UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 For the quarterly
period ended September 30, 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 November 8, 1996, was 6,795,790.
CONSOLIDATED DELIVERY & LOGISTICS, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996
INDEX
Page
Part I - Financial Information
Item 1 - Financial Statements
Consolidated Delivery & Logistics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of December 31, 1995, and 1
September 30, 1996
Condensed Consolidated Statements of Operations for 2
the Three and Nine Months Ended September 30, 1995 and 1996
Condensed Consolidated Statements of Cash Flows for the Nine 3
Months Ended September 30, 1995 and 1996
Notes to Condensed Consolidated Financial Statements 4
Combined Founding Companies
Condensed Combined Statements of Income for the Three and Nine 6
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 7
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 8
SureWay Air Traffic Corporation and Subsidiary
Condensed Consolidated Statements of Income for the Three and Nine 9
Months Ended September 30, 1995
Condensed Consolidated Statement of Cash Flows for the Nine 10
Months Ended September 30, 1995
Notes to Condensed Consolidated Financial Statements 11
Securities Courier Corporation
Condensed Statements of Income for the Three and Nine Months Ended 12
September 30, 1995
Condensed Statement of Cash Flows for the Nine Months Ended 13
September 30, 1995
Notes to Condensed Financial Statements 14
National Courier, Inc. and National Express, Inc.
Condensed Combined Statements of Income for the Three and Nine 15
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine Months 16
Ended September 30, 1995
Notes to Condensed Combined Financial Statements 17
Silver Star Express, Inc. and Related Companies
Condensed Combined Statements of Income for the Three and Nine 18
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 19
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 20
Click Messenger Service, Inc. and Related Companies
Condensed Combined Statements of Income for the Three and Nine 21
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 22
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 23
Crown Courier Systems, Inc. and Bestway Distribution Services, Inc.
Condensed Combined Statements of Income for the Three and Nine 24
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 25
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 26
Court Courier Systems, Inc. and Subsidiary
Condensed Consolidated Statements of Operations for the Three 27
and Nine Months Ended September 30, 1995
Condensed Consolidated Statement of Cash Flows for the Nine 28
Months Ended September 30, 1995
Notes to Condensed Consolidated Financial Statements 29
Orbit/Lightspeed Courier Systems, Inc. and Related Companies
Condensed Combined Statements of Income for the Three and Nine 30
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 31
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 32
Distribution Solutions International, Inc.
Condensed Statements of Income for the Three and Nine Months 33
Ended September 30, 1995
Condensed Statement of Cash Flows for the Nine Months Ended 34
September 30, 1995
Notes to Condensed Financial Statements 35
Olympic Courier Systems, Inc. and Related Company
Condensed Combined Statements of Operations for the Three and Nine 36
Months Ended September 30, 1995
Condensed Combined Statement of Cash Flows for the Nine 37
Months Ended September 30, 1995
Notes to Condensed Combined Financial Statements 38
American Courier Express, Inc.
Condensed Statements of Income for the Three and Nine Months 39
Ended September 30, 1995
Condensed Statement of Cash Flows for the Nine Months Ended 40
September 30, 1995
Notes to Condensed Financial Statements 41
Item 2 - Management's Discussion and Analysis of Financial Condition 42
Part II - Other Information
Item 1 - Legal Proceedings 46
Item 4 - Submission of Matters to a Vote of Security Holders 46
Item 6 - Exhibits and Reports on Form 8-K 46
Signature 48
11
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
December 31, 1995 September 30,
1996
------------------ -----------------
(Note 1) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $6,589 $2,504
Accounts receivable, net 18,555 21,338
Prepaid expenses and other current assets 2,312 3,118
------------------ -----------------
Total current assets 27,456 26,960
Equipment and leasehold improvements, net 3,925 4,174
Other assets 1,459 4,248
------------------ -----------------
TOTAL ASSETS $32,840 $35,382
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $2,803 $6,507
Current maturities of long-term debt 3,477 1,590
Accounts payable and accrued liabilities 13,634 11,872
------------------ -----------------
Total current liabilities 19,914 19,969
Long-term debt, net of current maturities 3,027 3,785
Other long-term liabilities 1,588 1,710
------------------ -----------------
TOTAL LIABILITIES 24,529 25,464
------------------ -----------------
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 and 6,704,881 shares issued and
outstanding at December 31, 1995, and September 30, 1996,
respectively 7 7
