-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KJTHmTeIiHpUsK2nmZf+qPPE8Y2vzfaIkrRCiM/TBDaju9Ky76wPnQrk2huYbt0G 0TxRVqlnPv50aQbCsXtsYw== 0000950131-01-000769.txt : 20010212 0000950131-01-000769.hdr.sgml : 20010212 ACCESSION NUMBER: 0000950131-01-000769 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001222 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME SECURITY INTERNATIONAL INC CENTRAL INDEX KEY: 0001038262 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DETECTIVE, GUARD & ARMORED CAR SERVICES [7381] IRS NUMBER: 980169495 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-14502 FILM NUMBER: 1529168 BUSINESS ADDRESS: STREET 1: LEVEL 7 77 PACIFIC HIGHWAY CITY: NORTH SYDNEY STATE: C3 ZIP: 00000 BUSINESS PHONE: 3125802354 8-K/A 1 0001.txt FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported): December 22, 2000 ------------------ Home Security International, Inc. --------------------------------- (Exact name of registrant as specified in its charter) Delaware 001-14502 98-0169495 - ----------------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File number) Identification No.) Unit 3, 167 Prospect Highway Seven Hills, NSW Australia 2147 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (011) (612) 9936-2424 --------------------- Level 7, 77 Pacific Highway, North Sydney, NSW Australia, 2060 -------------------------------------------------------------- Former name or former address, if changed since last report This current report on Form 8-K/A is being filed by Home Security International, Inc. to supplement the current report on Form 8-K dated January 5, 2001 by including the pro forma financial information related to the sale of Ness Security Pty Limited described below. All other information is repeated from the originally filed Form 8-K. Item 2. Acquisition or Disposition of Assets. ------------------------------------- On December 22, Home Security International, Inc. ("HSI" or the "Company") announced that it had completed the sale of 49% of its subsidiary, Ness Security Products Pty Limited ("Ness") to HIH Insurance ("HIH") for current cash consideration of $9.5 million ($AUD17.5 million). A deposit of approximately $2.44 million ($AUD4.5 million) was paid by HIH Insurances to the Company on September, 29 2000 in relation to the sale. The Company has agreed to use the remainder of the sales proceeds to repay $7 million ($AUD13 million) to HIH in relation to the (i) FAI Insurances Limited note representing vendor financing for the Company's purchase of FAI Finance Corporation Pty Limited in 1997; and (ii) short term finance provided by HIH in May, 2000. Furthermore, in connection with the sale, HIH has agreed to provide the Company with additional funds of $1.4 million ($AUD2.5 million) by June 30, 2001. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------- (b) Pro forma financial information. (i) Unaudited Pro Forma Consolidated Statement of Operations for three months ended September 30, 2000 (ii) Unaudited Pro Forma Consolidated Statement of Operations for fiscal year ended June 30, 2000 (iii) Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2000 (c) The following exhibits are filed herewith in accordance with Item 601 of Regulation S-K: 99.1 Company Press Release dated December 22, 2000. HOME SECURITY INTERNATIONAL, INC PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Introduction The accompanying unaudited pro forma consolidated statements of operations for the fiscal year ended June 30, 2000 and the three months ended September 30, 2000 have been prepared after giving effect to the pro forma adjustments described in the notes thereto as if the sale of 49% of Home Security International, Inc's ("the Company") shareholding in Ness Security Products Pty Limited ("Ness") ("the Ness Sale") took place at the beginning of such periods. The unaudited pro forma consolidated balance sheet as of September 30, 2000 has been prepared as if the Ness Sale, which completed on December 22, 2000, had been in effect on September 30, 2000. The unaudited pro forma statements do not purport to represent what the results of operations or financial condition of the Company would actually have been for the corresponding period if the respective events or transaction described above had in fact been in effect throughout such periods or to project the results of operations or financial condition of the Company for any future date or period. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements of the Company as found in the Annual Report on Form-10K for the fiscal year ended June 30, 2000, and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. Unaudited Pro Forma Consolidated Statement of Operations for three months ended September 30, 2000 HSI Consolidated Pro Forma September 30, Pro Forma September 30, 2000 Adjustments Note 2000 ------------- ----------- -------- ------------- (in thousands, except per share data) Net sales $ 5,763 $ - $ 5,763 Cost of goods (3,644) (3,644) ------- -------- Gross profit 2,119 2,119 General and administrative expenses (4,064) (4,064) Amortization and depreciation (604) 82 (1) (522) Research and development (46) (46) ------- -------- Loss from operations (2,595) (2,513) Non operating income - other - 409 (2) 409 Interest income (expense), net (220) 238 (3) 18 ------- -------- Loss before taxes, minority interest (2,815) (2,086) Income tax expense (147) (220) (4) (367) ------- -------- Loss before minority interest (2,962) (2,453) Minority interest - (121) (5) (121) ------- -------- Net loss $(2,962) $ (2,574) ======= ======== Diluted weighted average shares of Common Stock outstanding 5,828 5,828 Diluted loss per common share $ (0.51) $ (0.44)
