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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) August 10, 1996
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Alpha Microsystems
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(Exact Name of Registrant as Specified in Charter)
California 0-10558 95-3108178
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2722 South Fairview Street, Santa Ana, California 92704
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (714) 957-8500
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On August 10, 1996, Alpha Microsystems, a California corporation (the
"Company"), entered into an agreement (the "Agreement") for the sale of the
entire issued share capital of Alpha Microsystems (Great Britain) Limited (the
"Subsidiary"), with Sanderson Electronics PLC ("the "Purchaser"). The sale was
consummated on August 19, 1996.
Pursuant to the Agreement, the Company agreed to sell all of the
1,723,548 issued and outstanding ordinary shares of the Subsidiary to the
Purchaser in exchange for 907,792 ordinary shares of the Purchaser (the
"Purchase Price") valued at approximately $2,083,000 as of August 13, 1996. The
Purchase Price was determined based upon the net assets of the Subsidiary, its
past financial performance, and structural issues related to the Subsidiary, and
was the result of substantial negotiations with the Purchaser, an independent
third party. In conjunction with this agreement the Company and Sanderson
signed a three year hardware distribution agreement allowing Sanderson to sell
Alpha Microsystems hardware products in the United Kingdom and Eire. Except for
the Agreement and the products distribution agreement mentioned above, there is
no material relationship between the Purchaser and the Company or any of the
Company's affiliates, directors or officers or any associate of any director or
officer of the Company. In connection with the Agreement, the Company has
granted to the Purchaser the right to use the names "Alpha Micro" and "Alpha
Microsystems" in connection with the Subsidiary's hardware distribution and
service business for a period of up to 3 years after the closing of the
transactions contemplated by the Agreement. The Company may, however, terminate
the Purchaser's right to utilize those names on not less than three months'
notice in certain events. In addition, the Company has granted a license to the
Purchaser enabling the Purchaser to utilize certain trademarks of the Company in
connection with the operation of the business of the Subsidiary. No additional
consideration is being paid in connection with the grant of such licenses. The
Subsidiary has a number of active and inactive subsidiaries, each of which will
remain a subsidiary of the Subsidiary and, will be indirectly owned by the
Purchaser. The active subsidiaries include Sabre Business Systems Limited, a
corporation registered in Northern Ireland, Sabre Business Systems Limited, a
corporation registered in Ireland, and Sabre Software Developments Limited, a
corporation registered in Eire.
As part of the sale agreement, the Company has agreed to negotiate in
good faith toward developing a strategic alliance with Sanderson, whereby
Sanderson would distribute and market the Company's AlphaCONNECT family of
products in the United Kingdom and potentially in Southeast Asia. Sanderson has
significant distribution channels in these geographic areas.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information. The following pro forma
financial information is provided with this report:
(i) Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of May 26, 1996
(ii) Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Fiscal Quarter Ended May 26,
1996
(iii) Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Fiscal Year Ended
February 25, 1996
(iv) Notes to Unaudited Pro Forma Consolidated Financial
Statements
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(c) Exhibits. The following exhibits are included with this
report:
Item Exhibit No.
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Agreement between Registrant and Sanderson
Electronics PLC dated August 10, 1996 2
Press Release 99
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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.
Date: August 21, 1996 ALPHA MICROSYSTEMS
By: /S/ Douglas J. Tullio
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Douglas J. Tullio,
President and Chief Executive
Officer
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ALPHA MICROSYSTEMS
UNAUDITED PRO FORMA FINANCIAL DATA
On August 10, 1996 the Company agreed to sell Alpha Microsystems (Great Britain)
Limited ("AMGB"), a corporation registered in the United Kingdom, and its
subsidiaries, to Sanderson Electronics PLC ("Sanderson") for 907,792
unrestricted ordinary shares of Sanderson stock. Sanderson is listed on the
London Stock Exchange and the value per share at August 13, 1996 was (pound
sterling) 1.48 per share, which translates into a fair market value of
$2,083,000. Sanderson's current market capitalization is over $90 million and
its current number of shares outstanding are approximately 42 million.
Sanderson's fiscal 1995 results include revenues in excess of $88 million and
profits before tax of approximately $8 million.
The following unaudited Pro Forma Condensed Consolidated Balance Sheet is
presented as if the sale of AMGB had occurred on May 26, 1996. The following
unaudited Pro Forma Condensed Consolidated Statements of Operations for the
three months ended May 26, 1996 and the year ended February 25, 1996 are
presented as if the sale of AMGB had occurred on February 25, 1996 and February
26, 1995, respectively. The pro forma adjustments represent the Company's
determination of all material adjustments necessary to present fairly the
Company's pro forma results of operations and financial position and are based
upon available information and certain assumptions considered reasonable in the
circumstances.
The following pro forma financial information should be read in conjunction with
the historical financial statements and notes thereto of the Company filed on
Forms 10-K and 10-Q for the respective periods. The pro forma results of
operations are not necessarily indicative of the actual results that would have
occurred had the sale been consummated at the beginning of the period indicated
and do not purport to indicate results of operations as of any future date or
for any future period.