Additional paid-in capital 8,499 9,102
Retained earnings (accumulated deficit) (195) 809
------------------ -----------------
TOTAL STOCKHOLDERS' EQUITY 8,311 9,918
------------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $32,840 $35,382
================== =================
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For The Three Months Ended For The Nine Months Ended
September 30, September 30,
------------------------------------ ------------------------------------
1995 1996 1995 1996
---------------- ---------------- ---------------- ----------------
(Note 2) (Note 2)
REVENUES $0 $45,097 $0 $126,791
Cost of Revenues 0 31,436 0 88,007
---------------- ---------------- ---------------- ----------------
GROSS PROFIT 0 13,661 0 38,784
Selling, General, &
Administrative Expenses 2 12,714 4 36,710
---------------- ---------------- ---------------- ----------------
OPERATING INCOME (LOSS) (2) 947 (4) 2,074
OTHER (INCOME) EXPENSE:
Other (income) expense, net 6 (17) 6 (254)
Interest expense 0 190 0 597
---------------- ---------------- ---------------- ----------------
INCOME (LOSS) BEFORE INCOME
TAXES (8) 774 (10) 1,731
Provision for Income Taxes 0 325 0 727
---------------- ---------------- ---------------- ----------------
NET INCOME (LOSS) $(8) $449 $(10) $1,004
================ ================ ================ ================
NET INCOME PER SHARE $.07 $.15
================ ================
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,680 6,649
================ ================
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Nine Months
Ended September Ended September
30, 1995 30, 1996
(Note 2)
---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(10) $1,004
Adjustments to reconcile net income (loss) to net cash
used in operating activities --
Loss on disposal of equipment and leasehold
improvements 0 (5)
Depreciation and amortization 0 1,120
Changes in operating assets and liabilities
(Increase) decrease in --
Accounts receivable, net 0 (2,243)
Prepaid expenses and other current assets (2,103) (779)
Other assets 0 387
Increase (decrease) in --
Accounts payable and accrued liabilities 1,156 (2,096)
Other long-term liabilities 0 123
---------------- ----------------
Net cash used in operating activities (957) (2,489)
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses 0 (1,705)
Proceeds from sale of equipment and leasehold
improvements
Additions to equipment and leasehold improvements (60) (1,188)
---------------- ----------------
Net cash used in investing activities (60) (2,832)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs 0 (145)
Issuance of common stock in connection with
purchases of businesses
Short-term borrowings, net 0 3,683
Proceeds from long-term debt 1,850 555
Repurchase and cancellation of common stock (1) 0
Repayments of long-term debt 0 (3,459)
---------------- ----------------
Net cash provided by financing activities 1,849 1,236
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 832 (4,085)
CASH AND CASH EQUIVALENTS, beginning of period 2 6,589
---------------- ----------------
CASH AND CASH EQUIVALENTS, end of period $834 $2,504
================ ================
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 and nine months ended
September 30, 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/A 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 27, 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
inter-company balances and transactions have been eliminated.
Net Income Per Share --
The computation of consolidated net income per share for the
three and nine months ended September 30, 1996, is based upon 6,680,153
and 6,649,124 weighted average shares of Common Stock outstanding,
respectively. The conversion of the stock options and the debentures
outstanding at September 30, 1996, are not included in the computation
as the effect would be anti-dilutive.
(3) BUSINESS COMBINATIONS:
On September 30, 1996, the Company acquired Hurry Wagon, Inc.,
a same-day and overnight delivery service company serving the upstate
New York region. The acquisition was accounted for as a purchase
transaction. The total consideration paid for the acquired assets is
estimated to be 25,000 shares of Common Stock at $8 per share and the
assumption of approximately $185,000 of debt due to the former owners
of the business and their relatives. Final determination of the
acquisition cost will be made by December 31, 1996. The excess of
purchase price over net assets acquired of approximately $170,000 is
being amortized on a straight-line basis over 25 years. In addition,
the Company has signed non-compete agreements with two former employees
of Hurry Wagon for an consideration of $100,000, payable over a
four-year period. The accompanying condensed consolidated balance sheet
as of September 30, 1996, reflects the allocation of the preliminary
purchase price. Unaudited pro forma revenue and income data for the
nine months ended September 30, 1995 and 1996, reflecting the effects
of the four purchase acquisitions made in 1996 as if the acquisitions
were effective on the first day of the year being reported, are set
forth below.