- ------------- (1) Represents a reversal of amortization charges of $82,000 for the three months ended September 30, 2000 as if the 49% reduction of goodwill relating to Ness ("Ness goodwill") resulting from the Ness Sale had taken place on July 1, 2000. (2) Represents the profit arising from the Ness Sale totaling $409,000 which represents the difference between the sale price of $9,987,000 (AUD$17.5 million) and the net carrying value of the investment by the Company as at July 1, 2000 of $9,578,000 (AUD$16.8 million). (3) Represents the reversal of interest charges of $238,000 for the three months ended September 30, 2000 as if the Ness Sale had taken place on July 1, 2000 with the Company using the proceeds to: (i) Fully repay the FAI Insurance Group Note ("FAI Note"). (ii) Repurchase a portion of the receivables sold to FAI Finance Corporation Pty Limited ("FFC") pursuant to the Receivables Purchase Agreement ("RPA"). (iii) Fully repay the HIH Insurances Limited ("HIH") short-term loan granted on May 29,2000. (4) Represents the tax effect of the adjustments referred to in Notes 2 and 3 listed above. Taxation expense has been calculated at an effective tax rate of 34%. The profit from the Ness Sale is capital in nature and is assessable under Australian capital gains tax law. The capital gains tax applicable to the Ness sale is $140,000. (5) Represents the 49% minority interest in the earnings of Ness for the three months ended September 30, 2000 as if the Ness Sale had taken place on July 1, 2000. Pro Forma Consolidated Statement of Operations for fiscal year ended June 30, 2000
HSI Consolidated Pro Forma June 30, Pro Forma June 30, 2000 Adjustments Note 2000 ---------------- ----------- ---------- ------------ (in thousands, except per share data) Net sales $ 28,638 $ - $ 28,638 Cost of goods (15,545) (15,545) -------- -------- Gross profit 13,093 13,093 General and administrative expenses (19,547) (19,547) Amortization and depreciation (4,508) 334 (1) (4,174) Research and development (654) (654) -------- -------- Loss from operations (11,616) (11,282) Non operating income - other 380 447 (2) 827 Interest income (expense), net (1,170) 962 (3) (208) -------- -------- Loss before taxes, equity in income of affiliated companies and minority interest (12,406) (10,663) Income tax expense 1,240 (479) (4) 761 -------- -------- Loss before equity in income of affiliated companies and minority interest (11,166) (9,902) Equity in income of affiliated companies 56 56 Minority interest - (834) (5) (834) -------- -------- Net loss $(11,110) $(10,680) ======== ======== Diluted weighted average shares of Common Stock outstanding 5,828 5,828 Diluted loss per common share $ (1.91) $ (1.83) - ---------
(1) Represents a reversal of amortization charges of $334,000 for the fiscal year ended June 30, 2000 as if the 49% reduction of the Ness goodwill resulting from the Ness Sale had taken place on July 1, 1999. (2) Represents the profit arising from the Ness Sale totaling $447,000 which represents the difference between the sale price of $10,919,000 (AUD$17.5 million) and the net carrying value of the investment by the Company as at July 1, 1999 of $10,472,000 (AUD$16.8 million). (3) Represents: (a) the reversal of interest charges of $644,000 for the fiscal year ended June 30, 2000 as if the Ness Sale had taken place on July 1, 1999 with the Company using the proceeds to: (i) Fully repay the FAI Note. (ii) Avoid entering into the RPA with FFC. (iii) Repay a portion of the HIH short term loan granted on May 29, 2000; and (b) a $318,000 increase in interest income rates for the fiscal year ended June 30, 2000 resulting from investing the remaining balance of proceeds, after (i), (ii) and (iii) listed above, at market rates. (4) Represents the tax effect of the adjustments referred to in Notes 2 and 3 listed above. Taxation expense has been calculated at an effective tax rate of 34%. The profit from the Ness Sale is capital in nature and is assessable under Australian capital gains tax law. The capital gains tax applicable to the Ness sale is $152,000. (5) Represents the 49% minority interest in the earnings of Ness for the fiscal year ended June 30, 2000 as if the Ness Sale had taken place on July 1, 1999. Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2000
