RWWI Rand Worldwide Inc (PK)

 

 

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): September 29, 2014

 

 

Rand Worldwide, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-31265		84-1035353
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

161 Worcester Road, Suite 401, Framingham, Massachusetts		01701
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (508) 663-1400

Not Applicable

Former name or former address, if changed since last report

 

 

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:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

x	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On September 29, 2014 Rand Worldwide, Inc. (the “Company”) issued a press release regarding its financial results for the quarter and fiscal year ended June 30, 2014. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference into this item.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The disclosure in Item 8.01 below relating to certain anticipated changes in the Company’s Board of Directors and management is incorporated by reference into this Item 5.02.

 

Item 8.01.

Other Events

Sale of Rand Secure Data Division

On September 24, 2014, the Company spun off its Rand Secure Data division into a separate subsidiary and sold the stock of the newly formed subsidiary for $500,000, resulting in an estimated loss of $1.1 million.

Tender Offer

On September 29, 2014, the Company announced its intention to conduct a self-tender offer to repurchase up to 27,530,816 shares of its common stock at a purchase price of $1.20 per share. The Company intends to commence the tender offer as soon as practicable and in no event later than October 10, 2014.

The Company also announced that it expects to enter into a new credit facility in connection with the tender offer, which is expected to include a revolving credit facility of $10 million and a term loan of $25 million, with approximately $25 million expected to be used to repurchase shares together with cash on hand of approximately $9.5 million. The Company has received a commitment letter from the lender in connection with the proposed facility.

The Company’s majority stockholder, RWWI Holdings LLC, an affiliate of Ampersand Capital Partners (“Ampersand”), sold 9 million of its 34,232,682 shares of Common Stock to an affiliate of 3K Limited Partnership, an existing stockholder (“3K”), on September 26, 2014. In connection with that sale, RWWI Holdings LLC agreed not to exercise further board designation rights under its Stockholders Agreement from August 2010 under which it has the right to designate three directors until such time as its ownership falls below a certain threshold. RWWI Holdings LLC has indicated its intention to tender its remaining shares in the offer, subject to the proration procedures of the offer in the event that more than 27,530,816 shares of the Company’s common stock are tendered. Upon the Company’s acceptance of and payment for the shares tendered in the offer, it is the Company’s expectation that 3K and its affiliates will own a majority of the Company’s outstanding common stock. It is the Company’s belief that the two members of its board of directors who are currently serving as designees of Ampersand – Dr. Richard A. Charpie and Charles D. Yie – will resign from the Board, as will Manu Parpia, an independent director, following the completion of the offer. The Company and Marc L. Dulude, its Chairman and Chief Executive Officer, have also reached an understanding that Mr. Dulude will step down from each of his positions at the Company, including from the Board. It is the Company’s expectation that Lawrence Rychlak, currently President and Chief Financial Officer and a director of the Company, will be appointed to serve as Chief Executive Officer, pending arrangement of final terms. No definitive timetable for these changes has been finalized.

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A copy of the press release announcing the Company’s intention to commence the tender offer is attached hereto as Exhibit 99.2.

Important Information

This Current Report and the attached press release announcing the Company’s plans to initiate a tender offer is for informational purposes only and do not constitute an offer to purchase nor a solicitation of an offer to sell any shares of common stock of Rand Worldwide, Inc. The anticipated tender offer described in this Current Report and the attached press release has not yet commenced. The Company intends to file a tender offer statement on Schedule TO with the U.S. Securities and Exchange Commission (the “SEC”) upon the commencement of such tender offer. The tender offer statement (including the offer to purchase, letter of transmittal and other tender offer documents) will contain important information that should be read carefully before making any decision to tender shares in the tender offer. These materials, as well as any updates to them or other documents filed with the SEC, will be made available to all Company shareholders at no expense to them by contacting the Company or through the Company’s website at www.rand.com. In addition, all such materials (and all other tender offer documents filed with the SEC) will be available at no charge at the SEC’s website at www.sec.gov.

 

Item 9.01.

Financial Statements and Exhibits

 

Exhibit		Description
99.1		Press Release issued by Rand Worldwide, Inc. on September 29, 2014
99.2		Press Release issued by Rand Worldwide, Inc. on September 29, 2014

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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.

 

				RAND WORLDWIDE, INC.
September 29, 2014				By:		/s/ Lawrence Rychlak
						Name:		Lawrence Rychlak
						Title:		President and Chief Financial Officer

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Exhibit Index

 

Exhibit		Description
99.1		Press Release issued by Rand Worldwide, Inc. on September 29, 2014
99.2		Press Release issued by Rand Worldwide, Inc. on September 29, 2014

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

Rand Worldwide Reports Fiscal Year 2014 Results

 

 

Revenue Increases by 11% from Prior Fiscal Year

FRAMINGHAM, MA – September 29, 2014 – Rand Worldwide, Inc. (OTCBB: RWWI), a global provider of technology solutions to organizations with engineering design and information technology requirements, announces its financial results for its year ended June 30, 2014.

