UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: MAY 12, 2004
---------------------------------
(DATE OF EARLIEST EVENT REPORTED)
TECHTEAM GLOBAL, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-16284 38-2774613
---------------------------- ------------ ----------------------
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NUMBER)
27335 WEST 11 MILE ROAD
SOUTHFIELD, MICHIGAN 48034
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(248) 357-2866
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As previously reported in the Current Report on Form 8-K filed on
May 14, 2004, on May 13, 2004, TechTeam Global NV/SA, the
wholly-owned Belgian subsidiary of the Company, completed the
acquisition of all of the outstanding equity of Advanced Network
Engineering NV/SA (formerly Advanced Network Engineering CVBA)
("A.N.E.") from A.N.E.'s shareholders, Peter De Gendt, Werner
Meynaerts, Pascal Claessens, Wim De Geetere, and Christoph Gesqueire
("Selling Shareholders"). The Company is now submitting the
financial statements of the business acquired.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
(b) Pro forma financial information.
(c) Exhibits.
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(a) Financial statements of business acquired.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
We have audited the financial statements of Advanced Network Engineering CVBA
for the period ended March 31, 2004 with a balance sheet total of
E1.126.727,06 and a profit of the year of E50.500,51.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in Belgium. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis our opinion.
In our opinion, financial statements referred to above present fairly, in all
material respects, the financial position of Advanced Network Engineering CVBA
and the results of their operations in the period started April 1, 2003 and
ended March 31, 2004, are in conformity with accounting principles generally
accepted in the Belgium.
Brussels, July 7, 2004.
/s/ BVBA VAN CAUTER - SAEYS & CO
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ADVANCED NETWORK ENGINEERING CVBA
INDEX TO FINANCIAL STATEMENTS
Page
----
1. Financial statements 5
2. Notes to the financial statements 8
3. Additional information 16
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
1. FINANCIAL STATEMENTS
ADVANCED NETWORK ENGINEERING CVBA
NOTES 31/03/2004
----- -------------
(in Euros)
ASSETS
FIXED ASSETS (E) 86.761,00
I. FORMATION EXPENSES
II. INTANGIBLE ASSETS 1
III. TANGIBLE ASSETS 2 65.137,89
A. Land and buildings
B. Plant, machinery and equipment 2.1. 94,38
C. Furniture and vehicles 2.2. 33.526,63
D. Leasing and other similar rights 2.3. 5.718,02
E. Other tangible assets 2.4. 25.798,86
F. Assets under construction and advance payments
IV. FINANCIAL FIXED ASSETS 3 21.623,11
A. Affiliated companies 3.1. 20.000,00
B. Other enterprises linked
C. Other financial assets 3.2. 1.623,11
CURRENT ASSETS 1.039.966,06
V. LONG TERM RECEIVABLES
A. Trade debtors
B. Other amounts receivable
VI. INVENTORY 4 20.011,54
A. Raw materials 20.011,54
1. Consumables 20.011,54
2. Work in progress
VII. SHORT TERM RECEIVABLES 5 976.379,65
A. Trade accounts receivables 5.1. 974.143,90
B. Other receivables 5.2. 2.235,75
IX. CASH BALANCES 31.997,44
X. DEFERRED CHARGES AND ACCRUED INCOME 6 11.577,43
TOTAL ASSETS (E)1.126.727,06
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
ADVANCED NETWORK ENGINEERING CVBA
NOTES 31/03/2004
----- -------------
(IN EUROS)
LIABILITIES
EQUITY (E) 187.440,79
I. CAPITAL 7 75.000,00
A. Issued capital 75.000,00
B. Uncalled capital
IV. RESERVES 61.886,91
A. Legal reserve 7.436,81
B. Reserves not available for distribution 13.882,04
C. Untaxed reserves
D. Reserves available for distribution 40.568,06
V. ACCUMULATED RESULTS 50.553,88
PROVISIONS AND DEFERRED TAXES
VII. A. PROVISIONS FOR RISKS AND CHARGES
1. Pensions and similar obligations
2. Taxation
3. Repairs and maintenance
4. Other liabilities and charges
B. Deferred taxes
DEBTS 939.286,27
VIII. LONG TERM DEBTS 8 1.661,61
A. Financial debts 8.1. 1.661,61