For the Nine Months Ended
September 30,
1995 1996
(In thousands except per share data)
-----------------------------------
Revenues $11,502 $133,559
Net Income (loss) $(68) $754
Net Income Per Share N.A. $.11
The pro forma results are not necessarily indicative of actual
results that might have occurred had the operations of the Company and
the four acquisitions been combined at the beginning of the periods
presented.
(4) REVOLVING CREDIT FACILITY:
In May 1996, the Company entered into a two-year agreement
with Summit Bank and Mellon Bank N.A., to establish a revolving credit
facility. Credit availability is based on certain criteria, up to an
initial maximum amount of $15,000,000, which may under certain
conditions be increased to $25,000,000, and is secured by certain
assets, including accounts receivable and stock of the Company and its
subsidiaries. Availability at September 30, 1996, was approximately
$11,000,000, of which approximately $4,500,000 was available for future
borrowings. Interest rates on borrowings are based on margins over the
banks' lending rates or the London Inter-bank Offered Rate. The credit
agreement has certain restrictive covenants, with which the Company was
in compliance at September 30, 1996.
(5) SUBSEQUENT EVENT:
On November 1, 1996, the Company acquired W.I. Services, Inc.,
a New York City delivery service, for $200,000 in cash and 90,909
shares of common stock valued at $5.50. The acquisition will be
accounted for as a purchase transaction in the fourth quarter of 1996.
W.I. Services will be absorbed into the Company's existing New York
City operations. Pro forma revenue and income data for the nine months
ended September 30, 1996, would not be material to the Company's
operations for the same period.
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
REVENUES $37,677 $111,406
Cost of Revenues 26,079 77,547
---------------- ----------------
GROSS PROFIT 11,598 33,859
Selling, General, & Administrative Expenses 10,140 29,777
---------------- ----------------
OPERATING INCOME 1,458 4,082
OTHER (INCOME) EXPENSE:
Other (income) expense, net 7 (183)
Interest expense 213 608
---------------- ----------------
INCOME BEFORE INCOME TAXES 1,238 3,657
Pro Forma Provision for Income Taxes (Note 2) 433 1,475
---------------- ----------------
NET INCOME $805 $2,182
================ ================
See accompanying notes to condensed combined financial
statements.
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $2,251
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in loans receivable from stockholders (39)
Additions to equipment and leasehold improvements (1,397)
-------------------
Net cash used in investing activities (1,436)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 442
Proceeds from long-term debt 1,883
Repayments of long-term debt (2,203)
Distributions to stockholders (2,164)
-------------------
Net cash used in financing activities (2,042)
-------------------
Net decrease in cash and cash equivalents (1,227)
CASH AND CASH EQUIVALENTS, beginning of period 2,399
-------------------
CASH AND CASH EQUIVALENTS, end of period $1,172
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
REVENUES $10,765 $31,571
Cost of Revenues 7,004 18,783
---------------- ----------------
GROSS POFIT 3,761 12,788
Selling, General, & Administrative Expenses 3,296 11,005
---------------- ----------------
OPERATING INCOME 465 1,783
OTHER (INCOME) EXPENSE:
Other income, net (4) (57)
Interest expense 29 88
---------------- ----------------
INCOME BEFORE INCOME TAXES 440 1,752
Provision for Income Taxes 157 701
---------------- ----------------
NET INCOME $283 $1,051
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(357)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (650)
-------------------
Net cash used in investing activities (650)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 100
Proceeds from long-term debt 1,515
Repayments of long-term debt (893)
-------------------
Net cash provided by financing activities 722
-------------------
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 and nine months
ended September 30, 1995, are not necessarily indicative of the results 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 STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
REVENUES $4,161 $12,802
Cost of Revenues 3,233 11,089
---------------- ----------------
GROSS PROFIT 928 1,713
Selling, General, & Administrative Expenses 800 1,416
---------------- ----------------
OPERATING INCOME 128 297
OTHER (INCOME) EXPENSE:
Other income, net (28) (93)
Interest expense 51 139
---------------- ----------------
INCOME BEFORE INCOME TAXES 105 251
Pro Forma Provision for Income Taxes (Note 2) 43 101
---------------- ----------------
NET INCOME $62 $150
================ ================
See accompanying notes to condensed financial
statements.
