form8k.htm
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):  June 30, 2008


TIER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of
incorporation)
 
000-23195
(Commission
File Number)
94-3145844
(IRS Employer Identification No.)
10780 Parkridge Blvd., 4th Floor
Reston, Virginia
(Address of principal executive offices)
  
20191
(Zip Code)
 
(571) 382-1000
(Registrant's telephone number, including area code)
  


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o  
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
 
 

Item 2.01.  Completion of Acquisition or Disposition of Assets.

On June 30, 2008, the registrant completed the sale of the assets, operations and certain liabilities of its Government Business Process Outsourcing business, or GBPO, to Informatix, Inc., a privately held company.  The sale was completed pursuant to a Purchase and Sale Agreement dated June 9, 2008 by and between the registrant and Informatix for a purchase price of $8 million in cash, subject to a working capital adjustment.  The agreement also provides for earn-out payments to the registrant of up to $1 million per year for fiscal years 2008, 2009 and 2010, if the revenues of the business meet the targets set forth in the agreement for those respective fiscal years.

The foregoing description of the purchase and sale agreement is qualified by reference to the complete text of the agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K.

Item 7.01.  Regulation FD Disclosure.

On May 30, 2008, the registrant completed the sale of the assets, operations and certain liabilities of its State System Integration business to RKV Technologies, Inc, or RKV.  The sale was completed pursuant to an Asset Purchase Agreement dated May 23, 2008 by and between the registrant and RKV for a purchase price of $700,000.

On July 7, 2008, the registrant issued a press release announcing the dispositions disclosed in Item 2.01 and this Item 7.01 above, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Item 7.01 and in Exhibit 99.1 to this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(b)           Pro Forma Financial Information
 
 
 
 

TIER TECHNOLOGIES, INC.
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
  
AT MARCH 31, 2008
  
(unaudited)
  
                   
 
(in thousands)
  
As Reported with GBPO(1)
    
Disposition of
GBPO
    
Pro Forma
  
ASSETS:
                  
Current assets:
                  
Cash and cash equivalents
   $ 40,635     $ 7,784     $ 48,419  
Accounts receivable, net
     5,861       (1,765 )     4,096  
Unbilled receivables
     575       (131 )     444  
Prepaid expenses and other current assets
     2,383       (562 )     1,821  
Assets of discontinued operations
     39       —       39  
Current assets—held-for-sale
     25,996       —       25,996  
Total current assets
     75,489       5,326       80,815  
                         
Property, equipment and software, net
     8,014       (3,932 )     4,082  
Goodwill
     17,424       (2,899 )     14,525  
Other intangible assets, net
     15,548       —       15,548  
Investments in marketable securities
     31,111       —       31,111  
Restricted investments
     11,526       —       11,526  
Other assets
     362       —       362  
Total assets
   $ 159,474     $ (1,505 )   $ 157,969  
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                        
Current liabilities:
                        
Accounts payable
   $ 864     $ (14 )   $ 850  
Accrued compensation liabilities
     3,793       (605 )     3,188  
Accrued subcontractor expenses
     352       (13 )     339  
Accrued discount fees
     4,974       —       4,974  
Other accrued liabilities
     4,474       (63 )     4,411  
Deferred income
     2,105       —       2,105  
Liabilities of discontinued operations
     41       —       41  
Current liabilities—held-for-sale
     9,883       —       9,883  
Total current liabilities
     26,486       (695 )     25,791  
Other liabilities
     345       (165 )     180  
Total liabilities
     26,831       (860 )     25,971  
                         
                         
Shareholders’ equity:
                        
Preferred stock, no par value; authorized shares:  4,579;
no shares issued and outstanding
                        
Common stock and paid-in capital; shares authorized: 44,260;
shares issued: 20,439; shares outstanding: 19,555
     187,928       —       187,928  
Treasury stock—at cost, 884 shares
     (8,684 )     —       (8,684 )
Accumulated other comprehensive loss
     (1,414 )     —       (1,414 )
Accumulated deficit
     (45,187 )     (645 )     (45,832 )
Total shareholders’ equity
     132,643       (645 )     131,998  
Total liabilities and shareholders’ equity
   $ 159,474     $ (1,505 )   $ 157,969  
(1)  Reported amounts of GBPO were reclassified from held-for-sale for Pro Forma presentation.

 
 
 
 
 
TIER TECHNOLOGIES, INC.
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
  
AT SEPTEMBER 30, 2007
  
(unaudited)
  
                   
 
(in thousands)
  
As Reported with GBPO(1)
    
Disposition of
GBPO
    
Pro Forma
  
ASSETS:
                  
Current assets:
                  
Cash and cash equivalents
   $ 16,516     $ 7,784     $ 24,300  
Investments in marketable securities
     57,815       —       57,815  
Accounts receivable, net
     7,261       (2,137 )     5,124  
Unbilled receivables
     653       (108 )     545  
Prepaid expenses and other current assets
     2,610       (441 )     2,169  
Assets of discontinued operations
     672       —       672  
Current assets—held-for-sale
     26,156       —       26,156  
Total current assets
     111,683       5,098       116,781  
                         
Property, equipment and software, net
     7,664       (3,921 )     3,743  
Goodwill
     17,744       (3,218 )     14,526  
Other intangible assets, net
     17,640       —       17,640  
Restricted investments
     11,526       —       11,526  
Other assets
     167       —       167  
Total assets
   $ 166,424     $ (2,041 )   $ 164,383  
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                        
Current liabilities:
                        