B. Trade debts
C. Advances received on contracts in progress
D. Other debts
IX. SHORT TERM DEBTS 937.624,66
A. Current portion of amounts payable after one year 8.1. 67.957,92
B. Financial debts 8.2. 105.066,00
C. Trade debts 8.3. 512.391,48
D. Advances received on contracts in progress
E. Accrued taxes and social liabilities 9 252.209,26
F. Other debts
X. ACCRUED CHARGES AND DEFERRED INCOME
TOTAL LIABILITIES (E)1.126.727,06
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
ADVANCED NETWORK ENGINEERING CVBA
PROFIT AND LOSS ACCOUNT
NOTES 31/03/2004
----- ------------
(in Euros)
- Turnover 10 4.598.768,54
- Stock variation (work-in-process, finished goods)
- Raw materials and consumables 11 2.429.074,01
- Fixed assets - own construction
- Miscellaneous operating income 10 36.885,07
GROSS MARGIN 2.206.579,60
- Services and other goods 1.234.419,72
- Remunerations and social charges 12 740.729,46
- Depreciations and write offs on Fixed assets 45.587,36
- Write offs on current assets 13 3.257,86
- Provisions for other liabilities and charges
- Depreciation on consolidation differences
- Miscellaneous operating charges 14 19.943,77
- operating charges capitalised
OPERATING RESULT 15 162.641,43
- Financial income 4.372,50
- Financial charges 48.406,80
CURRENT RESULT BEFORE TAXES 118.607,13
- Exceptional income 4.621,13
- Exceptional charges 2.828,47
RESULT BEFORE TAXES 120.399,79
- Transfer to/from deferred taxes
- Corporate taxes 16 (69.899,28)
RESULT OF THE YEAR 50.500,51
- Transfer to/from untaxed reserves
- Share on consolidated companies (equity method)
RESULT TO BE ALLOCATED (E)50.500,51
------------
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
NOTE 1 - INTANGIBLE ASSETS
Acquisition cost
At the end of the preceding period 8.143,30
Depreciation and amounts written down
At the end of the preceding period 5.428,88
Movements during the period 2.714,42
--------
Depreciation at the end of the period (8.143,30)
---------
NET BOOK VALUE 0,00
NOTES 2 - TANGIBLE ASSETS
2.1 Plant, machinery and equipment
Acquisition cost
At the end of the preceding period 1.744,63
Movements during the period 0,00
--------
Acquisition cost at the end of the period 1.744,63
Depreciation and amounts written down
At the end of the preceding period 1.532,28
Movements during the period 117,97
--------
Depreciation at the end of the period (1.650,25)
---------
NET BOOK VALUE 94,38
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
2.2 Furniture and vehicles
Acquisition cost
At the end of the preceding period 237.131,14
Movements during the period 26.013,89
----------
Acquisition cost at the end of the period 263.145,03
Depreciation and amounts written down
At the end of the preceding period 198.452,11
Movements during the period 31.166,29
----------
Depreciation cost at the end of the period (229.618,40)
-----------
NET BOOK VALUE 33.526,63
2.3 Leasing and other similar rights
Acquisition cost
At the end of preceding period 47.333,37
Movements during the period 0,00
----------
Acquisition cost at the end of the period 47.333,37
Depreciation and amounts written down
At the end of the preceding period 32.523,88
Movements during the period 9.091,47
----------
Depreciation at the end of the period (41.615,35)
----------
NET BOOK VALUE 5.718,02
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
2.4 Other tangible assets
Acquisition cost
At the end of preceding period 48.937,01
Movements during the period 14.929,95
---------
Acquisition cost at the end of the period 63.866,96
Depreciation and amounts written down
At the end of the preceding period 35.570,89
Movements during the period 2.497,21
---------
Depreciation at the end of the period (38.068,10)
----------
NET BOOK VALUE 25.798,86
TOTAL TANGIBLE FIXED ASSETS 65.137,89
NOTE 3 - FINANCIAL FIXED ASSETS
3.1 Affiliated companies
Acquisition cost at the end of preceding period 51.457,86
Movements during the period 0,00
Less value (31.457,86)
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NET BOOK VALUE 20.000,00
It concerns 100% of the shares of
Innec NV, Casinoplein 16 9000 Gent.