SECURITIES COURIER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $855
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances on stockholder loan receivable (15)
Additions to equipment and leasehold improvements (130)
-------------------
Net cash used in investing activities (145)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital lease obligations and long-term debt (676)
Proceeds from long-term debt 116
-------------------
Net cash used in financing activities (560)
-------------------
Net increase in cash and cash equivalents 150
CASH AND CASH EQUIVALENTS, beginning of period 15
-------------------
CASH AND CASH EQUIVALENTS, end of period $165
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed financial statements,
Federal and state income taxes have been provided as if the Company had filed C
Corporation tax returns. The current income tax expense is reflected in the
accompanying condensed financial statements as an increase to additional paid-in
capital. Effective on the date of the acquisition, the S Corporation status was
terminated.
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $4,291 $11,996
Cost of revenues 2,285 7,360
---------------- ----------------
GROSS PROFIT 2,006 4,636
Selling, General, & Administrative Expenses 1,884 4,496
---------------- ----------------
OPERATING INCOME 122 140
OTHER (INCOME) EXPENSE:
Other expense, net 84 92
Interest expense 26 67
---------------- ----------------
INCOME (LOSS) BEFORE INCOME TAXES 12 (19)
Pro Forma Benefit from Income Taxes (Note 2) (27) (21)
---------------- ----------------
NET INCOME $39 $2
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(75)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (133)
-------------------
Net cash used in investing activities (133)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 123
-------------------
Net cash provided by financing activities 123
-------------------
Net decrease in cash and cash equivalents (85)
CASH AND CASH EQUIVALENTS, beginning of period 85
-------------------
CASH AND CASH EQUIVALENTS, end of period $0
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $3,417 $10,143
Cost of Revenues 2,557 7,676
---------------- ----------------
GROSS PROFIT 860 2,467
Selling, General, & Administrative Expenses 678 2,057
---------------- ----------------
OPERATING INCOME 182 410
OTHER (INCOME) EXPENSE:
Other income, net (29) (92)
Interest expense 14 42
---------------- ----------------
INCOME BEFORE INCOME TAXES 197 460
Pro Forma Provision for Income Taxes (Note 2) 76 184
---------------- ----------------
NET INCOME $121 $276
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $748
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments on stockholder receivable 35
Payments on notes receivable 44
Additions to equipment and leasehold improvements (84)
-------------------
Net cash used in investing activities (5)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (170)
Distributions to stockholders (1,499)
-------------------
Net cash used in financing activities (1,669)
-------------------
Net decrease in cash and cash equivalents (926)
CASH AND CASH EQUIVALENTS, beginning of period 1,329
-------------------
CASH AND CASH EQUIVALENTS, end of period $403
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $3,357 $9,267
Cost of Revenues 2,617 6,796
---------------- ----------------
GROSS PROFIT 740 2,471
Selling, General, & Administrative Expenses 465 1,890
---------------- ----------------
OPERATING INCOME 275 581
OTHER (INCOME) EXPENSE:
Other expense, net 37 37
Interest expense 17 41
---------------- ----------------
INCOME BEFORE INCOME TAXES 221 503
Pro Forma Provision for Income Taxes (Note 2) 90 203
---------------- ----------------
NET INCOME $131 $300
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $257
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (43)
-------------------
Net cash used in investing activities (43)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 58
Payments under capital lease obligations (85)
Distributions to stockholders (28)
-------------------
Net cash used in financing activities (55)
-------------------
Net increase in cash and cash equivalents 159
CASH AND CASH EQUIVALENTS, beginning of period 50
-------------------
CASH AND CASH EQUIVALENTS, end of period $209
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an adjustment to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $2,746 $8,206
Cost of Revenues 1,801 5,305
---------------- ----------------
GROSS PROFIT 945 2,901
Selling, General, & Administrative Expenses 959 2,756
---------------- ----------------
OPERATING INCOME (LOSS) (14) 145
OTHER (INCOME) EXPENSE:
Other income, net (36) (112)
Interest expense 10 12
---------------- ----------------
INCOME BEFORE INCOME TAXES 12 245
Pro Forma Provision for Income Taxes (Note 2) 3 98
---------------- ----------------
NET INCOME $9 $147
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $111
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (148)
-------------------
Net cash used in investing activities (148)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-term Debt 33
Distributions to stockholders (320)
Payments on Long-term Debt (67)
-------------------
Net cash used in financing activities (354)
-------------------
Net decrease in cash and cash equivalents (391)
CASH AND CASH EQUIVALENTS, beginning of period 525
-------------------
CASH AND CASH EQUIVALENTS, end of period $134
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $2,571 $7,395
Cost of Revenues 2,174 5,978
---------------- ----------------
GROSS PROFIT 397 1,417
Selling, General, & Administrative Expenses 369 1,274
---------------- ----------------
OPERATING INCOME 28 143
OTHER (INCOME) EXPENSE:
Other expense, net 0 25
Interest expense 56 174
---------------- ----------------
LOSS BEFORE INCOME TAXES (28) (56)
Provision for Income Taxes 0 1
---------------- ----------------
NET LOSS $(28) $(57)
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(96)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (82)
-------------------
Net cash used in investing activities (82)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 221
Payments on long-term debt and capital lease obligations (46)
-------------------
Net cash provided by financing activities 175
-------------------
Net decrease in cash and cash equivalents (3)
CASH AND CASH EQUIVALENTS, beginning of period 23
-------------------
CASH AND CASH EQUIVALENTS, end of period $20
===================
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 and nine months
ended September 30, 1995, are not necessarily indicative of the results 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 STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $2,056 $6,442
Cost of Revenues 1,482 4,615
---------------- ----------------
GROSS PROFIT 574 1,827
Selling, General, & Administrative Expenses 514 1,450
---------------- ----------------
OPERATING INCOME 60 377
OTHER (INCOME) EXPENSE:
Other income, net (5) (5)
Interest expense 3 11
---------------- ----------------
INCOME BEFORE INCOME TAXES 62 371
Pro Forma Provision for Income Taxes (Note 2) 24 148
---------------- ----------------
NET INCOME $38 $223
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $411
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (59)
-------------------
Net cash used in investing activities (59)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 78
Proceeds from long-term debt 120
Distributions to stockholders (310)
Repayments of long-term debt (95)
-------------------
Net cash used in financing activities (207)
-------------------
Net increase in cash and cash equivalents 145
CASH AND CASH EQUIVALENTS, beginning of period 71
-------------------
CASH AND CASH EQUIVALENTS, end of period $216
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $1,832 $6,216
Cost of Revenues 1,461 5,252
---------------- ----------------
GROSS PROFIT 371 964
Selling, General, & Administrative Expenses 303 930
---------------- ----------------
OPERATING INCOME 68 34
OTHER (INCOME) EXPENSE:
Other expense, net 0 7
Interest expense 9 17
---------------- ----------------
INCOME BEFORE INCOME TAXES 59 10
Pro Forma Provision for Income Taxes (Note 2) 4 4
---------------- ----------------
NET INCOME $55 $6
================ ================
See accompanying notes to condensed financial
statements.
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $388
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (97)
Increase in stockholder receivable (86)
-------------------
Net cash used in investing activities (183)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (178)
Proceeds from long-term debt 33
Repayments of long-term debt (54)
-------------------
Net cash used in financing activities (199)
-------------------
Net increase in cash and cash equivalents 6
CASH AND CASH EQUIVALENTS, beginning of period 2
-------------------
CASH AND CASH EQUIVALENTS, end of period $8
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed financial statements,
Federal and state income taxes have been provided as if the Company had filed C
Corporation tax returns. The current income tax expense is reflected in the
accompanying condensed financial statements as an increase to additional paid-in
capital. Effective on the date of the acquisition, the S Corporation status was
terminated.
