UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q/A
(Mark One)
Quarterlyreport pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 For the quarterly
period ended March 31, 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: 0-26954
CONSOLIDATED DELIVERY & LOGISTICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-3350958
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
Mack Centre IV, 61 South Paramus Road 07652
Paramus, New Jersey (Zip Code)
(Address of principal executive offices)
(201) 291-1900
(Registrant's telephone number, including area code)
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. Yes _X_ No___
The number of shares of common stock of the Registrant, par value $.001 per
share, outstanding as of May 9, 1996 was 6,629,569.
CONSOLIDATED DELIVERY & LOGISTICS, INC.
FORM 10-Q/A FOR THE QUARTER ENDED MARCH 31, 1996
INDEX
Page
Part I - Financial Information (unaudited)
Item 1 - Financial Statements
Consolidated Delivery & Logistics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of December 31, 1995, and 1
March 31, 1996
Condensed Consolidated Statements of Income for the Three Months 2
Ended March 31, 1995 and 1996
Condensed Consolidated Statements of Cash Flows for the Three Months 3
Ended March 31, 1995 and 1996
Notes to Condensed Consolidated Financial Statements 4
Combined Founding Companies
Condensed Combined Statement of Income for the Three Months 5
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 6
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 7
SureWay Air Traffic Corporation and Subsidiary
Condensed Consolidated Statement of Income for the Three Months 8
Ended March 31, 1995
Condensed Consolidated Statement of Cash Flows for the Three 9
Months Ended March 31, 1995
Notes to Condensed Consolidated Financial Statements 10
Securities Courier Corporation
Condensed Statement of Operations for the Three Months Ended 11
March 31, 1995
Condensed Statement of Cash Flows for the Three Months Ended 12
March 31, 1995
Notes to Condensed Financial Statements 13
National Courier, Inc. and National Express, Inc.
Condensed Combined Statement of Operations for the Three Months 14
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three Months 15
Ended March 31, 1995
Notes to Condensed Combined Financial Statements 16
Silver Star Express, Inc. and Related Companies
Condensed Combined Statement of Income for the Three Months 17
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 18
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 19
Crown Courier Systems, Inc. and Bestway Distribution Services, Inc.
Condensed Combined Statement of Income for the Three Months 20
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 21
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 22
Court Courier Systems, Inc. and Subsidiary
Condensed Consolidated Statement of Income for the Three Months 23
Ended March 31, 1995
Condensed Consolidated Statement of Cash Flows for the Three 24
Months Ended March 31, 1995
Notes to Condensed Consolidated Financial Statements 25
Orbit/Lightspeed Courier Systems, Inc. and Related Companies
Condensed Combined Statement of Income for the Three Months 26
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 27
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 28
Click Messenger Service, Inc. and Related Companies
Condensed Combined Statement of Income for the Three Months 29
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 30
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 31
Distribution Solutions International, Inc.
Condensed Statement of Operations for the Three Months Ended 32
March 31, 1995
Condensed Statement of Cash Flows for the Three Months Ended 33
March 31, 1995
Notes to Condensed Financial Statements 34
Olympic Courier Systems, Inc. and Related Company
Condensed Combined Statement of Income for the Three Months 35
Ended March 31, 1995
Condensed Combined Statement of Cash Flows for the Three 36
Months Ended March 31, 1995
Notes to Condensed Combined Financial Statements 37
American Courier Express, Inc.
