UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
Quarterlyreport pursuant to Section 13 or 15 (d) of the
X Securities Exchange Act of 1934 For the quarterly period
ended June 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 August 7, 1996 was 6,679,882.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC.
FORM 10-Q/A FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
Page
Part I - Financial Information (unaudited)
Item 1 - Financial Statements
Consolidated Delivery & Logistics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of December 31, 1995, and 1
June 30, 1996
Condensed Consolidated Statements of Operations for the Three and Six 2
Months Ended June 30, 1995 and 1996
Condensed Consolidated Statements of Cash Flows for the Six 3
Months Ended June 30, 1995 and 1996
Notes to Condensed Consolidated Financial Statements 4
Combined Founding Companies
Condensed Combined Statements of Income for the Three and Six 6
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 7
Months Ended June 30, 1995
Notes to Condensed Combined Financial Statements 8
SureWay Air Traffic Corporation and Subsidiary
Condensed Consolidated Statements of Income for the Three and Six 9
Months Ended June 30, 1995
Condensed Consolidated Statement of Cash Flows for the Six 10
Months Ended June 30, 1995
Notes to Condensed Consolidated Financial Statements 11
Securities Courier Corporation
Condensed Statements of Income for the Three and Six Months Ended 12
June 30, 1995
Condensed Statement of Cash Flows for the Six Months Ended 13
June 30, 1995
Notes to Condensed Financial Statements 14
National Courier, Inc. and National Express, Inc.
Condensed Combined Statements of Operations for the Three and Six 15
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six Months 16
Ended June 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 Six 18
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 19
Months Ended June 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 Six 21
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 22
Months Ended June 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 Six 24
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 25
Months Ended June 30, 1995
Notes to Condensed Combined Financial Statements 26
Court Courier Systems, Inc. and Subsidiary
Condensed Consolidated Statements of Operations for the Three and Six 27
Months Ended June 30, 1995
Condensed Consolidated Statement of Cash Flows for the Six 28
Months Ended June 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 Six 30
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 31
Months Ended June 30, 1995
Notes to Condensed Combined Financial Statements 32
Distribution Solutions International, Inc.
Condensed Statements of Operations for the Three and Six Months 33
Ended June 30, 1995
Condensed Statement of Cash Flows for the Six Months Ended 34
June 30, 1995
Notes to Condensed Financial Statements 35
Olympic Courier Systems, Inc. and Related Company
Condensed Combined Statements of Income for the Three and Six 36
Months Ended June 30, 1995
Condensed Combined Statement of Cash Flows for the Six 37
Months Ended June 30, 1995
Notes to Condensed Combined Financial Statements 38
American Courier Express, Inc.
Condensed Statements of Operations for the Three and Six Months 39
Ended June 30, 1995
Condensed Statement of Cash Flows for the Six Months Ended 40
June 30, 1995
Notes to Condensed Financial Statements 41
<PAGE>
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 47
Signature 49
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
<TABLE>
<S> <C> <C>
December 31, 1995 June 30, 1996
------------------ -----------------
(Note 1) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $6,589 $1,778
Accounts receivable, net 18,555 21,889
Prepaid expenses and other current assets 2,312 3,137
------------------ -----------------
Total current assets 27,456 26,804
Equipment and leasehold improvements, net 3,925 4,179
Other assets 1,459 3,891
================== =================
TOTAL ASSETS $32,840 $34,874
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $2,803 $6,511
Current maturities of long-term debt 3,477 1,574
Accounts payable and accrued liabilities 13,634 12,466
------------------ -----------------
Total current liabilities 19,914 20,551
Long-term debt, net of current maturities 3,027 3,743
Other long-term liabilities 1,588 1,312
------------------
-----------------
TOTAL LIABILITIES 24,529 25,606
------------------ -----------------
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 6,679,882 shares issued and
outstanding at December 31, 1995 and June 30, 1996,
respectively 7 7
Additional paid-in capital 8,499 8,901
Retained earnings (accumulated deficit) (195) 360
------------------ -----------------
TOTAL STOCKHOLDERS' EQUITY 8,311 9,268
================== =================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $32,840 $34,874
