0001272830-15-000039.txt : 20150401 0001272830-15-000039.hdr.sgml : 20150401 20150401161006 ACCESSION NUMBER: 0001272830-15-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20150331 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150401 DATE AS OF CHANGE: 20150401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VONAGE HOLDINGS CORP CENTRAL INDEX KEY: 0001272830 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 113547680 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32887 FILM NUMBER: 15743420 BUSINESS ADDRESS: STREET 1: 23 MAIN STREET CITY: HOLMDEL STATE: NJ ZIP: 07733 BUSINESS PHONE: 732-528-2600 MAIL ADDRESS: STREET 1: 23 MAIN STREET CITY: HOLMDEL STATE: NJ ZIP: 07733 8-K 1 a8-kbrazildisposition.htm 8-K 8-K Brazil Disposition


 
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 31, 2015
 
____________________________ 
 VONAGE HOLDINGS CORP.
(Exact Name of Registrant as Specified in Charter)
 
 ____________________________ 
 
Delaware
 
001-32887
 
11-3547680
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
23 Main Street, Holmdel, NJ
 
07733
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant's telephone number, including area code: (732) 528-2600
 
(Former Name or Former Address, if Changed Since Last Report)
____________________________ 
 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 



Item 2.01  Completion of Acquisition or Disposition of Assets.
On March 31, 2015, Vonage Holdings Corp. completed its previously announced exit from the Brazilian market for consumer telephony services and the associated wind down of its joint venture operations in the country (the "Brazil Joint Venture").
Item 9.01 Financial Statements and Exhibits

(b) The following pro forma financial information with respect to the disposition of our Brazil Joint Venture is attached as Exhibit 99.1 to this Form 8-K/A and are incorporated herein by reference:

Unaudited Pro Forma Condensed Consolidated Statements of Income for the years ended December 31, 2014 and December 31, 2013
Unaudited Pro Forma Condensed Consolidated Statements of Income for the quarters ended September 30, 2014, June 30, 2014, March 31, 2014, and September 30, 2013


(d) Exhibits.

99.1
 
Unaudited pro forma condensed consolidated statements of income of Vonage Holdings Corp.
 
 
 


SIGNATURE
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.
 
 
 
VONAGE HOLDINGS CORP.
 
 
 
 
 
Date:
April 1, 2015
By:
 
    /s/ David T. Pearson
 
 
 
 
David T. Pearson
Chief Financial Officer
 



Exhibit Index

 
Exhibit Number
 
Description
 
 
 
99.1
 
Unaudited pro forma condensed consolidated statements of income of Vonage Holdings Corp.
 
 
 
 



3
 EX-99.1 2 a8-kbrazildispositionex991.htm EXHIBIT 99.1 8-K Brazil Disposition Ex 991



EXHIBIT 99.1
VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
The following unaudited pro forma consolidated statements of income of Vonage Holdings Corp. (the "Company") give effect to the disposition of its Brazil Joint Venture, which was shut sown on March 31, 2015. The Company estimates that it incurred approximately $500,000 in cash charges in the first quarter of 2015 related to contract terminations and severance-related expenses.
The historical financial information of the Company set forth below has been derived from the unaudited consolidated statements of income of the Company included in the Company's Quarterly Reports on Form 10-Q for the quarters ended September 30, 2013, March 31, 2014, June 30, 2014, and September 30, 2014 and the historical audited consolidated statements of income of the Company included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and December 31, 2014.
The unaudited pro forma consolidated statements of income were prepared as if the disposition had occurred on July1, 2013 as the Brazil Joint Venture began operations in the third quarter of 2013. Pro forma consolidated statements of income for the five most recently completed quarters and the two most recently completed fiscal years are presented because the treatment of the Brazil Joint Venture has not yet been reflected as discontinued operations in the Company's historical information. The Brazil Joint Venture’s assets and net assets were immaterial at December 31, 2014, and accordingly the pro-forma balance sheet has been excluded.
The unaudited pro forma consolidated statements of income have been prepared by the Company's management for illustrative purposes only and is not necessarily indicative of the results of operations that actually would have been realized had the Company disposed of the Brazil Joint Venture during the specified periods. The pro forma adjustments are based upon assumptions that the Company's management believes are reasonable. The pro forma adjustments are based on the information available at the time of the preparation of the unaudited pro forma consolidated statements of income. These statements, including any notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the historical consolidated financial statements of the Company included in its Annual Report on Form 10-K for the years ended December 31, 2013 and December 31, 2014, and Quarterly Reports on Form 10-Q for the three months ended September 30, 2013, March 31, 2014, June 30, 2014, and September 30, 2014 filed with the Securities and Exchange Commission.


