UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
Quarterly report 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.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996
INDEX
Page
Part I - Financial Information (unaudited)
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets as of
December 31, 1995 and March 31, 1996 1
Condensed Combined/Consolidated Statements of Income for the
Three Months Ended March 31, 1995 and 1996 2
Condensed Combined/Consolidated Statements of Cash
Flows for the Three Months Ended March 31,
1995 and 1996 3
Notes to Condensed Combined/Consolidated
Financial Statements 4
Item 2 - Management's Discussion and Analysis of Financial
Condition 5
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K 7
Signature 8
<PAGE>
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 combined/consolidated financial statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED COMBINED/CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended
March 31,
-----------------------------------
1995 1996
--------------- ---------------
(Note 2)
REVENUES $34,031 $40,165
COST OF REVENUES 23,754 27,718
--------------- --------------
Gross profit 10,277 12,447
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 9,052 11,975
--------------- --------------
Operating income 1,225 472
OTHER INCOME (EXPENSE):
Other income, net 98 94
Interest expense (194) (181)
--------------- --------------
INCOME BEFORE INCOME TAXES 1,129 385
PROVISION FOR INCOME TAXES 462 162
--------------- --------------
Net income $667 $223
=============== ==============
NET INCOME PER SHARE $.03
===============
WEIGHTED AVERAGE SHARES OUTSTANDING 6,630
===============
PRO FORMA NET INCOME PER $.10
SHARE
===============
PRO FORMA WEIGHTED AVERAGE SHARES OUTSTANDING 6,811
===============
See accompanying notes to condensed combined/consolidated financial statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED COMBINED/CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended
March 31,
--------------------------------
1995 1996
-------------- --------------
(Note 2)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $667 $223
Adjustments to reconcile net income to net
cash provided (used) by
operating activities -
Adjustments to conform fiscal year-ends of
certain acquired companies 105 0
Depreciation and amortization 219 319
Changes in operating assets and liabilities
(Increase) decrease in -
Accounts receivable, net (2,077) (1,117)
Prepaid expenses and other
current assets (910) (704)
Other assets (93) 275
Increase (decrease) in -
Accounts payable and accrued liabilities 3,170 (1,194)
Other long-term liabilities (531) (206)
-------------- --------------
Net cash provided (used) by
operating activities 550 (2,404)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold
improvements (517) (536)
-------------- --------------
Net cash used in investing activities (517) (536)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net (44) (44)
Proceeds from long-term debt 36 440
Repayments of long-term debt (552) (1,025)
Distributions to stockholders 145 0
-------------- --------------
Net cash provided (used) by
financing activities (415) (629)
-------------- --------------
Net increase (decrease) in cash
and cash equivalents (382) (3,569)
CASH AND CASH EQUIVALENTS, beginning of year 2,399 6,589
============== ==============
CASH AND CASH EQUIVALENTS, end of period $2,017 $3,020
============== ==============
See accompanying notes to condensed combined/consolidated financial statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED COMBINED/CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION:
The accompanying unaudited condensed combined/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. October 1, 1995 has been used as the effective date
of the acquisition for accounting purposes since, in management's
opinion, effective control was transferred to the Company by that date.
The assets and liabilities of the acquired companies at September 30,
1995 were recorded by the Company at their historical amounts. The pro
forma combined statements of income and cash flows for the three months
ended March 31, 1995 include the combined operations of the acquired
companies for the three months then ended as if the acquisition had
taken place as of January 1, 1995.
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 pro forma combined net income per share for
the three months ended March 31, 1995 is based upon 6,810,564 shares of
Common Stock outstanding, which includes (i) 493,869 shares issued
prior to the Combination, (ii) 2,935,700 shares in connection with the
companies acquired in November 1995, (iii) 3,200,000 shares sold in the
Offering, and (iv) the dilution attributable to the Company's
debentures which are convertible into 180,995 shares of Common Stock.