================== =================
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<S> <C> <C>
For The Three Months Ended For The Six Months Ended
June 30, June 30,
------------------------------------ ------------------------------------
1995 1996 1995 1996
---------------- ---------------- ---------------- ----------------
(Note 2) (Note 2)
REVENUES $0 $41,529 $0 $81,694
Cost of Revenues 0 28,853 0 56,571
---------------- ---------------- ---------------- ----------------
GROSS PROFIT 0 12,676 0 25,123
Selling, General, &
Administrative Expenses 2 12,021 2 23,996
---------------- ---------------- ---------------- ----------------
OPERATING INCOME(LOSS) (2) 655 (2) 1,127
OTHER (INCOME) EXPENSE:
Other income, net 0 (143) 0 (237)
Interest expense 0 226 0 407
---------------- ---------------- ---------------- ----------------
INCOME(LOSS) BEFORE INCOME
TAXES (2) 572 (2) 957
Provision for Income Taxes 0 240 0 402
---------------- ---------------- ---------------- ----------------
NET INCOME(LOSS) $(2) $332 $(2) $555
================ ================ ================ ================
NET INCOME PER SHARE $.05 $.08
================ ================
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,637 6,633
================ ================
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
Six Months Ended Six Months
June 30, 1995 Ended June 30,
(Note 2) 1996
---------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(2) $555
Adjustments to reconcile net income (loss) to net cash
used in operating activities -
Loss on disposal of equipment and leasehold
improvements 0 (1)
Depreciation and amortization 0 792
Changes in operating assets and liabilities
(Increase) decrease in -
Accounts receivable, net 0 (2,794)
Prepaid expenses and other current assets 0 (798)
Other assets 0 266
Increase (decrease) in -
Accounts payable and accrued liabilities 0 (1,460)
Other long-term liabilities 0 (276)
---------------- --------------
Net cash used in operating activities (2) (3,716)
---------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses 0 (1,416)
Proceeds from sale of equipment and leasehold 0 46
improvements
Additions to equipment and leasehold improvements 0 (927)
---------------- --------------
Net cash used in investing activities 0 (2,297)
---------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs 0 (121)
Issuance of common stock in connection with 0 402
purchases of businesses
Short-term borrowings, net 0 2,852
Proceeds from long-term debt 0 1,092
Repayments of long-term debt 0 (3,023)
---------------- --------------
Net cash provided by financing activities 0 1,202
---------------- --------------
Net decrease in cash and cash equivalents (2) (4,811)
CASH AND CASH EQUIVALENTS, beginning of period 2 6,589
---------------- --------------
CASH AND CASH EQUIVALENTS, end of period $0 $1,778
================ ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements
<PAGE>
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 six months ended June 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 for the year
ended December 31, 1995.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation -
The Company completed the acquisition of 11 companies on
November 20, 1995. The Company selected October 1, 1995 as the
effective date of the merger. The assets and liabilities of the
acquired companies at September 30, 1995 were recorded by the Company
at their historical amounts.
The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.
Net Income Per Share -
The computation of consolidated net income per share for the
three and six months ended June 30, 1996, is based upon 6,636,756 and
6,633,163 shares of Common Stock outstanding, respectively. The
conversion of the stock options and the debentures outstanding at June
30, 1996, are not included in the computation as the effect would be
antidilutive.
<PAGE>
(3) BUSINESS COMBINATIONS:
During the three months ended June 30, 1996, the Company
acquired three businesses, accounted for as purchase transactions. The
total consideration paid for these businesses is contingent upon future
activity and is estimated to be $2,700,000 in cash and 50,312 shares of
Common Stock at $8 per share. The excess of purchase price over net
assets acquired is being amortized on a straight line basis over 25
years. Final determination of the individual acquisition costs will be
made by April 1999. The accompanying condensed consolidated financial
statements as of and for the three and six months ended June 30, 1996,
include the allocations of the preliminary purchase prices. Unaudited
pro forma revenue and income data, reflecting the effects of the
acquisitions for the six months ended June 30, 1995 and 1996, as if the
acquisitions were effective on the first day of the year being reported
are set forth below.