2



 VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2014
(In thousands, except per share amounts)

  
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
868,953

 
$
99

 
$
868,854

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $19,330, $0, and $19,330, respectively)
232,053

 
670

 
231,383

Cost of goods sold
36,815

 
315

 
36,500

Selling, general and administrative
274,750

 
3,857

 
270,893

Marketing
226,121

 
3,628

 
222,493

Depreciation and amortization
51,407

 
1,893

 
49,514

 
821,146

 
10,363

 
810,783

Income from operations
47,807

 
(10,264
)
 
58,071

Other Income (Expense):
 
 
 
 
 
Interest income
212

 
5

 
207

Interest expense
(6,823
)
 
 
 
(6,823
)
Other expense, net
11

 
 
 
11

 
(6,600
)
 
5

 
(6,605
)
Income before income tax expense
41,207

 
(10,259
)
 
51,466

Income tax expense
(21,760
)
 
(1
)
 
(21,759
)
Net income
$
19,447

 
$
(10,260
)
 
$
29,707

Plus: Net loss attributable to noncontrolling interest
819

 
819

 
—

Net income attributable to Vonage
$
20,266

 
$
(9,441
)
 
$
29,707

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.10

 
 
 
$
0.14

Diluted
$
0.09

 
 
 
$
0.14

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
209,822

 
 
 
209,822

Diluted
219,419

 
 
 
219,419



These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.



3



VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
(In thousands, except per share amounts)

 
 
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
214,737

 
$
27

 
$
214,710

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $4,704, $0, and $4,704, respectively)
56,807

 
332

 
56,475

Cost of goods sold
9,205

 
 
 
9,205

Selling, general and administrative
66,437

 
951

 
65,486

Marketing
58,305

 
1,639

 
56,666

Depreciation and amortization
12,346

 
71

 
12,275

 
203,100

 
2,993

 
200,107

Income from operations
11,637

 
(2,966
)
 
14,603

Other Income (Expense):
 
 
 
 
 
Interest income
37

 
 
 
37

Interest expense
(1,680
)
 
 
 
(1,680
)
Other income (expense), net
(2
)
 
 
 
(2
)
 
(1,645
)
 
—

 
(1,645
)
Income before income tax expense
9,992

 
(2,966
)
 
12,958

Income tax expense
(5,627
)
 
4

 
(5,631
)
Net income
$
4,365

 
$
(2,962
)
 
$
7,327

Plus: Net loss attributable to noncontrolling interest
191

 
191

 
—

Net income attributable to Vonage
$
4,556

 
$
(2,771
)
 
$
7,327

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.02

 
 
 
$
0.04

Diluted
$
0.02

 
 
 
$
0.03

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
208,580

 
 
 
208,580

Diluted
217,176

 
 
 
217,176



These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.




4



VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2014
(In thousands, except per share amounts)

 
 
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
218,882

 
$
4

 
$
218,878

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $5,098, $0, and $5,098, respectively)
59,059

 
117

 
58,942

Cost of goods sold
9,450

 
 
 
9,450

Selling, general and administrative
66,895

 
974

 
65,921

Marketing
59,003

 
401

 
58,602

Depreciation and amortization
12,459

 
14

 
12,445

 
206,866

 
1,506

 
205,360

Income from operations
12,016

 
(1,502
)
 
13,518

Other Income (Expense):
 
 
 
 
 
Interest income
31

 
 
 
31

Interest expense
(1,434
)
 
 
 
(1,434
)
Other income (expense), net
36

 
 
 
36

 
(1,367
)
 
—

 
(1,367
)
Income before income tax expense
10,649

 
(1,502
)
 
12,151

Income tax expense
(5,266
)
 
(5
)
 
(5,261
)
Net income
$
5,383

 
$
(1,507
)
 
$
6,890

Plus: Net loss attributable to noncontrolling interest
135

 
135

 
—

Net income attributable to Vonage
$
5,518

 
$
(1,372
)
 
$
6,890

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.03

 
 
 
$
0.03

Diluted
$
0.02

 
 
 
$
0.03

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
211,390

 
 
 
211,390

Diluted
221,002

 
 
 
221,002


These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.