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.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition
Overview
The Company was founded in June 1994 to create a national, full
service, same-day ground and air delivery and logistics company. On November 27,
1995, the Company acquired eleven companies (the "Combination") simultaneously
with the consummation of its initial public offering (the "Offering"). Prior to
the Combination, each of the acquired companies operated as a separate,
independent entity. As a result, historical combined results may not be
comparable to or indicative of future performance. For all periods presented,
the financial information includes the consolidated results of Consolidated
Delivery & Logistics, Inc. combined with those of the acquired companies as if
these businesses had always been members of the same operating group without
giving effect to the Combination or the Offering. The assets and liabilities of
the acquired companies are reflected at their historical amounts.
Prior to the Combination, most of the acquired companies elected to be
treated as S Corporations under the Internal Revenue Code of 1986, as amended.
Upon consummation of the Combination, the Company terminated such S Corporation
elections. For purposes of the pro forma combined financial statements presented
elsewhere herein, pro forma Federal income taxes have been provided for the
acquired companies as if they had all filed C Corporation tax returns for all
periods presented.
Three Months Ended March 31, 1996 Compared to 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. 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. These
increases were partially offset by lower margins in the Company's logistics
business for the reason 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 $1.5 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.
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 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, nc., American Courier Acquisition
Corp., American Courier Express, Inc. and the Stockholders named therein
(filed as Exhibit 2.1 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference)
2.2 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Bestway Distribution
Acquisition Corp., Bestway Distribution Services, Inc., Crown Courier
Systems, Inc. and the Stockholders named therein (filed as Exhibit 2.2 to
the Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
2.3 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Click Messenger Acquisition
Corp., Click Messenger Service, Inc., Click Messenger Service of N.Y.,
Inc., Meteor Messenger Service, Inc. (t/a Prime time), Cassidy, Ltd., DMK
Services, Ltd. and the Stockholders named therein (filed as Exhibit 2.3 to
the Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
2.4 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Court Courier Acquisition
Corp., Court Courier Systems, Inc., Court Courier - Revex of Connecticut,
Inc. and the Stockholders named therein (filed as Exhibit 2.4 to the
Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
2.5 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Distribution Solutions
Acquisition Corp., Distribution Solutions International, Inc. and the
Stockholder named therein (filed as Exhibit 2.5 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
2.6 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Clayton/National Acquisition
Corp., Clayton/National Courier Systems, Inc., National Express Company,
Inc. and the Stockholders named therein (filed as Exhibit 2.6 to the
Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
2.7 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Olympic Courier Acquisition
Corp., Olympic Courier Systems, Inc., Qualco Courier Systems, Inc. and the
Stockholders named therein (filed as Exhibit 2.7 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
2.8 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Orbit/Lightspeed Acquisition
Corp., Orbit/Lightspeed Courier Systems, Inc., NWC Trucking Corp., BMBA,
Inc., O/L Warehousing, Inc. and the Stockholders named therein (filed as
Exhibit 2.8 to the Company's Registration Statement on Form S-1 (File No.
33-97008) and incorporated herein by reference).