Condensed Statement of Operations for the Three Months Ended 38
March 31, 1995
Condensed Statement of Cash Flows for the Three Months Ended 39
March 31, 1995
Notes to Condensed Financial Statements 40
Item 2 - Management's Discussion and Analysis of Financial Condition 41
Part II - Other Information
Item 1 - Legal Proceedings 44
Item 6 - Exhibits and Reports on Form 8-K 44
Signature 46
39
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share information)
December 31, 1995 March 31, 1996
------------------ -----------------
(Note 1) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $6,589 $3,020
Accounts receivable, net 18,555 19,672
Prepaid expenses and other current assets 2,312 3,016
------------------ -----------------
Total current assets 27,456 25,708
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 3,925 4,153
OTHER ASSETS 1,459 1,173
================== =================
Total assets $32,840 $31,034
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $2,803 $2,759
Current maturities of long-term debt 3,477 3,607
Accounts payable and accrued liabilities 13,634 12,440
------------------ -----------------
Total current liabilities 19,914 18,806
LONG-TERM DEBT, net of current maturities 3,027 2,312
OTHER LONG-TERM LIABILITIES 1,588 1,382
------------------
-----------------
Total liabilities 24,529 22,500
------------------ -----------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value; 2,000,000 shares
authorized; no shares issued and outstanding 0 0
Common stock, $.001 par value; 30,000,000 shares
authorized; 6,629,569 shares issued and outstanding 7 7
Additional paid-in capital 8,499 8,499
Retained earnings (195) 28
------------------ -----------------
Total stockholders' equity 8,311 8,534
================== =================
Total liabilities and stockholders' equity $32,840 $31,034
================== =================
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
For The Three Months Ended March 31, 1995 and 1996
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended March
31,
-----------------------------------
1995 1996
--------------- ---------------
REVENUES $0 $40,165
COST OF REVENUES 0 27,718
--------------- ---------------
Gross profit 0 12,447
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 0 11,975
--------------- ---------------
Operating income 0 472
OTHER INCOME (EXPENSE):
Other income, net 0 94
Interest expense 0 (181)
--------------- ---------------
INCOME BEFORE INCOME TAXES 0 385
PROVISION FOR INCOME TAXES 0 162
--------------- ---------------
Net income 0 $223
=============== ===============
NET INCOME PER SHARE $.03
===============
WEIGHTED AVERAGE SHARES OUTSTANDING 6,630
===============
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
For The Three Months Ended March 31, 1995 and 1996
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the Three Months Ended
March 31,
--------------------------------
1995 1996
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $0 $223
Adjustments to reconcile net income to net cash used in operating
activities -
Adjustments to conform fiscal year-ends of certain acquired companies 0 0
Depreciation and amortization 0 319
Changes in operating assets and liabilities
(Increase) decrease in -
Accounts receivable, net 0 (1,117)
Prepaid expenses and other current assets 0 (704)
Other assets 0 275
Increase (decrease) in -
Accounts payable and accrued liabilities 0 (1,194)
Other long-term liabilities 0 (206)
-------------- --------------
Net cash used in operating activities 0 (2,404)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements 0 (536)
-------------- --------------
Net cash used in investing activities 0 (536)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net 0 (44)
Proceeds from long-term debt 0 440
Repayments of long-term debt 0 (1,025)
Distributions to stockholders 0 0
-------------- --------------
Net cash used in financing activities 0 (629)
-------------- --------------
Net decrease in cash and cash equivalents 0 (3,569)
CASH AND CASH EQUIVALENTS, beginning of period 2 6,589
============== ==============
CASH AND CASH EQUIVALENTS, end of period $2 $3,020
============== ==============
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. The balance sheet at December 31, 1995 has been
derived from the audited financial statements at that date. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31,
1996 are not necessarily indicative of the results that may be expected
for any other interim period or for the year ending December 31, 1996.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Form 10-K for the year
ended December 31, 1995.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation -
The Company completed the acquisition of 11 companies on
November 20, 1995. The Company selected October 1, 1995 as the
effective date of the merger. The assets and liabilities of the
acquired companies at September 30, 1995 were recorded by the Company
at their historical amounts.
The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.
Net Income Per Share -
The computation of consolidated net income per share for the
three months ended March 31, 1996 is based upon 6,629,569 shares of
Common Stock outstanding. The conversion of the stock options and the
debentures outstanding at March 31, 1996 are not included in the
computation as the effect would be antidilutive.
