View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 29, 1995
CUC International Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-10308 06-0918165
(State of other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
707 Summer Street 06901
Stamford, Connecticut (Zip Code)
(Address of principal executive offices)
(203)324-9261
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report.)
ITEM 5. OTHER INFORMATION
CUC INTERNATIONAL INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
The following unaudited pro forma condensed combined balance sheet as of
July 31, 1995 ("Balance Sheet") gives effect to the pending acquisition by
CUC International Inc. ("CUC") of North American Outdoor Group, Inc.
("NAOG"), scheduled to be completed during September 1995, including the
exchange of all of the outstanding shares of NAOG capital stock for
approximately 1.5 million shares of CUC common stock, par value $.01 per
share ("Common Stock"), as if the proposed transaction had occurred on July
31, 1995. The unaudited pro forma condensed combined statements of income
for the year ended January 31, 1995 and the six-month period ended July 31,
1995 ("Pro Forma Statements of Income" and, collectively with the Pro Forma
Balance Sheet, "Pro Forma Financial Statements") give effect to the
proposed transaction as if it had occurred on February 1, 1994. In
addition, the Pro Forma Statements of Income give effect to the
acquisitions by CUC of CUC Europe Limited ("CUC Europe"), Credit Card
Sentinel Limited ("Sentinel"), Welcome Wagon International, Inc. ("Welcome
Wagon"), and GETKO Group Inc. ("GETKO") (collectively with the acquisition
of NAOG, the "Acquisitions").
The pro forma information is based on the historical financial statements
of the acquired entities for the periods prior to acquisition (see Note (a)
to the unaudited pro forma financial information for the applicable
periods) and the historical financial statements of CUC contained in its
Annual Report on Form 10-K for the fiscal year ended January 31, 1995 and
the unaudited quarterly financial information of CUC for the period ended
July 31, 1995 giving effect to the assumptions and adjustments described in
the accompanying notes to the unaudited pro forma financial statements.
Pro forma condensed combined statements of income for the years ended
January 31, 1994 and 1993 for the NAOG and GETKO acquisitions, accounted
for as poolings of interests, have been excluded due to the insignificance
of their historical financial statements to the consolidated financial
statements of CUC. In addition, due to their insignificance the historical
financial statements of CUC for periods prior to February 1, 1995 have not
been restated.
The Pro Forma Financial Statements may not be indicative of the operating
results that actually would have occurred if the above transactions had
been consummated as of the dates indicated or the operating results which
may be obtained by CUC in the future. The Pro Forma Financial Statements
should be read in conjunction with the audited financial statements and
notes thereto of CUC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
July 31, 1995
CUC
As Reported NAOG Adjustments Pro Forma
----------- ---- ---------- -----------
ASSETS
Current Assets
Cash and cash equivalents $135,204 $5,110 $140,314
Receivables 224,355 9,652 234,007
Other current assets 170,602 10,599 181,201
Total current assets 530,161 25,361 555,522
Contract renewal rights and
intangible assets 264,560 190 264,750
Other non-current assets 75,493 7,019 82,512
--------- ------ ------------
Total assets $870,214 $32,570 $902,784
======= ===== =======
Accounts payable and accrued
expenses and federal and
income taxes payable $102,744 $5,877 $108,621
Deferred memb. income, net 194,261 23,437 217,698
Other non-current liabs 18,323 1,009 19,332
-------- ------- -----------
Total liabilities 315,328 30,323 345,651
Shareholders' equity:
Common stock 1,813 140 (125)(b) 1,828
Add'l paid in capital 264,184 426 125 (b) 264,735
Retained earnings 305,514 1,681 307,195
Treasury stock (16,625) (16,625)
---------- ------ ----------
Total shareholders' equity 554,886 2,247 557,133
---------- ------ ----------
Total liabilities and
shareholders' equity $870,214 $32,570 $902,784
====== ===== ======
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the Year Ended January 31, 1995
CUC Aquisitions Adjustments Pro Forma
------- ---------- ---------- --------
Membership and service
fees
and other revenues $1,044,669 $114,359 $1,159,028
EXPENSES
Operating 282,772 29,262 312,034
Marketing 421,987 43,420 465,407
General and
administrative 149,139 30,526 $2,630 (c) 182,295
Other (income)