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $1,322 $4,219
Cost of Revenues 721 2,294
---------------- ----------------
GROSS PROFIT 601 1,925
Selling, General, & Administrative Expenses 628 1,905
---------------- ----------------
OPERATING INCOME (LOSS) (27) 20
OTHER (INCOME) EXPENSE:
Other income, net (1) (1)
Interest expense 6 20
---------------- ----------------
INCOME BEFORE INCOME TAXES (32) 1
Pro Forma Provision for (Benefit from) Income Taxes (Note 2) (14) 0
---------------- ----------------
NET INCOME (LOSS) $(18) $1
================ ================
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 Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $29
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements (7)
-------------------
Net cash used in investing activities (7)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital lease obligations (13)
-------------------
Net cash used in financing activities (13)
-------------------
Net increase in cash and cash equivalents 9
CASH AND CASH EQUIVALENTS, beginning of period 0
-------------------
CASH AND CASH EQUIVALENTS, end of period $9
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed combined financial
statements, Federal and state income taxes have been provided as if the Company
had filed C Corporation tax returns. The current income tax expense is reflected
in the accompanying condensed combined financial statements as an increase to
additional paid-in capital. Effective on the date of the acquisition, the S
Corporation status was terminated.
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1995 1995
---------------- ----------------
REVENUES $1,159 $3,149
Cost of Revenues 744 2,399
---------------- ----------------
GROSS PROFIT 415 750
Selling, General, & Administrative Expenses 244 598
---------------- ----------------
OPERATING INCOME 171 152
OTHER (INCOME) EXPENSE:
Other (income) expense, net (24) 3
Interest expense 4 9
---------------- ----------------
INCOME BEFORE INCOME TAXES 191 140
Pro Forma Provision for Income Taxes (Note 2) 77 56
---------------- ----------------
NET INCOME $114 $84
================ ================
See accompanying notes to condensed financial
statements.
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine
Months Ended
September 30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(62)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements (17)
-------------------
Net cash used in investing activities (17)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 100
Repayments of long-term debt and capital lease obligations (25)
-------------------
Net cash provided by financing activities 75
-------------------
Net decrease in cash and cash equivalents (4)
CASH AND CASH EQUIVALENTS, beginning of period 14
-------------------
CASH AND CASH EQUIVALENTS, end of period $10
===================
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 and nine months ended
September 30, 1995, are not necessarily indicative of the results 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.
(2) INCOME TAXES:
For purposes of the accompanying condensed financial statements,
Federal and state income taxes have been provided as if the Company had filed C
Corporation tax returns. The current income tax expense is reflected in the
accompanying condensed financial statements as an adjustment to additional
paid-in capital. Effective on the date of the acquisition, the S Corporation
status was terminated.
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
Condensed 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 (the
"Offering"), separate wholly-owned subsidiaries of the Company merged with each
of the eleven Founding Companies (the "Mergers"). Prior to the Mergers, each of
the Founding Companies operated as a separate independent entity. The Company
selected October 1, 1995, as the effective date of the Merger. For the three-
and nine-month periods ended September 30, 1995, the combined financial
statements include the accounts of the Founding Companies as if the Founding
Companies had always been members of the same operating group without giving
effect to the Mergers or the Offering. As a result, combined results may not be
comparable to or indicative of future performance (see below).
During the nine months ended September 30, 1996, the Company acquired
four businesses, accounted for as purchase transactions. The total consideration
to be paid for the businesses is contingent on future activity and is estimated
to be $2,700,000, approximately 75,000 shares of Common Stock valued between
$5.50 and $8 per share, and the assumption of approximately $185,000 of debt due
to former owners and their relatives. The excess of purchase price over net
assets acquired is being amortized on a straight-line basis over 25 years.
Non-comparability - 1996 vs. 1995
Because the eleven Founding Companies operated as separate independent
entities prior to the Mergers, comparisons between the consolidated results of
the Company for the three and nine months ended September 30, 1996, and the
historical results of the eleven Founding Companies for the three and nine
months ended September 30, 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)
reallocation 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
administrative functions for themselves.
2. In 1996, the Company as a new entity began the process of merging and
rationalizing operations of the previously 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 and Court and American were consolidated 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 $3,200,000 in expenses in the first nine
months of 1996 ($1,100,000 for the third quarter of 1996) related to
corporate overhead and the costs of operating as 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 prior to the effective date of the Mergers.
The financial information presented in this report includes a) the
actual financial results of the Company for the three and nine months ended
September 30, 1995, before it had any material assets or operations, b) the
actual financial results of the Company for the three and nine months ended
September 30, 1996, c) the actual historical results for each of the Founding
Companies for the three and nine months ended September 30, 1995, and d)
combined historical results of the unrelated Founding Companies for the three
and nine months ended September 30, 1995. For all the reasons set forth above
and others, combined results are not indicative of results that 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
non-comparability in mind.
