SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULES 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Month of June 2002
GENESYS S.A.
(Exact name of registrant as specified in its charter)
L'Acropole, 954-980 avenue Jean Mermoz, 34000
Montpellier, FRANCE
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
-- --
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No X
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______________.
GENESYS, S.A.
FORM 6-K
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 3 MONTHS ENDED MARCH 31, 2002
U.S. GAAP
-----------------------------------------------------
1. MD&A
2. Financial Statements
3. Notes
-----------------------------------------------------
1. Management's Discussion and Analysis of Financial Condition and Results of
Operations
This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the financial
statements and footnotes for the three months ended March 31, 2002 contained
herein and the Form 20-F for the year ended December 31, 2001 filed with the
Securities and Exchange Commission.
We include the results of acquired companies in our results of operations
from their respective dates of acquisition. As a result, our historical
financial statements are not directly comparable from one period to the next.
The consolidated statements of operations for the three months ended March 31,
2001 did not include the results for Astound Incorporated and Vialog
Corporation, which we acquired at the end of March 2001 and in April 2001,
respectively. Note No. 9, Pro forma information, to the attached financial
statements presents a pro forma statement of operations for the three months
ended March 31, 2001 and balance sheet at March 31, 2001.
On February 6, 2002, we announced plans to consolidate our call center
operations in North America from six call centers to three call centers to
provide higher levels of customer service and improve operating efficiencies.
The three remaining call centers have the capacity to absorb the current volume
and to provide for future growth. The restructuring costs related to these
closings are estimated to be (euro) 7.6 million and are primarily for unusable
future facility lease commitments, the write-off of certain leasehold
improvements and equipment, employee severance as well as other miscellaneous
costs associated with the call center consolidation. Components of these costs
by call center to be closed are presented in the table below.
Bedford Denver Montgomery Total costs
------- ------ ---------- -----------
accrued
-------
((euro)in thousands)
Write-offs of leasehold improvements,
equipment and other tangible assets............ (euro) 218 (euro)2,099 (euro)1,059 (euro)3,376
Future lease payments under non
cancelable operating leases.................... 912 1,185 1,092 3,189
Severance and other people related expenses.... 117 541 197 855
Other related expenses......................... 25 60 105 190
-- -- --- ---
Total.......................................... (euro)1,272 (euro)3,885 (euro)2,453 (euro)7,610
=========== =========== =========== ===========
Of the restructuring costs related to the call center closings described
above, (euro) 3.7 million (pre-tax) was recorded as a non-recurring
restructuring charge in the three months ended March 31, 2002 and (euro) 3.9
million was recorded as an increase to goodwill arising from the acquisition of
Vialog. We estimate that future annual cost savings from the consolidation will
range from (euro) 3.5 to (euro) 4.0 million beginning in the third quarter of
2002.
Other costs relating to the consolidation of call centers will be recorded
as expenses as incurred during the second and third quarters of 2002, in
accordance with generally accepted accounting principles. These costs include
retention bonuses and duplicative costs in closing the affected call centers.
The expected amount of these costs is (euro) 868,000.
On March 20, 2002, our Bedford, Massachusetts call center was closed and
all traffic formerly serviced in Bedford has been re-routed to our Reston,
Virginia call center. Actual costs incurred for the Bedford closing compared to
the costs accrued through March 31, 2002 are presented in the table below :
Costs Incurred in Balance at
----- ----------- ----------
accrued the quarter March 31, 2002
------- ----------- --------------
Write-offs of leasehold improvements,
equipment and other tangible assets................. (euro) 218 (euro) 218 --
Future lease payments under non cancelable
operating leases.................................... 912 -- (euro) 912
Severance and other people related expenses......... 117 -- 117
Other related expenses.............................. 25 -- 25
-- --
Total............................................... (euro)1,272 (euro) 218 (euro)1,054
=========== =========== ===========
We expect to close the call centers located in Denver, Colorado and
Montgomery, Alabama by the end of the third quarter of 2002.
Three months ended March 31, 2002 compared with the three months ended March 31,
2001
Revenue
The following table sets forth our revenues for the three months ended
March 31, 2001 and 2002 by category and expressed as a percentage of total
revenues.
Three months ended March 31,
------------------------------
2001 2002
-------------- -------------
(euro) in % of (euro) in % of
thousands revenues thousands revenues
Audio conferencing...................... 22,947 85.7% 49,937 90.1%
Video conferencing...................... 2,668 10.0% 2,551 4.6%
Data conferencing and Web streaming..... 551 2.1% 2,452 4.4%
Products................................ 604 2.2% 512 0.9%
------ ------ ------ ------
Total revenues.......................... 26,770 100.0% 55,452 100.0%
====== ====== ====== ======
Total revenues increased (euro) 26.8 million, or 107.1%, from (euro) 26.8
million to (euro) 55.5 million for the three months ended March 31, 2001 and
2002, respectively. Of the increase, (euro) 26.1 million, or 90.9%, was
attributable to the acquisition of Vialog made in April 2001. Approximately
(euro) 2.1 million, or 7.0% of the increase, was driven by organic revenue
growth in Europe, particularly in France and Sweden. The remaining (euro) 0.8
million of the increase was due to the impact of currency exchange rate
movements, as the euro depreciated against the dollar and other non-euro
currencies in which we do business. Total conferencing minutes increased by
166.0%, from 100 million minutes (or 212 million minutes when combined with
Vialog) to 266 million minutes for the three months ended March 31, 2001 and
2002, respectively.
Audio conferencing. Audio conferencing revenues increased (euro) 27.0
million , or 117.6%, from (euro) 22.9 million to (euro) 49.9 million for the
three months ended March 31, 2001 and 2002, respectively. Of the increase,
(euro) 25.2 million, or 93.3% of the increase, was attributable to the
acquisition of Vialog in April 2001. The remaining (euro) 1.8 million increase
was mainly driven by revenue growth in Europe, particularly in France, the UK
and Sweden, as described above. Call volume minutes increased by 166.0%, from 99
million minutes (or 211 million minutes when combined with Vialog) to 265
million minutes for the three months ended March 31, 2001 and 2002,
respectively. The increase in call volume minutes is higher than the increase in
audio conferencing revenues primarily due to the significant shift from
operator-assisted services to automated services, which are at a lower
per-minute price. This shift is primarily occurring in North America, which
historically has a high proportion of operator-assisted calls. Additionally,
average per-minute prices for audio conferencing have declined, primarily as a
result of the effect of volume discounts and competitive pressure.
Video conferencing. Video conferencing revenues remained stable, from
(euro) 2.7 million to (euro) 2.6 million for the three months ended March 31,
2001 and 2002, respectively.
