1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number 0-20548
FRITZ COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3083515
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
706 Mission Street, Suite 900, San Francisco, California 94103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 904-8360
Not applicable
(Former name, former address and former fiscal year if changed from last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
As of February 29, 1996 there were 34.7 million shares of common stock
outstanding.
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FRITZ COMPANIES, INC. FORM 10-Q/A
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of February 29,
1996 and May 31, 1995 3
Condensed Consolidated Statements of Income for the three
and nine months ended February 29, 1996 and February 28, 1995 4
Condensed Consolidated Statements of Cash Flows for the nine
months ended February 29, 1996 and February 28, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
SIGNATURES 13
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FRITZ COMPANIES, INC. FORM 10-Q/A
PART 1. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
February 29, May 31,
1996 1995
------------ -------
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 80,523 $ 74,261
Accounts receivable, net of allowance for
doubtful accounts of $4,305 in February, (May, $4,512) 403,559 323,729
Deferred income taxes 8,576 9,767
Prepaid expenses and other assets 25,293 14,021
-------- --------
Total current assets 517,951 421,778
-------- --------
PROPERTY AND EQUIPMENT-NET 104,284 79,245
OTHER ASSETS:
Intangibles, net of accumulated amortization of $9,650
in February, (May, $6,498) 80,178 63,711
Other assets 15,275 11,964
-------- --------
Total other assets 95,453 75,675
-------- --------
TOTAL ASSETS $717,688 $576,698
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term obligations and
Short-term borrowings $ 68,501 $ 6,335
Accounts payable 325,412 299,536
Accrued liabilities 48,589 50,213
Income tax payable 6,315 5,101
-------- --------
Total current liabilities 448,817 361,185
LONG-TERM OBLIGATIONS 30,131 33,567
DEFERRED INCOME TAXES 1,035 1,781
OTHER LIABILITIES 9,621 5,950
-------- --------
TOTAL LIABILITIES 489,604 402,483
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock: par value $.01 per share
60,000 shares authorized, 34,665 shares
issued, (31,858 shares) and 34,665 shares
outstanding, (16,558 shares) 346 319
Additional paid-in capital 112,045 120,066
Retained earnings 116,007 87,586
Treasury stock-at cost (15,300 shares) 0 (35,000)
Cumulative foreign currency translation adjustments (314) 1,244
-------- --------
Total stockholders' equity 228,084 174,215
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $717,688 $576,698
======== ========
See notes to condensed consolidated financial statements.
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FRITZ COMPANIES, INC. FORM 10-Q/A
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
----------------- ----------------- ----------------- -----------------
February 29, 1996 February 28, 1995 February 29, 1996 February 28, 1995
----------------- ----------------- ----------------- -----------------
REVENUE $241,096 $236,972 $783,564 $631,688
FREIGHT CONSOLIDATION COSTS 137,285 139,197 445,054 364,713
-------- -------- -------- --------
NET REVENUE 103,811 97,775 338,510 266,975
-------- -------- -------- --------
OPERATING EXPENSES:
Salaries and related costs 56,725 52,722 180,777 144,671
General and administrative 36,919 31,322 109,245 83,138
Merger and related costs 4,600 4,600
-------- -------- -------- --------
Total operating expense 98,244 84,044 294,622 227,809
-------- -------- -------- --------
INCOME FROM OPERATIONS 5,567 13,731 43,888 39,166
OTHER EXPENSE--NET (714) (136) (162) (824)
-------- -------- -------- --------
INCOME BEFORE TAXES ON INCOME 4,853 13,595 43,726 38,342
TAXES ON INCOME 1,699 4,722 15,304 13,176
-------- -------- -------- --------
NET INCOME $ 3,154 $ 8,873 $ 28,422 $ 25,166
======== ======== ======== ========
Net income per share-primary $ 0.09 $ 0.27 $ 0.80 $ 0.80
======== ======== ======== ========
Weighted average shares outstanding 35,932 32,698 35,323 31,646
======== ======== ======== ========
Net income per share-fully diluted $ 0.09 $ 0.27 $ 0.80 $ 0.79
======== ======== ======== ========
Weighted average shares outstanding 35,972 32,964 35,469 31,795
======== ======== ======== ========
See notes to condensed consolidated financial statements.