Net equity as per 31/12/03: 30.309,95(E)
Result as per 31/12/03: 4.320,01(E)
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
3.2 Other financial assets
Net book value at the end of the preceding period 4.309,16
Reimbursements during the accounting year (2.686,05)
---------
NET BOOK VALUE 1.623,11
It concerns paid guarantees.
NOTE 4 - INVENTORY
It concerns inventory as per 31/03/2004 valued by identifying individually the
price of each element
NOTE 5 - SHORT TERM RECEIVABLES
5.1 Trade accounts receivable 974.143,90
----------
Clients 973.299,58
Invoices to establish 700,00
Doubtful debtors 831,56
Less value on doubtful debtors (687,24)
5.2 Other receivables 2.235,75
--------
Loan 2.235,75
NOTE 6 - DEFERRED CHARGES AND ACCRUED INCOME
Deferred charges 11.577,43
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
NOTE 7 - CAPITAL
March 31, 2004
--------------
Issued capital 75.000,00
Issued capital at the end of preceding period 75.000,00
Incorporation of reserves 0,00
---------
Issued capital at the end of the period 75.000,00
The capital of (E)75.000,00 is represented by 5.000 nominative shares.
NOTE 8 - LONG TERM DEBTS
Less than 1 year Between 1 and 5 years
---------------- ---------------------
8.1 Credit institutions
Credit institutions 67.957,92 1.661,61
These amounts are guaranteed by real guarantees given or irrevocably promised by
the enterprise on its own assets for an amount of (E)65.812,00.
8.2 Financial debts 105.066,00
----------
Loan 35.615,47
Loan 50.513,49
Innec NV 18.937,04
8.3 Trade debts 512.391,48
----------
Suppliers 497.055,18
Invoices to receive 15.336,30
Credit notes to establish 0,00
-12-
ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
NOTE 9 - ACCRUED TAXES AND SOCIAL LIABILITIES
Taxes 102.589,58
----------
VAT payable 18.353,51
Income tax to pay 29.432,61
Withholding tax on interests 1.511,74
Withholding taxes 8.791,72
Estimated taxes payable 44.500,00
Remuneration and social security 149.619,68
----------
Amounts due to National Office of Social Security 2.020,61
Other amounts payable relating to remuneration and social security 147.599,07
This item includes the provision for holiday pay and the provision for the year
end bonus which amounts respectively to (E)87.825,84 and (E)12.523,23.
NOTE 10 - TURNOVER
Turnover consulting 701.290,94
Turnover support 1.054.486,54
Turnover goods 2.732.714,13
Turnover training 21.837,72
Turnover website hosting 33.182,35
Turnover commissions 47.167,77
Turnover other 8.089,09
------------
4.598.768,54
Other operating income 36.885,07
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
NOTE 11 - RAW MATERIALS AND CONSUMABLES
Purchase goods for resale 2.440.907,49
Subcontracting 180,00
Purchase other (1.853,63)
Increase, decrease of stock (10.159,85)
-----------
2.429.074,01
NOTE 12 - PAYROLL CHARGES
Remuneration and direct social benefits 580.630,91
Employers' contribution social security 153.904,04
Other personnel charges 6.194,51
NOTE 13 - AMOUNTS WRITTEN OFF
Stocks and contracts in progress 3.257,86
Due to some old stock a depreciation has been taken into account.