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
REVENUES $34,031
COST OF REVENUES 23,754
----------------
Gross profit 10,277
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 9,052
----------------
Operating income 1,225
OTHER INCOME (EXPENSE):
Other income, net 98
Interest expense (194)
----------------
INCOME BEFORE INCOME TAXES 1,129
PROVISION FOR INCOME TAXES 462
----------------
Net income $667
================
See accompanying notes to condensed combined financial
statements.
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
-------------------
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $702
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (510)
-------------------
Net cash used in investing activities (510)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 51
Proceeds from long-term debt 28
Repayments of long-term debt (507)
Distributions to stockholders (146)
-------------------
Net cash used in financing activities (574)
-------------------
Net decrease in cash and cash equivalents (382)
CASH AND CASH EQUIVALENTS, beginning of period 2,399
===================
CASH AND CASH EQUIVALENTS, end of period $2,017
===================
See accompanying notes to condensed combined financial
statements.
COMBINED FOUNDING COMPANIES
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
The following companies are collectively referred to herein as the
"Founding Companies"; American Courier Express, Inc., Bestway Distribution
Systems, Inc., Click Messenger Service, Inc., Court Courier Systems, Inc.,
Distributions Solutions International, Inc., National Courier, Inc., Olympic
Courier Systems, Inc., Orbit/Lightspeed Courier Systems, Inc., Securities
Courier Corporation, Silver Star Express, Inc., and SureWay Air Traffic
Corporation. The Founding Companies are in the business of providing same day
ground and air delivery and logistics services. Simultaneously, with the closing
of Consolidated Delivery & Logistics, Inc's ("CDL") initial public offering in
November 1995, separate wholly-owned subsidiaries of CDL merged with each of the
eleven Founding Companies. All outstanding shares of each Founding Company were
exchanged for cash and shares of CDL's common stock concurrent with the
consummation of the initial public offering of the common stock of CDL.
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $9,177
COST OF REVENUES 4,580
----------------
Gross profit 4,597
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,185
----------------
Operating income 412
OTHER INCOME (EXPENSE):
Other income, net 191
Interest expense (20)
----------------
INCOME BEFORE INCOME TAXES 583
PROVISION FOR INCOME TAXES 45
----------------
Net income $538
================
See accompanying notes to condensed consolidated financial
statements.
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $155
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (316)
-------------------
Net cash used in investing activities (316)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 12
Repayments of long-term debt (136)
-------------------
Net cash used in financing activities (124)
-------------------
Net decrease in cash and cash equivalents (285)
CASH AND CASH EQUIVALENTS, beginning of period 285
===================
CASH AND CASH EQUIVALENTS, end of period $0
===================
See accompanying notes to condensed consolidated financial
statements.
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
SECURITIES COURIER CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $4,379
COST OF REVENUES 3,991
----------------
Gross profit 388
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 343
----------------
Operating income 45
OTHER INCOME (EXPENSE):
Other income, net 33
Interest expense (52)
----------------
INCOME BEFORE INCOME TAXES 26
PROVISION FOR INCOME TAXES 38
----------------
Net loss $(12)
================
See accompanying notes to condensed financial
statements.
SECURITIES COURIER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $292
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (52)
-------------------
Net cash used in investing activities (52)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (214)
-------------------
Net cash used in financing activities (214)
-------------------
Net increase in cash and cash equivalents 26
CASH AND CASH EQUIVALENTS, beginning of period 15
===================
CASH AND CASH EQUIVALENTS, end of period $41
===================
See accompanying notes to condensed financial
statements.
SECURITIES COURIER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
CONDENSED COMBINED STATEMENT OF OPERATIONS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $3,792
COST OF REVENUES 3,117
----------------
Gross profit 675
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 611
----------------
Operating income 64
OTHER INCOME (EXPENSE):
Other expense, net (36)
Interest expense (37)
----------------
LOSS BEFORE INCOME TAXES (9)
BENEFIT FROM INCOME TAXES (8)
----------------
Net loss $(1)
================
See accompanying notes to condensed combined financial
statements.
