-----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, BSvRzUijXK6iDg9JZTiuNgHotxwYvqc+qZLMM875bQdX+HfWjbG9AAi0KrtX0jr2 Q7jRuKq5D1sGu2pKCEJuKQ== 0000725282-00-000003.txt : 20000202 0000725282-00-000003.hdr.sgml : 20000202 ACCESSION NUMBER: 0000725282-00-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000101 ITEM INFORMATION: FILED AS OF DATE: 20000114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXECUTONE INFORMATION SYSTEMS INC CENTRAL INDEX KEY: 0000725282 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 860449210 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11551 FILM NUMBER: 507342 BUSINESS ADDRESS: STREET 1: 478 WHEELERS FARMS RD CITY: MILFORD STATE: CT ZIP: 06460 BUSINESS PHONE: 2038767600 MAIL ADDRESS: STREET 1: 478 WHEELERS FARMS RD CITY: MILFORD STATE: CT ZIP: 06460-1847 FORMER COMPANY: FORMER CONFORMED NAME: VODAVI TECHNOLOGY CORP DATE OF NAME CHANGE: 19880802 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington DC 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): January 1, 2000 eLOT, Inc. (f/k/a/ EXECUTONE INFORMATION SYSTEMS, INC.) (Exact name of registrant as specified in its charter) Virginia 0-11551 86-0449210 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 478 Wheelers Farms Road, Milford, Connecticut 06460 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 876-7600 Item 2. Disposition of Assets. On January 1, 2000, the eLOT, Inc., formerly known as Executone Information Systems, Inc. ("Executone" or the "Company") sold its Computer Telephony business ("CT Business") to Executone Inter- Tel Business Information Systems, Inc., a wholly owned subsidiary of Inter-Tel Incorporated ("Inter-Tel"). The purchase price was $44.3 million in cash, subject to purchase price adjustments as of the closing date. Item 7. Financial Statements and Exhibits. Page (b) Pro forma financial information 4 Pro forma consolidated balance sheet at September 30, 1999 5 Pro forma consolidated statement of operations for the nine months ended September 30, 1999 6 Pro forma consolidated statement of operations for the Year ended December 31, 1998 7 (c) Exhibits (1) Asset Purchase Agreement by and among Executone Information Systems, Inc., Executone Inter-Tel Business Information Systems, Inc., and Inter-Tel Incorporated, dated as of October 17, 1999. Incorporated by reference to the definitive proxy statement (Form 14A) of the Company filed on November 18, 1999 (File No. 0-11551). EXECUTONE INFORMATION SYSTEMS, INC. UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited Pro Forma Financial Information has been prepared pursuant to the asset purchase agreement dated October 17, 1999 among Executone, Inter-Tel and Executone Inter- Tel Business Information Systems, Inc. The Pro Forma Consolidated Balance Sheet as of September 30, 1999 has been prepared as if the sale of the computer telephony business had been consummated as of that date. The unaudited Pro Forma Consolidated Statements of Operations for the nine-month period ended September 30, 1999 and for the year ended December 31, 1998 have been prepared as if the sale of the computer telephony business had been consummated at the beginning of each period presented. The pro forma information set forth below is unaudited and not necessarily indicative of the results that would actually have occurred if the sale of the computer telephony business had occurred as of the time periods indicated or of results that may be obtained in the future. The pro forma adjustments, as described in the Notes to Unaudited Pro Forma Financial Statements, are based upon available information and upon certain assumptions that management believes are reasonable. The Pro Forma Consolidated Balance Sheet as of September 30, 1999 has been adjusted to reflect the sale of the net assets of the computer telephony business for $44.3 million. The estimated after tax gain on the transaction is included in equity. An additional adjustment has been made to reflect the use of the sale proceeds to repay Executone's outstanding balance on its revolving credit facility. The Pro Forma Consolidated Statements of Operations for the nine- month period ended September 30, 1999 and for the year ended December 31, 1998 have been adjusted to reflect the impact of the debt repayment on interest expense. The unaudited Pro Forma Financial Information should be read in conjunction with the following: - Executone's consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, filed with the Securities and Exchange Commission on April 15, 1999, and - Executone's unaudited financial statements included in the Company's Quarterly Report on Form 10-Q for the nine-month period ended September 30, 1999, filed with the Securities and Exchange Commission on November 12, 1999. EXECUTONE INFORMATION SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET The following unaudited pro forma consolidated balance sheet of Executone as of September 30, 1999 gives effect to the sale of the computer telephony business. The unaudited pro forma consolidated statements of operations of Executone for the year ended December 31, 1998 and the nine months ended September 30, 1999 present the results of Executone as if the computer telephony business had been sold at the beginning of each period presented. The unaudited pro forma consolidated financial statements are based on the historical financial statements of Executone and the assumptions and adjustments set forth in the accompanying notes to the unaudited pro forma consolidated financial statements.