Accounts payable
   $ 880     $ (3 )   $ 877  
Accrued compensation liabilities
     5,268       (616 )     4,652  
Accrued subcontractor expenses
     521       (17 )     504  
Accrued discount fees
     4,529       —       4,529  
Other accrued liabilities
     5,313       (850 )     4,463  
Deferred income
     2,649       —       2,649  
Liabilities of discontinued operations
     421       —       421  
Current liabilities—held-for-sale
     8,872       —       8,872  
Total current liabilities
     28,453       (1,486 )     26,967  
Other liabilities
     457       (257 )     200  
Total liabilities
     28,910       (1,743 )     27,167  
                         
                         
Shareholders’ equity:
                        
Preferred stock, no par value; authorized shares:  4,579;
no shares issued and outstanding
                        
Common stock and paid-in capital; shares authorized: 44,260;
shares issued: 20,425; shares outstanding: 19,541
     186,417       —       186,417  
Treasury stock—at cost, 884 shares
     (8,684 )     —       (8,684 )
Accumulated other comprehensive loss
     —       —       —  
Accumulated deficit
     (40,219 )     (298 )     (40,517 )
Total shareholders’ equity
     137,514       (298 )     137,216  
Total liabilities and shareholders’ equity
   $ 166,424     $ (2,041 )   $ 164,383  
(1)  Reported amounts of GBPO were reclassified from held-for-sale for Pro Forma presentation.
 

 
 
 
 
TIER TECHNOLOGIES, INC.
  
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
  
SIX MONTHS ENDED MARCH 31, 2008
  
(unaudited)
  
                   
(in thousands, except per share data)
  
As Reported with GBPO(1)
    
Disposition of GBPO
    
Pro Forma
  
Revenues
   $ 67,059     $ (12,143 )   $ 54,916  
                         
Costs and expenses:
                        
Direct costs
     47,019       (5,267 )     41,752  
General and administrative
     15,097       (1,115 )     13,982  
Selling and marketing
     4,803       (684 )     4,119  
Depreciation and amortization
     2,625       —       2,625  
Total costs and expenses
     69,544       (7,066 )     62,478  
Loss from continuing operations before other income and income taxes
     (2,485 )     (5,077 )     (7,562 )
                         
Other income:
                        
Interest income, net
     1,790       —       1,790  
Total other income
     1,790       —       1,790  
                         
(Loss) from continuing operations before income taxes
     (695 )     (5,077 )     (5,772 )
Income tax provision
     28       —       28  
                         
Loss from continuing operations
  
$
 (723 )   $ (5,077 )   $ (5,800 )
                         
(Loss) earnings per share—Basic and diluted:
                        
From continuing operations
   $ (0.04 )   $ (0.26 )   $ (0.30 )
                         
Weighted average common shares used in computing:
                        
Basic and diluted (loss) earnings per share
     19,547       19,547       19,547  
 
(1)  Results of GBPO were reclassified from discontinued operations for Pro Forma presentation.
 
 
TIER TECHNOLOGIES, INC.
  
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
  
FISCAL YEAR ENDED SEPTEMBER 30, 2007
  
(unaudited)
  
                   
(in thousands, except per share data)
  
As Reported with GBPO(1)
    
Disposition of GBPO
    
Pro Forma
  
Revenues
   $ 142,869     $ (31,721 )   $ 111,148  
                         
Costs and expenses:
                        
Direct costs
     101,965       (18,073 )     83,892  
General and administrative
     29,742       (2,257 )     27,485  
Selling and marketing
     9,340       (1,097 )     8,243  
Depreciation and amortization
     4,575       (2 )     4,573  
Write-down of goodwill and intangible assets
     11,694       (2,462 )     9,232  
Total costs and expenses
     157,316       (23,891 )     133,425  
Loss from continuing operations before other income and income taxes
     (14,447 )     (7,830 )     (22,277 )
                         
Other income:
                        
Equity in net income of unconsolidated affiliate
     475       —       475  
Interest income, net
     3,619       —       3,619  
Total other income
     4,094       —       4,094  
                         
(Loss) from continuing operations before income taxes
     (10,353 )     (7,830 )     (18,183 )
Income tax provision
     76       —       76  
                         
Loss from continuing operations
   $ (10,429 )   $ (7,830 )   $ (18,259 )
                         
(Loss) earnings per share—Basic and diluted:
                        
From continuing operations
   $ (0.54 )   $ (0.40 )   $ (0.94 )
                         
Weighted average common shares used in computing:
                        
Basic and diluted (loss) earnings per share
     19,512       19,512       19,512  
 
(1)  Results of GBPO were reclassified from discontinued operations for Pro Forma presentation.

(d)           Exhibits

See the exhibit index attached hereto.


 
 
 

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 hereunto duly authorized.



 
TIER TECHNOLOGIES, INC.
 
By:
/s/ Ronald W. Johnston
 
Name:
Ronald W. Johnston
 
Title:
Chief Financial Officer
Date: July 7, 2008
    

 
 
 

 
Exhibit Index
Exhibit
No                 Description
2.1
Purchase and Sale Agreement between Tier Technologies, Inc. and Informatix, Inc., dated June 30, 2008.
99.1
Press release titled "Tier Announces Sale of Government Business Process Outsourcing Business Unit" issued by the Company on July 7, 2008.