Data conferencing and Web streaming. Data conferencing and Web streaming
revenues increased from (euro) 0.5 million to (euro) 2.5 million for the three
months ended March 31, 2001 and 2002, respectively. The (euro) 2.0 million
increase in revenues was mainly attributable to the acquisition of the data
conferencing company Astound at the end of March 2001 and organic growth of Web
streaming.
Geographic composition of revenues. The following table shows our revenues
by segments for each of the three months ended March 31, 2001 and 2002 and
expressed as a percentage of total revenues.
In addition to the three geographic segments that existed prior to 2002, we
now have a fourth segment for our recently created global Video Conferencing
division. Amounts for the quarter ended March 31, 2001 have been restated to
reflect our current four segments structure.
Three months ended March 31,
-----------------------------------------------
2001 2002
-------------- --------------
(euro) in % of (euro) in % of
thousands revenues thousands revenues
Europe............. 12,472 46.6% 14,701 26.5%
North America...... 10,262 38.3% 36,275 65.4%
Asia-Pacific....... 1,272 4.8% 1,401 2.5%
Global Video....... 2,764 10.3% 3,075 5.6%
===== ===== ===== ====
Total revenues..... 26,770 100.0% 55,452 100.0%
======== ======== ======== ========
The shift in the geographic composition of revenues is primarily a result
of the impact of the acquisition of Vialog in April 2001, which is based in
North America.
Gross Profit
Gross profit increased (euro) 16.3 million, or 104.2%, from (euro) 15.7
million to (euro) 32.0 million for the three months ended March 31, 2001 and
2002, respectively. Of the increase, (euro) 14.9 million, or 91.4%, was
attributable to the acquisition of Vialog in April 2001. Gross profit decreased
as a percentage of revenues from 58.6% to 57.8% for the three months ended March
31, 2001 and 2002, respectively. This decrease is primarily due to the
significant proportion of operator-assisted conferencing used by the customers
obtained with the Vialog acquisition. These services have lower margins than
automated services. We expect to continue the migration of customers, in North
America and the UK particularly, from operator-assisted services to higher
margin, automated services during the next several quarters. We also expect that
the announced consolidation of our North America call centers to be completed by
the end of the third quarter 2002, will have a positive impact on our gross
margin, due to the expected reduction in our cost of revenues.
Operating Expenses
The following table breaks down our operating costs and expenses that are
not included in cost of revenues for the three months ended March 31, 2001 and
2002 by major components.
Three months ended March 31,
----------------------------
2001 2002
---------------- ----------------
(euro) in % of (euro) in % of
thousands revenues thousands revenues
Research and development...... 695 2.6% 1,260 2.3%
Selling and marketing......... 5,645 21.1% 13,508 24.4%
General and administrative.... 9,099 34.0% 15,210 27.4%
Non-recurring charge.......... -- -- 3,671 6.6%
Amortization of goodwill and
other intangibles............. 2,324 8.7% 3,649 6.6%
------ ------
Total operating expenses...... 17,763 66.4% 37,298 67.3%
======== ========
Research and Development
Our research and development expenses doubled from (euro) 0.7 million to
(euro) 1.3 million for the three months ended March 31, 2001 and 2002,
respectively, although they remained essentially steady as a percentage of our
revenues. The increase in research and development expenses resulted primarily
from the expansion of our workforce resulting from our acquisition of Astound at
the end of March 2001. Our major development activities have been the
development and enhancement of our Genesys Meeting Center, which is our fully
integrated, automated, audio and Web conferencing platform. Our development
activities also include the development in progress of our platform Genesys
Event and Managed Services that will be launched by the end of 2002 and will be
our platform for our operator-assisted services.
Selling and Marketing
Our selling and marketing expenses increased (euro) 7.9 million, or 141.1%,
from (euro) 5.6 million to (euro) 13.5 million for the three months ended March
31, 2001 and 2002, respectively. As a percentage of revenues, our selling and
marketing expenses increased from 21.1% to 24.4% for the three months ended
March 31, 2001 and 2002, respectively. Of the increase, (euro) 5.6 million, or
70.9% of the increase, was attributable to the Astound and Vialog acquisitions
completed at the end of March 2001 and April 2001, respectively. The Vialog
acquisition more than doubled our sales force in North America. The remaining
amount of the increase mainly related to the organic growth of our sales force,
particularly in the United States, and the expansion of our global marketing
team in connection with our efforts to further penetrate the market,
particularly in North America, and increase global brand awareness.
Additionally, selling and marketing expenses included (euro) 0.3 million of
employee separation costs in the three months ended March 31, 2002 partly
relating to our North American restructuring.
General and Administrative
Our General and administrative expenses increased (euro) 6.1 million, or
67.2%, from (euro) 9.1 million to (euro) 15.2 million for the three months ended
March 31, 2001 and 2002, respectively. Of the increase, (euro) 5.4 million, or
88.5% of the increase, was attributable to the Astound and Vialog acquisitions
completed at the end of March 2001 and April 2001, respectively. Additionally,
general and administrative expenses increased due to the growth of our company
(such as increased professional fees and investor relations expenses following
our April 2001 listing on the Nasdaq Stock Market). Separation costs of ((euro)
0.6 million), partly relating to our North American restructuring, were recorded
in the three months ended March 31, 2002. As a percentage of revenues, our
general and administrative expenses decreased by 6.6%, from 34.0% to 27.4% for
the three months ended March 31, 2001 and 2002, respectively.
Non-recurring charge
As described above, on February 6, 2002, we announced plans to consolidate
our call center operations in North America . The restructuring costs related to
these closings are estimated to be (euro) 7.6 million. Of this amount, (euro)
3.7 million was recorded as a non-recurring restructuring charge in the three
months ended March 31, 2002. The remaining amount of (euro) 3.9 million was
recorded as an increase to goodwill arising from the acquisition of Vialog.
Amortization of Goodwill and Other Intangibles
Amortization of goodwill and other intangibles increased (euro) 1.3
million, or 57.0%, from (euro) 2.3 million to (euro) 3.6 million for the three
months ended March 31, 2001 and 2002, respectively. The net increase of (euro)
1.3 million was primarily due to the amortization of identifiable intangible
assets relating to the acquisition of Astound and Vialog made at the end of
March 2001 and April 2001, respectively. Amortization of these intangible assets
amounted to (euro) 3.5 million for the three months ended March 31, 2002.
We have applied Statement of Financial Accounting Standards (SFAS) No.