2.9 Agreement and Plan of Reorganization, dated as of September 8, 1995, by
and among Consolidated Delivery & Logistics, Inc., Securities Courier
Acquisition Corp., Securities Courier Corporation and the Stockholder named
therein (filed as Exhibit 2.9 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
2.10 Agreement and Plan of Reorganization, dated as of September 8, 1995, by and
among Consolidated Delivery & Logistics, Inc., Silver Star Acquisition
Corp., Silver Star Express, Inc., All World Brokers, Inc., Parcel Delivery
Company of Florida, Inc., Silver Star Express North, Inc. and the
Stockholders named therein (filed as Exhibit 2.10 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
2.11 Agreement and Plan of Reorganization, dated as of September 8, 1995, by
and among Consolidated Delivery & Logistics, Inc., SureWay Air Acquisition
Corp., SureWay Air Traffic Corporation and the Stockholders named therein
(filed as Exhibit 2.11 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
2.12 Amendment, dated as of November 7, 1995, to Agreement and Plan of
Reorganization, dated as of September 8, 1995, by and among Consolidated
Delivery & Logistics, Inc., Click Messenger Acquisition Corp., Click
Messenger Service, Inc., Click Messenger Service of N.Y., Inc., Meteor
Messenger Service, Inc. (t/a Prime time), Cassidy, Ltd., DMK Services,
Ltd. and the Stockholders named therein (filed as Exhibit 2.12 to the
Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
2.13 Amendment, dated as of November 7, 1995, to Agreement and Plan of
Reorganization, dated as of September 8, 1995, by and among Consolidated
Delivery & Logistics, Inc., Clayton/National Acquisition Corp., Clayton/
National Courier Systems, Inc., National Express Company, Inc. and the
Stockholders named therein (filed as Exhibit 2.13 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
2.14 Amendment, dated as of November 7, 1995, to Agreement and Plan of
Reorganization, dated as of September 8, 1995, by and among Consolidated
Delivery & Logistics, Inc., Orbit/Lightspeed Acquisition Corp., Orbit/
Lightspeed Courier Systems, Inc., NWC Trucking Corp., BMBA, Inc., O/L
Warehousing, Inc. and the Stockholders named therein (filed as Exhibit
2.14 to the Company's Registration Statement on Form S-1 (File No.
33-97008) and incorporated herein by reference).
2.15 Amendment, dated as of October 10, 1995, to Agreement and Plan of
Reorganization, dated as of September 8, 1995, by and among
Consolidated Delivery & Logistics, Inc., Securities Courier Acquisition
Corp., Securities Courier Corporation and the Stockholder named therein
(filed as Exhibit 2.15 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
3.1 Second Restated Certificate of Incorporation of Consolidated Delivery &
Logistics, Inc. (filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (File No. 33-97008) and incorporated herein by
reference).
3.2 Amended and Restated By-laws of Consolidated Delivery & Logistics, Inc.
(filed as Exhibit 3.2 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
4.1 Form of certificate evidencing ownership of Common Stock of Consolidated
Delivery & Logistics, Inc. (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
4.2 Instruments defining the rights of holders of the Company's long-term debt
(not filed pursuant to Regulation S-K Item 601((b)(4)(iii); to be furnished
to the Commission upon request).
10.1 Consolidated Delivery & Logistics, Inc. Employee Stock Compensation
Program (filed as Exhibit 10.1 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.2 Consolidated Delivery & Logistics, Inc. 1995 Stock Option Plan for
Independent Directors (filed as Exhibit 10.2 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
10.3 Management Team Agreement dated November 8, 1995, among Consolidated
Delivery & Logistics, Inc. and John Mattei, Joseph Wojak and William
Brannan (filed as Exhibit 10.3 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.4 Employment Agreement, dated as of September 8, 1995, with John Mattei
("Mattei Employment Agreement") (filed as Exhibit 10.5 to the Company's
Registration Statement on Form S-1 (File No. 33-97008) and incorporated
herein by reference).
10.5 Amendment to Mattei Employment Agreement.
10.6 Employment Agreement, dated as of September 8, 1995, with William T.
Brannan (filed as Exhibit 10.6 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.7 Employment Agreement, dated as of September 8, 1995, with Joseph G.
