-----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, WOuISX6ixboTNcuXngRUQkDoxGXN87C9LlqBXgcesfeWOwSP/zxKhAjc7EjX29Ik KydJHhKyh0fj/6RUd9pgcQ== 0000908184-97-000095.txt : 19971007 0000908184-97-000095.hdr.sgml : 19971007 ACCESSION NUMBER: 0000908184-97-000095 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970918 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971003 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLDCORP INC CENTRAL INDEX KEY: 0000811664 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 941358276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09591 FILM NUMBER: 97690866 BUSINESS ADDRESS: STREET 1: 13873 PARK CTR RD STE 490 CITY: HERNDON STATE: VA ZIP: 22071 BUSINESS PHONE: 7038349200 MAIL ADDRESS: STREET 1: 13873 PARK CENTER ROAD CITY: HERNDON STATE: VA ZIP: 22071 8-K 1 CURRENT REPORT ON FORM 8-K 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): September 18, 1997 WORLDCORP, INC. (Exact name of registrant as specified in charter) Delaware 1-5351 94-3040585 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 13873 Park Center Road, Suite 490, Herndon, Virginia 20171 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (703) 834-9200 Item 2. Acquisition or Disposition of Assets. On September 18, 1997, WorldCorp, Inc., a Delaware corporation ("WorldCorp"), consummated the sale of 3,227,000 shares (the "Shares") of common stock of World Airways, Inc. ("World Airways") to World Airways. The Shares were purchased by World Airways for total consideration of $24.7 million or $7.65 per Share. $15 million of the net proceeds from the sale of the Shares were used to retire a senior secured bank note, and the balance of proceeds were added to WorldCorp's working capital. Subsequent to this sale, WorldCorp owns 3,702,000 Shares of the common stock of World Airways, or 46% of World Airways. A copy of the press release announcing the completion of the sale of the Shares is attached hereto as Exhibit 99.1. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired Not Applicable (b) Pro Forma Financial Information On August 26, 1997, World Airways completed a private offering, issuing $50.0 million of 8% convertible senior subordinated debentures (the "Debentures") due in 2004 (the "Offering"). The Debentures are unsecured obligations, convertible into shares of World Airways common stock, at a conversion price of $8.90 per share, and subordinated to all present and future senior indebtedness of World Airways. Net proceeds from the Offering approximated $48.5 million and would be used by World Airways to: 1) repurchase approximately 4.0 million shares of its common stock, 2) repay approximately $4.0 million of certain indebtedness, and 3) increase its working capital for general corporate purposes. The Company's portion of Offering expenses approximated $1.0 million. On September 18, 1997, World Airways repurchased 3,227,000 shares of its common stock from the Company, its largest shareholder, for approximately $24.7 million (the "Repurchase"). Under the terms of the Offering, World Airways must repurchase at least 4.0 million shares of its common stock within 150 days after the sale of the Debentures. As a result, an additional 773,000 shares of common stock must be repurchased by January 1998 and may be repurchased from the Company or other shareholders. No assurances, however, can be given with respect to the eventual outcome of future share repurchases. Upon receipt of its proceeds from the sale of common stock to World Airways, the Company used approximately $15.0 million to repay an outstanding obligation to a financial institution. The following unaudited pro forma condensed financial information gives effect to the Repurchase and the necessary adjustments for WorldCorp using the equity method. Prior to the Repurchase, WorldCorp owned approximately 62% of World Airways and accounted for World Airways as a consolidated subsidiary. As a result of the Repurchase, WorldCorp currently owns approximately 46% of World Airways and will record its proportionate share of World Airways' financial results subsequent to September 18, 1997, using the equity method. The unaudited pro forma condensed consolidated balance sheet has been prepared as if the Offering, the $4.0 million repayment of indebtedness by World Airways, the Repurchase and the $15.0 million repayment of indebtedness by the Company, were consummated as of June 30, 1997. