------------------------------------------------------------------------------------- Balance-sheet total 11 059 057 l00,00 11 576 229 100,00 - --------------------------------------------------------------------------------------------------------------------------------
F-6
- ---------------------------------------------------------------------------------------------------------------------------- LYON CONSULTANT USD December, 31 % December, 31 % 1996 1997 - ---------------------------------------------------------------------------------------------------------------------------- PROFIT AND LOSS ACCOUNT 3.1 Sales 14 332 223 100,00 14 159 519 100,00 Costs ----- 4.1 Employees charges 9 682 288 67,56 10 092 084 71,27 4.2 General expenses and taxes (4.3) 2 408 109 16,80 1 886 795 13,33 Depreciation 150 031 1,05 191 227 1,35 4.4 Financial expenses 2 331 0,02 4 123 0,03 ---------------------------------------------------------- 12 242 759 85,42 12 174 229 85,98 ---------------------------------------------------------- ---------------------------------------------------------- Operating profit (loss) 2 089464 14,58 1 985 290 14,02 ----------------------- ---------------------------------------------------------- 4.5 Other operating results 99 054 0,69 110 668 0,78 4.6 Financial income 225 829 1,58 250 830 1,77 4.7 Extraordinary items 0 0 ---------------------------------------------------------- 324 883 2,27 361 498 2,55 ---------------------------------------------------------- 4.8 Year-end bonuses 443 621 3,10 404 343 2,86 ---------------------------------------------------------- 4.9 Corporation-tax -10184 -0,07 292 710 2,07 ---------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- NET PROFIT 1 980 910 13,82 1 649 735 11,65 - ---------------------------------------------------------------------------------------------------------------------------
F-7
- ------------------------------------------------------------------------------------------------------------------------------------ LYON CONSULTANTS Group Currency: USD June 22nd, 1998 ------------------------------------------------------------------------ December, 31 Exchange rate December, 31 1996 Additions Deductions adjustment 1997 ------------------------------------------------------------------------ GROSS VALUE 1.1 FIXED ASSETS ------------ 1.11 INTANGIBLE FIXED ASSETS . Goodwill . Costs of development and research . Other 14,828 13,089 4 577 -1 859 21 481 ------------------------------------------------------------------------ 14,828 13,089 4 577 -1 859 21 481 ------------------------------------------------------------------------ 1.12 TANGIBLE FIXED ASSETS 1.211 Premises 60 359 4 476 9 803 -7 571 47 461 1.122 Cars 21 845 37 526 19 105 -2 740 37 526 1.123 Other tangible fixed assets 418 805 156 803 77 103 -52 532 445 973 Purchase in course 0 6 680 0 0 6 680 ------------------------------------------------------------------------ 501 008 205 484 106 010 -62 843 537 640 ------------------------------------------------------------------------ 1.13 FINANCIAL FIXED ASSETS (long-term) 1.131 Non consolidated participations 1.134 Other receivables 35 631 8 304 -4 469 39 466 35 631 8 304 -4 469 39 466
F-8
- ------------------------------------------------------------------------------------------------------------------------------------ LYON CONSULTANTS Group Currency: USD June 22nd, 1998 ------------------------------------------------------------------------ December, 31 Exchange rate December, 31 1996 Additions Deductions adjustment 1997 - ------------------------------------------------------------------------------------------------------------------------------------ DEPRECIATION - ---------------------------------------------- FIXED ASSETS - ------------ INTANGIBLE FIXED ASSETS . Goodwill . Costs of development and research . Other 10 838 8 690 4 577 -1 638 13 313 ---------------------------------------------------------------------------- 10 838 8 690 4 577 -1 638 13 313 ---------------------------------------------------------------------------- TANGIBLE FIXED ASSETS Premises 11 047 8 894 9 803 -1 670 8 468 Cars 11 120 7 250 11 808 -1 627 4 935 Other tangible fixed assets 127 730 166 392 67 840 -21 348 204 934 ---------------------------------------------------------------------------- 149 897 182 536 89 450 -24 645 218 337 - ------------------------------------------------------------------------------------------------------------------------------------
