EXHIBIT 99
PEOPLES TELEPHONE COMPANY, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma financial statements give effect to the sale
by Peoples Telephone Company, Inc. of the operating assets of its inmate phone
division for $10,625,000 in cash. The unaudited pro forma balance sheet reflects
the disposition of these assets as of September 30, 1997. The unaudited pro
forma statements of income reflect the results of operations of Peoples
Telephone Company, Inc. after giving effect to the operations which were
generated by the assets sold for the nine months ended September 30, 1997 and
the years ended December 31, 1996, 1995, and 1994 as if the disposition had
occurred on January 1, 1997, 1996, 1995, and 1994, respectively.
PEOPLES TELEPHONE COMPANY, INC.
CONSOLIDATED PRO FORMA BALANCE SHEET
September 30, 1997
(UNAUDITED)
(in thousands)
(a)
Inmate
Peoples Telephone Division Pro Forma
Company, Inc. Assets Sold Adjustments Pro Forma
---------------- ----------- ----------- ----------
Assets
Current assets:
Cash and cash equivalents ........... $ 7,330 $ -- $ 10,625 (c) $ 17,955
Accounts and notes receivable, net... 15,735 -- -- 15,735
Inventory............................ 2,340 -- -- 2,340
Prepaid expenses and other current
assets.............................. 2,832 307 (b) -- 2,525
---------------- ----------- ----------- ----------
Total current assets.............. 28,237 307 10,625 38,555
Property and equipment, net.......... 55,353 4,505 (b) -- 50,848
Intangible assets, net............... 31,412 1,162 (b) -- 30,250
Other assets, net.................... 8,998 108 (b) -- 8,890
---------------- ----------- ----------- ----------
Total assets...................... $ 124,000 $ 6,082 $ 10,625 $ 128,543
================ =========== =========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable and current
maturities of long term debt........ $ 599 $ -- $ -- $ 599
Other current liabilities............ 24,232 -- 500 (d) 24,732
---------------- ----------- ----------- ----------
Total current liabilities........ 24,831 -- 500 25,331
Notes payable and long term debt..... 100,180 -- -- 100,180
Other long term liabilities.......... 196 -- -- 196
---------------- ----------- ----------- ----------
Total liabilities................ 125,207 -- 500 125,707
---------------- ----------- ----------- ----------
Convertible preferred stock.......... 15,982 -- -- 15,982
Common stock......................... 162 -- -- 162
Capital in excess of par value....... 59,551 -- -- 59,551
Accumulated deficit.................. (75,197) -- 4,043 (e) (71,154)
Unrealized loss on investment........ (1,705) -- -- (1,705)
---------------- ----------- ----------- ----------
Total shareholders' deficit....... (17,189) -- 4,043 (13,146)
---------------- ----------- ----------- ----------
Total liabilities and shareholders'
equity.......................... $ 124,000 $ -- $ 4,543 $ 128,543
================ ============ =========== ==========
PEOPLES TELEPHONE COMPANY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 1997
(UNAUDITED)
(in thousands, except per share data)
Inmate
Peoples Telephone Division Pro Forma
Company, Inc. Assets Sold Adjustments Pro Forma
---------------- ----------- ----------- ----------
Revenues:
Coin calls ........................... $ 57,029 $ -- $ -- $ 57,029
Non-coin calls ....................... 39,595 10,026 -- 29,569
Service and other .................... -- -- -- --
Gain on sale of assets ............... -- -- -- --
---------------- ----------- ----------- ----------
Total revenues...................... 96,624 10,026 -- 86,598
---------------- ----------- ----------- ----------
Costs and expenses:
Telephone charges..................... 26,882 4,658 -- 22,224
Commissions........................... 25,550 3,429 -- 22,121
Field service and collection......... 15,414 795 -- 14,619
Depreciation and amortization......... 18,705 2,721 -- 15,984
Selling, general, and administrative.. 9,896 443 -- 9,453
Loss from impairment of inmate assets. -- -- -- --
Provision for dial-around compensation
adjustment........................... 2,116 -- -- 2,116
Other (income) expense................ -- -- -- --
---------------- ----------- ----------- ----------
Total costs and expenses........... 98,563 12,046 -- 86,517
---------------- ----------- ----------- ----------
Operating income (loss)................... (1,939) (2,020) -- 81
---------------- ----------- ----------- ----------
Other (income) and expenses:
Interest expense, net................. 9,820 -- -- 9,820
(Gain) loss on disposal/operations of
prepaid calling card and international
telephone centers................... -- -- -- --