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 1996 and the six months ended June 30, 1997, give effect to the Offering, the $4.0 million repayment of indebtedness by World Airways, the Repurchase and the $15.0 million repayment of indebtedness by the Company, as if each were completed as of January 1, 1996. As a result, WorldCorp's pro forma statement of operations includes World Airways' results for each period under the equity method of accounting. Such statements of operations do not include the pre-tax estimated gain on sale of stock by WorldCorp of approximately $9.3 million which will be recorded by the Company as a result of the Repurchase in the third quarter. However, such statements do reflect adjustments for the elimination of historical transactions between WorldCorp and World Airways and related income tax effects. This method of combining historical financial statements for the preparation of the pro forma condensed consolidated financial information is for presentation only. WORLDCORP, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET June 30, 1997 (Dollars in thousands) Pro Forma Equity Method Pro Adjust- forma Pro Historical ments Adjust- Forma WorldCorp (Note a) Subtotal ments WorldCorp Current assets: Cash and cash equivalents $ 8,390 $ (8,270) $ 120 $ 23,687b $ 8,807 (15,000)c Other current assets 27,196 $(25,188) 2,008 - $ 2,008 Total current assets 35,586 (33,458) 2,128 8,687 10,815 Equipment and property, net 73,473 (73,147) 326 - 326 Long-term operating deposits 15,965 - 15,965 - 15,965 Investment in affiliate - InteliData 35,399 - 35,399 - 35,399 Investment in affiliate - World Airways - 11,923 11,923 (14,377)b (2,454) Other assets 7,865 (21,064) (13,199) - (13,199) Total assets $ 168,288 $(115,746) $52,542 $(5,690) $ 46,852 Current liabilities: Notes payable and current maturities of long-term obligations $ 26,739 $ (11,694) 15,045 (15,000)c 45 Accounts payable 21,733 (21,413) 320 - 320 Accrued main- tenance in excess of reserves paid 16,095 (16,095) - - - Other current liabilities 17,604 (16,108) 1,496 - 1,496 Total current liabilities 82,171 (65,310) 16,861 (15,000) 1,861 Long-term obli- gations, net 103,789 (29,070) 74,719 - 74,719 Other liabilities 14,394 (14,393) 1 - 1 Total liabilities 200,354 (108,773) 91,581 (15,000) 76,581 Minority interest 7,434 (7,434) - - - Common stock- holders' deficit: Common stock 16,630 - 16,630 - 16,630 Additional paid in capital 43,861 - 43,861 - 43,861 Deferred compen- sation (549) - (549) - (549) Accumulated deficit (90,870) - (90,870) 9,310d (81,560) ESSOP guaranteed bank loan (461) 461 - - - Treasury stock, at cost (8,111) - (8,111) - (8,111) Total stock- holders' deficit (39,500) 461 (39,039) 9,310 (29,729) Total liabilities and common stockholders' deficit $168,288 $(115,746) $ 52,542 $ (5,690) $ 46,852 WORLDCORP, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Six Months Ended June 30, 1997 (Dollars in thousands, except per share amounts) Pro Forma Equity Method Pro Adjust- forma Pro Historical ments Adjust- Forma WorldCorp (Note a) Subtotal ments WorldCorp Operating revenues: World Airways $ 160,676 $(160,676) $ - $ - $ - US Order - - - - - Total operating revenues 160,676 (160,676) - - - Operating expenses World Airways: Flight 33,114 (33,114) - - - Maintenance 34,595 (34,595) - - - Aircraft costs 49,379 (49,379) - - - Fuel 5,703 (5,703) - - - Flight operations subcontracted to others 2,249 (2,249) - - - Promotions, sales and commissions 4,663 (4,663) - - - Depreciation and amortization 4,331 (4,331) - - - General and administrative 13,808 (13,808) - - - Total operating expenses - World Airways 147,842 (147,842) - - - US Order: Total operating expenses - US Order - - - - WorldCorp: General and administrative 1,324 - 1,324 - 1,324 Total operating expenses 149,166 (147,842) 1,324 - 1,324 Operating income (loss) 11,510 (12,834) (1,324) - (1,324) Other income (expense) Interest expense (5,625) 2,046 (3,579) 860c (2,719) Interest income 429 (338) 91 - 91 Equity in loss of InteliData (770) - (770) - (770) Equity in income of World Airways - 6,569 6,569 (2,469) 4,100 b,e Loss on purchases of equity by subsidiaries (396) - (396) - (396) Other, net (204) 110 (94) - (94) Total other income (expense) (6,566) 8,387 1,821 (1,609) 212 Earning (loss) from continuing opertations before income taxes and minority interest 4,944 (4,447) 497 (1,609) (1,112) Income tax expense (350) 350 - - - Minority interest (4,097) 4,097 - - - Earnings (loss) from continuing operations $497 $- $ 497 $(1,609) $(1,112) Primary earnings (loss) from continuing operations per common equivalent share $0.03 $0.03 $(0.10)b $(0.07) Primary weighted average common and common equivalent shares outstanding 15,012,368 15,012,368 15,012,368 15,012,368 Fully diluted earnings (loss) from continuing operations per common equivalent share $* $* $* $* Fully diluted weighted average common and common equivalent shares outstanding * * * * * Amounts are not presented as they are anti-dilutive. WORLDCORP, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Twelve Months Ended December 31, 1996 (Dollars in thousands, except per share amounts) Pro Forma Equity Method Pro Adjust- forma Pro Historical ments Adjust- Forma WorldCorp (Note a) Subtotal ments WorldCorp Operating revenues: World Airways $ 309,587 $(309,587) $ - $ - $ - US Order 4,085 - 4,085 - 4,085 Total operating revenues 313,672 (309,587) 4,085 - 4,085 Operating expenses World Airways: Flight 71,121 (71,121) - - - Maintenance 60,462 (60,462) - - - Aircraft costs 85,227 (85,227) - - - Fuel 19,255 (19,255) - - - Flight operations subcontracted to others 12,932 (12,932) - - - Promotions, sales and commissions 6,236 (6,236) - - - Depreciation and amortization 8,032 (8,032) - - - General and administrative 24,677 (24,677) - - - Total operating expenses - World Airways 287,942 (287,942) - - - US Order: Total operating expenses - US Order 