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(75)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (21)
-------------------
Net cash used in investing activities (21)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 51
-------------------
Net cash provided by financing activities 51
-------------------
Net decrease in cash and cash equivalents (45)
CASH AND CASH EQUIVALENTS, beginning of period 85
===================
CASH AND CASH EQUIVALENTS, end of period $40
===================
See accompanying notes to condensed combined financial
statements.
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $3,359
COST OF REVENUES 2,600
----------------
Gross profit 759
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 653
----------------
Operating income 106
OTHER INCOME (EXPENSE):
Other income, net 25
Interest income 1
----------------
INCOME BEFORE INCOME TAXES 132
PROVISION FOR INCOME TAXES 96
----------------
Net income $36
================
See accompanying notes to condensed combined financial
statements.
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $230
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (46)
-------------------
Net cash used in investing activities (46)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (73)
Distributions to stockholders (146)
-------------------
Net cash used in financing activities (219)
-------------------
Net decrease in cash and cash equivalents (35)
CASH AND CASH EQUIVALENTS, beginning of period 1,329
===================
CASH AND CASH EQUIVALENTS, end of period $1,294
===================
See accompanying notes to condensed combined financial
statements.
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $2,596
COST OF REVENUES 1,637
----------------
Gross profit 959
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 866
----------------
Operating income 93
OTHER INCOME, net 29
----------------
INCOME BEFORE INCOME TAXES 122
PROVISION FOR INCOME TAXES 87
----------------
Net income $35
================
See accompanying notes to condensed combined financial
statements.
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(201)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (46)
-------------------
Net cash used in investing activities (46)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (33)
-------------------
Net cash used in financing activities (33)
-------------------
Net decrease in cash and cash equivalents (280)
CASH AND CASH EQUIVALENTS, beginning of period 525
===================
CASH AND CASH EQUIVALENTS, end of period $245
===================
See accompanying notes to condensed combined financial
statements.
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $2,403
COST OF REVENUES 1,943
----------------
Gross profit 460
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 359
----------------
Operating income 101
OTHER INCOME (EXPENSE):
Other expense, net (30)
Interest expense (68)
----------------
INCOME BEFORE INCOME TAXES 3
PROVISION FOR INCOME TAXES 1
----------------
Net income $2
================
See accompanying notes to condensed consolidated financial
statements.
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(23)
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES: 0
-------------------
CASH FLOWS USED IN FINANCING ACTIVITIES: 0
-------------------
Net decrease in cash and cash equivalents (23)
CASH AND CASH EQUIVALENTS, beginning of period 23
===================
CASH AND CASH EQUIVALENTS, end of period $0
===================
See accompanying notes to condensed consolidated financial
statements.
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
ORBIT/LIGHTSPEED COURIER SYSTEMS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $2,078
COST OF REVENUES 1,729
----------------
Gross profit 349
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 209
----------------
Operating income 140
INTEREST EXPENSE (3)
----------------
INCOME BEFORE INCOME TAXES 137
PROVISION FOR INCOME TAXES 55
----------------
Net income $82
================
See accompanying notes to condensed combined financial
statements.
ORBIT/LIGHTSPEED COURIER SYSTEMS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $112
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (5)
-------------------
Net cash used in investing activities (5)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (25)
Repayments of long-term debt (19)
-------------------
Net cash used in financing activities (44)
-------------------
Net increase in cash and cash equivalents 63
CASH AND CASH EQUIVALENTS, beginning of period 71
===================
CASH AND CASH EQUIVALENTS, end of period $134
===================
See accompanying notes to condensed combined financial
statements.
ORBIT/LIGHTSPEED COURIER SYSTEMS, INC. AND RELATED COMPANIES
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $1,935
COST OF REVENUES 922
----------------
Gross profit 1,013
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 688
----------------
Operating income 325
OTHER EXPENSE, net (145)
----------------
INCOME BEFORE INCOME TAXES 180
PROVISION FOR INCOME TAXES 150
----------------
Net income $30
================
See accompanying notes to condensed combined financial
statements.