142, Goodwill and Other Intangible Assets, since January 1, 2002. Application of
the non-amortization provisions of SFAS No. 142 decreased the amortization
expenses by approximately (euro) 3.0 million for the three months ended March
31, 2002. We also reclassified an assembled workforce intangible asset with an
unamortized balance of (euro) 6.5 million to goodwill at January 1, 2002.
As a result, the increase due to the intangible assets of Vialog and
Astound was partly offset by the non amortization of goodwill including former
assembled workforce since January 1, 2002.
EBITDA
Our EBITDA, excluding the non-recurring charge described above, almost
tripled from (euro) 2.4 million to (euro) 6.7 million for the three months ended
March 31, 2001 and 2002, respectively. Our EBITDA margin increased from 8.9% to
12.1% for the three months ended March 31, 2001 and 2002, respectively. The
increase in EBITDA margin primarily reflects the decreased level of expenses for
General and Administrative, partly offset by the increased level of expenses for
Selling and Marketing and our lower gross margin, as described above. We expect
that the announced consolidation of our North America call centers, to be
completed by the end of the third quarter of 2002, will improve operating
efficiency and that our EBITDA margin will improve after the consolidation is
completed.
Operating loss
Our operating loss increased from (euro) 2.1 million to (euro) 5.3 million
for the three months ended March 31, 2001 and 2002, respectively. Excluding the
non-recurring charge described above, our operating loss decreased to (euro) 1.6
million for the three months ended March 31, 2002.
Financial Income (Expenses)
We incurred net financial expenses of (euro) 3.1 million for the three
months ended March 31, 2002, after generating net financial income of (euro) 1.4
million for the three months ended March 31, 2001. The change primarily reflects
a significant increase in interest expense, due to a significant increase in our
long-term debt following the Vialog acquisition. As part of the acquisition of
Vialog, in April 2001, we entered into a U.S. $ 125 million credit facility that
replaced our previous U.S. $ 35 million multi-currency term loan and Vialog's
existing long term debt (U.S. $ 75 million senior notes payable). Additionally,
we incurred a net foreign exchange loss of (euro) 0.5 million for the three
months ended March 31, 2002 compared to a net foreign exchange gain of (euro)
1.2 million for the three months ended March 31, 2001.
Income Tax Expense
We generated a net income tax credit of (euro) 0.3 million for the three
months ended March 31, 2002, after incurring income tax expense of (euro) 1.3
million for the three months ended March 31, 2001. The net increase of (euro)
1.6 million mainly consists of (euro) 1.2 million in deferred tax income
relating to the amortization of identifiable intangible assets in connection
with the acquisition of identifiable intangible assets from Astound and Vialog
in 2001.
Net Loss
For the foregoing reasons, we recorded a net loss of (euro) 8.0 million for
the three months ended March 31, 2002, compared to a net loss of (euro) 2.0
million for the three months ended March 31, 2001. The net loss before the
non-recurring charge amounted to (euro) 4.3 million for the three months ended
March 31, 2002.
Liquidity and Capital Resources
General
Our capital requirements are driven primarily by our (i) capital
expenditures for telecommunications and bridging equipment, servers, computers
and software and (ii) to fund acquisitions. To date, we have funded our capital
requirements through a combination of equity offerings, borrowings (including
bank financings and convertible debt issuances), and operating cash flow.
At March 31, 2002, our principal sources of liquidity included (euro) 13.9
million in cash and cash equivalents and a total of (euro) 5.4 million of
unutilized short-term credit facilities. Under the terms of our U.S. $ 125
million credit facility, we may only have U.S. $ 4.0 million of additional
indebtedness, which may limit our ability to borrow under our short-term credit
facilities.
In connection with the acquisition of Vialog, in April 2001, we and Vialog
entered into a U.S.$ 125 million credit facility, which was used to refinance
existing debt of our company and Vialog and for working capital purposes. This
facility, which has since been amended, is described in more detail below. We
believe that our capital resources are sufficient to meet our current working
capital needs.
Cash Flows
Cash and cash equivalents decreased from (euro) 17.5 million at the end of
December 2001 to (euro) 13.9 million at the end of March 2002.
Cash of (euro) 1.9 million was provided by operating activities. Cash was
provided by the increase of other liabilities amounting to (euro) 5.3 million
including mainly restructuring costs accrued , partly offset by the cash used in
the increase of accounts receivable and decrease of accounts payable that
amounted to (euro) 1.6 million and (euro) 2.9 million, respectively.
Cash of (euro) 5.8 million was used in investing activities, of which
(euro) 4.3 million was for the final payment, or "top up", for the acquisition
of Astound. Additionally, cash of (euro) 1.5 million was used to fund capital
expenditures for telecommunications and bridging equipment, servers, computers
and software,.
Cash of (euro) 0.1 million was used in financing activities.
Credit Facility and other outstanding indebtedness
On April 20, 2001 we and Vialog entered into a U.S. $ 125 million credit
facility agreement with BNP Paribas, CIBC World Markets and Fortis Bank. This
credit facility, which was amended thereafter, replaced our then outstanding
U.S. $ 35 million multi-currency term loan and the long term debt of Vialog
(U.S. $ 75 million senior notes payable), that existed prior to our acquisition
of Vialog. The U.S. $ 125 million credit facility includes the following items :
- a U.S.$ 50 million senior term loan facility granted to Vialog,
which was used by Vialog to refinance its existing debt. This
facility matures on April 28, 2006 and bears interest at the rate
of Libor USD plus a margin of 2.65% per annum.
- a U.S.$ 30 million senior term loan facility granted to Vialog,
which was used by Vialog to refinance its existing debt. This
facility matures on October 31, 2006 and bears interest at the
rate of Libor USD plus a margin of 3.15% per annum
- a U.S.$ 35 million senior term loan facility granted tour
company, which we used to partially refinance our existing debt.
This facility matures on April 28, 2006 and bears interest at the
rate of Libor USD plus a margin of 2.65% per annum
- a U.S.$ 5 million revolving loan facility granted to Vialog, to
be used by Vialog for working capital purposes. This facility
bears interest at the rate of Libor USD plus a margin of 2.65%
per annum
- a U.S.$ 5 million revolving loan facility granted to our company,
which we use for working capital purposes. This facility bears
interest at the rate of Libor USD plus a margin of 2.65% per
annum.
The U.S.$ 50 million and U.S.$ 35 million term loans granted to Vialog
and our company, respectively, are to be repaid in semi-annual installments in
accordance with the schedule set forth in the credit facility agreement. The
U.S.$ 30 million facility is to be repaid in one payment at maturity. All
amounts borrowed are repayable at any time in whole or in part at the option of
the borrower.
The U.S. $125 million credit facility requires us to comply with certain
financial covenants, consisting of leverage, interest cover, and cash cover
ratios. We are currently in compliance with all of these covenants as amended.
