-----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, S1y4Kj/Mph9LPGYgi5S+or/eg88DEKGuekTGfH+KQZwhyLTDSTuGXYurzM/xd9sR rXEu/Qz3YIt2x/dcPujr3w== 0000950116-01-500114.txt : 20010507 0000950116-01-500114.hdr.sgml : 20010507 ACCESSION NUMBER: 0000950116-01-500114 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010222 ITEM INFORMATION: FILED AS OF DATE: 20010504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCO GROUP INC CENTRAL INDEX KEY: 0001022608 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 232858652 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21639 FILM NUMBER: 1623340 BUSINESS ADDRESS: STREET 1: 515 PENNSYLVANIA AVE CITY: FT WASHINGTON STATE: PA ZIP: 19034 BUSINESS PHONE: 2157939300 8-K/A 1 eight-k_a.txt FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------------------- Date of Report (Date of earliest event reported): February 22, 2001 NCO GROUP, INC. --------------------------- (Exact name of Registrant as specified in its charter) Pennsylvania 0-21639 23-2858652 - ------------------------------- ------------------------ ---------------------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification Number) 515 Pennsylvania Avenue Fort Washington, Pennsylvania 19034 ----------------------------------- (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (215) 793-9300 -------------- -1- Pursuant to the Fifth Amended Plan of Reorganization (with technical amendments) dated December 21, 2000 (the "Plan") of Creditrust Corporation ("Creditrust") and related Second Amended and Restated Agreement and Plan of Merger dated as of September 20, 2000 ("Merger Agreement") among Creditrust, NCO Financial Systems, Inc., NCO Portfolio Management, Inc. ("Portfolio"), and NCO Group, Inc. (the "Company"), on February 22, 2001, Creditrust was merged into Portfolio. Portfolio was the surviving corporation in the merger and will continue to operate as a Delaware corporation under the name "NCO Portfolio Management, Inc." The Company owns approximately 63% of the common stock of Portfolio. On March 5, 2001 the Company filed a Current Report on Form 8-K with the SEC to report the merger, among other things. The Company is amending such Current Report on Form 8-K to provide the financial information required by Item 7 of the Current Report on Form 8-K. Item 7. Financial Statements and Exhibits. --------------------------------- The following exhibits are being filed as part of this report: (a) Financial Statements of Businesses Acquired ------------------------------------------------ Incorporated by reference to the Annual Report on Form 10-K of NCO Portfolio Management, Inc. (SEC File No.000-32403) filed with the Securities and Exchange Commission on April 2, 2001. (b) Pro Forma Financial Information. ------------------------------------- Pro Forma Consolidated Financial Information...............F-1 (c) Exhibits: -------------- Number Title ------ ----- 2.1 Second Amended and Restated Agreement and Plan of Merger dated as of September 20, 2000 for the merger of Creditrust with and into Portfolio. Omitted schedules and exhibits will be supplied to the SEC upon request. (previously filed) -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 hereunto duly authorized. NCO GROUP, INC. By: /s/ Steven L. Winokur -------------------------- Executive Vice President, Finance and Chief Financial Officer Date: May 4, 2001 -3- NCO GROUP, INC. Pro Forma Consolidated Financial Statements Basis of Presentation The Pro Forma Consolidated Balance Sheet as of December 31, 2000 and the Pro Forma Consolidated Statement of Income for the year ended December 31, 2000 are based on the historical financial statements of NCO Group, Inc. ("NCO") and Creditrust Corporation ("Creditrust"). The acquisition of Creditrust has been accounted for using the purchase method of accounting with the results of Creditrust included in NCO's historical statements of income beginning on the date of acquisition. The Pro Forma Consolidated Balance Sheet as of December 31, 2000 has been prepared assuming