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FRITZ COMPANIES, INC. FORM 10-Q/A
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Nine Months Ended
---------------------------------------
February 29, 1996 February 28, 1995
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 28,422 $ 25,166
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 14,097 10,332
Deferred income taxes 445 620
Tax benefit from exercise of stock options 11,388
Other (3,769)
Effect of changes in:
Receivables (48,249) (50,736)
Prepaid expenses and other current assets (10,980) (2,613)
Payables and accrued liabilities (2,561) 29,353
-------- -------
Net cash (used) provided by operating activities (7,438) 8,353
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (30,923) (37,645)
Proceeds from sales of marketable securities 1,861
Acquisitions, net of cash acquired (17,592) (169)
Other 1,202 (1,605)
-------- -------
Net cash used by investing activities (47,313) (37,558)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Long term obligations repaid (13,537) (4,368)
Proceeds from revolving loan 61,617 0
Proceeds from mortgage financing 18,500
Proceeds from stock options exercised 15,573 3,770
Proceeds from common stock issued 42,321
Purchase of treasury stocks (1,377)
Dividends paid (2,819)
Other (2,640) 1,248
-------- -------
Net cash provided by financing activities 61,013 57,275
-------- -------
INCREASE IN CASH AND EQUIVALENTS 6,262 28,070
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 74,261 24,102
-------- -------
CASH AND EQUIVALENTS AT END OF PERIOD $80,523 $52,172
======== =======
OTHER CASH FLOW INFORMATION:
Income taxes paid $16,093 $ 9,589
======== =======
Interest paid $ 3,642 $ 1,740
======== =======
Noncash investing and financing activities in
connection with acquisitions:
Liabilities assumed $36,608 $77,011
======== =======
Common stocks issued 0 0
======== =======
See notes to condensed consolidated financial statements.
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FRITZ COMPANIES, INC. FORM 10-Q/A
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL
The accompanying condensed consolidated financial statements of Fritz
Companies, Inc. (the Company) for the three and nine months ended February 29,
1996 and February 28, 1995 are unaudited and in the opinion of management,
contain all material adjustments which consist only of normal and recurring
adjustments, except for the adjustments described below in Note 5, necessary for
a fair presentation of the results of such periods. Effective May 31, 1995 the
Company changed its fiscal year end of December 31 to a fiscal year end of May
31. On May 30, 1995 the Company completed its merger with Intertrans Corporation
(Intertrans). The February 28, 1995 period represents combined operating results
reported for Fritz Companies, Inc. and Intertrans for the three and nine months
ended December 31, 1994 and January 31, 1995, respectively, accounted for on
pooling of interests basis.
During the three months ended February 29, 1996, the Company entered
and recorded certain transactions relating to merger and related costs,
acquisitions and logistics services. See Note 5 below for further discussion.
The significant accounting policies followed by the Company are
described in Note 1 to the audited consolidated financial statements for the
year ended May 31, 1995. In accordance with SEC regulations, certain information
and footnote disclosures normally included in the annual financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted for the purposes of the condensed consolidated interim
financial statements. The condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements, including the
notes thereto, for the year ended May 31, 1995 included in the Company's Form
10-K filed on August 28, 1995. The results of operations for the three and nine
months ended February 29, 1996 are not necessarily indicative of the results to
be expected for the full year.
2. STOCKHOLDERS' EQUITY
On October 2, 1995, the Company's Board of Directors declared a
two-for-one stock split effected in the form of a 100% stock dividend that was
distributed on October 30, 1995 to stockholders of record on October 13, 1995.
Stockholders' equity has been adjusted to give effect to the stock split for the
prior periods. In addition, all references in the financial statements to number
of shares, per share amounts, stock option data and the Company's common stock
have been adjusted.
The Company also retired all of its 15.3 million shares of treasury
stock on October 1, 1995. As a result, common stock was debited for $153,000 and
paid-in capital for $34.8 million. The reduction in paid-in capital was
partially offset by stock options exercised for $15.6 million for nine months
ended February 29, 1996 and related tax benefit for $11.4 million. The tax
benefit is related to the difference between the market price at the date of
exercise and the option price.
