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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): October 23, 2000
Billing Concepts Corp.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-28536 74-2781950
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
7411 John Smith Drive, Suite 200, San Antonio, Texas 78229
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (210) 949-7000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 23, 2000, Billing Concepts Corp. (the "Registrant") disposed
of all of the issued and outstanding shares of capital stock of five of its
wholly owned subsidiaries: Billing Concepts, Inc. ("BCI"), Enhanced Services
Billing, Inc. ("ESBI"), BC Transaction Processing Services, Inc. ("BCTPS"),
Aptis, Inc. ("Aptis") and Operator Service Company ("OSC," and collectively with
BCI, ESBI, BCTPS and Aptis, the "Companies"). Pursuant to an Agreement and Plan
of Merger dated as of September 15, 2000, as amended as of October 20, 2000 (as
amended, the "Merger Agreement"), by and among the Registrant, the Companies, BC
Holding I Corporation ("Buyer I"), BC Holding II Corporation ("Buyer II"), BC
Holding III Corporation ("Buyer III," and collectively with Buyer I and Buyer
II, the "Buyers"), BC Acquisition I Corporation ("Acquisition Sub 1"), BC
Acquisition II Corporation ("Acquisition Sub 2"), BC Acquisition III Corporation
("Acquisition Sub 3") and BC Acquisition IV Corporation ("Acquisition Sub 4,"
and collectively with Acquisition Sub 1, Acquisition Sub 2 and Acquisition Sub
3, the "Acquisition Subs"), Acquisition Sub 1 and BCTPS merged with and into
BCI, Acquisition Sub 2 merged with and into ESBI, Acquisition Sub 3 merged with
and into Aptis and Acquisition Sub 4 merged with and into OSC. Each of the
Buyers and Acquisition Subs is a direct or indirect subsidiary of Platinum
Equity Holdings, LLC, a Delaware limited liability company ("Platinum").
Pursuant to the mergers, BCI and ESBI became wholly owned subsidiaries of Buyer
I, Aptis became a wholly owned subsidiary of Buyer II and OSC became a wholly
owned subsidiary of Buyer III.
The Registrant, as sole stockholder of the Companies prior to the
mergers, received consideration from the Buyers in the form of $52,500,000 in
cash, subject to adjustment following the closing based on the calculation of
working capital on the Companies' balance sheets as of the closing date.
Pursuant to the Merger Agreement, the Registrant is also to receive up to
$20,000,000 in royalties over the 36-month period commencing on the closing
date, subject to the Companies meeting certain revenue targets. The Registrant
has also entered into a consulting agreement with Platinum pursuant to which the
Registrant will receive $7,500,000 over the two-year period commencing on the
closing date as consideration for consulting services to be provided by the
Registrant to Platinum during such two-year period. The amount of consideration
was arrived at through negotiations between the Registrant and Platinum and was
based on a variety of factors, including, but not limited to, earnings and
revenue, the value of the goodwill and the nature of the teleservices industry.
To the Registrant's knowledge, there is no other material relationship between
Platinum and the Registrant or any of its affiliates, any director or officer of
the Registrant, or any associate of any such director or officer.
A copy of the Registrant's October 23, 2000 press release announcing
the completion of the dispositions is included as exhibit 99.1 and is
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information gives effect to
Billing Concepts Corp.'s disposition of the Companies on October 23, 2000. The
unaudited pro forma condensed consolidated statements of operations for the nine
months ended June 30, 2000 and the year ended September 30, 1999 include the
effects of the disposition as if the disposition had occurred on October 1,
1998. The following pro forma financial information, consisting of the pro forma
statements of operations, the pro forma balance sheet as of June 30, 2000, and
the accompanying notes, should be read in conjunction with the historical annual
and quarterly financial statements and accompanying notes of Billing Concepts
Corp. and Subsidiaries.
The pro forma financial information is presented for illustrative
purposes only and is not necessarily indicative of the future results of
operations of Billing Concepts Corp. after the disposition of the Companies,
or of the results of operations of Billing Concepts Corp. that would have
occurred had the disposition been effected on the dates described above.