---------------- ----------- ----------- ----------
Total other (income) and expenses, net 9,820 -- -- 9,820
---------------- ----------- ----------- ----------
Income (loss)from continuing operations
before income taxes...................... (11,759) (2,020) -- (9,739)
Benefit from (provision for) income
taxes.................................... -- -- -- --
---------------- ----------- ----------- ----------
Net income (loss) from continuing operations
before extraordinary item................ $ (11,759) $ (2,020) -- $ (9,739)
================ =========== ============ ==========
Primary and fully diluted earnings per share
Loss from continuing operations........ $ (0.77) $ (0.65)
================ ==========
Weighted average of common and common
equivalent shares outstanding............ 16,195 16,195
================ ==========
PEOPLES TELEPHONE COMPANY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For The Year Ended December 31, 1996
(UNAUDITED)
(in thousands, except per share data)
Inmate
Peoples Telephone Division Pro Forma
Company, Inc. Assets Sold Adjustments Pro Forma
---------------- ----------- ----------- ----------
Revenues:
Coin calls ........................... $ 77,389 $ -- $ -- $ 77,389
Non-coin calls ....................... 47,568 17,951 -- 29,617
Service and other .................... -- -- -- --
Gain on sale of assets ............... -- -- -- --
---------------- ----------- ----------- ----------
Total revenues ..................... 124,957 17,951 -- 107,006
---------------- ----------- ----------- ----------
Costs and expenses:
Telephone charges .................... 39,091 8,983 -- 30,108
Commissions .......................... 33,942 5,692 -- 28,250
Field service and collection ..,...... 20,204 1,074 -- 19,130
Depreciation and amortization ........ 23,965 3,499 -- 20,466
Selling, general, and administrative . 12,367 427 -- 11,940
Loss from impairment of inmate assets. -- -- -- --
Provision for dial-around compensation
adjustment .......................... -- -- -- --
Other (income) expense ............... (950) -- -- (950)
---------------- ----------- ----------- ----------
Total costs and expenses .......... 128,619 19,675 -- 108,944
---------------- ----------- ----------- ----------
Operating income (loss) .................. (3,662) (1,724) -- (1,938)
---------------- ----------- ----------- ----------
Other (income) and expenses:
Interest expense, net ................ 12,875 -- -- 12,875
(Gain) loss on disposal/operations of
prepaid calling card and inter-
national telephone centers ......... (545) -- -- (545)
---------------- ----------- ----------- ----------
Total other (income) and expenses, net 12,330 -- -- 12,330
---------------- ----------- ----------- ----------
Income (loss) from continuing operations
before income taxes .................... (15,992) (1,724) -- (14,268)
Benefit from (provision for) income
taxes .................................. -- -- -- --
---------------- ----------- ----------- ----------
Net income (loss) from continuing operations
before extraordinary item .............. $ (15,992) $ (1,724) -- $(14,268)
=============== ============ =========== ==========
Primary and fully diluted earnings per share
Loss from continuing operations ..... $ (1.05) $ (0.95)
=============== ==========
Weighted average of common and common
equivalent shares outstanding ........... 16,188 16,188
=============== ==========
PEOPLES TELEPHONE COMPANY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For The Year Ended December 31, 1995
(UNAUDITED)
(in thousands, except per share data)
Inmate
Peoples Telephone Division Pro Forma
Company, Inc. Assets Sold Adjustments Pro Forma
---------------- ----------- ----------- ----------
Revenues:
Coin calls ........................... $ 78,353 $ -- $ -- $ 78,353
Non-coin calls ....................... 59,916 26,029 -- 33,887
Service and other .................... 122 -- -- 122
Gain on sale of assets ............... -- -- -- --
---------------- ----------- ----------- ----------
Total revenues 138,391 26,029 -- 112,362
---------------- ----------- ----------- ----------
Costs and expenses:
Telephone charges .................... 48,716 13,134 -- 35,582
Commissions .......................... 34,740 7,141 -- 27,599
Field service and collection ......... 23,382 2,248 -- 21,134
Depreciation and amortization ........ 22,061 2,881 -- 19,180
Selling, general, and administrative.. 11,859 699 -- 11,160
Loss from impairment of inmate assets. 4,740 4,740 -- --
Provision for dial-around compensation
adjustment .......................... -- -- -- --
Other (income) expense ............... 6,177 -- -- 6,177
