-----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, UEfG7pT8/+WaFMzpr/Ax2iZULO3Mrd6enYOkDsNfxNZemWtNMlgdoRIG5rEABecP CO5WTHnO1Auu8HGRN4JCbQ== 0000950115-97-001111.txt : 19970724 0000950115-97-001111.hdr.sgml : 19970724 ACCESSION NUMBER: 0000950115-97-001111 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970708 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970723 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRW FINANCIAL INC /DE CENTRAL INDEX KEY: 0000943809 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 232691986 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26014 FILM NUMBER: 97644343 BUSINESS ADDRESS: STREET 1: 443 S GULPH RD CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6109625100 MAIL ADDRESS: STREET 1: 443 S GULPH RD CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 8-K 1 CURRENT REPORT 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): July 8, 1997 CRW Financial, Inc. ------------------------------------------------------ (Exact Name of registrant as specified in its charter) Delaware 0-26015 23-2691986 - ------------------------------- ------------------------ ------------------ (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification No.) 443 South Gulph Road, King of Prussia, Pennsylvania 19406 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (610) 878-7400 ------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 2. Disposition of Assets. On July 8, 1997, CRW Financial, Inc. (the "Registrant") completed the sale of 345,178 shares of common stock of NCO Group, Inc. ("NCO") in an underwritten secondary offering of NCO common stock to the public conducted by NCO, receiving net proceeds of $27.88 per share after underwriting commissions, for aggregate net proceeds of approximately $9.6 million. The Registrant immediately utilized such net proceeds to fully retire its 7.5 million of outstanding bank debt, and intends to utilize the remaining proceeds to reduce other current liabilities and for general working capital of the Registrant. The Registrant had acquired the NCO common stock, as well as a warrant to purchase 250,000 additional shares of NCO common stock at an exercise price of $27.625 per share, in connection with the sale of its collection business to NCO in February 1997. The sale of the NCO common stock will result in an after tax gain of approximately $800,000. Subsequent to sale of the NCO common stock, the Registrant has three principal assets: (i) 6,238,413 shares of TeleSpectrum Worldwide Inc. ("TeleSpectrum") common stock, (ii) a warrant to purchase 250,000 shares of restricted NCO common stock at an exercise price of $27.625 per share, with respect to which the Registrant has certain registration rights, and (iii) the Registrant's wholly-owned subsidiary, Casino Money Centers, Inc. ("CMC"). The Registrant is currently contemplating a divestiture of CMC. The Registrant does not currently intend to pursue any further acquisitions. The Registrant currently has 6,255,433 shares of common stock outstanding. In addition, 2,150,771 shares of the Registrant's common stock are currently issuable pursuant to vested stock options and warrants issued by the Registrant. The exercise of currently vested stock options and warrants would result in cash proceeds to the Registrant of approximately $4.8 million. Item 7. Financial Statements and Exhibits. (b) Pro Forma Financial Information. The following pro forma financial information is filed as part of this report and is set forth in the pages attached hereto: 1. Basis of Presentation 2. Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 1996 and three months ended March 31, 1997. 3. Pro Forma Condensed Consolidated Balance Sheet at March 31, 1997. 4. Notes of Pro Forma Condensed Consolidated Financial Information. CRW FINANCIAL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION BASIS OF REPRESENTATION The attached unaudited pro forma condensed consolidated balance sheet at March 31, 1997, and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 1996 and for the three months ended March 31, 1997, give effect to the sale of the Registrant's 345,178 shares of NCO Group, Inc. common stock as if the sale of such stock occurred on January 1, 1996. The pro forma financial data is presented for informational purposes only and should not be construed to be indicative of the actual results of operations of the company for periods presented or future results of operations of the Company. The pro forma adjustments are described in the accompanying notes presented herein. CRW FINANCIAL, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Historical Adjustments Pro Forma ---------- ----------- --------- (In Thousands - Except Share Amounts) NET REVENUES $3,412 $ -- $3,412 ------- ----- ------ OPERATING EXPENSES: Compensation 2,986 -- 2,986 Special