Confirmation of the approval of the latest amendment was received on May 31,
2002. In addition, the credit facility places limits on our ability to make
capital expenditures and prohibits our payment of dividends. We have pledged as
security for our credit facility the shares of our principal subsidiaries, as
well as the accounts receivable of our U.S. subsidiary. If our financial results
do not reach the level required by our debt covenants and we are unable to
obtain a waiver from our lenders, our debt would be in default and callable by
our lenders.
Other Commitments
We have entered into an interest rate swap agreement to hedge our
exposure on a portion of our debt.
We do not have any material guarantees outstanding, nor do we have any
securitization or other off-balance sheet financing arrangements, other than
those described in note No. 14, Commitments and Contingencies, to the financial
statements contained in the Form 20-F for the year ended December 31, 2001, as
filed with the Securities and Exchange Commission.
Trend Information
On March 6, 2002, we announced that we believed the business environment
was going to remain favorable for the conferencing and collaboration industry in
2002. As a result, we stated our expectation that our gross margin and EBITDA
might improve due to the increasing share of our business represented by
automated services, as well as control over the selling and marketing, and
general and administrative expenses.
For internal planning purposes, we have targeted revenues to reach between
(euro) 230 million and (euro) 250 million for the year ended December 31, 2002.
On May 14, 2002, we reiterated our comfort with respect to this guidance.
However, these revenue targets are subject to significant uncertainty, and might
not be reached for any number or reasons, including those described under Item
3, "Key information - Risk Factors" of the Form 20-F for the year ended December
31, 2001 as filed with the Securities and Exchange Commission.
Critical accounting policies
We prepare our consolidated financial statements in accordance with U.S.
generally accepted accounting principles. The preparation of these financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities.
We believe the following critical accounting policies, among others,
represent the more significant judgments and estimates used in preparation of
our consolidated financial statements.
Allowance for doubtful accounts
We evaluate the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we are aware of a specific
customer's inability to meet its financial obligations to us (e.g., bankruptcy
filings, failure to pay amounts due to us or others), we record a specific
reserve for bad debts against amounts due to reduce the net recognized
receivable to the amount we reasonably believe will be collected. For all other
customers, we recognize reserves for bad debts based on past write-off history
(average percentage of receivables written off historically), and the length of
time the receivables are past due. If circumstances change (i.e. higher than
expected defaults or an unexpected material adverse change in a major customer's
ability to meet its financial obligations to us), our estimates of the
recoverability of amounts due us could be reduced by a material amount.
Impairment of goodwill and identifiable intangible assets
In reviewing the recoverability of our goodwill and identifiable
intangible assets, we must make assumptions regarding estimated future cash
flows and other factors to determine the fair value of the respective assets.
These assumptions require us to exercise significant judgment, often on a
subjective basis. If these estimates or their related assumptions change in the
future, we may be required to record impairment charges for these assets. In the
three months ended December 31, 2001, we recorded an impairment charge on these
assets of (euro) 61.3 million.
Since January 1, 2002, we have adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets. Under SFAS 142, we
discontinued amortizing our goodwill, but we were required to review our
goodwill for impairment during the three months ending March 31, 2002, and then
on an annual basis thereafter. Based on the circumstances and underlying
assumptions made when the impairment reviews are performed in the future,
further impairment charges could be required.
Based on the results of the review that we performed during the three
months ended March 31, 2002, no impairment charge was recorded.
We continue to amortize our identifiable intangible assets that have
determinable lives, but we are still required to review the recoverability of
these assets whenever events or changes in business circumstances indicate that
the assets may be impaired. Based on the circumstances and underlying
assumptions made at the time of these reviews, further impairment charges could
be required.
Deferred tax assets
We recognize deferred tax assets and liabilities based on the differences
between the financial statement carrying amounts and the tax bases of assets and
liabilities. We regularly review our deferred tax assets for recoverability and
establish a valuation allowance based upon historical losses, projected future
taxable income for each subsidiary and the expected timing of the reversals of
existing temporary differences. As a result of this review, we have recorded a
deferred tax asset of (euro) 0.3 million as of March 31, 2002, and we have
established a full valuation allowance on the remaining amount of our deferred
tax assets.
2. Financial Statements
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31, March 31,
2001 2002
------------ ---------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents........................................ (euro)17,510 (euro)13,942
Accounts receivable, less allowances of(euro)3,201 at
December 31, 2001 and(euro)2,759 at March 31, 2002........... 48,989 49,941
Inventory........................................................ 146 143
Prepaid expenses ................................................ 7,156 6,237
Other current assets............................................. 6,664 5,816
------- -------
Total current assets........................................ 80,465 76,079
Property and equipment, net........................................... 47,697 44,864
Goodwill and other intangibles, net................................... 275,058 275,144
Investment in affiliated company...................................... 126 115
Deferred tax assets................................................... 236 270
Deferred financing costs, net......................................... 4,722 4,440
Other assets.......................................................... 2,100 2,080
------- -------
Total assets................................................(euro)410,404 (euro)402,992
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdrafts.................................................. -- --
Accounts payable................................................. (euro)24,533 (euro)21,549
Accrued liabilities.............................................. 7,148 5,606
Accrued compensation............................................. 7,489 8,754
Tax payable...................................................... 9,929 10,653
Deferred revenue................................................. 4,198 3,412
Current portion of long-term debt................................ 6,901 6,069
Current portion of capitalized lease obligations................. 266 213
Current portion of deferred tax liability........................ 5,346 4,904
Current portion of accrued restructuring expenses.............. -- 6,246
Other current liabilities........................................ 6,894 4,361
------- -------
Total current liabilities................................... 72,704 71,767
Long-term portion of long-term debt................................... 142,552 144,718
Long-term portion of capitalized lease obligations.................... 171 134
Long-term portion of deferred tax liability........................... 28,503 26,111
Other long-term liability............................................. 3,606 4,821
Commitments and contingencies......................................... -- --
Shareholders' equity:
Ordinary shares; (euro) 5.00 nominal value; 15,271,064 and
15,281,090 shares issued and outstanding at December 31, 2001 and
March 31, 2002 respectively...................................... 76,356 76,405
Common shares to be issued;(euro)5.00 nominal value; 250,687
shares and 247,759 at December 31, 2001 and March 31, 2002,
respectively..................................................... 1,253 1,239
Additional paid-in capital....................................... 194,019 194,055
Accumulated other comprehensive income........................... 3,749 4,024
Deferred compensation............................................ (465) (404)
Accumulated deficit.............................................. (111,293) (119,127)
------- -------
163,619 156,192
Less cost of treasury shares: 22,131 shares at December 31, 2001 and
March 31, 2002 , respectively (751) (751)
------- -------
Total shareholders' equity.................................. 162,868 155,441