F-9 - ------------------------------------------------------------- LYON CONSULTANTS Group Currency: USD - ------------------------------------------------------------- AMOUNTS RECEIVABLE Trade debtors 3 757 905 Less : provision for bad debts 0 ---------------- Bad debts included in trade debtors 0 Other amounts receivable Staff 17 309 Prepaid -income tax and tax credit 1 329 013 VAT 144 330 Prepaid expenses/accrued income 12 063 UK 6 645 ---------------- TotaL amounts receivables * 5 267 265 ---------------- Claimable after one year: 0 GROUP COMPANIES - ------------------------------------------------------------- December, 31 SECURITIES 1997 Market-value -------------- . shares negociable bonds ( sicav ) 5 221 002 CASH . cash in hand 4 835 . deposits . current account bankers 716 189 -------------- 721 024 -------------- F-10 - --------------------------------------------------------- LYON CONSULTANTS Group Currency: USD - --------------------------------------------------------- December, 31 SHAREHOLDERS' FUNDS 1997 ------------- Subscribed and paid up capital 705 566 Capital surplus Revaluation on reserve Legal and statutory reserves 4 175 Other reserves and retained earnings 5 910 557 Foreign currency translation adjustment -780 247 Profit of the year 1 649 735 ------------- 7 489 786 ------------- GOVERNMENT GRANTS PROVISIONS ------------- Litigations 33 400 ------------- Pensions 0 Total amounts falling due after one year LONG TERM LIABILITIES ANVAR 333 996 CCIP 25 551 ------------- Total 359 546 ------------- Repayable over more than 5 years: 0 Average interest rate : 0 - --------------------------------------------------------- CURRENT LIABILITIES Bankers (overdrafts) Trade creditors 749 536 Vacation accruals 682 630 Year-end bonuses 391 398 Wages 71 464 Other social liabilities 677 536 VAT 759 934 Other taxes 106 541 Prepaid services by customers 173 967 Other creditors ss accruals UK 80 490 ------------- 3 693 497 - --------------------------------------------------------- F-11
- -------------------------------------------------------------------------------- Name of the Group :LYON CONSULTANTS June 22nd, 1998 USD - -------------------------------------------------------------------------------- ----------------------------- 3.1 SALES 14 332 223 14 159 519 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ 1996 % Net sales 96 % Net sales 97 1997 - ------------------------------------------------------------------------------------------------------------------ 4. COSTS 4.1 Employee charges ----------------------------------------------------------------- Staff at december 31 : 153 9 682 288 67,56% 71.27% 10 092 084 ----------------------------------------------------------------- 4.2. General expenses ----------------------------------------------------------------- 2 281 363 15,92% 12,18% 1 724 230 ----------------------------------------------------------------- 4.3 Taxes ----------------------------------------------------------------- 126 746 0,88% 1,15% 162 566 ----------------------------------------------------------------- 4.4. Financial expenses ----------------------------------------------------------------- 2 331 0,02% 0,03% 4 123 - ------------------------------------------------------------------------------------------------------------------ 4.5. Other operating results ----------------------------------------------------------------- 99 054 0,69% 0,78% 110 668 ----------------------------------------------------------------- 4.6 Financial income ----------------------------------------------------------------- 225 829 1,58% 1,77% 250 830 -----------------------------------------------------------------
F-12
Name of the Group : LYON CONSULTANTS June 22nd, 1998 USD - ------------------------------------------------------------------------------------------------------- 4.7 Extraordinary item 4.8 Year-end bonuses --------------------------------------------------- Legal compulsory bonus (staff over 5O) 443 621 3,10% 2,86% 404 343 - ------------------------------------------------------------------------------------------------------- 4.9 Corporation tax Current income tax 701 753 818 179 Income tax credit due to R & D -663 021 -506 423 Income tax credit due to training -71 945 0 Deffered taxation effect 23 028 -19 046 --------------------------------------------------- -10 184 NS NS 292 710 - -------------------------------------------------------------------------------------------------------
F-13
- ------------------------------------------------------------------------------------------------ Name of the Group : LYON CONSULTANT Currency : USD June 22nd, 1998 - ------------------------------------------------------------------------------------------------ DETAILS OF ADJUSTMENTS 1996 and prior 1997 variation ----------------------------------------- OF THE DRAFT STATEMENTS - ------------------------------------------------------------------------------------------------ Reevaluation of negociable securities 89 785 52 463 Potential exchange gains 7 955 -1 320 Adj.Accelerated depreciation of fixed assets 78 519 12 891 Deferred taxation 135 869 19 046 Total incidence ------------- on the retained earnings 312 128 ------------- ------------ on the net income 83 081 ------------ VALUATION OF THE RIGHT FOR RETIREMENT ALLOWANCES - ------------------------------------------------------------------------------------------------ Allowances estimation regarding the future rights 182 709 Theoratical social charges ( 45% ) 82 219 Probability per capita 0 - ------------------------------------------------------------------------------------------------
F-14