NOTE 14 - OTHER OPERATING CHARGES
Taxes related to operations 19.943,77
NOTE 15 - FINANCIAL RESULTS
Financial income 4.372,50
Interests 500,00
Other 3.872,50
Financial charges (48.406,80)
Interests (13.510,90)
Depreciation on financial fixed assets (31.457,86)
Other (3.438,04)
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
2. NOTES TO THE FINANCIAL STATEMENTS
(amounts are in Euro's)
NOTE 16 - INCOME TAXES
Corporate taxes (69.899,28)
----------
Income taxes of the current period (69.536,52)
Withholding taxes 36,52
Advance payment of income taxes 25.000,00
Estimated additional income taxes 44.500,00
Income taxes of previous periods (362,74)
Income taxes 362,74
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ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
3. ADDITIONAL INFORMATION
CONTINGENCIES
We note that a depreciation of E31.457,86 has been taken into account on the
participation INNEC NV. The participation is evaluated at E20.000,00 on March
31st, 2004. Further, the participation has been sold on May 13th, 2004 for an
amount of E20.000,00.
LEGAL DISCUSSIONS
No provisions have to be taken into account concerning legal discussions.
DIFFERENCES BETWEEN U.S. GAAP AND BELGIUM GAAP
1. General Presentation of the Financial Statements
Belgium GAAP differs from U.S. GAAP in that the financial statements do not
require a presentation of the statement of cash flows.
Furthermore, Belgian accounting legislation establishes standard charts of
accounts, as subscribed in law of January 30, 2001 and based on formats set
forth in the European Union's 4th Directive. These charts of accounts prescribe
the details that must be disclosed in the balance sheet and the profit and loss
statement. The format of the presentation of the balance sheet differs from U.S.
GAAP format in that the different items on the balance sheet are represented in
ascending degree of liquidity (from long term to short term), i.e. on the Assets
statement starting with Fixed Assets and ending with Cash and short-term
Deferred Charges and Accrued Income and on the Liabilities statement starting
with Owners' Equity and ending with short-term Accrued Charges and Deferred
Income.
The total balance sheet amount is equal.
2. Statements of Operations
The presentation of the profit and loss statement differs from U.S. GAAP in the
sense that the Belgium accounting legislation does not require any allocation of
costs other than the cost of Purchased Goods, Raw Materials, or Purchased
Subcontracting to the Cost of Sales or Cost of Revenue.
This means for instance that, in the case of revenues obtained from IT Services,
the expenses of the billable staff are not included in the Gross Margin but are
presented below the Gross Margin within the normal salary cost in the Operating
Result.
Other general costs concerning sales are represented as general costs and not
allocated to cost of services sold.
-16-
ADVANCED NETWORK ENGINEERING CVBA ACCOUNTS AS PER 31/03/2004
3. ADDITIONAL INFORMATION
3. Evaluation Rules
Taking into account the type of the contracts and sales business of Advanced
Network Engineering CVBA, there was no need to apply other evaluation rule f.i.
revenue recognition or work in process.
The result for the year is equal.
-17-
(b) Pro forma financial information.
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The unaudited pro forma condensed combined financial information for TechTeam
Global, Inc. ("TechTeam") set forth below gives effect to the acquisition of
Advanced Network Engineering NV/SA (formerly Advanced Network Engineering CVBA)
("A.N.E.") using the purchase method of accounting, after giving effect to the
adjustments described in the accompanying notes. The unaudited pro forma
condensed combined statements of operations includes only the results of ongoing
operations and excludes such impacts as nonrecurring items related to the
acquisition and synergies and related cost savings associated with the
integration of the acquisition.
The unaudited pro forma condensed combined statement of financial position as of
March 31, 2004 gives effect to the acquisition of A.N.E. as if it occurred on
that date. The unaudited pro forma condensed combined statements of operations
for the three months ended March 31, 2004 and the year ended December 31, 2003
give effect to the acquisition as if it occurred on the first day of each of
those periods by combining the results for the three months ended March 31, 2004
of TechTeam with the results for the same period of A.N.E., and combining the
results for the year ended December 31, 2003 of TechTeam with the results for
the year ended March 31, 2004 of A.N.E.. The unaudited pro forma condensed
combined financial information reflects certain adjustments.