------- -------
Total liabilities and shareholders' equity............................(euro)410,404 (euro)402,992
============= =============
See notes to financial statements
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except share data)
Three Months ended
------------------
March 31,
---------
2001 2002
------ ------
Revenue:
Services............................... (euro)26,166 (euro)54,940
Products............................... 604 512
------------ ------------
26,770 55,452
Cost of revenue:
Services............................... 10,603 22,934
Products............................... 483 485
------------ ------------
11,086 23,419
Gross profit................................ 15,684 32,033
Operating expenses:
Research and development............... 695 1,260
Selling and marketing.................. 5,645 13,508
General and administrative............. 9,099 15,210
Non-recurring charge................... -- 3,671
Amortization of goodwill and other
intangibles...................... 2,324 3,649
------------ ------------
Total operating expenses.................... 17,763 37,298
------------ ------------
Operating loss.............................. (2,079) (5,265)
Financial income (expense)
Interest income........................ 733 58
Interest expense....................... (908) (2,297)
Foreign exchange gain (loss)........... 1,221 (540)
Other financial income (expense), net. 402 (275)
------------ ------------
Financial income (expense), net............. 1,448 (3,054)
Equity in loss of affiliated company........ -- (8)
------------ ------------
Loss before taxes........................... (631) (8,327)
Income tax credit (expense)................. (1,346) 349
------------ ------------
Net loss.................................... (euro)(1,977) (euro)(7,978)
============ ============
Basic and diluted net loss per share........ (euro)(0.21) (euro)(0.52)
============ ============
Number of shares used in computing basic
and diluted net loss per share.............. 9,418,996 15,528,376
============ ============
See notes to financial statements
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
Three Months ended
March 31,
2001 2002
------ ------
Cash flows from operating activities:
Net loss..................................................................... (euro)(1,977) (euro)(7,978)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation.............................................................. 2,129 4,665
Amortization of goodwill and other intangibles............................ 2,324 3,649
Amortization of deferred financing costs and debt issuance discount....... 108 358
Amortization of deferred charges.......................................... 31 28
Allowance for bad debts................................................... 377 770
Amortization of deferred stock-based compensation......................... -- 61
Loss on disposal of assets................................................ 4 (1)
Deferred taxes expense (income)........................................... 805 (1,203)
Equity in loss of affiliated company...................................... -- 8
Changes in unrealized losses on investments............................... 13 --
Changes in operating assets and liabilities, net of effects of acquisition
of businesses:
(Increase) in accounts receivable......................................... (2,295) (1,647)
Decrease in inventory..................................................... 20 3
Decrease (increase) in prepaid expenses................................... (521) 793
Decrease (increase) in other assets....................................... (826) 62
Decrease in intangibles................................................... 694 --
Increase (decrease) in accounts payable................................... 4,649 (2,859)
(Decrease) in accrued liabilities......................................... (744) (1,487)
Increase (decrease) in accrued compensation............................... (912) 1,305
Increase in accrued taxes................................................. 1,043 784
(Decrease) in deferred revenue............................................ (274) (714)
Increase (decrease) in other liabilities.................................. (5,512) 5,344
------------ -----------
Net cash provided by (used in) operating activities.......................... (864) 1,941
============ ============
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired............................. (13,979) (4,299)
Acquisition of furniture and equipment....................................... (2,895) (1,546)
Proceeds from sales of furniture and equipment............................... -- 41
-- --
Net cash used in investing activities........................................ (16,874) (5,804)
============ ============
Cash flows from financing activities:
Increase in bank overdrafts.................................................. (1,882) --
Net proceeds from issuance of common stock................................... -- 71
Purchase of treasury shares.................................................. (245) --
Principal payments on long-term debt......................................... (529) (136)
------------ -----------
Net cash used in financing activities........................................ (2,656) (65)
============ ============
Effect of foreign exchange rate changes on cash and cash equivalents......... 425 360
Decrease in cash and cash equivalents........................................ (19,969) (3,568)
Cash and cash equivalents, beginning of period............................... 49,705 17,510
------------ ------------
Cash and cash equivalents, end of period..................................... (euro)29,736 (euro)13,942
============ ============
Supplemental disclosures of cash flow information:
Interest paid............................................................. (euro) 1,185 (euro)91
Income taxes paid......................................................... 305 841
Non-cash investing and financing transactions:
Fixed assets acquired under capital lease............................... -- --
Issuance of common stock in connection with acquisitions.................. -- --
Acquisition of businesses:
Assets acquired........................................................... (euro)70,739 --
Liabilities assumed and issued............................................ (24,127) --
Common stock committed to be issued....................................... (26,383) --
Acquisition costs incurred in connection with probable acquisitions..... 343 --
Cash to be paid in the following period.................................. (4,170) --
Cash incurred during previous period for current year acquisitions........ (717) --
Cash paid in connection with previous period acquisitions................. -- (euro)4,299
------------ -----------
Cash paid................................................................. 15,685 4,299
Less cash acquired........................................................ (1,706) --
------------ -----------
Net cash paid for acquisitions of businesses................................. (euro)13,979 (euro)4,299
============ ===========
See notes to financial statements
3. NOTES
GENESYS S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except share data and when indicated)
Note 1. Organization and business
Genesys S.A., together with its subsidiaries ("the Company"), is a limited
liability company organized under the laws of France.
The Company is a global communications specialist, providing practical and
innovative real-time collaborative and managed event services worldwide.
Note 2. Basis of Presentation
As a publicly traded company on the Nouveau Marche of Euronext Paris since
October 1998, the Company publishes consolidated financial statements that have
been prepared in accordance with generally accepted accounting principles in
France, which differ in certain respects from generally accepted accounting
principles in the United States.
In addition, the Company has been listed on the Nasdaq Stock Market since
April 26, 2001. As a result, the Company publishes consolidated financial
statements prepared in accordance with generally accepted accounting principles
in the United States.
The accompanying unaudited consolidated financial statements have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States and pursuant to the rules and regulations of the
Securities and Exchange Commission for interim financial information. These
financial statements reflect all adjustments (consisting of normal recurring
accruals) that, in the opinion of management, are necessary for a fair
presentation of the interim periods presented. The unaudited results of
operations for the quarter ended March 31, 2002 are not necessarily an
indication of the results of operations that may be expected for the full year
ending December 31, 2002. These financial statements do not include all
disclosures associated with annual financial statements and, accordingly, should
be read in conjunction with the financial statements and footnotes for the year
ended December 31, 2001 included in the Company's Form 20-F as filed with the
Securities and Exchange Commission.