Wojak (filed as Exhibit 10.7 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.8 Employment Agreement, dated as of September 15, 1995, with John Bailey
(filed as Exhibit 10.8 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.9 Employment Agreement, dated as of September 15, 1995, with William
Beaury (filed as Exhibit 10.9 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.10Employment Agreement, dated as of September 15, 1995, with Michael
Berry (filed as Exhibit 10.10 to the Company's Registration Statement
on Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.11Employment Agreement, dated as of September 15, 1995, with Vincent Brana
(filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.12 Employment Agreement, dated as of September 15, 1995, with Michael
Brooks (filed as Exhibit 10.12 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.13Employment Agreement, dated as of September 15, 1995, with Juan Camandona
(filed as Exhibit 10.13 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.14Employment Agreement, dated as of September 15, 1995, with Joseph
Caruvana (filed as Exhibit 10.14 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.15Employment Agreement, dated as of September 15, 1995, with Randall Catlin
(filed as Exhibit 10.15 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.16Employment Agreement, dated as of September 15, 1995, with Martin Galinsky
(filed as Exhibit 10.16 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.17Employment Agreement, dated as of September 15, 1995, with Curtis Hight
(filed as Exhibit 10.17 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.18Employment Agreement, dated as of September 15, 1995, with Norton Hight
(filed as Exhibit 10.18 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.19Employment Agreement, dated as of September 15, 1995, with Rick Katz (filed
as Exhibit 10.19 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.20Employment Agreement, dated as of September 15, 1995, with David Kronick
(filed as Exhibit 10.20 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.21Employment Agreement, dated as of September 15, 1995, with Andrew B.
Kronick (filed as Exhibit 10.21 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.22Employment Agreement, dated as of September 15, 1995, with Howard
Kronick (filed as Exhibit 10.22 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.23Employment Agreement, dated as of September 15, 1995, with Irwin Leibowitz
(filed as Exhibit 10.23 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.24Employment Agreement, dated as of September 15, 1995, with Labe Leibowitz
(filed as Exhibit 10.24 to the Company's Registration Statement on Form
S-1 (File No. 33-97008) and incorporated herein by reference).
10.25Employment Agreement, dated as of September 15, 1995, with John LoPresti
(filed as Exhibit 10.25 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.26Employment Agreement, dated as of September 15, 1995, with Thomas LoPresti
(filed as Exhibit 10.26 to the Company's Registration Statement on Form
S-1 (File No. 33-97008) and incorporated herein by reference).
10.27Employment Agreement, dated as of September 15, 1995, with David Mathia
(filed as Exhibit 10.27 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.28Employment Agreement, dated as of September 15, 1995, with Jack McCorkell
(filed as Exhibit 10.28 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.29Employment Agreement, dated as of September 15, 1995, with Philip Panasci
(filed as Exhibit 10.29 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.30Employment Agreement, dated as of September 15, 1995, with Peter Silver
(filed as Exhibit 10.30 to the Company's Registration Statement on Form
S-1 (File No. 33-97008) and incorporated herein by reference).
10.31Employment Agreement, dated as of September 15, 1995, with Philip
Snyder (filed as Exhibit 10.31 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.32Employment Agreement, dated as of September 15, 1995, with William Starace
(filed as Exhibit 10.32 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.33Employment Agreement, dated as of September 15, 1995, with Kenneth Tunnell,
Jr. (filed as Exhibit 10.33 to the Company's Registration Statement on Form
S-1 (File No. 33-97008) and incorporated herein by reference).
10.34Employment Agreement, dated as of September 15, 1995, with Jeremy Weinstein
(filed as Exhibit 10.34 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.35Employment Agreement, dated as of September 15, 1995, with Robert Wyatt
(filed as Exhibit 10.35 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
10.36Employment Agreement, dated as of September 15, 1995, with Stephen J.
Zrowka (filed as Exhibit 10.36 to the Company's Registration Statement on
Form S-1 (File No. 33-97008) and incorporated herein by reference).
10.37Termination Agreement, dated August 14, 1995, by and between Consolidated
Delivery & Logistics, Inc. and David Lardier (filed as Exhibit 10.37 to
the Company's Registration Statement on Form S-1 (File No. 33-97008) and
incorporated herein by reference).
10.38Share Acquisition Agreement and Release with Victor Samara (filed as
Exhibit 10.38 to the Company's Registration Statement on Form S-1 (File No.