the Creditrust acquisition was completed on December 31, 2000. The Pro Forma Consolidated Statement of Income for the year ended December 31, 2000 has been prepared assuming the Creditrust acquisition was completed on January 1, 2000. The Pro Forma Consolidated Balance Sheet and Statement of Income do not purport to represent what NCO's actual financial position or results of operations would have been had the acquisition of Creditrust occurred as of such dates, or to project NCO's financial position or results of operations for any period or date, nor does it give effect to any matters other than those described in the notes thereto. In addition, the allocations of purchase price to the assets and liabilities of Creditrust are preliminary and the final allocations may differ from the amounts reflected herein. The unaudited Pro Forma Consolidated Balance Sheet and Statement of Income should be read in conjunction with NCO's consolidated financial statements and notes thereto, and the historical financial statements of Creditrust which are incorporated by reference in this Current Report on Form 8-K/A. F-1 NCO GROUP, INC. Pro Forma Consolidated Balance Sheet December 31, 2000 (Unaudited) (dollars in thousands)
Acquisition NCO Group Creditrust Adjustments (1) Pro Forma --------- ---------- --------------- --------- ASSETS Current assets: Cash and cash equivalents $ 13,490 $ 3,244 $ 2,320 $ 19,054 Restricted cash - 3,629 (2,504) 1,125 Accounts receivable, trade, net 93,971 - - 93,971 Purchased accounts receivable, current portion 10,861 34,095 - 44,956 Investment in securitization, current portion - 1,442 - 1,442 Deferred income taxes 2,287 - - 2,287 Other current assets 7,925 1,087 (666) 8,346 --------- --------- --------- --------- Total current assets 128,534 43,497 (850) 171,181 Property and equipment, net 66,401 3,130 - 69,531 Other assets: Intangibles, net of accumulated amortization 536,750 4,459 (3,584) 537,625 Purchased accounts receivable, net of current portion 23,614 69,599 (768) 92,445 Investment in securitization, net of current portion - 7,617 (5,443) 2,174 Notes receivable 18,250 - - 18,250 Deferred income taxes - 16,818 (16,818) - Other assets 10,457 85 - 10,542 --------- --------- --------- --------- Total other assets 589,071 98,578 (26,613) 661,036 --------- --------- --------- --------- Total assets $ 784,006 $ 145,205 $ (27,463) $ 901,748 ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Long-term debt, current portion $ 642 $ 24,807 $ - $ 25,449 Corporate taxes payable 1,328 - - 1,328 Accounts payable 12,360 13,753 (13,471) 12,642 Accrued expenses 19,168 2,540 - 21,708 Accrued compensation and related expenses 15,304 1,270 - 16,574 --------- --------- --------- --------- Total current liabilities 48,802 42,370 (13,471) 77,701 Long-term liabilities: Long term debt, net of current portion 303,920 64,113 13,396 381,429 Deferred income taxes 40,549 - (10,000) 30,549 Other long-term liabilities 4,309 - - 4,309 Minority interest - - 21,334 21,334 Shareholders' equity Common stock 316,372 105 (105) 316,372 Additional paid-in-capital - 72,109 (72,109) - Stock held for benefit plan - (269) 269 - Other comprehensive loss (1,525) - - (1,525) Retained earnings (deficit) 71,579 (33,223) 33,223 71,579 --------- --------- --------- --------- Shareholders' equity 386,426 38,722 (38,722) 386,426 --------- --------- --------- --------- Total liabilities and shareholders' equity $ 784,006 $ 145,205 $ (27,463) $ 901,748 ========= ========= ========= =========
F-2 NCO GROUP, INC. Pro Forma Consolidated Statement of Income For the Year Ended December 31, 2000 (Unaudited) (amounts in thousands, except per share amounts)