- ------------------------------------------------------------------------------------------------ Name of the Group : LYON CONSULTANT Currency : USD June 22nd, 1998 - ------------------------------------------------------------------------------------------------ LYON EQUITY ROLL - ------------------------------------------------------------------------------------------------ DESCRIPTION COMMON STOCK RETAINED EARNINGS exc.rate adjust. TOTAL --------------------------------------------------------------------- Balance 12/31/96 47 737 6 678 390 -2 419 6 723 708 --------------------------------------------------------------------- Net income 1 649 735 0 1 649 735 Foreign currency adjustment -777 828 -777 828 Issue 75,000 shares 12 525 12 525 Incorporation of retained earnings 651 292 -651 292 0 Exchange rate adjust. related to incorporation of Retained Earnings (see foot note) -5 988 0 -112,366 -118 354 --------------------------------------------------------------------- Balance per roll forward 12/31/97 705 566 7 676 833 -892 613 7 489 786 - ------------------------------------------------------------------------------------------------
foot note: FF 3,900,000 of retained earnings have been incorporated. As at 12/31/96 they were translated at a rate of 5.107 FF per 1 USD and, as at 12/31/97, at a rate of 5.9881. F-15
- ------------------------------------------------------------------------------------------------ Name of the Group : LYON CONSULTANT Currency : USD June 22nd, 1998 - ------------------------------------------------------------------------------------------------ COMMITMENTS, CONTINGENT LIABILITIES AND CHARGES ------------------------------------------------------------------------------------- December 31, 1996 Additions Deductions Exchange rate adj. December 31, 1997 ------------------------------------------------------------------------------------- Litigation 85 927 34 504 85 927 - 1 104 33 400 - ------------------------------------------------------------------------------------------------
F-16 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) F-17 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEETS December 31, 1997 (Unaudited and in thousands)
Pro Forma IMR Lyon Adjustments Combined ------------- ------------ -------------- -------------- ASSETS Current assets: Cash and cash equivalents................................ $ 85,819 $ 721 (17,110) (A) $ 69,430 Marketable securities.................................... 4,453 5,221 9,674 Accounts receivable...................................... 11,156 3,758 14,914 Unbilled work in process................................. 6,390 - 6,390 Other current assets..................................... 6,553 1,509 8,062 ------------ ------------ ------------ Total current assets............................... 114,371 11,209 108,470 Property and equipment, net of accumulated depreciation.......................... 9,818 367 10,185 Capitalized software costs, net of accumulated amortization.......................... 47 - 47 Deposits and other assets................................... 960 - 28,023 (A) 960 (28,023) (B) Goodwill, net of accumulated amortization................... 10,157 - 5,900 (B) 15,372 (685) (C) ------------ ------------ ------------ Total assets....................................... $ 135,353 $ 11,576 $ 135,034 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable......................................... $ 3,136 $ 750 $ 3,886 Accrued compensation..................................... 8,430 - 8,430 Deferred revenue......................................... 4,413 - 4,413 Other current liabilities................................ 4,599 2,944 700 (A) 8,243 ------------ ------------ ------------ Total current liabilities.......................... 20,578 3,694 24,972 Long-term debt.............................................. 885 359 1,244 Deferred tax liability...................................... 546 - 546 Other liabilities........................................... 133 33 166 ------------ ------------ ------------ Total liabilities.................................. 22,142 4,086 26,928 ------------ ------------ ------------ Minority interest .......................................... 4 - 4 ------------ ------------ ------------ Shareholders' equity: Preferred stock ......................................... - - - Common stock............................................. 2,565 706 50 (A) 2,615 (706) (B) Additional paid-in capital............................... 98,735 - 10,163 (A) 108,898 Retained earnings........................................ 12,564 7,677 (21,419) (B) (1,863) (685) (C) Cumulative foreign currency translation adjustment....... (657) (893) 2 (B) (1,548) ------------ ------------ ------------ Total shareholders' equity......................... 113,207 7,490 108,102 ------------ ------------ ------------ Total liabilities and shareholders' equity......... $ 135,353 $ 11,576 $ 135,034 ============ ============ ============
The accompanying notes are an integral part of these pro forma consolidated financial statements. F-18 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF INCOME Year ended December 31, 1997 (Unaudited and in thousands except per share data)