19,190 - 19,190 - 19,190 WorldCorp: General and administrative 3,803 - 3,803 - 3,803 Total operating expenses 310,935 (287,942) 22,993 - 22,993 Operating income (loss) 2,737 (21,645) (18,908) - (18,908) Other income (expense) Interest expense (11,680) 3,529 (8,151) 298c (7,853) Interest income 3,389 (1,230) 2,159 - 2,159 Equity in loss of InteliData (23,273) - (23,273) - (23,273) Equity in income of World Airways - 10,977 10,977 (4,073)b,e 6,904 Gain (loss) on issuances (purchases) of equity by subsidiaries, net 38,886 - 38,886 - 38,886 Other, net (1,550) 314 (1,236) - (1,236) Total other income 5,772 13,590 19,362 (3,775) 15,587 Earning (loss) from continuing opertations before income taxes and minority interest 8,509 (8,055) 454 (3,775) (3,321) Income tax expense (504) 679 175 - 175 Minority interest (568) 7,376 6,808 - 6,808 Earnings from continuing operations $ 7,437 $- $7,437 $ (3,775) $ 3,662 Primary earnings from continuing operations per common equivalent share $ 0.45 $0.45 $(0.23)b $0.22 Primary weighted average common and common equivalent shares outstanding 16,676,889 16,676,889 16,676,889 16,676,889 Fully diluted earnings (loss) from continuing operations per common equivalent share $* $* $* $* Fully diluted weighted average common and common equivalent shares outstanding * * * * * Amounts are not presented as they are anti-dilutive. _____________________________ Footnotes: (a) The pro forma equity method adjustments were made to the unaudited pro forma condensed consolidated financial information to record WorldCorp's proportionate share of World Airways' net assets and financial results under the equity method, as a result of WorldCorp's ownership percentage in World Airways decreasing from approximately 62% to approximately 46% due to the Repurchase. Prior to the Repurchase, the Company accounted for World Airways as a consolidated subsidiary. (b) The pro forma adjustments were made to the unaudited pro forma condensed consolidated financial information to give effect to the cash received and the reduction in the Company's investment in World Airways as a result of the Repurchase and the Company's share of the Offering's expenses which approximated $1.0 million. (c) The pro forma adjustments were made to the unaudited pro forma condensed consolidated financial information to give effect to the Company's use of a portion of the proceeds received from the Repurchase to repay an outstanding obligation to a financial institution for approximately $15.0 million and the resulting reduction in interest expense. (d) Reflects the estimated gain on the sale of the World Airways Shares by WorldCorp. (e) Reflects the pro forma adjustments to World Airways operating results as a result of the Offering (primarily additional interest expense) and the adjustment to WorldCorp's percentage interest in World Airways' earnings as a result of the Repurchase. -2- (c) Exhibits 99.1 Press Release dated September 18, 1997, announcing the completion of the sale of the Shares. -3- 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. WORLDCORP, INC. Date: October 3, 1997 By: /s/ Andrew M. Paalborg Andrew M. Paalborg Vice President and General Counsel -4- INDEX TO EXHIBITS 99.1 Press Release dated September 18, 1997, announcing the completion of the sale of the Shares. -5- EX-99.1 2 PRESS RELEASE Exhibit 99.1 WORLDCORP CONTACT: Coleman Andrews Chairman (703) 834-9201 or Doug Poretz The Poretz Group (703) 506-1778 FOR IMMEDIATE RELEASE September 18, 1997 2:30 PM WorldCorp Sells Shares in Subsidiary; Retires $15MM Bank Debt HERNDON, VIRGINIA, September 18, 1997 -- WorldCorp (NYSE: WOA) announced today that it has completed the sale of 3,227,000 shares of World Airways common stock. The shares were purchased by World Airways for total consideration of $24.7MM or $7.65 per share. $15MM of proceeds from the share sale were used to retire a senior secured bank note, and the balance of proceeds were added to WorldCorp's working capital. Subsequent to the sale, WorldCorp owns 3,702,000 shares of World Airways stock, or 46% of the Company. WorldCorp owns significant positions in companies that operate in two distinct business areas. InteliData develops and markets products and services for the financial services and telecommunications industries. InteliData's financial services products include bank branded customers services, voice response systems and data translation systems. Its telecommunications products include the Intelifone smart telephone and a complete package of interactive applications. Over 50 banks and telephone companies currently use InteliData's products and services. WorldCorp owns approximately 29% of InteliData. World Airways provides ACMI leases to commercial and military customers using MD-11 and DC-10 passenger and cargo aircraft. WorldCorp owns approximately 46% of World Airways. "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission (which reports are available from the Company upon request). These risks could cause the Company's actual results for 1997 and beyond to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company in this release. ### -----END PRIVACY-ENHANCED MESSAGE-----