SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 1, 2001
Dispatch Management Services Corp.
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(Exact name of registrant specified in Charter)
Delaware 0-23349 13-3967426
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(State or other (Commission (IRS Employee
jurisdiction of File Number) Identification No.)
incorporation)
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1981 Marcus Avenue, Suite C131, Lake Success, New York 11042
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(Address of principal executive offices) Zip Code
REGISTRANT'S TELEPHONE, INCLUDING AREA CODE: (516) 326-9810
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(Former name and former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On March 1, 2001, Dispatch Management Services Corp. and Dispatch Management
Services of New York Corp. ("Sellers"), completed the sale of its New York
City Business ("Business"), located at 65 West 36th Street, New York, New
York to EarlyBird Delivery Systems, LLC. The disposition was made pursuant
to the Asset Purchase Agreement dated as of March 1, 2001 for $2,874,000
less $274,000 for a promissory note which will be cancelled and $175,000 for
a settlement agreement which will be forgiven.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Statements.
The unaudited consolidated pro forma statements of operations for the nine
months ended September 30, 2000 and for the year ended December 31, 1999 and an
unaudited consolidated pro forma balance sheet at September 30, 2000, along with
a description of all pro forma adjustments, are attached as pages 2 through 6.
(c) Exhibit
The following exhibit is filed with this report:
(2) Asset Purchase Agreement dated as of March 1, 2001
UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL DATA
The unaudited consolidated pro forma statements of operations for the nine
months ended September 30, 2000 and for the year ended December 31, 1999 give
the effect to the disposition of the Business as if it had occurred on January
1, 1999. The unaudited consolidated pro forma balance sheet at September 30,
2000 gives effect to the disposition of the Business as if it had occurred on
September 30, 2000.
The following unaudited financial pro forma information should be read in
conjunction with the consolidated financial statements and related footnotes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1999 and Quarterly Report on Form 10-Q for the quarter ended September 30,
2000. The following pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the future operating results or
financial position.
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DISPATCH MANAGEMENT SERVICES CORP.
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, 2000
Less:
Historical New York City Pro Forma
DMS Corp. Business (1) Adjustments Pro Forma
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ASSETS
Current assets:
Cash and cash equivalents $ 878 $ 108 $ 1,385 (2) $ 2,155
Accounts receivable 22,466 2,217 - 20,249
Prepaid and other current assets 2,756 47 - 2,709
Income tax receivable 78 - - 78
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Total current assets 26,178 2,372 1,385 25,191
Property and equipment, net 9,129 800 8,329
Deferred financing costs, net 230 - 230
Intangilble assets, primarily goodwill, net 147,547 26,581 120,966
Other assets 812 17 795
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Total assets $ 183,896 $ 29,770 $ 1,385 $ 155,511
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdrafts $ 2,880 $ 161 $ - $ 2,719
Current portion of long-term debt 73,350 - (1,040) (2) 72,310
Accounts payable 5,864 540 - 5,324
Accrued liabilities 9,068 477 - 8,591
Accrued payroll and related expenses 3,986 687 - 3,299
Income tax payable 614 - - 614
Acquisition-related notes payable, current portion 3,724 382 - 3,342
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Total current liabilities 99,486 2,247 (1,040) 96,199
Acquisition-related notes payable 1,521 120 - 1,401
Intercompany payable - 30,338 26,425 (3,913)
Other long-term liabilities 4,719 13 - 4,706
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Total liabilities 105,726 32,718 25,385 98,393
Stockholders' equity:
Common stock 127 - - 127
Additional paid-in capital 119,834 - - 119,834
Accumulated deficit (40,099) (2,948) (24,000) (3) (61,151)
Accumulated other comprehensive loss (1,534) - - (1,534)
Less common stock held in treasury (158) - - (158)
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Total stockholders' equity 78,170 (2,948) (24,000) 57,118
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Total liabilities and stockholders' equity $ 183,896 $ 29,770 $ 1,385 $ 155,511
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The accompanying notes are an integral part of these pro forma financial
statements.