HSI Consolidated Pro Forma December 31, Pro Forma December 31, 1999 Adjustments Note 1999 -------------- ------------- -------- ---------------- (in thousands) ASSETS Current Assets Cash and cash equivalents $ 2,926 $ - $ 2,926 Accounts receivable - trade, net 2,390 2,390 Inventories, net 6,653 6,653 Prepaid expenses and other current 437 437 assets ------- ------- ------- Total current assets 12,406 - 12,406 ------- ------- ------- Non - current assets Capital assets, net 4,757 4,757 Intangibles, net 20,200 (6,542) (1) 13,658 Deferred income taxes 2,341 2,341 Other non - current assets 1,219 1,219 ------- ------- ------- Total non - current assets 28,517 (6,542) 21,975 ------- ------- ------- Total assets $40,923 $(6,542) $34,381 ======= ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Note payable - FAI Insurances Group $ 555 $ (291) (2) 264 HIH short term loans 4,589 (4,589) (2) - Note payable - International Home Security Investments Limited 463 463 Borrowing - FAI Finance Corporation 1,032 1,032 Deposit received in advance - Ness Sale 2,455 (2,455) (3) - Payable - trade 3,041 3,041 Accrued liabilities 1,878 1,878 Lease liability 247 247 Income taxes payable 111 139 (4) 250 Deferred income 1,405 1,405 ------- ------- ------- Total current liabilities 15,776 (7,196) 8,580 ------- ------- ------- Non-current liabilities Note payable - FAI Insurances Group 3,313 (2,211) (2) 1,102 Borrowings - FAI Finance Corporation 3,034 3,034 Lease liability 484 484 Accrued liabilities 223 223 Deferred income 2,440 2,440 ------- ------- ------- Total non-current liabilities 9,494 (2,211) 7,283 ------- ------- ------- Total liabilities 25,270 (9,407) 15,863 ------- ------- ------- Minority Interest - 3,502 (5) 3,502 Shareholders' equity Common stock 6 6 Additional paid-in capital 22,310 22,310 Warrants 1,064 1,064 Secured note issue (2,375) (2,375) Accumulated other comprehensive loss (362) (907) (6) (1,269) Retained earnings (loss) (4,990) 270 (7) (4,720) ------- ------- ------- Total shareholders' equity 15,653 (637) 15,016 ------- ------- ------- Total liabilities and shareholders' equity $40,923 $(6,542) $34,381 ======= ======= =======
(1) Represents the 49% reduction in the carrying value of the Ness goodwill resulting from the Ness Sale. (2) Represents the repayment of $7,091,000 to HIH Insurances Limited ("HIH") from the proceeds of the Ness Sale summarized as follows:
FAI Insurances Group Note - Current Portion $ 291,000 HIH Short Term Loans $4,589,000 ---------- Total Current Portion of Repayments $4,880,000 FAI Insurances Group Note - Non-Current Portion $2,211,000 ---------- Total Repayments $7,091,000 ==========
(3) Represents the reclassification of the cash deposit paid by HIH on September 29, 2000 in relation to the Ness Sale. (4) Represents taxation liability arising on the Ness Sale. (5) Represents the 49% minority interest in the net assets of Ness as if the Ness Sale had taken place on September 30, 2000. (6) Represents the foreign exchange impact of the reduction of the Ness Goodwill which originated in Australian dollars and has been converted into U.S. dollars at the historical exchange rate since origination. (7) Represents the profit on the Ness Sale. HOME SECURITY INTERNATIONAL, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this 8-K report to be signed on its behalf by the undersigned, thereunto duly authorized. HOME SECURITY INTERNATIONAL, INC. By: /s/Terrence Youngman -------------------- Terrence Youngman President Dated: February 8, 2001 EX-99.1 2 0002.txt COMPANY PRESS RELEASE EXHIBIT 99.1 Home Security International Inc. reports completion of Sale of 49% of Ness Security and Retail Consumer Support Agreement. Sydney, Australia, Friday, 22 December 2000. - Home Security International, Inc (Amex: HSI) announced that it had completed the sale of 49% of its subsidiary, Ness Security Products Pty Limited ("Ness") to HIH Insurance. The completion of the previously announced sale of 49% of Ness will reduce the Company's debt by AUD $13 million in relation to: a) The FAI note representing vendor finance for the Company's purchase of FAI Finance Corporation Pty Limited in 1997, and b) Short term financing provided by HIH Insurance. The Company has received the AUD $4.5 million cash component due under the sale agreement. A further AUD $2.5 million in cash will be received by the Company in January 2001. FAI Finance Corporation ("FFC"), a wholly owned subsidiary of HIH Insurance, has agreed to provide the Company with retail consumer finance support to a limit of AUD $100 million. The completion of this agreement maintains and confirms the Company's access to a relationship that will facilitate the continued finance of its security package in Australia. The completion of the above transaction will facilitate a lump sum payment to the Company of approximately AUD $2.7 million in cash by FFC relating to the terms of the facility. The Company also reported that it had recommenced discussions with a major corporation within the security industry in relation to forming a strategic alliance within the residential security market. There is no assurance that any alliance will be made. The Company is continuing in its efforts to consolidate its operations and reduce overhead. As part of this consolidation process the Company has moved its operations to premises leased by its 51% owned subsidiary, Ness, in Sydney Australia. The Company expects its operating losses to continue. HSI has included forward-looking statements concerning its business in this press release. These forward-looking statements are subject to certain risks and uncertainties including those contained in the Form 10-Q dated 14 November 2000, that could cause actual results to differ materially from those projected. Home Security International, Inc. expressly disclaims any obligation to release publicly any updates or revisions to such forward-looking statements to reflect any change in expectations. -----END PRIVACY-ENHANCED MESSAGE-----