For its fiscal year ended June 30, 2014, Rand Worldwide, Inc. reported total revenues of $91.6 million, as compared with $82.5 million for its prior fiscal year. The Company’s overall gross margin was 49.4%, a slight decrease from the 50.5% reported for fiscal 2013, resulting in income from continuing operations of $9.1 million, or $0.16 per fully diluted share. For the year ended June 30, 2013, Rand Worldwide reported income from continuing operations of $2.5 million, or $0.04 per fully diluted share.

Included in the full year results is a $4.5 million non-recurring reduction of income tax expense resulting from the recognition of a portion of the value of the Company’s Canadian net operating loss carryforwards that are available to offset future income taxes. In accordance with generally accepted accounting principles, the Company reduced a valuation allowance on its books in its fourth quarter to reflect the future value of certain loss carryforwards due to the continued profitability of its Canadian operations.

Lawrence Rychlak, president and chief financial officer, commented, “This past fiscal year was a very successful one for us in many respects. We saw growth in all revenue categories and particularly our product sales which increased over 14% from the prior year. These strong revenues coupled with continued management of the operations resulted in a healthy bottom line which positions us well for the future.”

“I am very pleased with the operating results for this fiscal year and with the overall health of all of our business lines,” said Marc Dulude, chief executive officer. “Rand Worldwide is well equipped and prepared to take on the next set of challenges and opportunities that come before us.”

Forward-looking Statement

This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Rand Worldwide, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words “goal,” “expect,”

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“anticipate,” “estimate,” “should,” “believe,” “intend,” and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Rand Worldwide operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations.

(Tables Below)

Rand Worldwide, Inc.

Summary Unaudited Consolidated Financial Data

 

		Twelve Months Ended
		June 30,
		2014				2013
Revenues-
Product sales		$	47,822,000			$	41,869,000
Service revenue			23,480,000				21,764,000
Commission revenue			20,294,000				18,870,000
Total revenues			91,596,000				82,503,000
Cost of revenues-
Cost of product sales			30,547,000				26,282,000
Cost of service revenue			15,763,000				14,540,000
Total cost of revenues			46,310,000				40,822,000
Gross margin		$	45,286,000			$	41,681,000
Operating income			7,558,000				4,679,000
Income from continuing operations before income taxes			7,334,000				4,203,000
Loss from discontinued operations, net of tax			—				(241,000	)
Loss on sale of discontinued operations, net of tax			(463,000	)			(370,000	)
Net income			8,594,000				1,901,000
Net income available to common stockholders			8,485,000				1,792,000
Earnings per share:
Basic earnings per common share:
Continuing operations		$	0.17			$	0.04
Discontinued operations			(0.01	)			(0.01	)
Basic earnings per common share		$	0.16			$	0.03
Diluted earnings per common share:
Continuing operations		$	0.16			$	0.04
Discontinued operations			(0.01	)			(0.01	)
Diluted earnings per common share		$	0.15			$	0.03
Weighted average common shares outstanding:
Basic			54,210,555				53,951,438
Diluted			57,039,061				55,102,436

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		June 30,				June 30,
		2014				2013
Current assets		$	29,098,000			$	20,077,000
Long term assets			29,659,000				28,089,000
Total assets		$	58,757,000			$	48,166,000
Current liabilities		$	16,085,000			$	13,460,000
Long term liabilities			352,000				1,506,000
Total stockholders’ equity			42,320,000				33,200,000
Total liabilities and stockholders’ equity		$	58,757,000			$	48,166,000

Unaudited Sales Ratios

 

		Three months ended
		6/30/2014		6/30/2013
AEC and Manufacturing Sales as a % of Total Sales:
AEC		42%		43%
Manufacturing		37%		35%
Suites % of Product and Subscription Revenue		62%		64%
Top Autodesk products by % of product & subscription sales
Product Design Suite		25%		21%
Building Design Suite		23%		27%
AutoCAD		14%		13%
Infrastructure Design Suite		9%		8%
AutoCAD LT		4%		n/a - 4%
AutoCAD Electrical		n/a - 2%		4%

About Rand Worldwide

Rand Worldwide is one of the world’s leading professional services and technology companies for the engineering community, targeting organizations in the building, infrastructure, and manufacturing industries. The company advances the way organizations design, develop, and manage building, infrastructure, and manufacturing projects. Fortune 500 and Engineering News Record’s Top 100 companies work with Rand Worldwide to gain a competitive advantage through technology consulting, implementation, training, and support services. One of the world’s largest integrators of Autodesk software, the company also provides facilities management software from ARCHIBUS, CAD and PLM courseware through their ASCENT division and provides training and support solutions on Dassault Systèmes and PTC products. For more information, visit rand.com

 

Rand Worldwide Company Contact Chantale Marchand

Rand Worldwide

Phone +1 (508) 663-1411 cmarchand@rand.com

Any and all trademarks making reference to or related to Rand Worldwide, IMAGINiT, ASCENT or ProductivityNOW are registered and/or owned by Rand Worldwide, Inc., and/or its subsidiaries, affiliates, and/or other legal holders under the Rand Worldwide, Inc. name.