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $64
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (24)
-------------------
Net cash used in investing activities (24)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 16
Repayments of long-term debt (16)
-------------------
Net cash provided by financing activities 0
-------------------
Net increase in cash and cash equivalents 40
CASH AND CASH EQUIVALENTS, beginning of period 50
===================
CASH AND CASH EQUIVALENTS, end of period $90
===================
See accompanying notes to condensed combined financial
statements.
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $1,897
COST OF REVENUES 1,671
----------------
Gross profit 226
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 257
----------------
Operating income (31)
OTHER INCOME (EXPENSE):
Other expense, net (2)
Interest expense (6)
----------------
LOSS BEFORE INCOME TAXES (39)
PROVISION FOR INCOME TAXES 0
----------------
Net loss $(39)
================
See accompanying notes to condensed financial
statements.
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $87
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES: 0
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (10)
-------------------
Net cash used in financing activities (10)
-------------------
Net increase in cash and cash equivalents 77
CASH AND CASH EQUIVALENTS, beginning of period 2
===================
CASH AND CASH EQUIVALENTS, end of period $79
===================
See accompanying notes to condensed financial
statements.
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
CONDENSED COMBINED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $1,465
COST OF REVENUES 816
----------------
Gross profit 649
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 656
----------------
Operating loss (7)
OTHER INCOME (EXPENSE):
Other income, net 40
Interest expense (7)
----------------
INCOME BEFORE INCOME TAXES 26
PROVISION FOR INCOME TAXES 11
----------------
Net income $15
================
See accompanying notes to condensed combined financial
statements.
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $38
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES: 0
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (5)
-------------------
Net cash used in financing activities (5)
-------------------
Net increase in cash and cash equivalents 33
CASH AND CASH EQUIVALENTS, beginning of period 0
===================
CASH AND CASH EQUIVALENTS, end of period $33
===================
See accompanying notes to condensed combined financial
statements.
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENT OF INCOME
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
----------------
(Note 1)
REVENUES $950
COST OF REVENUES 748
----------------
Gross profit 202
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 225
----------------
Operating income (23)
OTHER INCOME (EXPENSE):
Other expense, net (7)
Interest expense (2)
----------------
LOSS BEFORE INCOME TAXES (32)
BENEFIT FROM INCOME TAXES (13)
----------------
Net loss $(19)
================
See accompanying notes to condensed financial
statements.
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $23
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (0)
-------------------
Net cash used in investing activities (0)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 30
Repayments of long-term debt (6)
-------------------
Net cash provided by financing activities 24
-------------------
Net increase in cash and cash equivalents 47
CASH AND CASH EQUIVALENTS, beginning of period 14
===================
CASH AND CASH EQUIVALENTS, end of period $61
===================
See accompanying notes to condensed financial
statements.
AMERICAN COURIER EXPRESS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for a full
year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
Item 2 - Management's Discussion and Analysis of Financial Condition
Overview
The following discussion of the Company's results of operations and of
its liquidity and capital resources should be read in conjunction with the
Consolidated Financial Statements of the Company and the related notes thereto
appearing elsewhere in this Quarterly Report. Simultaneously, with the closing
of the Company's initial public offering in November, 1995, separate
wholly-owned subsidiaries of the Company merged with each of the eleven Founding
Companies. Prior to the Merger, each of the Founding Companies operated as a
separate independent entity. The Company selected October 1, 1995 as the
effective date of the Merger.