During the nine months ended February 29, 1996, the Company granted
options for the purchase of 299,608 shares of common stock, net of
cancellations, and made restricted stock grants of 199,378 shares, net of
forfeitures, under the 1992 Omnibus Equity Incentive Plan.
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FRITZ COMPANIES, INC. FORM 10-Q/A
3. INCOME TAXES
Income tax expense for the nine months ended February 29, 1996
consisted of approximately $14.9 million of current tax provision and $0.4
million of net deferred tax provision.
4. ACQUISITIONS
In the nine months ended February 29, 1996, the Company acquired
eight freight forwarding customs brokerage companies, and purchased additional
interests in companies for an aggregate purchase price of $26.4 million
consisting of cash of $19.8 million and net obligations payable of $6.6 million.
Of the total acquisition price, the Company acquired current assets of $34.0
million, fixed assets of $9.6 million, noncurrent assets of $4.8 million,
current liabilities of $31.8 million and noncurrent liabilities of $4.8 million.
Intangible assets of $14.6 million were recorded in connection with these
acquisitions, which are being amortized on a straight line basis over various
lives ranging from three to forty years.
5. ADJUSTMENTS RELATED TO RESTATEMENT
In connection with the preparation of the year end financial
statements, the Company completed an analysis of merger and related costs and
other transactions during the year, and concluded certain adjustments were
necessary for the third quarter of 1996. The Company has accordingly restated
its financial statements for the quarterly period ended February 29, 1996. The
items requiring adjustment were as follows:
Merger and Related Costs
In May 1995, the Company merged with Intertrans in a transaction
accounted for as a pooling of interests. In connection with the merger, the
Company originally estimated and recorded approximately $30 million of merger
and related costs, of which approximately $12.5 million was accrued under
applicable accounting guidelines. For the year ended May 31,1996, the Company
identified additional merger and related costs of $14.6 million, of which
approximately $4.6 million were incurred in the third quarter of fiscal year
1996, and the remaining balance in the fourth quarter. These third quarter
charges consist primarily of EDP systems integration costs that previously had
been capitalized.
Other Items
The Company recorded adjustments which represent the effect of
consolidating certain subsidiaries acquired as of the closing date rather than
as originally recorded using the effective date provided in the purchase
agreement. The effect of these adjustments was to reduce revenue by
approximately $26 million, net revenue by approximately $8 million and pre-tax
income by approximately $0.9 million.
The Company also recorded adjustments to restate revenue, net
revenue and pre-tax income pending receipt of additional documentation and
information. The effect of these adjustments was to reduce revenue and net
revenue by approximately $5 million and by approximately $3 million of pre-tax
income for logistics services provided to a customer through an agent. Although
the Company believes the services were performed, it has deferred recognition of
revenue pending receipt of additional documentation and payment from the agent
to substantiate completion of the earnings process. The remaining adjustment
comprises approximately $2 million of revenue and net revenue and $0.5 million
of pre-tax income relating to transactions requiring additional documentation
and information that the Company is seeking to obtain.
Further, the Company recorded additional operating expenses of
approximately $2.0 million primarily related to software development costs that
previously had been capitalized.
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FRITZ COMPANIES, INC. FORM 10-Q/A
The restated amounts are as follows (in thousands except per
share amounts):
THREE MONTHS ENDED FEBRUARY 29, 1996 NINE MONTHS ENDED FEBRUARY 29, 1996
---------------------------------------- ---------------------------------------
AS REPORTED RESTATEMENT AS RESTATED AS REPORTED RESTATEMENT AS RESTATED
----------- ----------- ----------- ----------- ----------- -----------
Revenue $274,266 $(33,170) $241,096 $816,734 $(33,170) $783,564
Net Revenue $118,748 $(14,937) $103,811 $353,447 $(14,937) $338,510
General and Administrative $102,152 $ (8,508) $ 93,644 $298,530 $ (8,508) $290,022
Merger and Related Costs $ 0 $ 4,600 $ 4,600 $ 0 $ 4,600 $ 4,600
Income Before Taxes on Income $ 15,850 $(10,997) $ 4,853 $ 54,723 $(10,997) $ 43,726
Net Income $ 10,301 $ (7,147) $ 3,154 $ 35,569 $ (7,147) $ 28,422
Net Income per share - primary $ .29 $ (.20) $ .09 $ 1.01 $ (.21) $ .80
Net Income per share - fully diluted $ .29 $ (.20) $ .09 $ 1.00 $ (.20) $ .80
Retained Earnings $123,154 $ (7,147) $116,007 $123,154 $ (7,147) $116,007
The changes above have been reflected throughout the restated condensed
consolidated financial statements.