5



VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(In thousands, except per share amounts)

 
 
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
220,733

 
 
 
$
220,733

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $5,154, $0 and $5,154, respectively)
59,442

 
22

 
59,420

Cost of goods sold
9,739

 
 
 
9,739

Selling, general and administrative
71,628

 
938

 
70,690

Marketing
57,264

 
307

 
56,957

Depreciation and amortization
12,338

 
12

 
12,326

 
210,411

 
1,279

 
209,132

Income from operations
10,322

 
(1,279
)
 
11,601

Other Income (Expense):
 
 
 
 
 
Interest income
91

 
 
 
91

Interest expense
(2,077
)
 
 
 
(2,077
)
Other expense, net
(13
)
 
 
 
(13
)
 
(1,999
)
 
—

 
(1,999
)
Income before income tax expense
8,323

 
(1,279
)
 
9,602

Income tax expense
(4,118
)
 
 
 
(4,118
)
Net income
$
4,205

 
$
(1,279
)
 
$
5,484

Plus: Net loss attributable to noncontrolling interest
383

 
383

 
—

Net income attributable to Vonage
$
4,588

 
$
(896
)
 
$
5,484

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.02

 
 
 
$
0.03

Diluted
$
0.02

 
 
 
$
0.02

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
212,195

 
 
 
212,195

Diluted
225,187

 
 
 
225,187



These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.



6



 VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2013
(In thousands, except per share amounts)

 
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
829,067

 
 
 
$
829,067

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $14,892, $0, and $14,892, respectively)
237,294

 
50

 
237,244

Cost of goods sold
37,586

 
 
 
37,586

Selling, general and administrative
238,720

 
1,564

 
237,156

Marketing
227,052

 
 
 
227,052

Depreciation and amortization
36,066

 
12

 
36,054

 
776,718

 
1,626

 
775,092

Income from operations
52,349

 
(1,626
)
 
53,975

Other Income (Expense):
 
 
 
 
 
Interest income
307

 
 
 
307

Interest expense
(6,557
)
 
 
 
(6,557
)
Other expense, net
(104
)
 
 
 
(104
)
 
(6,354
)
 
—

 
(6,354
)
Income before income tax expense
45,995

 
(1,626
)
 
47,621

Income tax expense
(18,194
)
 
 
 
(18,194
)
Net income
$
27,801

 
$
(1,626
)
 
$
29,427

Plus: Net loss attributable to noncontrolling interest
488

 
488

 
—

Net income attributable to Vonage
$
28,289

 
$
(1,138
)
 
$
29,427

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.13

 
 
 
$
0.14

Diluted
$
0.13

 
 
 
$
0.13

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
211,563

 
 
 
211,563

Diluted
220,520

 
 
 
220,520



These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.

7



VONAGE HOLDINGS CORP.
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
(In thousands, except per share amounts)

 
 
 
 
Pro Forma

 
 
 
As Reported

 
Adjustment (1)

 
Pro Forma

 
 
 
 
 
 
Revenues
$
203,984

 
 
 
$
203,984

 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
Cost of telephony services (excluding depreciation and amortization of $3,522, $0, and $3,522, respectively)
58,500

 
 
 
58,500

Cost of goods sold
9,535

 
 
 
9,535

Selling, general and administrative
59,134

 
739

 
58,395

Marketing
59,133

 
 
 
59,133

Depreciation and amortization
8,459

 
 
 
8,459

 
194,761

 
739

 
194,022

Income from operations
9,223

 
(739
)
 
9,962

Other Income (Expense):
 
 
 
 
 
Interest income
97

 
 
 
97

Interest expense
(1,509
)
 
 
 
(1,509
)
Other income (expense), net
(15
)
 
 
 
(15
)
 
(1,427
)
 
—

 
(1,427
)
Income before income tax expense
7,796

 
(739
)
 
8,535

Income tax expense
(3,811
)
 
 
 
(3,811
)
Net income
$
3,985

 
$
(739
)
 
$
4,724

Plus: Net loss attributable to noncontrolling interest
222

 
222

 
—

Net income attributable to Vonage
$
4,207

 
$
(517
)
 
$
4,724

Net income attributable to Vonage per common share:
 
 
 
 
 
Basic
$
0.02

 
 
 
$
0.02

Diluted
$
0.02

 
 
 
$
0.02

Weighted-average common shares outstanding:
 
 
 
 
 
Basic
209,589

 
 
 
209,589

Diluted
217,059

 
 
 
217,059



These unaudited pro forma consolidated statements of income reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations.

(1) Adjustments to remove the historical results of Brazil Joint Venture from continuing operations.

8