33-97008) and incorporated herein by reference).
10.39Share Acquisition Agreement and Release with the Estate of William Samara
(filed as Exhibit 10.39 to the Company's Registration Statement on Form S-1
(File No. 33-97008) and incorporated herein by reference).
27.1 Financial Data Schedule.
(b) The Company has not filed any reports on Form 8-K during the relevant
period.
<PAGE>
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: May 9, 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)
<PAGE>
INDEX TO EXHIBITS
Exhibits Page
10.5 Amendment to Mattei Employment Agreement 17
27.1 Financial Data Schedule 20
<PAGE>
AMENDMENT TO EMPLOYMENT AGREEMENT
Dated: April 11, 1996
This Amendment amends an Employment Agreement dated as of September 8,
1995 (the "Agreement") by and between Consolidated Delivery & Logistics, Inc.
(the "Company") and John Mattei (the "Executive").
Background. The Executive has served as Chairman of the Board and Chief
Executive Officer of the Company from its inception to date. The Board of
Directors of the Company has determined that it would be preferable for the
Executive to focus his duties on certain functions designated below in his role
as Chairman of the Board of the Company, and that the Executive should not
control day-to-day operations of the Company. The Board has also asked the
Executive to agree to relinquish his title as Chief Executive Officer to
facilitate the engagement by the Board of Directors of the Company of an
individual who can serve as Chief Executive Officer. The parties also desire to
reduce the term of the Agreement and amend the provisions with respect to
severance. Article 16 of the Agreement requires all amendments to be in writing.
The Executive is agreeable to these changes. Accordingly, the Agreement is
modified as follows.
Section 1. Term. The first two sentences of Section 1 of the Agreement are
deleted and amended in their entirety as follows:
"The Company agrees to employ the Executive, and the Executive agrees to be
employed by the Company, upon the terms and conditions hereinafter
provided, for a period commencing on November 27, 1995 (the "Commencement
Date") and, subject to earlier termination pursuant to Section 5 hereof,
continuing until January 3, 1997 (the "Term"). Upon the mutual agreement of
the parties, the Term may be extended for additional one-year terms
thereafter, in which case the "Term" shall be deemed to refer to the term
of this Agreement as so extended."
The parties agree to commence discussions with respect to their intentions on
extension of the Term 45 days prior to the end of the Term.
Section 2. Position and Duties. The first sentence of Section 2 of the
Employment Agreement is deleted in its entirety and replaced by the following:
"During the Term, the Executive agrees to serve as a director and Chairman
of the Board of the Company and will have such powers and duties as are
commensurate with such position and as may be reasonably conferred upon him
by the Board of Directors of the Company (the "Board") and the Executive
Committee of the Board. Such powers and duties shall include being the head
of the Company's mergers and acquisitions department and legal department
(with all people serving in such departments reporting directly to him) and
participation at a senior executive level in all institutional and
shareholder relations, banking and capital raising activities. Further,
until such time as the Board selects a new Chief Executive Officer, the
Executive shall hold the title of Chief Executive Officer of the Company."
The Executive shall report only to the Executive Committee of the Board of
Directors and/or the full Board and shall be subject to the control and
direction of such bodies.
Section 3. The first sentence of Section 3(a) of the Agreement is deleted
and replaced by the following:
(a) The Company shall pay the Executive a fixed salary at the rate of (i)
(A) $200,000 per annum during the initial Term to November 27, 1996 and (B)
$250,000 per annum from November 28, 1996 to January 3, 1997, and (ii)
$250,000 per annum if the Term is extended ("Base Salary").