The consolidated financial statements include the accounts of the Company
and its subsidiaries.
The main consolidation principles are as follows:
- Companies which are wholly owned or which the Company controls are
consolidated;
- Companies over which the Company exercises significant influence
but does not control are accounted for under the equity method of
accounting;
- All significant inter-company transactions and balances are
eliminated.
The Company has applied Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets, since January 1, 2002. Statement 142
prohibits the amortization of goodwill and indefinite-lived intangible assets.
Statement 142 requires that these assets be reviewed for impairment at least
annually. Intangible assets that have definite lives will continue to be
amortized over their useful lives.
Application of the non-amortization provisions of Statement 142 resulted
in a decrease in amortization expenses of approximately (euro) 3.0 million for
the three months ended March 31, 2002. The Company also reclassified an
assembled workforce intangible asset with an unamortized balance of (euro) 6.5
million (along with a deferred tax liability of (euro) 1.8 million) to goodwill
at January 1, 2002. The Company tests goodwill for impairment using the two-step
process prescribed in Statement 142. The first step is a screen for potential
impairment, while the second step measures the amount of the impairment, if any.
In the first quarter of 2002, the Company performed the first of the required
impairment tests of goodwill and indefinite lived intangible assets as of
January 1, 2002. Based on the results of this review, no impairment charge was
recorded.
The following companies have been consolidated:
Interest and
Name Location control
- ---------------------------------------------- ----------------------- --------------
Fully consolidated companies:
Genesys S.A................................... Montpellier, France Parent company
Genesys Conferencing France, S.A.............. Ivry, France 100%
Genesys Conferencing A.B...................... Stockholm, Sweden 100%
Genesys Conferencing S.A...................... Brussels, Belgium 100%
Genesys Conferencing Ltd...................... Croydon, England 100%
Genesys Conferencing Pte Ltd.................. Singapore 100%
Genesys Conferencing Pty Ltd.................. Melbourne, Australia 100%
Genesys Conferencing Ltd...................... Hong Kong 100%
Genesys Conferencing, Inc..................... Denver, USA 100%
Genesys Conferencing S.R.L.................... Milan, Italy 100%
Astound Inc................................... Toronto, Canada 100%
Darome Teleconferencing GmbH.................. Berlin, Germany 100%
Eesys, S.A.S................................. Paris, France 100%
Geene, S.A.S.................................. Paris, France 100%
305 4344 Nova Scotia Ltd...................... Halifax, Canada 100%
305 4345 Nova Scotia Ltd...................... Halifax, Canada 100%
Affiliates accounted for under the equity
method:
Genesys Conferencing Iberia................... Madrid, Spain 20%
On January 1, 2002, Genesys Conferencing Inc merged into Genesys
Conferencing of Massachusetts, Inc. Thereafter, Genesys Conferencing of
Massachusetts, Inc. was renamed to Genesys Conferencing Inc.
Note 2. Non-recurring charge
On February 6, 2002, the Company announced plans to consolidate its call
center operations in North America from six call centers to three call centers
to provide higher levels of customer service and improve operating efficiencies.
The three remaining call centers have the capacity to absorb the current volume
and to provide for future growth. The restructuring costs related to these
closings are estimated to be (euro) 7.6 million and are primarily for unusable
future facility lease commitments, the write-off of certain leasehold
improvements and equipment, employee severance as well as other miscellaneous
costs associated with the call center consolidation. Components of these costs
by call center to be closed are presented in the table below.
Bedford Denver Montgomery Total costs
------- ------ ---------- -----------
accrued
-------
Write-offs of leasehold improvements,
equipment and other tangible assets...............(euro) 218 (euro) 2,099 (euro) 1,059 (euro) 3,376
Future lease payments under non cancelable
operating leases.................................. 912 1,185 1,092 3,189
Severance and other people related expenses....... 117 541 197 855
Other related expenses............................ 25 60 105 190
-- -- --- ---
Total.............................................(euro)1,272 (euro) 3,885 (euro) 2,453 (euro) 7,610
=========== ============ ============ ============
Of the (euro) 7.6 million restructuring costs accrued in the three months
ended March 31, 2002, (euro) 3.7 million was recorded as a non-recurring
restructuring charge and (euro) 3.9 million was recorded as an increase to
goodwill arising from the acquisition of Vialog. The Company estimates that
future annual cost savings from the consolidation will range from (euro) 3.5 to
(euro) 4.0 million beginning the third quarter of 2002.
Other costs relating to the consolidation of call centers will be recorded
as general and administrative expense as they will incur by the end of the year
2002, in accordance with generally accepted accounting principles. These costs
include retention bonuses and duplicative costs in closing call centers. The
expected amount of these costs is (euro) 868.
On March 20, 2002, the Company's Bedford, Massachusetts call center was
closed and all traffic formerly generated in Bedford has been re-routed to the
Company's Reston, Virginia call center. Actual costs incurred for the Bedford
closing compared to the costs accrued through March 31, 2002 are presented in
the table below:
costs Incurred in Balance at
----- ----------- ----------
accrued the quarter March 31, 2002
------- ----------- --------------
Write-offs of leasehold improvements,
equipment and other tangible assets................(euro) 218 (euro) 218 --
Future lease payments under non cancelable
operating leases................................... 912 -- (euro) 912
Severance and other people related expenses........ 117 -- 117
Other related expenses............................. 25 -- 25
-- --
Total..............................................(euro) 1,272 (euro) 218 (euro) 1,054
============ =========== =============
In addition, duplicative costs for Bedford ((euro) 85) and retention
bonuses for Denver ((euro) 89) incurred and have been recorded as general and
administrative expense in the three months ended March 31, 2002.
The Company expects to close the call centers located in Denver, Colorado
and Montgomery, Alabama by the end of the third quarter of 2002.
Note 3. Acquisitions
On March 27, 2001, the Company completed the acquisition of Astound Inc., a
web conferencing and web streaming company headquartered in Canada.
The total purchase price was(euro)58,739 and consisted of :
- (euro) 14,399 in cash paid immediately;
- (euro) 4,000 in cash (named "top up") paid on January 4, 2002, together
with interests Libor USD 9 months + spread 2,75% thereon ((euro)171);
- 916,391 convertible notes, each with a principal amount of (euro)
28,79. Each note is convertible into one share of common stock, not
later than March 27, 2011. The fair market value of these notes
amounted to (euro) 26,383 at acquisition date;
- (euro) 1,659 of acquisition costs;
- (euro) 1,561 for deferred compensation relating to 188,116 stock
options;
- (euro) 10,566 for deferred tax relating to identifiable intangible
assets.