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FRITZ COMPANIES, INC. FORM 10-Q/A
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The following discussion is of the Company's financial condition and
results of operations for the three and nine months ended February 29, 1996 and
February 28, 1995. See Note 1 to Notes to Condensed Consolidated Financial
Statements. The merger with Intertrans was completed on May 30, 1995. The
results of the prior year for comparison purposes are based on the reported
revenues and earnings of the Company and Intertrans of last year, accounted as a
pooling of interests.
As discussed in Note 5 of Notes to Condensed Consolidated Financial
Statements, the Company has restated its third quarter of fiscal year 1996
financial statements. The changes from the restatement have been reflected
throughout these financial statements.
For nine months ended February 29, 1996, the Company further expanded
its domestic infrastructure by acquiring a freight logistics company, MDS
(Atlantic), Inc. in New Jersey, and a warehousing and distribution facility in
Charleston, South Carolina.
The Company also augmented its international operations by acquiring
Nielsen Global Freight Corporation (Nielsen), one of the largest logistics
service companies in Finland providing air and sea freight forwarding, customs
clearance, inland freight consolidation, warehousing and logistics management
in Finland. Nielsen is headquartered in Helsinki. The Company also acquired
Quick Freight (Pty) Ltd. and Quickair (Pty) Ltd., an international freight
forwarder and customs broker headquartered in Cape Town, South Africa and
expanded its operations in Asia with the acquisition of Logistics (Holdings)
Ltd., a Hong Kong based international NVOCC operator and Amel Express Limited,
a Hong Kong based air and ocean freight forwarder with emphasis on the garment
on hanger business from Hong Kong to New York. In Latin America, freight
forwarding/customs brokerage operations were expanded with the acquisition of
Stair/Stanzione Group, Rex Air Freight, and Consolidados De Carga with offices
in Venezuela, Chile, Costa Rica, Panama and Peru. In Canada, operations were
expanded with the acquisition of Robinson and Heath, Ltd., headquartered in
Toronto, with offices located in Ontario, Montreal and Vancouver; and George
Fairman Custom House Brokers Consultant Ltd. based in Toronto. These two
companies provide customs brokerage and consulting services, international
freight forwarding and warehousing and distribution services.
RESULTS OF OPERATIONS
The following table shows the revenue and net revenue, in thousands of
dollars and percentages attributable to the Company's principal logistics
services during the periods indicated:
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------------------- -------------------------------------------
FEBRUARY 29, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1996 % 1995(a) % 1996 % 1995(a) %
-------- ----- -------- ----- -------- ----- -------- -----
REVENUE:
Customs brokerage $ 31,006 12.9 $ 32,244 13.6 $104,044 13.3 $ 91,215 14.4
Ocean freight forwarding 76,517 31.7 61,991 26.2 242,566 31.0 177,030 28.0
Airfreight forwarding 112,637 46.7 126,052 53.2 370,992 47.3 323,369 51.2
Warehousing and distribution 20,936 8.7 16,685 7.0 65,962 8.4 40,074 6.4
-------- ----- -------- ----- -------- ----- -------- -----
Total revenue $241,096 100.0 $236,972 100.0 $783,564 100.0 $631,688 100.0
======== ===== ======== ===== ======== ===== ======== =====
NET REVENUE:
Customs brokerage $ 31,006 29.8 $ 32,244 33.0 $104,044 30.7 $ 91,215 34.2
Ocean freight forwarding 22,584 21.8 21,620 22.1 76,410 22.6 59,133 22.1
Airfreight forwarding 34,893 33.6 30,490 31.2 108,182 32.0 84,332 31.6
Warehousing and distribution 15,328 14.8 13,421 13.7 49,874 14.7 32,295 12.1
-------- ----- -------- ----- -------- ----- -------- -----
Total net revenue $103,811 100.0 $ 97,775 100.0 $338,510 100.0 $266,975 100.0
======== ===== ======== ===== ======== ===== ======== =====
(a) As discussed in Note 1 of Notes to Condensed Consolidated Financial
Statements, the February 28, 1995 period represents the combined operating
results reported for Fritz and Intertrans for the three and nine months
ended December 31, 1994 and January 31, 1995, respectively.