Pro Forma IMR Lyon Adjustments Combined ------------- -------------- -------------- -------------- Revenue........................................ $ 83,550 $ 14,159 $ 97,709 Cost of revenue................................ 45,959 7,504 53,463 -------------- -------------- ------------- Gross profit.......................... 37,591 6,655 44,246 Selling, general and administrative expenses... 20,865 4,959 25,824 Goodwill amortization.......................... 1,123 - 685 (C) 1,808 In-process purchased technology................ - - 15,400 (B) 15,400 -------------- -------------- ------------- Income from operations................ 15,603 1,696 1,214 Other income (expense): Interest expense...................... (175) (2) (177) Interest income and other............. 1,947 249 2,196 -------------- -------------- ------------- Total other income (expense).......... 1,772 247 2,019 -------------- -------------- ------------- Income before provision for income taxes and minority interest..................... 17,375 1,943 3,233 Provision for income taxes..................... 5,432 293 5,725 -------------- -------------- ------------- Income (loss) before minority interest 11,943 1,650 (2,492) Minority interest in net income................ (48) - (48) -------------- -------------- ------------- Net income (loss)..................... $ 11,895 $ 1,650 $ (2,540) ============== ============== ============= Net loss per share: Basic and diluted............................................................................. $(0.10) ======= Shares outstanding: Basic and diluted............................................................................. 24,628
The accompanying notes are an integral part of these pro forma consolidated financial statements. F-19 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEETS March 31, 1998 (Unaudited and in thousands)
Pro Forma IMR Lyon Adjustments Combined ------------- -------------- -------------- -------------- ASSETS Current assets: Cash and cash equivalents............................. $ 87,042 $ 676 (17,110) (A) $ 70,608 Marketable securities................................. 5,643 5,532 11,175 Accounts receivable................................... 17,046 5,338 22,384 Unbilled work in process.............................. 6,980 - 6,980 Other current assets.................................. 4,400 - 4,400 ----------------- -------------- -------------- Total current assets............................ 121,111 11,546 115,547 Property and equipment, net of accumulated depreciation....................... 12,871 275 13,146 Deposits and other assets................................ 1,540 11 28,023 (A) 1,551 (28,023) (B) Goodwill, net of accumulated amortization................ 9,870 - 5,900 (B) 14,914 (856) (C) ----------------- -------------- -------------- Total assets.................................... $ 145,392 $ 11,832 $ 145,158 ================= ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable...................................... $ 2,792 $ 706 $ 3,498 Accrued compensation.................................. 6,936 - 6,936 Deferred revenue...................................... 4,337 - 4,337 Other current liabilities............................. 9,678 3,224 700 (A) 13,602 ----------------- -------------- -------------- Total current liabilities....................... 23,743 3,930 28,373 Long-term debt........................................... 693 359 1,052 Deferred tax liability................................... 545 - 545 Other liabilities........................................ 130 - 130 ----------------- -------------- -------------- Total liabilities............................... 25,111 4,289 30,100 ----------------- -------------- -------------- Minority interest ....................................... 6 - 6 ----------------- -------------- -------------- Shareholders' equity: Preferred stock ...................................... - - - Common stock.......................................... 2,580 706 50 (A) 2,630 (706) (B) Additional paid-in capital............................ 100,356 - 10,163 (A) 110,519 Retained earnings..................................... 17,988 8,090 (21,419) (B) 3,803 (856) (C) Cumulative foreign currency translation adjustment.... (649) (1,253) 2 (B) (1,900) ----------------- -------------- -------------- Total shareholders' equity...................... 120,275 7,543 115,052 ----------------- -------------- -------------- Total liabilities and shareholders' equity...... $ 145,392 $ 11,832 $ 145,158 ================= ============== ==============
The accompanying notes are an integral part of these pro forma consolidated financial statements. F-20 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF INCOME Three months ended March 31, 1998 (Unaudited and in thousands except per share data)