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BILLING CONCEPTS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS RESULTS
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ASSETS
Current assets:
Cash and cash equivalents $ 96,331 $ (42,111) $ 54,220
Accounts receivable, net 37,068 (28,149) 8,919
Purchased receivables 15,261 (15,261) -
Prepaids and other 3,852 (3,709) 143
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Total current assets 152,512 (89,230) 63,282
Property and equipment, net 24,934 (23,891) 1,043
Other assets, net 33,136 (26,302) 6,834
Investments in equity affiliates 39,197 - 39,197
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Total assets $ 249,779 $ (139,423) $ 110,356
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 15,514 $ (15,431) $ 83
Accounts payable - billing customers 96,391 (96,391) -
Accrued liabilities 24,920 (24,316) 604
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Total current liabilities 136,825 (136,138) 687
Deferred income taxes 1,725 (1,725) -
Other liabilities 1,380 (726) 654
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Total liabilities 139,930 (138,589) 1,341
Stockholders' equity:
Preferred Stock, $0.01 par value, 10,000,000 shares
authorized, no shares issued or outstanding at
June 30, 2000 - - -
Common Stock, $0.01 par value, 42,312,534 shares
issued and outstanding at June 30, 2000 417 - 417
Additional paid-in capital 88,665 - 88,665
Retained earnings 21,623 (834) 20,789
Deferred compensation (96) - (96)
Treasury stock, at cost (760) - (760)
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Total stockholders' equity 109,849 (834) $ 109,015
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Total liabilities and stockholders' equity $ 249,779 $ (139,423) $ 110,356
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SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
BILLING CONCEPTS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS RESULTS
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Operating revenues $ 111,345 $ (110,900) $ 445
Cost of revenues 76,444 (76,221) 223
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Gross profit 34,901 (34,679) 222
Selling, general and administrative expenses 35,547 (24,492) 11,055
Research and development 12,937 (12,937) -
Advance funding program income, net (1,452) 1,452 -
Depreciation and amortization expense 9,572 (8,386) 1,186
Special charges 2,950 (1,216) 1,734
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Income (loss) from operations (24,653) 10,900 (13,753)
Other income (expense):
Interest income, net 4,916 (4,907) 9
Equity in net loss of investee (6,288) - (6,288)
In-process research and development of investee (4,965) - (4,965)
Other, net (321) 338 17
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Total other expense, net (6,658) (4,569) (11,227)
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Loss from continuing operations before income taxes (31,311) 6,331 (24,980)
Benefit for income taxes 4,721 (40) 4,681
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Net loss from continuing operations (26,590) 6,291 (20,299)
Discontinued operations:
Net loss from discontinued operations - (6,291) (6,291)
Loss on disposition of discontinued operations - - -
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Net loss $ (26,590) $ - $ (26,590)
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Basic and Diluted:
Net loss from continuing operations per common share $ (0.52)
Net loss from discontinued operations per common share $ (0.16)
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Net loss per common share $ (0.68)
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Weighted average common shares outstanding 39,367
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SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
BILLING CONCEPTS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS RESULTS
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Operating revenues $ 181,324 $ (181,324) $ -
Cost of revenues 109,519 (109,519) -
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Gross profit 71,805 (71,805) -
Selling, general and administrative expenses 35,311 (29,996) 5,315
Research and development 5,788 (5,725) 63
Advance funding program income, net (3,673) 3,673 -
Depreciation and amortization expense 9,329 (9,286) 43
Special charges 1,529 (1,529) -
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Income (loss) from operations 23,521 (28,942) (5,421)
Other income (expense):
Interest income, net 5,789 (5,789) -
Equity in net loss of investee (1,809) - (1,809)
Other, net (100) 100 -
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Total other income (expense), net 3,880 (5,689) (1,809)
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Income (loss) from continuing operations
before income taxes 27,401 (34,631) (7,230)
Benefit (provision) for income taxes (11,579) 13,388 1,809
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Net income (loss) from continuing operations 15,822 (21,243) (5,421)
Discontinued operations:
Net income from discontinued operations - 21,243 21,243
Loss on disposition of discontinued operations - (834) (834)
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Net income $ 15,822 $ (834) $ 14,988
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Basic and Diluted:
Net loss from continuing operations per common share $ (0.15)
Net income from discontinued operations per common share $ 0.57
Loss on disposition of discontinued operations per common share $ (0.02)
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Net loss per common share $ 0.40
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Weighted average common shares outstanding 37,116
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SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Pro Forma Adjustments:
The pro forma adjustments give effect to Billing Concepts Corp.'s
disposition of the Companies on October 23, 2000 to subsidiaries of Platinum.
See Item 2 for further information regarding the transaction. The pro forma
adjustments consider only that portion of the consideration received at the
closing of the transaction ($52,500,000 in cash).
The pro forma adjustments for the statements of operations reflect the
elimination of financial activity from the Companies' divested operations along
with the pro forma effect of the disposition as if the disposition had occurred
on October 1, 1998. The pro forma adjustments for the balance sheet are
reflected as if the disposition had occurred on the balance sheet date.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
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99.1 Press Release, dated October 23, 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this current report to be signed on its behalf by the
undersigned hereunto duly authorized.
BILLING CONCEPTS CORP.
Date: November 7, 2000 By: /s/ David P. Tusa
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Name: David P. Tusa
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release, dated October 23, 2000
5