SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
July 17, 1996
Commission File Number: 33-15370-D
CUSA Technologies, Inc.
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(Exact name of the small business as specified in charter)
Nevada 87-0439511
______________________ _________________________
State of Incorporation IRS Identification Number
986 West Atherton Drive, Salt Lake City, Utah 84123
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(Address of principle executive offices)
(801) 263-1840
__________________________________________
(Telephone of issuer including area code)
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ITEM 2. DISPOSITION OF ASSETS
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Pursuant to an Asset Purchase Agreement dated July 2, 1996 (the
"Agreement"), CUSA Technologies, Inc. and certain of its subsidiaries
(collectively the "Company") sold the assets (the "Disposed Assets") of
its medical practice management software and commercial software divisions
(the "Disposed Divisions") to Physicians Computer Network, Inc. ("PCN")
for $10,100,000 plus the assumption of certain liabilities. The amount of
consideration was determined after extensive arms' length negotiations.
The consideration paid for the Disposed Assets consisted of $4,500,000 cash at
closing, the forgiveness at closing of a $1,500,000 promissory note
executed by the Company on June 13, 1996, the foregiveness at closing of
approximately $1,500,000 of trade payables owed by the Company to PCN, the
assumption at closing of certain of certain liabilities of the Disposed
Divisions, $3,150,000 cash due five days following the receipt by PCN of the
audited financial statements for the Disposed Divisions, $200,000 due upon
the transfer of certain assets of one of the subsidiaries of the Company
which were subject to a court ordered receivership at the date of closing,
and $750,000 (the "Last Payment") due five days following the completion and
delivery of a report detailing the results of certain agreed upon procedures,
to be performed by the Company's independent auditors on the accounts
receivable and the deferred revenue of the Disposed Divisions (the "Setoff
Report"). The amount of the Last Payment is subject to certain setoff
rights depending on the results of the Setoff Report.
The Disposed Assets included the accounts receivable, goodwill, customer
lists, hardware and software maintenance agreements, workforce-in-place, and
intellectual property related to the Disposed Divisions. The net loss for the
Disposed Divisions was approximately $1,925,000 for the quarter ended
March 31, 1996 on revenues of $3,300,0000. The Company retained all of the
assets of its credit union software, credit union statement processing,
medical records software and rental equipment software businesses.
The Agreement contains certain non-compete and non-solicitation provisions
whereby the Company and its Affiliates are restricted from selling any product
to any of the end-users of the Disposed Divisions or participating in the
medical practice management software business for a period of 5 years, and
from selling its Carepoint for Clinics medical records package to any end user
who was a PCN customer as of the closing for a period of two years following
the closing. As part of the Agreement, PCN will become the Company's
exclusive provider of IBM hardware for the next five years.
Under such arrangement, the Company committed to purchase a minimum of
$2,000,000 of hardware each year at a discount from PCN's reseller prices under
favorable credit terms.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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The following Unaudited Pro forma Condensed Consolidated financial statements
are included as part of this report:
Unaudited Pro forma Condensed Consolidated Balance Sheet as of March 31, 1996
Unaudited Proforma Condensed Consolidated Statements of Operations for the
year ended June 30, 1995 and nine months ended March 31, 1996.
Notes to Unaudited Pro Forma Condensed Financial Statements
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
________________________________________________________________
The following unaudited pro forma condensed consolidated balance sheet as of
March 31, 1996 and the related unaudited pro forma condensed consolidated
statements of operations for the nine months ending March 31, 1996 and the
year ending June 30, 1995 are based on the consolidated historical financial
statements of CUSA Technologies, Inc. (CTI) as previously reported on form
10-QSB for the nine months ended March 31, 1996 and on form 10-KSB for the
year ended June 30, 1995, adjusted to reflect the disposition of CTI's
Commercial and Medical Divisions as if such disposition occurred at the
beginning of the periods for the statements of operations and as of the end of
the period for the balance sheet.