Noncomparability - 1996 vs. 1995
Because the eleven Founding Companies operated as separate independent
entities prior to the Merger, comparisons between the consolidated results of
the Company for the three months ended March 31, 1996 and the historical results
of the eleven Founding Companies for the three months ended March 31, 1995 are
difficult to make for numerous reasons, including the following:
1. In 1996, the Founding Companies were all subsumed within the common
management of the Company. This resulted among other things in a) each
Founding Company being subjected to an administrative charge, b) realloca-
tion of costs, such as, for instance, common insurance, being acquired
for the Company and its subsidiaries as a whole and c) the Founding
Companies being relieved of the necessity of performing various administra-
tive functions for themselves.
2. In 1996, the Company, as a new entity, began the process of merging and
rationalizing operations, of the unrelated Founding Companies. For example,
a) Olympic, Orbit/Lightspeed and the Manhattan Division of Click were
combined into one Manhattan Division of the Company, b) the balance of
Click, Court and American began the process of consolidating into the
Northeast Division of the Company and c) work was rationalized and
reallocated among the former Founding Companies, such as, for example,
having SureWay take on some of the air courier services formerly performed
by National.
3. The Company had approximately $1,100,000 in expenses in the first quarter
of 1996 related to corporate overhead and the costs of being a public
company which would not have been necessary or incurred for the eleven
separate companies in 1995.
4. Most of the Founding Companies were operated as Subchapter S corporations
in 1995.
The financial information presented in this report includes a) the
actual financial results of the Company for the quarter ended March 31, 1995,
before it had any material assets or operations, b) the actual financial results
of the Company for the quarter ended March 31, 1996, c) the actual historical
results for each of the Founding Companies for the quarter ended March 31, 1995
and d) combined historical results of the unrelated Founding Companies for the
quarter ended March 31, 1995. For all the reasons set forth above and others,
combined results are not indicative of results which would have been achieved if
the Founding Companies had actually been combined during those periods, and may
not be comparable to or indicative of future performance. Nonetheless, the
following section discusses consolidated 1996 results compared to combined
historical 1995 results to indicate general trends affecting operations, as well
as trends within the material Founding Companies. The following section should
be read with the foregoing caveats as to noncomparability in mind.
Consolidated Three Months Ended March 31, 1996 Compared to Combined Historical
Founding Companies Three Months Ended March 31, 1995
Revenues for the first quarter of 1996 increased $6.1 million,
or 18.0%, to $40.2 million from $34.0 million for the first quarter of 1995
primarily as a result of increased air and ground delivery revenues, as well as
increases in revenues in the Company's logistics business. Revenues at National
increased $360,000 from $3.8 million for the three months ended March 31, 1995
to $4.2 million for the three months ended March 31, 1996. Revenues at
Securities Courier decreased by $215,000 from $4.4 million to $4.2 million while
Sureway increased its revenues by $3.8 million from $9.2 million for the first
quarter of 1995 to $13.0 million for the first quarter of 1996. The increase at
Sureway resulted from a growth in its air courier business as well as its
logistics business. For the first quarter of 1996, ground delivery revenues
increased approximately $2.8 million (13.0%), air delivery revenues increased
approximately $2.4 million (26.2%) and logistics revenues increased by
approximately $927,000 (26.9%) over the comparable period in 1995. Ground
delivery revenues increased primarily due to additional business from existing
customers as well as the addition of new customers in the consumer products and
pharmaceutical industries. The increase in air delivery revenues during the
first quarter of 1996 was largely attributable to new customers in the computer
hardware and software industries and to increased demand from existing
customers. The increase in logistics revenues was primarily attributable to the
addition of new customers and increased demand from existing customers. This
increase was partially offset by a significant reduction in revenues resulting
from the loss of several important project bids during the period.