compensation charges 1,319 -- 1,319 Other operating costs 2,518 -- 2,518 Depreciation and amortization 162 -- 162 ------- ----- ------ Operating loss (3,573) -- (3,573) INTEREST EXPENSE (825) -- (825) EQUITY IN EARNINGS OF TLSP 774 -- 774 OTHER INCOME 1,136 1,323(A) 2,459 ------- ----- ------ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX BENEFIT (2,488) 1,323 (1,165) INCOME TAX BENEFIT (855) 502(A) (353) ------- ----- ------ LOSS FROM CONTINUING OPERATIONS (1,633) 821 (812) GAIN ON SALE OF DISCONTINUED OPERATIONS, NET -- 1,481 1,481 LOSS FROM DISCONTINUED OPERATIONS, net of income tax benefit of $(754) (1,152) -- (1,152) ------- ----- ------ INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (2,785) 2,302 (483) EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT (1,132) -- (1,132) ------- ----- ------- NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS ($3,917) $2,302 ($1,615) ======= ====== ======= NET INCOME (LOSS) PER COMMON SHARE: Continuing operations $(0.43) $0.22 $(0.21) Discontinued operations and gain on merger (0.30) 0.39 0.09 Extraordinary item (0.30) -- (0.30) ------ ----- ------ $(1.03) $0.61 $(0.42) ======= ===== ====== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: 3,793,846 3,793,846
CRW FINANCIAL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997
Pro Forma Historical Adjustments Pro Forma ---------- ----------- ---------- (In Thousands, except share amounts) NET REVENUES 1,266 $ -- $1,266 OPERATING EXPENSES, excluding Non-cash charges 1,544 -- 1,544 DEPRECIATION AND AMORTIZATION 39 -- 39 ------ ------ ------ Operating Loss (317) -- (317) INTEREST EXPENSE (206) -- 206 EQUITY IN EARNINGS OF TELESPECTRUM WORLDWIDE INC. 805 -- 805 OTHER INCOME -- 1,323(A) 1,323 ------ ------ ------ Income (loss) from continuing operations before income taxes 282 1,323 1,605 INCOME TAXES (BENEFIT) 107 502 609 ------ ------ ------ INCOME FROM CONTINUING OPERATIONS 175 821 996 INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET (59) -- (59) GAIN ON SALE OF DISCONTINUED OPERATIONS, NET 1,481 -- 1,481 ------ ------ ------ NET INCOME $1,597 $ 821 $2,418 ====== ====== ====== NET INCOME (LOSS) PER COMMON SHARE: Continuing Operations $ 0.02 $ 0.11 $ 0.13 Discontinued Operations 0.19 -- 0.19 ------ ------ ------ $ 0.21 $ 0.11 $ 0.32 ====== ====== ====== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: 7,621,183 7,621,183 7,621,183
CRW FINANCIAL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 1997
Pro Forma ASSETS Historical Adjustments Pro Forma ------ ---------- ----------- --------- CURRENT ASSETS: (In Thousands, Except Share Amounts) Cash $ 1,831 $ 3,123 (A) $ 4,954 Net assets of discontinued operation -- -- -- Other current assets 630 -- 630 Investment in NCO Group, Inc. 8,231 (7,481)(A) 750 -------- -------- -------- Total current assets 10,692 (4,358) 6,334 PROPERTY AND EQUIPMENT, net 191 -- 191 INTANGIBLE ASSETS, net 500 -- 500 INVESTMENT IN TELESPECTRUM WORLDWIDE INC. 55,460 -- 55,460 DEFERRED INCOME TAX ASSET 1,519 (502)(A) 1,017 OTHER ASSETS 104 -- 104 -------- -------- -------- $ 68,466 $ (4,860) $ 63,606 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revolving line of credit $ 6,500 $(6,500)(A) $ -- Current portion of long-term debt 350 -- 350 Accounts payable 450 -- 450 Accrued expenses 2,976 -- 2,976 -------- -------- -------- Total current liabilities 10,276 (6,500) 3,776 -------- -------- -------- LONG-TERM DEBT 223 -- 223 -------- -------- -------- OTHER LONG-TERM LIABILITIES 160 -- 160 -------- -------- -------- DEFFERED INCOME TAXES 21,898 -- 21,898 -------- -------- -------- STOCKHOLDERS' EQUITY: Preferred Stock, no par value, 500,000 shares authorized, no shares issued and outstanding -- -- -- Common Stock $.01 par value, 20,000,000 shares authorized 5,884,984 shares issued and outstanding 59 -- 59 Additional paid-in capital 39,939 -- 39,939 Unrealized loss on investment in NCO Group, Inc. (819) 819 (A) -- Accumulated deficit (3,270) 821 (A) (2,449) -------- -------- -------- Total stockholders' equity 35,909 1,640 37,549 -------- -------- -------- $ 68,466 $ (4,860) $ 63,606 ======== ======== ========
CRW FINANCIAL, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (A) On July 8, 1997, the Company completed the sale of its 345,178 shares of NCO Group Inc. common stock receiving net proceeds of $9,623,000. The Company will record a gain of $821,000, net of a 38% effective tax rate as shown below (in thousands): Proceeds from sale of stock $9,623 Carrying value of stock 8,300 ----- Pre-tax gain 1,323 Utilization of net operating loss carryforward 502 ----- Gain on sale of stock, net $ 821 ===== -2- 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. CRW FINANCIAL, INC. Date: July 23, 1997 By: /s/Jonathan P. Robinson ----------------------- Jonathan P. Robinson, Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----