The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the audited financial statements of CTI and its
subsidiaries, along with the related notes thereto. The pro forma adjustments
include certain assumptions as discussed in the accompanying notes and are
subject to change. Furthermore, the unaudited pro forma condensed consolidated
results of operations are not necessarily indicative of actual results which
might have occurred had the disposition occurred on the dates indicated or
of results that may be obtained in the future.
CUSA Technologies, Inc.
Unaudited Pro forma Condensed Consolidating Balance Sheet
March 31, 1996
Consolidated
Disposed Pro forma Pro forma
Historical Divisions Adjustments Balance
ASSETS
Current Assets
Cash and cash equivalents $ 130,843 $ - $ 9,925,000(1) $10,055,843
Trade accounts receivable, net
allowance for doubtful accounts 7,175,262 2,627,212 4,548,050
Inventories 488,330 130,043 358,287
Prepaid expenses and other assets 507,475 116,389 391,086
__________ __________ __________ __________
Total current assets $ 8,301,910 $ 2,873,644 $ 9,925,000 $15,353,266
Property and equipment 6,914,130 1,578,585 5,335,545
Less accumulated depreciation 1,651,302 468,829 1,182,473
__________ __________ _________ __________
Net property and equipment 5,262,828 1,109,756 - 4,153,072
Receivables from related parties 452,225 - 452,225
Software development and acquisition
costs, net 4,418,464 1,438,408 2,980,056
Excess of purchase price over fair value of
net tangible and identifiable intangible
assets acquired 14,687,106 9,673,067 5,014,039
Deferred income tax assets 54,282 - (54,282)(2) -
Other assets 288,417 77,523 210,894
__________ _________ _________ __________
Total Assets $33,465,232 $15,172,398 $9,870,718 $28,163,552
__________ __________ _________ __________
__________ __________ _________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit with banks $ 1,342,088 $ - $ 1,342,088
Current installments of long-term debt 952,482 97,686 854,796
Current installments of obligations
under capital leases 169,604 - 169,604
Accounts payable 4,291,430 849,760 3,441,670
Accrued liabilities and deposits 3,834,925 461,781 3,373,144
Income taxes payable 79,048 - 931,703(2) 1,010,751
Notes payable to related parties 1,268,390 - (175,000)(1) 1,093,390
Deferred revenue 7,378,666 2,529,654 4,849,012
__________ _________ _________ _________
Total current liabilities 19,316,633 3,938,881 756,703 16,134,455
Long-term debt with related parties 2,445,000 - 2,445,000
Long-term debt, excluding current
installments 1,921,425 - 1,921,425
Obligations under capital leases,
excluding current installments 95,317 - 95,317
Deferred income taxes - - 2,259,044(2) 2,259,044
__________ _________ _________ __________
Total liabilities 23,778,375 3,938,881 3,015,747 22,855,241
Stockholders' Equity:
Series A convertible preferred stock,
$.001 par value; authorized 1,500,000
shares; issued 1,000,000 shares 1,000 1,000
Common stock, $.001 par value;
authorized 25,000,000 shares; issued
8,847,053 shares at March 31, 1996
and 8,509,516 shares at June 30, 1995 8,847 8,847
Additional paid in capital 10,380,378 - 10,380,378
Retained earnings (accumulated deficit) (703,368) (1,133,517)(1) (5,081,914)
(3,245,029)(2)
Division equity - 11,233,517 11,233,517 (1) -
__________ __________ __________ __________
Total stockholders' equity 9,686,857 11,233,517 6,854,971 5,308,311
__________ __________ __________ __________
$33,465,232 $15,172,398 $ 9,870,718 28,163,552
__________ __________ __________ __________
__________ __________ __________ __________
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
CUSA Technologies, Inc.