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Exhibit 99.2

 

 

FOR IMMEDIATE RELEASE

Rand Worldwide Plans to Launch a Self-Tender Offer

for Shares of its Common Stock

FRAMINGHAM, MA – September 29, 2014 – Rand Worldwide, Inc. (OTCBB: RWWI), a global provider of technology solutions to organizations with engineering design and information technology requirements, announced today that it intends to conduct a self-tender offer to repurchase up to 27,530,816 shares of its common stock at a purchase price of $1.20 per share. The number of shares sought in the tender offer represents approximately 50.5% of the Company’s shares currently outstanding, or approximately 46% on a fully diluted basis. Participation in the tender offer by Company stockholders is voluntary and stockholders will not be required to tender any shares. If Company stockholders tender more than 27,530,816 shares, the Company will purchase shares from all stockholders who properly tendered shares, on a pro rata basis based on the aggregate number of shares tendered. If individual stockholders holding fewer than 100 shares tender all of their shares, the Company will accept those shares first, without proration.

The Company expects to enter into a new credit facility in connection with the tender offer, which is expected to include a revolving credit facility of $10 million and a term loan of $25 million, with approximately $25 million expected to be used to repurchase shares together with cash on hand of approximately $9.5 million. The Company has received a commitment letter from the lending bank relating to the new credit facility, and the Company is currently negotiating the terms of the credit facility which is expected to be in place by the closing of the tender offer. The tender offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to the completion of the new credit facility and other customary conditions that will be described in the tender offer documents. The tender offer documents, which will be distributed to stockholders upon commencement of the tender offer, will also contain tendering instructions and a complete explanation of the tender offer’s terms and conditions.

The Company is making the offer for the purpose of maximizing shareholder value and providing its shareholders an opportunity for liquidity in its common stock, which is not heavily traded. The Company’s majority stockholder, RWWI Holdings LLC, sold 9,000,000 of its shares of Company common stock to another existing stockholder on September 26, 2014 at a price of $1.20 per share and has indicated that it plans to tender its remaining shares in the tender offer, subject to proration if applicable.

Rand Worldwide currently anticipates commencing the tender offer within ten business days of today’s date. The tender offer will be held open for at least twenty business days following its commencement, and tenders of shares must be made prior to the expiration of the tender offer period.

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None of the Company, its directors, the information agent, or the depositary makes any recommendation as to whether to tender shares. Company stockholders will be able to obtain copies of the offer to purchase, related materials filed by the Company as part of the statement on Schedule TO, and other documents filed with the Securities and Exchange Commission through the SEC’s website at www.sec.gov without charge when these documents become available. Shareholders may also obtain a copy of these documents, as well as any other documents the Company has filed with the SEC, without charge, by contacting the Company or through the Company’s website at www.rand.com. Stockholders are urged to carefully read these materials, when available, prior to making any decision with respect to the tender offer.

Tender Offer Statement

The anticipated tender offer described in this press release has not yet commenced. This press release is for informational purposes only and is neither an offer to purchase nor a solicitation or an offer to sell any shares of the Company’s common stock. The solicitation and the offer to buy the Company’s common stock will only be made pursuant to the offer to purchase and related materials that the Company will make available to its stockholders. Stockholders should read those materials and the documents incorporated therein by reference carefully when they become available because they will contain important information, including the various terms and conditions of the tender offer.

Forward-looking Statement

This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Rand Worldwide, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words “goal,” “expect,” “anticipate,” “estimate,” “should,” “believe,” “intend,” and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Rand Worldwide operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations.

About Rand Worldwide

Rand Worldwide is one of the world’s leading professional services and technology companies for the engineering community, targeting organizations in the building, infrastructure, and manufacturing industries. The company advances the way organizations design, develop, and manage building, infrastructure, and manufacturing projects. Fortune 500 and Engineering News Record’s Top 100 companies work with Rand Worldwide to gain a competitive advantage through technology consulting, implementation, training, and support services. One of the world’s largest integrators of Autodesk software, the company also provides facilities management software from ARCHIBUS, CAD and PLM courseware through their ASCENT division and provides training and support solutions on Dassault Systèmes and PTC products. For more information, visit rand.com

 

Rand Worldwide Company Contact

Chantale Marchand

Rand Worldwide

Phone +1 (508) 663-1411

cmarchand@rand.com

Any and all trademarks making reference to or related to Rand Worldwide, IMAGINiT, ASCENT or ProductivityNOW are registered and/or owned by Rand Worldwide, Inc., and/or its subsidiaries, affiliates, and/or other legal holders under the Rand Worldwide, Inc. name.

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