UNITED STATES
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) November 30, 2001
EMERGENT INFORMATION TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
California 0-23585 33-0080929
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
4695 MacArthur Court, Eighth Floor, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 975-1487
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 30, 2001, Emergent Information Technologies, Inc. (the
"Company") sold the stock of Emergent Information Technologies - East (also
known as Government Services Group or "GSG"), a wholly-owned subsidiary of the
Company, to L-3 Communications Corporation, a Delaware corporation ("L-3"), for
$39.8 million (the "Purchase Price"). The Purchase Price is subject to
adjustment under the terms of the Stock Purchase and Sale Agreement, dated
November 19, 2001, by and among the Company, Steven Myers Holding Inc. and L-3
Communications Corporation, as amended.
In determining the amount of consideration to be paid for the stock of
GSG, the Company evaluated offers to purchase the stock of GSG from a number of
potential purchasers. After reviewing the offers received, the Company entered
into exclusive negotiations with L-3. The final purchase price was arrived at by
means of arm's length bargaining between the Company and L-3.
At the time of the disposition, there was no material relationship between
L-3 (including its officers, directors and shareholders) and (i) the Company,
(ii) any of the Company's affiliates, (iii) any director or officer of the
Company, or (iv) any associate of any such officer or director.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information
Unaudited Pro Forma Consolidated Statements of Operations of Emergent
Information Technologies, Inc. and Subsidiaries for the year ended
December 31, 2000.
The remaining pro forma financial information which would otherwise be
required to be reported under Item 7 is not provided herein pursuant to
General Instruction B.3. of Form 8-K as substantially the same information
required has been "previously reported" (as defined in Rule 12b-2) by the
Company in connection with the Company's quarterly report on Form 10-Q for
the period ended September 30, 2001 (File No. 000-23585).
(c) Exhibits.
Exhibit No. Description
----------- -----------
10.1 Amendment No. 1 to Stock Purchase and Sale Agreement,
dated November 29, 2001, by and among Emergent
Information Technologies, Inc., Steven Myers Holding
Inc. and L-3 Communications Corporation.
99.1 Press Release dated December 3, 2001
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.
EMERGENT INFORMATION TECHNOLOGIES, INC.
(Registrant)
Date December 12,2001 /s/ Cathy L. Wood
---------------------------- ----------------------------------------
(Signature)
Cathy L. Wood
Chief Financial Officer
INDEX TO FINANCIAL STATEMENTS
Page
----
PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Consolidated Statements of Operations
of Emergent Information Technologies, Inc. and Subsidiaries
for the year ended December 31, 2000..................................... F-2
F-1
EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 2000
------------------------------------------------
HISTORICAL(A) ADJUSTMENT PRO FORMA
------------- ---------- ---------
Net revenue ..................................................... $ 120,140 $ 82,634 (B) $ 37,506
Cost of revenue ................................................. 72,980 52,289 (B) 20,691
--------- --------- ---------
Gross margin ............................................... 47,160 30,345 16,815
Selling, general and administrative expenses .................... 32,921 20,179 (B) 12,742
Amortization of goodwill and other intangibles .................. 1,716 1,716 (C) --
--------- --------- ---------
Operating income ........................................... 12,523 8,450 4,073
Other expense:
Interest expense, net ...................................... (2,010) (1,741)(D) (269)
Other expense, net ......................................... (52) 7 (59)
--------- --------- ---------
Income from continuing operations before income taxes .. 10,461 6,716 3,745
Income tax expense .............................................. 4,289 2,754 1,535
--------- --------- ---------
Income from continuing operations ...................... 6,172 3,962 2,210
Discontinued operations:
Loss from operations of discontinued business, net of income
tax benefit of $3,364 .................................. (5,928) (5,928)
Loss from disposal of discontinued business, net of income
tax benefit of $3,509 .................................. (30,607) (30,607)
--------- ---------
Net loss ........................................................ $ (30,363) $ (34,325)
========= =========
Income per share from continuing operations:
Basic ...................................................... $ .38 $ .14
Diluted .................................................... $ .37 $ .13
Loss per share from discontinued operations:
Basic ...................................................... $ (2.23) $ (2.23)
Diluted .................................................... $ (2.20) $ (2.20)
--------- ---------
Net loss per share
Basic ...................................................... $ (1.85) $ (2.10)
Diluted .................................................... $ (1.83) $ (2.07)
========= =========
Weight average shares outstanding
Basic ...................................................... 16,350 16,350
Diluted .................................................... 16,579 16,579
F-2
EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
(A) The accompanying historical consolidated statement of operations for the
year ended December 31, 2000 has been derived from the Company's audited
consolidated financial statements and notes thereto for the year ended
December 31, 2000, included in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on April 17, 2001.
(B) Represents operating activity of the Government Services Group for the
twelve months ended December 31, 2000.
(C) Represents the elimination of goodwill and other intangible amortization
related to prior acquisitions that were disposed of as part of the sale of
the Government Services Group.
(D) Represents interest expense applicable to the Government Services Group
based on an allocation of debt outstanding at actual rates in effect
during the period.
(E) Represents the impact of the tax provision related to the adjustments
described in (B), (C) and (D) above.
F-3
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
10.1 Amendment No. 1 to Stock Purchase and Sale Agreement,
dated November 29, 2001, by and among Emergent
Information Technologies, Inc., Steven Myers Holding
Inc. and L-3 Communications Corporation.
99.1 Press Release dated December 3, 2001