Section 4. Section 5(a) (i) and (ii) are deleted and replaced by the
following:
(i) In the event the Executive's employment terminates either (a)
during the Term due to a Without Cause Termination or a Constructive
Discharge or (b) at the end of the initial Term (January 3, 1997) or
any extended Term where both parties do not agree to renew the
Agreement and extend the Term pursuant to Section 1 as amended or (c)
by reason of Executive's death, Permanent Disability or retirement
pursuant to the terms of any retirement plan maintained by the Company
(a "Retirement Plan") (but not by reason of a Termination for Cause),
the Company shall, as a death benefit or severance pay, as the case
may be, and subject to the provisions of Section 6 below, pay to the
Executive an amount in cash equal to $600,000, subject to paragraph
(ii) below.
(ii) The Company shall have the election to pay the foregoing sum
in a lump-sum upon termination or in 36 equal monthly installments of
principal commencing on the termination date ($16,667 each) plus
interest at the floating rate of prime plus one per annum, provided
however that the entire balance shall be immediately due and payable
upon any Change of Control (as defined in Section 9) or upon a payment
default by the Company of any monthly installment which continues for
more than five (5) business days after notice is received from the
Executive of non-payment. After such an event of default, the interest
rate on the outstanding balance due shall increase to a floating rate
equal to prime plus 3. Prime shall mean the prime or base rate of
United Jersey Bank or, if different, the Company's principal lender at
the date of default. The sum is also prepayable at the option of the
Company without premium or penalty.
Section 5. Stock Options. The Executive currently holds options to acquire
15,384 shares of the Company's Common Stock pursuant to options granted under
the Company's Employee Stock Compensation Program. Notwithstanding any provision
of his option agreement or the Program, the Company agrees that the term of any
option vested at the date of termination of employment (which shall be deemed to
be not less than 7,692 shares even if termination is at January 3, 1997) shall
not expire until 30 days after all severance or death benefit payments (pursuant
to Section 4 above) have been paid in full. The Executive acknowledges that he
has received advice from independent personal counsel with respect to the tax
impact of this provision.
Section 6. Office. So long as he is the Chairman of the Company and the
Company maintains its present office in Paramus, the Executive shall be entitled
to occupy the same office as he currently occupies and receive the same level of
secretarial and other support services as is provided to any other corporate
executive at CDL. Further, if the office moves during the Term, he shall receive
comparable offices in the new location.
Section 7. Address. Section 10(a) of the Agreement is amended to change the
address of the Company to Mack Centre IV, 61 Paramus Road, Paramus, New Jersey
07652.
Section 8. Legal Fees. The Company shall reimburse the Executive for legal
fees incurred in connection with this Amendment up to $6,500.
Section 9. Indemnification. If there are any legal proceedings initiated
against the Executive after the Term for actions by the Executive occurring in
the course of his employment during the Term so as to entitle him to
indemnification pursuant to the Company's by-laws, he shall be entitled to not
less than equivalent rights with respect to indemnification as any other officer
or director of the Company.
Section 10. Prevailing Party. In any litigation pursuant to this Amendment,
the prevailing party shall be entitled to an award of its reasonable counsel
fees.
Section 11. No Further Changes. Except as set forth herein, there shall be
no other changes in the Agreement. This Amendment shall be effective upon
approval by the Board of Directors of the Company.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer and the Executive has signed this Amendment, all as
of the date first written above.
CONSOLIDATED DELIVERY &
LOGISTICS, INC.
By: /s/ William T. Brannan
____________________________
William T. Brannan,
President
/s/ John Mattei
_____________________________
John Mattei
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<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE> 1
<CASH> 3,020
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<ALLOWANCES> (941)
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<PP&E> 11,329
<DEPRECIATION> (7,176)
<TOTAL-ASSETS> 31,034
<CURRENT-LIABILITIES> 18,806
<BONDS> 2,312
0
0
<COMMON> 7
<OTHER-SE> 8,527
<TOTAL-LIABILITY-AND-EQUITY> 31,034
<SALES> 0
<TOTAL-REVENUES> 40,165
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<INCOME-PRETAX> 385
<INCOME-TAX> 162
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