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FRITZ COMPANIES, INC. FORM 10-Q/A
THREE MONTHS ENDED FEBRUARY 29, 1996 COMPARED WITH THREE MONTHS ENDED FEBRUARY
28, 1995
REVENUE AND NET REVENUE: For the third quarter of fiscal year 1996,
revenue increased 2% to $241.1 million from $237.0 million in 1995, and net
revenue increased 6% to $103.8 million from $97.8 million in 1995. The results
of operations for the principal services areas in which the Company is engaged
are more fully described below and in addition, due to the accounting year
changes, the comparable period of last year includes a significant portion
of the calendar fourth quarter which was a peak season for the Company
("seasonality effect"). In addition, see Note 1 of Notes to Consolidated
Condensed Financial Statements.
CUSTOMS BROKERAGE: For the third quarter of fiscal year 1996, net
revenue decreased 3.8% to $31.0 million from $32.2 million in 1995. The decrease
in net revenue was attributable to growth in the Company's customer base being
outweighed by the "seasonality effect." As a percentage of the Company's net
revenue customs brokerage represented 29.8%, down from 33.0% in the prior period
as the Company's other logistics and transportation services grew at a faster
rate primarily due to acquisitions, new clients and the "seasonality effect."
OCEAN FREIGHT FORWARDING: For the third quarter of fiscal year 1996,
revenue increased 23.4% to $76.5 million from $62.0 million in 1995 and net
revenue increased 4.5% to $22.6 million from $21.6 million in 1995. The
expansion of Non-Vessel Operating Common Carrier (NVOCC) and ocean export
activities in Europe and Asia accounted for the majority of the increase in the
third quarter.
AIRFREIGHT FORWARDING: For the third quarter of fiscal year 1996,
revenue decreased 10.6% to $112.6 million from $126.1 million in 1995 and net
revenue increased 14.4% to $34.9 million from $30.5 million in 1995. While
revenue growth was down, due principally to "seasonality effect," the
airfreight margin expansion from the Company's merger with Intertrans continued
to improve.
WAREHOUSING AND DISTRIBUTION: For the third quarter of fiscal year
1996, revenue increased 25.5% to $20.9 million from $16.7 million in 1995 and
net revenue increased 14.2% to $15.3 million from $13.4 million in 1995. The
growth was attributable primarily to the Company's acquisition of a
warehousing/distribution concern and increased penetration of domestic
services from existing integrated logistics customers on inbound shipments from
Asia and Europe to the United States.
OPERATING EXPENSES: Operating expenses for the third quarter of fiscal
year 1996 increased 16.9% to $98.2 million from $84.0 million for the prior
period principally due to additional merger and related costs, warehouse
related expenses and the "seasonality effect."
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FRITZ COMPANIES, INC. FORM 10-Q/A
NINE MONTHS ENDED FEBRUARY 29, 1996 COMPARED WITH NINE MONTHS ENDED FEBRUARY
28, 1995
REVENUE AND NET REVENUE: Revenue for the nine months ended February 29,
1996 increased 24% to $783.6 million from $631.7 million in 1995, and net
revenue increased 26.8% to $338.5 million from $267.0 million in 1995. As a
result of the Company's focus on integrated transportation logistics services
for existing and new customers, geographic expansion, and strategic
acquisitions, all of the Company's principal service areas reported revenue
increases. The results of operations for the principal service areas in which
the Company is engaged are more fully described below.