Acquisition NCO Group Creditrust Adjustments Pro Forma -------------- ----------- ------------- ---------------- Revenue $ 605,884 $ 42,149 $ - $ 648,033 Operating costs and expenses: Payroll and related expenses 293,292 23,369 - 316,661 Selling, general, and administrative expenses 179,924 17,104 - 197,028 Depreciation and amortization expense 32,360 4,281 (3,413) (2) 33,228 Impairment of securitization - 18,849 - 18,849 Impairment of finance receivables - 52,851 - 52,851 Restructuring costs - 8,773 - 8,773 ---------- ----------- ---------- ----------- Total operating costs and expenses 505,576 125,227 (3,413) 627,390 ---------- ----------- ---------- ----------- Income (loss) from operations 100,308 (83,078) 3,413 20,643 Other income (expense): Interest and investment income 2,503 797 - 3,300 Interest expense (25,942) (12,993) 465 (3) (38,470) Other income 1,313 - - 1,313 Reorganization items: Professional fees - (2,620) 2,620 (4) - ---------- ----------- ---------- ----------- (22,126) (14,816) 3,085 (33,857) ---------- ----------- ---------- ----------- Income (loss) before income tax expense 78,182 (97,894) 6,498 (13,214) Income tax expense (benefit) 32,042 (35,507) 6,818 (5) 3,353 ---------- ----------- ---------- ----------- Income from continuing operations before minority interest 46,140 (62,387) (320) (16,567) Minority interest - - 21,819 (6) 21,819 ---------- ----------- ---------- ----------- Income from continuing operations 46,140 (62,387) 21,499 5,252 Discontinued operations: Income (loss) from discontinued operations (975) - - (975) Loss on diposal of discontinued operations (23,179) - - (23,179) ---------- ----------- ---------- ----------- Net income (loss) applicable to common shareholders $ 21,986 $ (62,387) $ 21,499 $ (18,902) ========== =========== ========== =========== Income from continuing operations per share: Basic $ 1.80 $ 0.21 ========== =========== Diluted $ 1.79 $ 0.20 ========== =========== Net income per share: Basic $ 0.86 $ (0.74) ========== =========== Diluted $ 0.85 $ (0.73) ========== =========== Weighted average shares outstanding: Basic 25,587 25,587 ========== =========== Diluted 25,842 25,842 ========== ===========
F-3 NCO GROUP, INC. Notes to Pro Forma Consolidated Financial Statements (Unaudited) (1) Gives effect to the following acquisition related adjustments: (i) the issuance of $3 million of common stock to an affiliate and another investor for $2,320,000 of cash and forgiveness of a note payable of $680,000; (ii) the reduction of securitized debt by utilizing reserves included in restricted cash; (iii) the allocation of deferred acquisition costs to the acquired assets; (iv) the elimination of deferred financing fees from pre-acquisition debt; (v) the addition of $875,000 of deferred financing fees for the new $50 million credit facility; (vi) the adjustment of the purchased accounts receivable portfolios to market value; (vii) the adjustment of the investment in securitizations to market value; (viii) the adjustment of deferred income tax assets that may not be recoverable after the acquisition and the reclassification of the remaining deferred income tax asset of Creditrust against the deferred income tax liability of NCO; (ix) the pay-off of certain liabilities at the time of the acquisition; (x) the net increase in debt after the pay-off of existing debt with borrowings under the new credit facility and incremental borrowings required to finance the acquisition; and (xi) record minority interest in the consolidated entity. (2) Gives effect to the elimination of amortization expense from deferred financing fees written-off and the addition of amortization expense from $875,000 of new deferred financing costs. (3) Gives effect to the change in interest expense from: (i) the replacement of pre-acquisition debt with the new credit facility; (ii) the reduction in securitized debt by utilizing reserves included in restricted cash; and (iii) the elimination of original issue discounts associated with warrants eliminated as part of the acquisition. (4) Gives effect to the elimination of professional fees incurred in connection with the bankruptcy of Creditrust and the acquisition. (5) Gives effect to the adjustment of deferred income tax assets that may not be recoverable after the acquisition. (6) Gives effect to the minority interest in the consolidated entity. F-4 -----END PRIVACY-ENHANCED MESSAGE-----