Unaudited Pro forma Condensed Consolidated Statement of Operations
For the year ending June 30, 1995
Consolidated
Disposed Pro forma Pro forma
Historical Divisions Adjustments Balance
Net revenues $32,539,715 $ 8,420,333 $24,119,382
Cost of goods sold and other
direct costs 16,862,596 4,971,365 11,891,231
__________ __________ _________ __________
Gross profit 15,677,119 $ 3,448,968 0 12,228,151
Product development costs 1,790,823 748,827 1,041,996
Selling, general and administrative
expenses 12,016,136 3,814,470 8,201,666
__________ __________ _________ __________
Operating income (loss) 1,870,160 (1,114,329) 0 2,984,489
Other income (expense):
Interest expense (388,617) (136,069) (252,548)
Other, net 81,355 28,143 53,212
__________ __________ _________ __________
Earnings (loss) before income taxes 1,562,898 (1,222,255) 0 2,785,153
Income taxes (benefit) 786,872 (615,368) 1,402,240
__________ __________ _________ __________
Net earnings (loss) 776,026 (606,887) 0 1,382,913
__________ __________ _________ __________
__________ __________ _________ __________
Earnings (loss) per common and common
equivalent share
Primary .09 (0.08) 0.16
Fully diluted .08 (0.08) 0.16
Weighted average common and common
equivalent shares
Primary 7,655,280 7,185,371 7,655,280
Fully diluted 8,020,584 7,185,371 8,020,584
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
CUSA Technologies, Inc.
Unaudited Pro forma Condensed Consolidating Statement of Operations
For the nine months ending March 31, 1996
Consolidated
Disposed Pro forma Pro forma
Historical Divisions Adjustments Balance
Net Revenues $35,031,945 $10,573,659 $24,458,286
Cost of goods sold and other direct costs 18,976,320 6,475,330 12,500,990
__________ __________ _________ __________
Gross profit 16,055,625 4,098,329 - 11,957,296
Product development costs 1,970,843 395,626 1,575,217
Selling, general and administrative
expense 15,320,599 6,856,946 8,463,653
__________ __________ _________ __________
Operating income (loss) (1,235,817) (3,154,243) - 1,918,426
Other income (expense):
Interest expense (437,308) (209,161) (228,147)
Other, net (37,729) 8,679 (46,408)
__________ _________ _________ __________
Income (loss) before income taxes (1,710,854) (3,354,725) - 1,643,870
Income taxes (benefit) (302,806) (1,086,470) 783,664
__________ _________ _________ _________
Net earnings (loss) $(1,408,048) (2,268,255) 860,206
__________ _________ _________ _________
__________ _________ _________ _________
Earnings (loss) per common and
common equivalent share
Primary $ (0.17) (0.26) 0.08
Fully diluted $ (0.17) (0.26) 0.08
Weighted average common and common
equivalent shares
Primary 8,653,093 8,653,093 9,602,252
Fully diluted 8,653,093 8,653,093 9,695,703
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
CUSA Technologies, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements
(1) General Assumptions
The accompanying unaudited pro forma condensed consolidated balance sheet as of
March 31, 1996 and the unaudited pro forma condensed consolidated statements of
operations for the nine months ended March 31, 1996 and the year ended June 30,
1995 were prepared based on the following assumptions:
The pro forma adjustments were made assuming the divisions were disposed as
of the beginning of the periods for the statements of operations and as of
the end of the period for the balance sheet.
(2) Pro Forma Adjustments
The adjustments to the unaudited accompanying condensed consolidated pro forma
balance sheet as of March 31, 1996 and the unaudited pro forma condensed
statements of operations for the nine months ended March 31, 1996 and the year
ended June 30, 1995 are as follows:
(1) Adjustment to record the disposition of the divisions.
(2) Adjustment to record income tax expense related to the disposition of
the divisions at the estimated effective rate of 38% of the gain on disposition,
exclusive of permanent tax differences related to the disposition of goodwill.
Exhibits
The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document
______ ______ _________________________________
10.5 10 Asset Purchase Agreement between
Physician's Computer Network, Inc. and
CUSA Technologies, Inc. dated July 2, 1996
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SIGNATURES
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Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: July 17, 1996
CUSA TECHNOLOGIES, INC.
By: _/s/_________________________________
D. Jeff Peck, Chief Financial Officer