September 30, 1999 CT Pro Forma (in thousands of dollars) Consolidated Adjustments Pro Forma ASSETS Current Assets Cash and cash equivalents $1,219 $ - $28,961(a,b) $30,180 Accounts receivable 30,320 (19,438) - 10,882 Inventories 21,905 (13,240) - 8,665 Prepaid expenses and other current assets 4,339 (1,900) (1,627)(a) 812 Total Current Assets 57,783 (34,578) 27,334 50,539 Property & Equipment, net 12,114 (4,206) - 7,908 Intangible Assets, net 3,698 - - 3,698 Deferred Taxes 22,811 - (10,750)(a,b) 12,061 Other Assets 6,809 (663) (190)(a) 5,956 TOTAL ASSETS $103,215 $(39,447) $16,394 $80,162 LIABILITIES AND EQUITY Current Liabilities Current portion of long-term debt $1,107 $(343) $ - $764 Accounts payable 19,195 (13,972) - 5,223 Accrued payroll and related costs 4,259 (2,431) 350 (a) 2,178 Accrued liabilities 11,944 (5,428) 1,200 (a) 7,716 Deferred revenue and customer deposits 2,198 (1,316) - 882 Total Current Liabilities 38,703 (23,490) 1,550 16,763 Long-Term Debt 30,146 (454) (15,339)(b) 14,353 Other Long-Term Liabilities 1,445 (1,445) - - Total Liabilities 70,294 (25,389) (13,789) 31,116 Stockholders' Equity Common stock 630 - - 630 Preferred stock - - - - Additional paid-in capital 78,413 (14,058) 14,058 (a) 78,413 Retained earnings(deficit)(46,122) - 16,125 (a,b)(29,997) Total Stockholders' Equity 32,921 (14,058) 30,183 49,046 TOTAL LIABILITIES AND EQUITY $103,215 $(39,447) 16,394 80,162
EXECUTONE INFORMATION SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) Nine Months Ended September 30, 1999 CT Pro Forma Consolidated Operations Adjustments Pro Forma Net Sales $96,822 $(75,191) $4,261(d) $25,892 Cost of Sales 66,959 (52,476) 4,261(d) 18,744 Gross Profit 29,863 (22,715) - 7,148 Operating Expenses Engineering & Development 6,721 (4,807) - 1,914 Selling, General & Administrative 32,534 (16,952) - 15,582 Total Operating Expenses 39,255 (21,759) - 17,496 Operating Income (Loss) (9,392) (956) - (10,348) Interest Expense (2,321) - 952 (c) (1,369) Other Income 1,252 - - 1,252 Pretax Income (Loss) (10,461) (956) 952 (10,465) Income Taxes - (382) 382 (c,d) - Income (Loss) from Continuing Operations $(10,461) $(574) $570 $(10,465) Basic and Diluted Earnings (Loss) Per Share $(0.18) $(0.18) Average Common Shares Outstanding 57,334 57,334
EXECUTONE INFORMATION SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31, 1998 CT Pro Forma Consolidated Operations Adjustments Pro Forma Net Sales $133,498 $(104,552) $5,916 (d) $34,862 Cost of Sales 91,777 (74,174) 5,916 (d) 23,519 Gross Profit 41,721 (30,378) - 11,343 Operating Expenses Engineering & Development 10,052 (7,293) - 2,759 Selling, General & Administrative 41,435 (24,851) - 16,584 eLottery goodwill impairment and other shutdown costs 25,486 - - 25,486 Special charges 9,028 (3,735) - 5,293 Total Operating Expenses 86,001 (35,879) - 50,122 Operating Income (Loss) (44,280) 5,501 - (38,779) Interest Expense (2,393) - 682 (c) (1,711) Net Gain on Sale of Businesses 5,269 - - 5,269 Other Income (Expense) 313 - - 313 Pretax Income (Loss) (41,091) 5,501 682 (34,908) Income Taxes (Benefit) (4,232) 2,200 273 (c,d) (1,759) Income (Loss) from Continuing Operations $(36,859) $3,301 $409 $(33,149) Basic and Diluted Earnings (Loss) Per Share $(0.74) $(0.67) Average Common Shares Outstanding 49,755 49,755
EXECUTONE Information Systems, Inc. Notes To Unaudited Pro Forma Consolidated Financial Statements The unaudited Pro Forma Financial Statements are based on the assumptions set forth in the notes to such data and should be read in conjunction with the Executone Consolidated Financial Statements and the related Notes thereto and other financial information included elsewhere in the Executone proxy statement for the Annual Meeting of Shareholders held December 14, 1999 (incorporated in this report by reference). The Pro Forma Statements are based upon Executone's consolidated totals, adjusted to reflect the proposed sale of the computer telephony business and other pro forma adjustments as noted below. Balance Sheet Adjustments (a) Adjustment to reflect the after tax gain on the sale of the computer telephony business based upon cash proceeds of $44.3 million, less the net assets sold of $14.1 million, $3.3 million in expenses incurred to separate the businesses and other charges and the estimated federal and state effective tax rate of 40%. (b) To reflect the use of the proceeds to repay Executone's entire outstanding balance as of September 30, 1999 on the revolving credit facility of $15.3 million. Income Statement Adjustments (c) Adjustment for each of the periods presented to reflect the reduction in interest expense that would result from the assumed repayment of debt (see (b) above) at the beginning of the period. Amounts are tax effected at the estimated federal and state effective rate of 40% for all periods except the nine-month period ended September 30, 1999, for which Executone has not taken tax benefit for its losses during the year. (d) In accordance with the manufacturing agreement, the CT Business will manufacture for and sell products to Executone's healthcare communications business post-closing at manufactured cost. To reflect these sales in the historical CT Business statements, sales to the healthcare communications business which were intercompany sales on the consolidated books and records have been added back to the CT Business income statement as if it were a standalone company. This adjustment eliminates these sales to determine the consolidated pro forma statement of operations. 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. EXECUTONE INFORMATION SYSTEMS, INC. By: __________________________________ Edward W. Stone Senior Vice President and Chief Financial Officer Date: January 13, 2000 -----END PRIVACY-ENHANCED MESSAGE-----