expense, net 247 602 1,620 (d) 2,469
---------- ---------- ---------- ---------
Total expenses 854,145 103,810 4,250 962,205
---------- ---------- --------- ---------
Income before income
taxes 190,524 10,549 (4,250) 196,823
Provision for income
taxes 72,933 5,282 (1,052)(e) 77,163
---------- ---------- ---------- ---------
Net income $117,591 $5,267 ($3,198) $119,660
======== ====== ======== ========
Net income per common
share $0.66 $0.66
===== =====
Weighted average
number of common and
dilutive common
equivalent shares
outstanding 176,834 5,217 182,051
======= ==== =======
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the Six Months Ended July 31, 1995
CUC Acquisitions Adjustments Pro Forma
------- --------- --------- ---------
Membership and service
fees
and other revenues $616,175 $25,881 $642,056
EXPENSES
Operating 163,797 9,792 173,589
Marketing 244,657 8,110 252,767
General and
administrative 90,189 5,688 $148 (c) 96,025
Other (income)
expense, net (128) 13 149 (d) 34
-------- -------- --------- -------
Total expenses 498,515 23,603 297 522,415
-------- --------- --------- -------
Income before income
taxes 117,660 2,278 (297) 119,641
Provision for income
taxes 44,770 903 (59)(e) 45,614
-------- --------- --------- -------
Net income $72,890 $1,375 ($238) $74,027
======= ======= ======= =======
Net income per common
share $0.40 $0.40
===== =====
Weighted average
number of common and
dilutive common
equivalent shares
outstanding 184,440 1,530 185,970
======= ==== =======
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(a)During February 1995, CUC acquired Welcome Wagon and substantially all
of the assets of a related entity, Gifts International Inc., for $19.5
million. During March 1995, CUC acquired the parent of its European
licensee, CUC Europe, for $13 million and Sentinel for $22.5 million.
These acquisitions were accounted for in accordance with the purchase
method of accounting and, therefore, their results of operations have
been included in Pro Forma Statements of Income from the beginning of
each period presented to their respective acquisition dates.
During June 1995, CUC acquired all of the outstanding capital stock of
GETKO for approximately 3.7 million shares of Common Stock in a
transaction accounted for as a pooling of interests. However, CUC's
historical financial statements for periods prior to February 1, 1995
have not been restated due to their insignificance. Therefore, the
unaudited pro forma condensed combined statement of income for the year
ended January 31, 1995 gives effect to the acquisition of GETKO from the
beginning of the period. During August 1995, CUC announced that it
entered into an agreement to acquire all of the outstanding capital
stock of NAOG for approximately 1.5 million shares of Common Stock in a
transaction to be accounted for as a pooling of interests, which
acquisition is expected to be completed during September 1995.
Therefore, NAOG has been included in the Pro Forma Financial Statements
for all periods presented. Pro forma condensed combined statements of
income for the years ended January 31, 1994 and 1993 for NAOG and GETKO
have been excluded due to the insignificance of NAOG's and GETKO's
historical financial statements to the consolidated financial statements
of CUC.
(b) The Pro Forma Financial Statements assume that all outstanding shares
of NAOG capital stock will be converted and approximately 1.5 million
shares of Common Stock to be issued upon the consummation of a
transaction to be accounted for as a pooling of interests. The effect
of this transaction was to increase Common Stock by approximately $15
and additional paid-in capital by approximately $551 and to eliminate
NAOG capital stock.
The following adjustments have been made to the pro forma
results of operations:
Increase / (Decrease)
Income
------------------------
Six Months Year Ended
Ended January 31,
July 31, 1995
1995
(c) General and Administrative: ----------- -----------
Amortization of excess of cost
over net assets acquired $(148) $(2,630)
==== ======
(d) Other (Income) Expense, Net:
Effect of cash paid to Welcome
Wagon shareholders on interest
(income) expense, net (585)
Effect of cash paid to CUC Europe
shareholders on interest
(income) expense, net (36) (360)
Effect of cash paid to Sentinel
shareholders on interest
(income) expense, net (113) (675)
------- -------
(149) (1,620)
==== ====
(e) Provision for Income Taxes:
Tax effect of pro forma
adjustments $59 $1,052
=== ======
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CUC International Inc.
September 1, 1995 COSMO CORIGLIANO
Cosmo Corigliano - Senior Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)