Gross profit for the first quarter of 1996 increased $2.2 million, or
21.1%, to $12.4 million from $10.3 million for the first quarter of 1995
primarily as a result of increased air and ground delivery revenues. Gross
profit at Securities Courier increased $338,000 and at Sureway by $1.1 million
for the first quarter of 1996 over the first quarter of 1995. The increase at
Securities Courier is due to a reduction in insurance and payroll because of the
increased purchasing power of the Company. The increase in gross profit at
National Courier of approximately $700,000 was due mainly to the
reclassification of certain costs from Cost of Sales to SG&A to conform to a
more consistent reporting basis. These increases were partially offset by lower
margins in the Company's logistics business as a result of the loss of several
project bids as described above. Gross profit margin for the first quarter of
1996 increased to 31.0%, as compared to 30.2% for the first quarter of 1995. The
increase in gross profit margin resulted primarily from the Company's ability to
provide an increased level of services to its customers and to reduce the amount
of work subcontracted to third parties. This increase was partially offset by
lower margins resulting from adverse weather conditions occurring during the
first quarter of 1996.
SG&A for the first quarter of 1996 increased $2.9 million, or 32.3%, to
$12.0 million from $9.1 million for the first quarter of 1995. As a percentage
of revenues, SG&A increased to 29.8% for the first quarter of 1996 from 26.6%
for the comparable period of 1995. Approximately $0.8 million of the increase in
SG&A resulted from increased costs relating to ongoing staff and facility
expansion to generate and support the increased revenue volume as described
above. Approximately $1.0 million of the increase in SG&A resulted from
corporate overhead expenses, including salaries and benefits for members of
senior management and administrative staff, professional fees, travel and office
expenses, and other costs related to the establishment of the Company's
corporate and administrative infrastructure as a newly formed public company. In
addition, a portion of the increase in SG&A expenses was attributable to costs
necessary to consolidate and combine certain of the Company's facilities and
operations. The reclassification of costs as discussed above, of $0.7 million at
National Courier made up the balance of the increase.
For the reasons discussed above, operating income for the first quarter
of 1996 decreased $753,000, or 61.5%, to $472,000 from $1.2 million for the
comparable period in 1995. Operating margin decreased to 1.2% in the first
quarter of 1996 from 3.6% for the first quarter of 1995.
Interest expense for the first quarter of 1996 decreased $13,000, or
6.7%, to $181,000 from $194,000 for the first quarter of 1995 primarily as a
result of lower interest rates on outstanding borrowings.
The provision for income taxes for the first quarter of 1996 decreased
$300,000, or 64.9%, to $162,000 from $462,000 for the first quarter of 1995
primarily as a result of a lower level of taxable income.
For the reasons discussed above, net income for the first quarter of
1996 decreased $444,000, or 66.6%, to $223,000 from $667,000 for the first
quarter of 1995.
Liquidity and Capital Resources
During the first quarter of 1996, net cash used by operating activities
was $2.4 million, compared to net cash provided by operating activities of
$550,000 during the first quarter of 1995. The decrease in cash generated by
operating activities resulted primarily from lower net income and changes in
working capital items.
Additions to equipment and leasehold improvements used $536,000 in
investing activities during the first quarter of 1996, compared to $517,000
during the comparable period in 1995.
During the first quarter of 1996, net cash used by financing activities
was $629,000, compared to $415,000 for the comparable period of 1995. The higher
level of cash used during the first three months of 1996 resulted from the
repayment of approximately $1.0 million of long-term debt, partially offset by
higher short-term borrowings.
Management believes that cash flow from operations, together with its
current sources of liquidity and borrowing capacity, are sufficient to support
the Company's operations and general business and capital liquidity
requirements. The Company will seek opportunities to make appropriate
acquisitions and intends to implement an opportunistic acquisition program. The
Company currently intends to use its Common Stock for all or a portion of the
consideration to be paid in future acquisitions. However, the recent decline in
the market value of the Company's Common Stock has reduced the attractiveness of
the Common Stock as an acquisition medium. As a result, the Company will be
required to utilize more of its cash resources, if available, in order to effect
its acquisition program. The Company currently does not have sufficient cash
resources to fund its acquisition program. Accordingly, the Company's growth
through acquisitions will be limited unless it is able to obtain additional
capital through additional debt or equity financings. The Company is currently
discussing the terms of a proposed credit facility with an institutional lender.