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DISPATCH MANAGEMENT SERVICES CORP.
UNAUDITED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
( DOLLARS IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
LESS:
HISTORICAL NEW YORK CITY PRO FORMA
DMS CORP. BUSINESS (4) ADJUSTMENTS PRO FORMA
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Net revenue.......................................... $ 137,512 $ 20,539 $ - $ 116,973
Cost of revenue.......................................... 85,111 12,105 - 73,006
Gross profit.......................................... ------------- --------------- ------------- ------------
52,401 8,434 - 43,967
Selling, general and administrative expenses... 43,781 9,010 - 34,771
Depreciation and amortization........................ 6,276 908 - 5,368
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(Loss) income from operations.................. 2,344 (1,484) - 3,828
Interest expense.......................................... 6,242 775 (74) (5) 5,393
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Loss before income tax provision................ (3,898) (2,259) 74 (1,565)
Income tax provision.................................. 474 - - 474
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Net loss............................................. $ (4,372) $ (2,259) $ 74 $ (2,039)
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Loss per common share - basic and diluted:
Net loss........................................ $ (0.35) $ (0.16)
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Weighted average shares outstanding................ 12,608,040 12,608,040
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The accompanying notes are an integral part of these pro forma financial
statements.
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DISPATCH MANAGEMENT SERVICES CORP.
UNAUDITED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
( DOLLARS IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
Less:
Historical New York City Pro Forma
DMS Corp. Business (4) Adjustments Pro Forma
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Net revenue............................... $ 219,863 $ 35,584 $ - $ 184,279
Cost of revenue.......................... 134,360 19,799 - 114,561
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Gross profit........................... 85,503 $ 15,785 - 69,718
Selling, general and administrative expenses... 66,992 13,935 - 53,057
Depreciation and amortization............ 21,469 1,257 - 20,212
Other charges,............................. 1,663 - - 1,663
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(Loss) income from operations............ (4,621) 593 - (5,214)
Interest expense........................... 8,895 1,171 (99) (5) 7,625
Other expense (income)............... - 22 - (22)
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Loss before income tax provision............ (13,516) (600) 99 (12,817)
Income tax provision.................. 688 - - 688
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Net loss....................... $ (14,204) $ (600) $ 99 $ (13,505)
` ============= ================ ============= ============
Loss per common share - basic and diluted:
Net loss.......................... $ (1.18) $ (1.12)
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Weighted average shares outstanding........ 12,052,023 12,052,023
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The accompanying notes are an integral part of these pro forma financial
statements.
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Notes to Unaudited Consolidated Pro Forma Financial Data
Pro Forma Adjustments
The following notes describe the adjustments found on the accompanying financial
statements:
Balance Sheet
(1) The amounts included in the New York City Business ("Business") column
reflect the historical assets and liabilities of the Business involved in
the disposition.
(2) The pro forma adjustments reflect the $1,385,000 increase in cash and cash
equivalents and the $1,040,000 reduction in long-term debt on the
disposition of the Business.
Purchase price $2,874,000
Less: promissory note cancelled 274,000
settlement forgiven 175,000
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Cash received 2,425,000
Repayment of debt 1,040,000
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Increase in cash $1,385,000
(3) The pro forma adjustments reflect the loss of $24,000,000 on the sale of the
Business.
Statements of Operations
(4) The amounts included in the New York City Business column reflect the
historical activity of the Business involved in the disposition.
(5) The pro forma adjustments represent the estimated reduction in interest
expense as a result of long-term debt being reduced by $1,040,000. Interest
expense was calculated using the weighted average interest rate
(approximately 9.5%) on the long-term debt expected to be repaid.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DISPATCH MANAGEMENT SERVICES CORP.
By: /s/
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Name: Douglas Roth
Title: Chief Financial Officer
Dated: March 15, 2001
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