The results of A.N.E. for the three months ended March 31, 2004 and the year
ended December 31, 2003 are presented in accordance with accounting principals
generally accepted in the United States ("US GAAP") and were translated into
U.S. dollars at the average exchange rate during each respective period. The
financial position of A.N.E. as of March 31, 2004 was translated into U.S.
dollars at the exchange rate at that date. Adjustments to A.N.E.'s financial
statements to conform to US GAAP related to classifying expenses in the
statement of operations by their functional classification rather than their
natural classification. Belgian GAAP does not require any allocation of costs
other than the cost of purchased goods, raw materials, or purchased
subcontracting to cost of revenue. There was no impact on net income.
The pro forma condensed combined financial information is for informational
purposes only and does not purport to represent what the consolidated financial
position or results of operations of TechTeam would actually have been if the
ANE acquisition, in fact, had occurred on March 31, 2004, or at the beginning of
the periods presented, or to project the consolidated financial position or
results of operations as of any future date or any future period. The unaudited
pro forma financial information should be read together with (i) the TechTeam
Global, Inc. consolidated financial statements as of December 31, 2003 and 2002,
and for each of the three years in the period ended December 31, 2003, including
the notes thereto, included in TechTeam's Annual Report on Form 10-K for the
fiscal year ended December 31, 2003, and (ii) the TechTeam Global, Inc.
unaudited condensed consolidated financial statements as of March 31, 2004 and
for the three-month periods ended March 31, 2004 and 2003, including the notes
thereto, included in TechTeam's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2004
-18-
TECHTEAM GLOBAL, INC. AND SUBSIDIARIES
CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
AS OF MARCH 31, 2004
(UNAUDITED)
ADVANCED PRO FORMA
TECHTEAM NETWORK PRO FORMA TECHTEAM
GLOBAL ENGINEERING ADJUSTMENTS GLOBAL
-------- ----------- ----------- ---------
(In thousands and in US dollars)
ASSETS
Current assets
Cash and cash equivalents............................ $36,145 $ 39 $(1,106)(A) $35,078
Accounts receivable, net............................. 23,995 1,189 -- 25,184
Prepaid expenses and other........................... 1,697 14 -- 1,711
Deferred income taxes................................ 562 -- -- 562
------- ------- ------- -------
Total current assets................................. 62,399 1,242 (1,106) 62,535
Property, equipment, and purchased software, net......... 9,470 72 -- 9,542
Goodwill and other intangible assets, net................ 5,733 24 878(A) 6,635
Other assets............................................. 1,361 34 -- 1,395
------- ------- ------- -------
Total assets............................................. $78,963 $ 1,372 $ (228) $80,107
======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of notes payable..................... $ 173 $ 211 $ -- $ 384
Accounts payable..................................... 4,767 605 -- 5,372
Accrued payroll, related taxes and
withholdings...................................... 6,025 182 -- 6,207
Accrued expenses and other........................... 3,919 144 -- 4,063
------- ------- ------- -------
Total current liabilities............................ 14,884 1,142 -- 16,026
Long-term liabilities.................................... 348 2 -- 350
Redeemable convertible preferred stock................... 5,000 -- -- 5,000
Shareholders' equity
Common stock......................................... 85 91 (91)(A) 85
Additional paid-in capital........................... 57,409 -- -- 57,409
Retained earnings.................................... 692 137 (137)(A) 692
Accumulated other comprehensive income............... 545 -- -- 545
------- ------- ------- -------
Total shareholders' equity........................... 58,731 228 (228) 58,731
------- ------- ------- -------
Total liabilities and shareholders' equity............... $78,963 $ 1,372 $ (228) $80,107
======= ======= ======= =======
-19-
TECHTEAM GLOBAL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004
(UNAUDITED)
ADVANCED PRO FORMA
TECHTEAM NETWORK PRO FORMA TECHTEAM
GLOBAL ENGINEERING ADJUSTMENTS GLOBAL
-------- ----------- ----------- ---------
(In thousands and in US dollars, except per share data)