Actual Consolidated Nine Months Ended September 30, 1996, Compared to Pro
Forma Combined Historical Nine Months Ended September 30, 1995
Revenues for the first nine months of 1996 increased $15.4 million, or 13.8%, to
$126.8 million from $111.4 million for the first nine months of 1995, primarily
as a result of increased air and ground delivery revenues. Revenues at National
increased $0.2 million from $12.0 million for the nine months ended September
30, 1995, to $12.2 million for the nine months ended September 30, 1996.
Revenues at Securities Courier decreased from $12.8 million to $12.7 million,
while SureWay increased its revenues by $10.1 million, from $31.6 million for
the first nine months of 1995 to $41.7 million for the same period in 1996.
Revenues increased by $4.8 million in the Company's newly consolidated Northeast
Region to $24.6 million for the nine months ended September 30, 1996, from the
combined total of $19.8 million for the same period in 1995 for American
Courier, Click Messenger, and Court Courier. The increase at SureWay resulted
from growth in its air courier and fulfillment logistics businesses, as well as
revenues contributed from the purchase acquisitions made in the second quarter
of 1996. For the first nine months of 1996, ground delivery revenues increased
approximately $7.1 million (10.5%), air delivery revenues increased
approximately $6.4 million (20.1%), and logistics revenues increased
approximately $1.9 million (15.8%) over the similar period in 1995. Ground
delivery revenues increased primarily due to additional business from existing
customers, as well as from the addition of customers in the consumer products
and pharmaceutical industries, primarily in the Northeast Region. The increase
in air delivery revenues during the first nine months of 1996 was largely
attributable to new customers in the computer hardware and software industries
and increased demand from existing customers. The overall increase in logistics
revenues was primarily attributable to increased demand from existing customers
and the success of project bids on new customer contracts in fulfillment and
distribution logistics services, offset by the non-renewal of contracts from
existing customers in contract logistics services.
Gross profit for the first nine months of 1996 increased $4.9 million, or 14.5%,
to $38.8 million, from $33.9 million for the first nine months of 1995,
primarily as a result of the previously discussed increase in air and ground
delivery revenues. Gross profit at Securities Courier increased by $0.7 million
and at SureWay by $4.6 million for the first nine months of 1996 over the same
period in 1995. The increase at SureWay was due primarily to the revenue
increase discussed above. The increase at Securities Courier was due to a
reduction in insurance and payroll costs, a result of the increased purchasing
power of the Company. These increases were partially offset by lower margins in
the Company's logistics business as a result of the non-renewal of contracts
discussed previously. The Company's gross profit margin as a percentage of
revenues increased to 30.6% in the first nine months of 1996 from 30.4% for the
same period in 1995.
Selling, general, and administrative expenses for the first nine months of 1996
increased $6.9 million, or 23.2%, to $36.7 million from $29.8 million for the
same period in 1995. As a percentage of revenues, selling, general, and
administrative expenses increased to 29.0% in 1996 from 26.7% in 1995.
Approximately $3.2 million of the increase was due to corporate overhead
expenses, including salaries and benefits for members of senior management and
administrative staff, professional fees, travel and office expenses, and other
costs associated with the establishment and maintenance of the Company's
corporate and administrative infrastructure as a public company. In addition, a
portion of the increase was attributable to costs necessary to consolidate and
combine certain of the Company's facilities and operations.
For the reasons described above, operating income for the first nine months of
1996 decreased $2.0 million, or 48.8%, to $2.1 million from $4.1 million for the
same period in 1995. Operating margin as a percentage of revenues decreased in
1996 to 1.6% from 3.7% for 1995.
The provision for income taxes for the first nine months of 1996 decreased $0.8
million, or 53.3%, to $0.7 million from $1.5 million for the first nine months
of 1995 due to the lower taxable income.
Net income decreased to $1.0 million, or 54.5%, for the nine months ended
September 30, 1996, from $2.2 million for the nine months ended September 30,
1996, for the reasons discussed above.