---------------- ----------- ----------- ----------
Total costs and expenses .......... 151,675 30,843 -- 120,832
---------------- ----------- ----------- ----------
Operating income (loss) .................. (13,284) (4,814) -- (8,470)
---------------- ----------- ----------- ----------
Other (income) and expenses:
Interest expense, net ................ 10,355 -- -- 10,355
(Gain) loss on disposal/operations of
prepaid calling card and international
telephone centers .................. 566 -- -- 566
---------------- ----------- ----------- ----------
Total other (income) and expenses, net 10,921 -- -- 10,921
---------------- ----------- ----------- ----------
Income (loss) from continuing operations
before income taxes ..................... (24,205) (4,814) -- (19,391)
Benefit from (provision for) income
taxes ................................... 1,738 1,521 -- 217
---------------- ----------- ----------- ----------
Net income (loss) from continuing operations
before extraordinary item .............. $ (22,467) $ (3,293) -- $ (19,174)
================ ============ =========== ===========
Primary and fully diluted earnings per share
Loss from continuing operations ....... $ (1.43) $ (1.22)
================ ===========
Weighted average of common and common
equivalent shares outstanding ........... 16,091 16,091
================ ===========
PEOPLES TELEPHONE COMPANY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For The Year Ended December 31, 1994
(UNAUDITED)
(in thousands, except per share data)
Inmate
Peoples Telephone Division Pro Forma
Company, Inc. Assets Sold Adjustments Pro Forma
---------------- ----------- ----------- ----------
Revenues:
Coin calls ........................... $ 79,392 $ -- $ -- $ 79,392
Non-coin calls ....................... 77,994 42,428 -- 35,566
Service and other .................... 1,615 -- -- 1,615
Gain on sale of assets ............... 441 441 -- --
---------------- ----------- ----------- ----------
Total revenues ..................... 159,442 42,869 -- 116,573
---------------- ----------- ----------- ----------
Costs and expenses:
Telephone charges .................... 67,656 23,940 -- 43,716
Commissions .......................... 32,693 9,128 -- 23,565
Field service and collection ......... 21,334 2,726 -- 18,608
Depreciation and amortization ........ 21,674 3,337 -- 18,337
Selling, general, and administrative . 14,580 1,536 -- 13,044
Loss from impairment of inmate assets. -- -- -- --
Provision for dial-around compensation
adjustment .......................... -- -- -- --
Other (income) expense ............... -- -- -- --
---------------- ----------- ----------- ----------
Total costs and expenses .......... 157,937 40,667 -- 117,270
---------------- ----------- ----------- ----------
Operating income (loss) .................. 1,505 2,202 -- (697)
---------------- ----------- ----------- ----------
Other (income) and expenses:
Interest expense, net ................ 7,516 -- -- 7,516
(Gain) loss on disposal/operations of
prepaid calling card and international
telephone centers .................. 5,506 -- -- 5,506
---------------- ----------- ----------- ----------
Total other (income) and expenses, net 13,022 -- -- 13,022
---------------- ----------- ----------- ----------
Income (loss) from continuing operations
before income taxes ................... (11,517) 2,202 -- (13,719)
Benefit from (provision for) income taxes. 4,405 (840) -- 5,245
---------------- ----------- ----------- ----------
Net income (loss) from continuing operations
before extraordinary item ............. $ (7,112) $ 1,362 -- $ (8,474)
================ =========== =========== ===========
Primary and fully diluted earnings per share
Loss from continuing operations ....... $ (0.45) $ (0.54)
================ ===========
Weighted average of common and common
equivalent shares outstanding .......... 15,713 15,713
================ ===========
PEOPLES TELEPHONE COMPANY, INC.
FOOTNOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands)
(a) Does not include accounts receivable, not sold or liabilities, not assumed
of approximately $1.0 million and $1.2 million, respectively.
(b) Represents assets of Peoples Telephone Company, Inc. inmate division
acquired or assumed by Talton Holdings, Inc. ("Talton").
(c) Represents the cash proceeds from the sales transaction with Talton.
(d) Estimated costs related to the disposition of assets.
(e) The gain on the disposal of the inmate division results from the difference
between proceeds from the transaction, less estimated costs related to the
transaction, and the net book value of the assets sold.