Pro Forma IMR Lyon Adjustments Combined ------------- -------------- -------------- -------------- Revenue........................................ $ 31,460 $ 4,015 $ 35,475 Cost of revenue................................ 16,981 2,128 19,109 ----------------- ----------------- ---------------- Gross profit.......................... 14,479 1,887 16,366 Selling, general and administrative expenses... 7,574 1,332 8,906 Goodwill amortization.......................... 290 - 171 (C) 461 ----------------- ----------------- ---------------- Income from operations................ 6,615 555 6,999 Other income (expense): Interest expense...................... (27) - (27) Interest income and other............. 1,114 81 1,195 ----------------- ----------------- ---------------- Total other income (expense).......... 1,087 81 1,168 ----------------- ----------------- ---------------- Income before provision for income taxes....... 7,702 636 8,167 Provision for income taxes..................... 2,278 223 2,501 ----------------- ----------------- ---------------- Net income............................ $ 5,424 $ 413 $ 5,666 ================= ================= ================ Earnings per share: Basic......................................................................................... $0.22 ===== Diluted....................................................................................... $0.15 ===== Shares outstanding: Basic......................................................................................... 26,297 Diluted....................................................................................... 37,496
The accompanying notes are an integral part of these pro forma consolidated financial statements. F-21 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation - Pursuant to an Agreement signed May 15, 1998, Information Management Resources, Inc. ("IMR") agreed to acquire 100% of the outstanding shares of Lyon Consultants, S.A. ("Lyon"), a privately held software engineering company headquartered in Paris, France from its five owners. Lyon specializes in rapid software application development, utilizing reusable business and technical software objects, and information technology consulting. Lyon currently provides these services to large European and American companies, with a strong emphasis on the insurance, banking, utility and manufacturing industries. The Lyon acquisition is accounted for as a purchase pursuant to APB No. 16, "Business Combinations". A portion of the acquisition price was expensed in the quarter ended June 30, 1998 as acquired in-process technology in accordance with Financial Accounting Standards (FAS) No. 2. (See Note 3.) The Pro Forma Consolidated Balance Sheet as of December 31, 1997 and March 31, 1998 and the Pro Forma Consolidated Statements of Income for the year ended December 31, 1997 and the three months ended March 31, 1998 give affect to the acquisition of Lyon assuming the acquisition occurred on January 1, 1997. These Pro Forma Consolidated Financial Statements have not been restated to give affect to the business combination of RHO Transformation Technologies Pty. Ltd. which was effective June 30, 1998 and was accounted for as a pooling-of-interests combination. The Pro Forma Consolidated Financial Statements have been prepared based on the historical financial statements of IMR and Lyon for the periods stated above. Such pro forma statements may not be indicative of the results that would have occurred if the acquisitions had been consummated on the dates indicated, or of the operating results that may be achieved in the future. The pro forma statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 1997, which are contained in IMR's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. 2. Pro Forma Adjustments - The pro forma adjustments to the consolidated financial statements are summarized as follows: (A) Reflects the acquisition of Lyon Consultants, S.A. (B) Reflects the elimination of the investment in Lyon Consultants, S.A. and the allocation of the purchase price to goodwill, acquired in-process technology and certain other intangible assets. (C) Reflects current and prior years' amortization of intangible assets. F-22 INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. In-Process Purchased Technology - The purchased assets and assumed liabilities in connection with the acquisition of Lyon were recorded at their estimated fair values at the acquisition date. During July 1998, the Company received an appraisal of the intangible assets which indicated that approximately $15.4 million of the acquired intangible assets was in-process purchased technology that had not yet reached technological feasibility. This appraisal was also utilized for the attached pro forma financial statements, which give affect to the Lyon acquisition assuming the acquisition occurred on January 1, 1997. Because there can be no assurance that the Company will be able to successfully complete the development and integration of the in-process technology into its suite of software products or that the acquired technology has any alternative future use, the acquired in-process technology was charged to expense, for pro forma purposes, in the year ended December 31, 1997. F-23 -----END PRIVACY-ENHANCED MESSAGE-----