CUSTOMS BROKERAGE: For the nine months ended February 29, 1996, net
revenue increased 14.1% to $104.0 million from $91.2 million in 1995. The
increase in net revenue was attributable to growth in the Company's existing
customer base and new clients. As a percentage of the Company's net revenue,
customs brokerage represented 30.7%, down from 34.2% in the prior period as the
Company's other logistics and transportation services grew at a faster rate
primarily due to acquisitions and new clients.
OCEAN FREIGHT FORWARDING: For the nine months ended February 29, 1996,
revenue increased 37.0% to $242.6 million from $177.0 million and net revenue
increased 29.2% to $76.4 million from $59.1 million in 1995. The expansion of
NVOCC and ocean export activities in Europe and Asia accounted for the majority
of the increase for the nine months ended February 29, 1996.
AIRFREIGHT FORWARDING: For the nine months ended February 29, 1996,
revenue increased 14.7% to $371.0 million from $323.4 million in 1995 and net
revenue increased 28.3% to $108.2 million from $84.3 million in 1995. The
Company's continued expansion of its operations in Latin America, Europe and
Asia led to volume increases in airfreight forwarding, as well as a margin
expansion from the Company's merger with Intertrans.
WAREHOUSING AND DISTRIBUTION: For the nine months ended February 29,
1996, revenue increased 64.6% to $66.0 million from $40.1 million in 1995 and
net revenue increased 54.4% to $49.9 million from $32.3 million in 1995. The
growth was attributable primarily to the Company's acquisition of a
warehousing/distribution concern and increased use of domestic services by the
Company's existing customers on inbound shipments from Asia and Europe to the
United States.
OPERATING EXPENSES: For the nine months ended February 29, 1996,
operating expenses increased 29.3% to $294.6 million from $227.8 million in
1995. Operating expenses, excluding adjustments for merger and related costs
which was discussed in Note 5 of Notes to Condensed Consolidated Financial
Statements, were 85.7% and 85.3% of net revenue in 1996 and 1995, respectively.
Improvement in operating margin, primarily as a result of the Company's merger
with Intertrans, was offset by increases in warehouse related expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and equivalents increased $6.2 million to $80.5
million at February 29, 1996 from $74.3 million at May 31, 1995. This increase
was primarily due to cash provided by financing activities in excess of cash
used from operating activities and investing activities. The Company's
investing activities for this period include capital expenditures of $30.9
million and cash outlays of $17.6 million for cost of interests in acquired
companies during the nine months ended February 29, 1996.
On December 15, 1995, the Company entered into an $80 million
syndicated multi-currency credit facility (the Credit Facility) maturing
December 15, 1998. The Credit Facility replaces the Company's previous
revolving line of credit of $50 million. The primary purpose of the Facility
is to provide the Company with the resources necessary to support the rapid
growth of its business. Borrowings under the Credit Facility are unsecured.
In addition, the Company is required to comply with certain financial covenants
such as (i) maximum leverage ratio, (ii) minimum fixed charge coverage ratio,
and (iii) minimum current ratio. In addition, the Company has a term loan for
real estate mortgage financing in the amount of $18.5 million that will be due
on June 30, 1997.
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FRITZ COMPANIES, INC. FORM 10-Q/A
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
10.1 Multi currency Credit Agreement among the Registrant, the
several financial institutions (collectively, the "Banks";
Individually, a "Bank"), and Bank of America National Trust
and Savings Association,as letter of credit issuing bank,
swingline bank, and agent for the Banks dated as of
December 15, 1995.
10.2 Credit Agreement between Registrant and Bank of America
National Trust and Savings Association dated as of December
15, 1995.
10.3 First Amendment to Credit Agreement between Registrant and
Bank of America National Trust and Savings Association
dated as of February 28, 1996.
b) No reports were filed on Form 8-K during the quarter ended February
29, 1996.
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FRITZ COMPANIES, INC. FORM 10-Q/A
S I G N A T U R E S
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 on August 20, 1996.
FRITZ COMPANIES, INC.
Registrant
/s/ Lynn C. Fritz
--------------------------------------------
Lynn C. Fritz, Chairman of the Board
and Chief Executive Officer
--------------------------------------------
Dennis L. Pelino, President and Chief Operating
Officer
/s/ Ronald W. Womack
--------------------------------------------
Ronald W. Womack, Vice President of Finance
and Principal Accounting Officer
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