Revenue....................................... $ 30,270 $ 1,454 $ -- $ 31,724
Cost of services delivered.................... 23,117 1,187 -- 24,304
-------- -------- ------ --------
Gross profit.................................. 7,153 267 -- 7,420
Selling, general, and administrative expense.. 5,963 194 19(B) 6,176
-------- -------- ------ --------
Operating income.............................. 1,190 73 (19) 1,244
Other expense................................. (34) (6) (7)(c) (47)
-------- -------- ------ --------
Income (loss) before income taxes............. 1,156 67 (26) 1,197
Income tax provision.......................... 532 55 (9)(D) 578
-------- -------- ------ --------
Net income.................................... $ 624 $ 12 $ (17) $ 619
======== ======== ====== ========
Basic earnings per share...................... $ 0.07 $ 0.07
======== ========
Diluted earnings per share.................... $ 0.07 $ 0.06
======== ========
Weighted average number of common shares
and common share equivalents outstanding
Basic..................................... 8,735 8,735
======== ========
Diluted................................... 9,580 9,580
======== ========
-20-
TECHTEAM GLOBAL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(UNAUDITED)
ADVANCED PRO FORMA
TECHTEAM NETWORK PRO FORMA TECHTEAM
GLOBAL ENGINEERING ADJUSTMENTS GLOBAL
------------- ------------- ------------- ----------
(In thousands and in US dollars, except per share data)
Revenue........................................... $ 88,089 $ 5,407 $ -- $ 93,496
Cost of services delivered........................ 72,073 4,470 -- 76,543
------------- ------------- ------------- ----------
Gross profit...................................... 16,016 937 -- 16,953
Selling, general, and administrative expense...... 18,695 744 77(B) 19,516
------------- ------------- ------------- ----------
Operating income (loss)........................... (2,679) 193 (77) (2,563)
Other income (expense)............................ 2,043 (15) (26)(c) 2,002
------------- ------------- ------------- ----------
Income before income taxes........................ (636) 178 (103) (561)
Income tax provision.............................. 410 82 (35)(D) 457
------------- ------------- ------------- ----------
Net income........................................ $ (1,046) $ 96 $ (68) $ (1,018)
============= ============= ============= ==========
Basic and diluted loss per share.................. $ (0.10) $ (0.10)
============= ==========
Weighted average number of common shares
and common share equivalents outstanding
Basic......................................... 10,066 10,066
============= ==========
Diluted....................................... 10,066 10,066
============= ==========
-21-
TECHTEAM GLOBAL, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
NOTE 1 -- PRO FORMA ADJUSTMENTS
Pro forma adjustments for the unaudited pro forma condensed combined statement
of financial position as of March 31, 2004, and the condensed combined
statements of operations for the three months ended March 31, 2004 and the year
ended December 31, 2003 are as follows:
(A) To reflect the payment of the initial purchase price of
E850,000 plus acquisition costs of E58,000 ($1,106,000 at
March 31, 2004), for the acquisition of all of the outstanding
stock of A.N.E., to reflect the fair value of identifiable
intangible assets in excess of the carrying amount acquired,
and to reflect goodwill as the excess of the purchase price
paid over the estimated fair value of the identified net
assets acquired.
(B) To reflect the amortization of identifiable intangible assets
resulting from the acquisition, which are amortized on a
straight-line basis over a period of six years.
(C) To reduce interest income for the cash used in the acquisition
of A.N.E.
(D) To record the related tax effects of the pro forma adjustments
to the condensed combined statements of operations. The
adjustments assume no utilization of existing net operating
loss carryfowards at TechTeam Global NV/SA to reduce taxable
income at A.N.E.
-22-
(c) Exhibits
23.1 Consent of Independent Accountants
SIGNATURE
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.
TECHTEAM GLOBAL, INC.
By: /s/ Michael A. Sosin
---------------------------------------
Michael A. Sosin, Vice President, Secretary
Date: July 27, 2004
23
Exhibit Index
-------------
No. Description
--- -----------
23.1 Consent of Independent Accountants