However, there can be no assurance that the Company will be able to obtain such
financing if and when it is needed or that, if available, it will be available
on terms the Company deems acceptable. As a result, the Company might be unable
to implement successfully its acquisition strategy.
Disclosure Regarding Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. Certain information contained in this
Form 10-Q includes information that is forward looking, such as the Company's
expectations for future performance, its growth and acquisition strategies, its
anticipated liquidity and capital needs and its future prospects. The matters
referred to in such forward looking statements could be affected by the risks
and uncertainties related to the Company's business. These risks and
uncertainties include, but are not limited to, the effect of economic and market
conditions, the Company's lack of prior operating history, the ability of the
Company to successfully integrate the business of acquired companies, the impact
of competition, both for customers and for acquisition candidates, the need for
financing to implement the Company's strategic plan, as well as certain other
risks described elsewhere herein and in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995. Subsequent written and oral forward
looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by the cautionary statements contained
herein and elsewhere in this Form 10-Q.
Part II - OTHER INFORMATION
Item 1 - Legal Proceedings.
The Company and its subsidiaries are from time to time, parties to
litigation arising in the normal course of their business, most of
which involves claims for personal injury and property damage incurred
in connection with their operations. Management believes that none of
these actions will have a material adverse effect on the financial
position or results of operations of the Company and its subsidiaries.
Item 2 - Changes in Securities. Not applicable
Item 3 - Defaults Upon Senior Securities. Not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders. Not applicable
Item 5 - Other Information. Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits - none.
(b) The Company has not filed any reports on Form 8-K during the
relevant period.
27 Financial Data Schedule (for electronic submission only)
Appendix A to Item 601(c) of Regulation S-K
Commercial and Industrial Companies
Article 5 of Regulation S-X
Item Number Item Descrition Item Amount
5-02(1) cash and cash items 3,020
5-02(2) marketable securities 0
5-02(3)(a)(1) notes and accounts receivable-trade 20,613
5-02(4) allowance for doubtful accounts (941)
5-02(6) inventory 0
5-02(9) total current assets 25,708
5-02(13) property, plant and equipment 11,329
5-02(14) accumulated depreciation (7,176)
5-02(18) total assets 31,034
5-02(21) total current liabilities 18,806
5-02(22) bonds, mortgages and similar debt 0
5-02(28) preferred stock-mandatory redemption 0
5-02(29) preferred stock-no mandatory redemption 0
5-02(30) common stock 7
5-02(31) other stockholders' equity 8,527
5-02(32) total liabilities and stockholders' equity 31,034
5-03(b)1(a) net sales of tangible products 0
5-03(b)1 total revenues 40,165
5-03(b)2(a) cost of tangible goods sold 0
5-03(b)2 total costs and expenses applicable to sales and revenues 27,718
5-03(b)3 other costs and expenses 11,770
5-03(b)5 provision for doubtful accounts and notes 205
5-03(b)(8) interest and amortization of debt discount 181
5-03(b)(10) income before taxes and other items 385
5-03(b)(11) income before taxes 385
5-03(b)(14) income/loss continuing operations 385
5-03(b)(15) discontinued operations 0
5-03(b)(17) extraordinary items 0
5-03(b)(18) cumulative effect-changes in accounting principles 0
5-03(b)(19) net income or loss 223
5-03(b)(20) earnings per share--primary .03
5-03(b)(20) earnings per share--fully diluted .03
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.
Dated: September ___, 1996 CONSOLIDATED DELIVERY & LOGISTICS, INC.
By:___________________________
Joseph G. Wojak
Executive Vice President, Chief
Financial Officer, Treasurer
and Secretary
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
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.
Dated: September ___, 1996 CONSOLIDATED DELIVERY & LOGISTICS, INC.
By: /s/ Joseph G. Wojak
Joseph G. Wojak
Executive Vice President, Chief
Financial Officer, Treasurer
and Secretary
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)