Actual Consolidated Three Months Ended September 30, 1996, Compared to
Pro Forma Combined Historical Three Months Ended September 30, 1995
Revenues for the third quarter of 1996 increased $7.4 million, or 19.6%, to
$45.1 million from $37.7 million for the third quarter of 1995 primarily as a
result of increased air and ground delivery revenues. Revenues at SureWay
increased $4.2 million to $14.9 million for the third quarter of 1996. Revenues
in the Company's consolidated Northeast Region (formerly American Courier, Click
Messenger, and Court Courier) increased $2.0 million to $9.1 million from the
$7.1 million combined total revenues for the same period in 1995. The Company's
Manhattan Region posted a $0.8 million increase in revenues to $4.2 million from
the combined $3.4 million in the third quarter of 1995 of Orbit/Lightspeed
Courier, Olympic Courier, and the Manhattan Division of Click Messenger. For the
third quarter of 1996, ground delivery revenues increased $3.5 million (15.5%),
air delivery revenues increased $2.7 million (25.2%), and logistics revenues
increased $1.2 million (28.9%) over the third quarter of 1995. The increase in
ground and air revenues from the third quarter of 1995 was largely attributable
to the addition of customers in the computer hardware, computer software, and
pharmaceutical industries, increased demand from existing customers, and from
the purchase acquisitions made in the second quarter of 1996. The increase in
logistics revenues resulted primarily from new customers in the computer parts
supplies and office products industries gained by the distribution and
fulfillment logistics services..
Gross profit for the third quarter of 1996 increased $2.1 million, or 18.1%, to
$13.7 million from $11.6 million for the third quarter of 1995, primarily as a
result of the increase in ground and air delivery revenues discussed above.
Selling, general, and administrative expenses for the third quarter of 1996
increased $2.6 million, or 25.7%, to $12.7 million from $10.1 million for the
third quarter of 1995. As a percentage of revenues, selling, general, and
administrative expenses increased to 28.2% for the third quarter of 1996 from
26.9% for the same period in 1995. Approximately $1.1 million of the increase
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 and
maintenance of the Company's corporate and administrative infrastructure as a
public company, which was not the case in 1995. In addition, a portion of the
increase in selling, general, and administrative expenses was attributable to
costs necessary to consolidate and combine certain of the Company's facilities
and operations.
The provision for income taxes for the third quarter of 1996 decreased $108,000,
to $325,000, from $433,000 for the same quarter in 1995 due to lower taxable
income, offset by the use of a higher effective tax rate in 1996.
For the reasons discussed above, net income declined $348,000, from $797,000 for
the three months ended September 30, 1995, to $449,000 for the three months
ended September 30, 1996.
Liquidity and Capital Resources
Working capital at September 30, 1996, amounted to $6,991,000, as
compared to $7,542,000 at December 31, 1995. The decrease is primarily
attributable to seasonal changes in current assets and liabilities and the
financing of purchase acquisitions made in 1996. During the nine months ended
September 30, 1996, net cash used by operating activities was $2.5 million. Cash
used in investing activities was $2.8 million, which primarily consisted of
funds used for the acquisitions of four companies during the second and third
quarters of 1996 and equipment purchases of approximately $1.2 million. Cash
provided by financing activities was $1.2 million, which consisted primarily of
an increase in borrowing under the Company's line of credit, offset by
repayments of outstanding debt.
In May 1996, the Company entered into a two-year agreement with Summit
Bank and Mellon Bank N.A. to establish a revolving credit facility. Credit
availability is based on certain criteria, up to an initial maximum amount of
$15,000,000, which may under certain conditions be increased to $25,000,000, and
is secured by certain assets, including accounts receivable and stock of the
Company and its subsidiaries. Availability at September 30, 1996, was
approximately $11,000,000, of which approximately $4,500,000 was available for
future borrowings. Interest rates on borrowings are based on margins over the
banks' lending rates or the London Inter-bank Offered Rate. The credit agreement
has certain restrictive covenants, with which the Company was in compliance at
September 30, 1996.
Management believes that cash flows 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 continue to seek opportunities to make
appropriate acquisitions under an opportunistic acquisition program. The Company
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 in order to effect its acquisition program.
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. Assumption
Holdings Corp., Inc. vs. Securities Courier Corp. was settled in September
1996 for $75,000. Mr. Brana, the president of Securities Courier Corp.,
paid the final $50,000 of the settlement out of his personal funds.
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)
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: November 14, 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: November 14, 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)