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ALPHA MICROSYSTEMS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MAY 26, 1996
(In thousands, except share data)
Pro Forma
Historical Adjustments Pro Forma
Consolidated (Note A) Consolidated
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ASSETS
Current assets:
Cash and cash equivalents $ 1,673 $ (782) $ 891
Marketable securities -- 2,083 2,083
Accounts receivable, net 4,300 (1,564) 2,736
Inventories 854 (562) 292
Note receivable 107 -- 107
Prepaid expenses and other current assets 470 (161) 309
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Total current assets 7,404 (986) 6,418
Property and equipment, at cost 16,779 (750) 16,029
Less accumulated depreciation and amortization 12,797 (611) 12,186
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Net property and equipment 3,982 (139) 3,843
Service contracts, net 650 -- 650
Software costs, net 632 -- 632
Goodwill, net 168 (140) 28
Other assets, net 116 (49) 67
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$ 12,952 $ (1,314) $ 11,638
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings $ 500 $ -- $ 500
Accounts payable 1,539 (537) 1,002
Deferred revenue 2,309 (310) 1,999
Other accrued liabilities 762 (414) 348
Accrued salaries and wages 248 (71) 177
Current portion of long-term debt 138 -- 138
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Total current liabilities 5,496 (1,332) 4,164
Long-term debt 197 -- 197
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 5,000,000
shares authorized; none issued -- -- --
Common stock, no par value; 20,000,000 shares
authorized; 6,929,523 shares
issued and outstanding at May 26, 1996 22,412 -- 22,412
Accumulated deficit (15,038) (165) (15,203)
Unamortized restricted stock plan expense (18) -- (18)
Foreign currency translation adjustment (97) 183 86
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Total shareholders' equity 7,259 18 7,277
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$ 12,952 $ (1,314) $ 11,638
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See accompanying Notes to the Unaudited Pro Forma Consolidated Financial
Statements.
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ALPHA MICROSYSTEMS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended February 25, 1996
(In thousands, except per share data)
Pro Forma
Historical Adjustments Pro Forma
Consolidated (Note A) Consolidated
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Net sales:
Product $ 14,466 $ (3,744) $ 10,722
Service 18,297 (3,357) 14,940
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Total net sales 32,763 (7,101) 25,662
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Cost of sales:
Product 10,228 (2,413) 7,815
Service 12,739 (1,568) 11,171
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Total cost of sales 22,967 (3,981) 18,986
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Gross Margin 9,796 (3,120) 6,676
Selling, general and administrative expense 11,855 (3,238) 8,617
Research and development expense 2,093 -- 2,093
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Total operating expenses 13,948 (3,238) 10,710
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Income (loss) from operations (4,152) 118 (4,034)
Interest income (93) (7) (100)
Interest expense 38 -- 38
Other (income) expense, net (466) (27) (493)
Foreign exchange (gain) loss (76) 77 1
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Total other (income) expenses (597) 43 (554)
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Income (loss) before taxes (3,555) 75 (3,480)
(Benefit) provision for income taxes 20 (19) 1
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Net income (loss) $ (3,575) $ 94 $ (3,481)
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Net income (loss) per share $ (0.54) $ 0.01 $ (0.53)
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Number of shares used in the
computation of per share amounts 6,565 6,565 6,565
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See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated
Financial Statements.
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ALPHA MICROSYSTEMS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended May 26, 1996
(In thousands, except per share data)
Pro Forma
Historical Adjustments Pro Forma
Consolidated (Note A) Consolidated
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Net sales:
Product $ 2,798 $ (824) $ 1,974
Service 4,278 (766) 3,512
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Total net sales 7,076 (1,590) 5,486
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Cost of sales:
Product 1,495 (367) 1,128
Service 3,234 (389) 2,845
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Total cost of sales 4,729 (756) 3,973
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Gross Margin 2,347 (834) 1,513
Selling, general and administrative expense 2,199 (645) 1,554
Research and development expense 557 -- 557
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Total operating expenses 2,756 (645) 2,111
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Income (loss) from operations (409) (189) (598)
Interest income (4) (4) (8)
Interest expense 16 -- 16
Other (income) expense, net (75) (31) (106)
Foreign exchange (gain) loss (7) 7 --
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Total other (income) expenses (70) (28) (98)
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Income (loss) before taxes (339) (161) (500)
(Benefit) provision for income taxes 5 4 9
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Net income (loss) $ (344) $ (165) $ (509)
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Net income (loss) per share $ (0.05) $ (0.02) $ (0.07)
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Number of shares used in the
computation of per share amounts 6,869 6,869 6,869
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See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated
Financial Statements.
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ALPHA MICROSYSTEMS
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(A) To reflect the disposition of the Alpha Microsystems (Great Britain)
Limited ("AMGB") operations, a former wholly-owned subsidiary, to
Sanderson Electronics PLC ("Sanderson") for 907,792 unregistered
ordinary shares of Sanderson stock, listed on the London Exchange and
valued at $2,083,000 based upon the closing price of the shares as of
August 13, 1996. Sanderson registered the above shares with the
London Stock Exchange on August 19, 1996.
Like any securities of this nature, there are significant risks
associated with market and exchange rate fluctuations and the
associated with these securities can be best assessed by reviewing the
information filed by Sanderson with the London Stock Exchange. These
securities are classified as short-term marketable securities held for
sale.
To reflect the three year agreement for hardware distribution between
Sanderson and the Company at comparable terms extended to AMGB
during the pro forma periods, the Company has recognized in the
Unaudited Pro Forma Condensed Consolidated Statements of Operations
revenue of $1,147,000 for the twelve months ended February 25, 1996 and
$320,000 for the three months ended May 26, 1996.