The purchase price exceeded the fair value of the net tangible assets
acquired by(euro)60,263. Based on an independent report, this excess was
allocated to:
- technology for(euro)30,351, classified in other intangibles and
amortized over 4 years.
- assembled workforce for(euro)1,349, classified in other intangibles and
amortized over 3 years. In accordance with Statement No 142, the
unamortized balance of assembled workforce was reclassified to goodwill
at January 1, 2002.
- goodwill for (euro) 28,563 and amortized over 5 years. In accordance
with Statement No 142, goodwill has been no longer amortized since
January 1, 2002.
Based on the results of the review of the carrying value of Astound's
goodwill and identifiable intangible assets performed as of December 31, 2001,
an impairment charge of (euro) 32,777 was recorded in 2001.
On April 25, 2001, the Company completed the acquisition of Vialog
Corporation, an audio, video and data conferencing company listed on the
American Stock Exchange (AMEX).
The total purchase price as adjusted in the first quarter of 2002,
primarily to reflect the closing of two Vialog's call centers (see note 2),
was (euro)122,046 and consisted of:
- 3,446,969 shares of Genesys S.A. with a fair market value
of(euro)75,557 at the time of issuance. Vialog shareholders received
ADS's for each Vialog share at an exchange ratio of 0.33515 Genesys
share per Vialog share, resulting in approximately 24.65% ownership of
Genesys S.A. One Genesys ADS is equivalent to one-half Genesys common
shares;
- (euro) 8,717 of acquisition costs;
- (euro) 8,648 for deferred compensation relating to 2,466,889 stock
options;
- (euro) 29,124 for deferred tax relating to allocated purchase price.
The purchase price exceeded the fair value of the net tangible assets
acquired by (euro) 207,031. Based on an independent report, this excess was
allocated to:
- customer list for retail conferencing for (euro) 81,551, classified in
other intangibles and amortized over 10 years;
- customer list for wholesale conferencing for(euro)4,245, classified in
other intangibles and amortized over 5 years;
- assembled workforce for (euro) 5,250, classified in other intangibles
and amortized over 4 years. In accordance with Statement No 142, the
unamortized balance of assembled workforce was reclassified to goodwill
at January 1, 2002.
- goodwill for (euro) 115,985 and amortized over 20 years. In accordance
with Statement No 142, goodwill has been no longer amortized since
January 1, 2002.
Note 4. Long-term debt
Long-term debt consists of the following:
December 31, March 31,
2001 2002
------------- -------------
Term loans, variable rate...................................(euro)128,812 (euro)129,983
Revolving loans, variable rate.............................. 12,108 12,224
3% Convertible notes, net of unamortized discount of
(euro)469 and (euro)516 at December 31, 2001 and
March 31, 2002, respectively................................ 8,281 8,328
Interest free loan from Anvar............................... 252 252
Capital lease obligations................................... 437 347
-------- --------
Total long-term debt........................................ 149,890 151,134
Less current portion........................................ (7,167) (6,282)
-------- --------
Long-term debt, less current portion........................(euro)142,723 (euro)144,852
============= =============
On April 20, 2001, Genesys S.A. ("Genesys") and Vialog Corporation
("Vialog") entered into a U.S. $ 125 million credit facility agreement with BNP
Paribas, CIBC World Markets and Fortis Bank. This credit facility, which was
amended thereafter, replaced the $ 35 million multi-currency term loan of
Genesys and long term debt of Vialog (U.S. $ 75 million senior notes payable),
which existed prior to the acquisition by Genesys. The U.S. $ 125 million credit
facility includes the following items :
- a U.S.$ 50 million senior term loan facility granted to Vialog,
which was used by Vialog to refinance its existing debt. This
facility matures on April 28, 2006 and bears interest at the rate of
Libor USD plus a margin of 2.65% per annum.
- a U.S.$ 30 million senior term loan facility granted to Vialog,
which was used by Vialog to refinance its existing debt. This
facility matures on October 31, 2006 and bears interest at the rate
of Libor USD plus a margin of 3.15% per annum
- a U.S.$ 35 million senior term loan facility granted to Genesys,
which was used by Genesys to partially refinance its existing debt.
This facility matures on April 28, 2006 and bears interest at the
rate of Libor USD plus a margin of 2.65% per annum
- a U.S.$ 5 million revolving loan facility granted to Vialog, which
was used by Vialog for working capital purposes. This facility bears
interest at the rate of Libor USD plus a margin of 2.65% per annum
- a U.S.$ 5 million revolving loan facility granted to Genesys, which
was used by Genesys for working capital purposes. This facility
bears interest at the rate of Libor USD plus a margin of 2.65% per
annum.
The U.S.$ 50 million and U.S.$ 35 million term loans granted to Vialog and
Genesys, respectively, are to be repaid in semi-annual installments in
accordance with the schedule set forth in the credit facility agreement. The
U.S.$ 30 million facility is to be repaid in one payment at maturity. All
amounts borrowed are repayable at any time in whole or in part at the option of
the borrower.
The U.S. $ 125 million credit facility requires the Company to comply with
certain financial covenants, consisting of leverage, interest cover, and cash
cover ratios. The Company is currently in compliance with all of the covenants,
as amended. Confirmation of the approval of the latest amendment was received on
May 31, 2002.
Note 5. Shareholders' equity
On January 7, 2002, 7,098 stocks options of Genesys S.A. were exercised. As
a result, ordinary shares and additional paid-in-capital increased by (euro) 35
and (euro) 36, respectively.
In February 2002, 2,928 convertible notes issued on March 27, 2001 to
finance the acquisition of Astound have been converted into shares. As a result,
(euro) 14 was reclassified from common shares to be issued to ordinary shares.
Note 6. Revenue breakdown
Revenues consist of the following:
Three months ended
------------------
March 31,
---------
2001 2002
------ ------
Services
- --Audio conferencing........................ (euro) 22,947 (euro) 49,937
- --Video conferencing........................ 2,668 2,551
- --Data conferencing and web streaming....... 551 2,452
Products.................................... 604 512
------ ------
Total....................................... (euro) 26,770 (euro) 55,452
============= =============
Note 7. Segment and geographic information
The Company and its subsidiaries currently operate in four reportable
segments: Europe, North America, Asia-Pacific and, starting in 2002, global
Video division. The Company makes key decisions and evaluates performance of the
Company based on these segments. Transfers between segments are accounted for at
amounts that are generally above cost and consistent with the rules and
regulations of governing tax authorities. Such transfers are eliminated in the
consolidated financial statements. Corporate items include non-operating
overhead and research and development expenditures. Corporate assets mainly
include research and development telecommunications equipment.
The following is a summary of operations by segment for the three months
ended March 31, 2001 and 2002 :
North Asia- Global Inter-
Europe America Pacific Video Corporate segment Total
------ ------- ------- ------ --------- ------- -----
3 months ended March 31, 2001
Revenue......................... (euro)12,497 (euro)10,312 (euro)1,272 (euro)2,764 -- (euro)(75) (euro)26,770
Gross Profit.................... 8,460 6,093 612 519 -- -- 15,684
EBITDA.......................... 4,706 1,412 169 (273) (euro)(3,640) -- 2,374
Operating income (loss)......... 1,977 116 97 (493) (3,776) -- (2,079)
3 months ended March 31, 2002
Revenue......................... (euro)14,833 (euro)36,538 (euro)1,401 (euro)3,075 -- (euro)(395) (euro)55,452
Gross Profit.................... 11,396 19,085 786 766 -- -- 32,033
EBITDA.......................... 8,804 1,123 47 194 (euro)(7,119) -- 3,049
Operating income (loss)......... 8,024 (5,733) (52) (125) (7,379) -- (5,265)
EBITDA and operating loss of North America for the three months ended March
31, 2002 included the non-recurring restructuring charge amounting to (euro)
3,671, as described in note 2. EBITDA before the non-recurring charge amounted
to (euro) 6,720 for three months ended March 31, 2002.
Note 8. Commitments and contingencies
Interest rate swap relating to the U.S. $ 125 million credit facility
On June 29, 2001, the Company entered into a U.S. $ 57.5 million interest
rate swap agreement to hedge its exposure on 50% of its outstanding term loans
under the U.S.$ 125 million credit facility, excluding the U.S. $ 10 million
revolving line of credit, granted in April 2001, denominated in U.S. dollars.
The effect of the agreement was to convert underlying variable rate debt based
on Libor USD to fixed rate debt with an interest rate of 5.52 %.
Each interest-rate swap agreement is designated with all or a portion of
the principal balance and has a term equal to specific debt obligation. This
agreement involves the exchange of amounts based on a fixed interest rate for
amounts based on variable interest rates over the life of the agreement without
an exchange of the notional amount upon which the payments are based. The
differential to be paid or received as interest rates change is accrued and
recognized as an adjustment of interest expense related to the debt. The related
amount payable to or receivable from third parties is included in other
liabilities or assets. The fair value of the swap agreement and changes in the
fair value as a result of changes in market interest rates are recognized as
comprehensive income or loss. As a result, the comprehensive loss for this
interest rate swap agreement amounted to (euro) 2,038 at March 31, 2002.
Securities relating to the U.S. $ 125 million credit facility
The U.S. $ 125 million credit facility agreement signed on April 20, 2001
with BNP Paribas, CIBC World Markets and Fortis Bank is secured by the
following:
- stock pledge of shares of Genesys Conferencing Ltd (England),
Genesys Conferencing AB (Sweden) and Genesys Conferencing Inc;
- security over assets such as accounts receivable, inventories and
property, plant and equipment of Genesys Conferencing Inc;
- security over some assets such as accounts receivable of Genesys
Conferencing Inc.
Note 9. Proforma information
The following schedules set forth unaudted pro forma condensed
consolidated financial information for the Company which has been prepared to
reflect the acquisitions made by the Company since January 1, 2001. These
acquisitions included:
- - Astound, acquired on March 27, 2001,
- - Vialog, acquired on April 25, 2001.
The consolidated pro forma information has been prepared in accordance
with generally accepted accounting principles in the United States.
The unaudited pro forma condensed consolidated statement of operations for
the three months ended March 31, 2001 gives effect to the acquisitions of
Astound and Vialog, as if they had occurred on January 1, 2001.
The unaudited pro forma condensed consolidated balance sheet as of March
31, 2001 has been prepared as if the acquisitions of Vialog had occurred on
March 31, 2001.
The pro forma statement of operations include :
- goodwill and other intangible assets relating to the acquisitions,
- long term debt and common stock issued to finance the acquisitions,
The pro forma information is not necessarily indicative of the financial
statements that would have been obtained had these acquisitions actually
occurred at January 1, 2001 or March 31, 2001, nor are they necessarily
indicative of future consolidated information.
Unaudited pro forma condensed consolidated statement of operations
Three months
ended
March 31,
2001
-------------
Revenue................................................. (euro)52,621
Cost of revenue: 22,770
------------
Gross profit............................................ 29,851
Operating expenses:
Research and development............................. 1,243
Selling, general and administrative.................. 25,288
Amortization of goodwill and other intangibles....... 10,009
------------
Total operating expenses................................ 36,540
------------
Operating loss.......................................... (6,689)
Financial expense, net.................................. (921)
------------
Loss before taxes....................................... (7,610)
Income tax expense...................................... (1,364)
------------
Net loss................................................ (euro)(8,974)
============
Basic and diluted net loss per share.................... (euro) (0.65)
============
Number of shares used in computing basic and diluted
net loss per share...................................... 13,782,356
============
Supplementary information:
EBITDA (euro) 7,340
============
Unaudited pro forma condensed consolidated balance sheet
March 31,
2001
-------------
Assets
Current assets:
Cash and cash equivalents..........................(euro) 22,224
Accounts receivables............................... 48,619
Inventory.......................................... 165
Prepaid expenses and other current assets.......... 11,160
-------------
Total current assets.......................... 82,168
Property and equipment, net............................. 50,075
Goodwill and other intangibles, net..................... 354,780
Deferred tax assets..................................... 509
Deferred financing costs and other assets, net.......... 4,842
-------------
Total assets..................................(euro)492,374
=============
Liabilities and Shareholders' Equity
Current liabilities:
Revolving line of credit...........................(euro) 8,351
Accounts payable................................... 34,844
Accrued liabilities and accrued compensation....... 8,800
Taxes payable..................................... 7,534
Deferred revenue................................... 2,909
Current portion of long-term debt.................. 17,227
Current portion of deferred tax liability.......... 5,346
Other current liabilities.......................... 17,551
-------------
Total current liabilities..................... 102,562
Long-term portion of long-term debt..................... 125,291
Long-term portion of deferred tax liability............. 25,097
Other long term liability............................... 717
Commitments and contingencies........................... --
Shareholders' equity.................................... 238,707
-------------
Total liabilities and shareholders' equity..............(euro)492,374
=============
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, thereunto duly authorized.
Dated: June 12, 2002
GENESYS SA
By: /s/ Francois Legros
--------------------------------------------
Name: Francois Legros
Title: Chairman and Chief Executive Officer