For the Six Months Ended June 30,
1995 1996
(In thousands except per share data)
-----------------------------------
Revenues $5,987 $86,287
Net Income (Loss) $(65) $321
Net Income Per Share N.A. $.05
The pro forma results are not necessarily indicative of actual
results which might have occurred had the operations of the Company and
the acquired businesses 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 (formerly United Jersey Bank, N.A.) 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 June 30, 1996, was approximately $12,500,000, of which approximately
$6,000,000 was available for future borrowings. Interest rates on
borrowings are based on margins over the banks lending rates or the
London interbank borrowing rate (Libor). The credit agreement has
certain restrictive covenants, with which the Company was in compliance
at June 30, 1996.
<PAGE>
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $39,698 $73,729
COST OF REVENUES 27,714 51,468
------------- ------------
Gross profit 11,984 22,261
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 10,585 19,637
------------- ------------
Operating income 1,399 2,624
OTHER (INCOME) EXPENSE:
Other income, net (92) (190)
Interest expense 201 395
------------- ------------
INCOME BEFORE INCOME TAXES 1,290 2,419
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 580 1,042
------------- ------------
Net income $710 $1,377
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
COMBINED FOUNDING COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $1,923
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (1,007)
-------------------
Net cash used in investing activities (1,007)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 85
Proceeds from long-term debt 1,619
Repayments of long-term debt (1,802)
Distributions to stockholders (1,441)
-------------------
Net cash used in financing activities (1,539)
-------------------
Net decrease in cash and cash equivalents (623)
CASH AND CASH EQUIVALENTS, beginning of period 2,399
===================
CASH AND CASH EQUIVALENTS, end of period $1,776
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
The following companies are collectively referred to herein as the
"Founding Companies"; American Courier Express, Inc., Bestway Distribution
Systems, Inc., Click Messenger Service, Inc., Court Courier Systems, Inc.,
Distributions Solutions International, Inc., National Courier, Inc., Olympic
Courier Systems, Inc., Orbit/Lightspeed Courier Systems, Inc., Securities
Courier Corporation, Silver Star Express, Inc., and SureWay Air Traffic
Corporation. The Founding Companies are in the business of providing same day
ground and air delivery and logistics services. Simultaneously, with the closing
of Consolidated Delivery & Logistics, Inc's ("CDL") initial public offering in
November 1995, separate wholly-owned subsidiaries of CDL merged with each of the
eleven Founding Companies. All outstanding shares of each Founding Company were
exchanged for cash and shares of CDL's common stock concurrent with the
consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $11,629 $20,806
COST OF REVENUES 7,199 11,779
------------- ------------
Gross profit 4,430 9,027
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,524 7,709
------------- ------------
Operating income 906 1,318
OTHER (INCOME) EXPENSE:
Other (income) expense, net 138 (53)
Interest expense 39 59
------------- ------------
INCOME BEFORE INCOME TAXES 729 1,312
PROVISION FOR INCOME TAXES 499 544
------------- ------------
Net income $230 $768
============= ============
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
SUREWAY AIR TRAFFIC CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $176
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (481)
-------------------
Net cash used in investing activities (481)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (150)
Proceeds from long-term debt 1,416
Repayments of long-term debt (798)
-------------------
Net cash provided by financing activities 468
-------------------
Net increase in cash and cash equivalents 163
CASH AND CASH EQUIVALENTS, beginning of period 285
===================
CASH AND CASH EQUIVALENTS, end of period $448
===================
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
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 six months
ended June 30, 1995, are not necessarily indicative of the results that may be
expected for a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
<PAGE>
SECURITIES COURIER CORPORATION
CONDENSED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $4,262 $8,641
COST OF REVENUES 3,865 7,856
------------- ------------
Gross profit 397 785
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 273 616
------------- ------------
Operating income 124 169
OTHER (INCOME) EXPENSE:
Other income, net (32) (65)
Interest expense 36 88
------------- ------------
INCOME BEFORE INCOME TAXES 120 146
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 20 58
------------- ------------
Net income $100 $88
============= ============
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
SECURITIES COURIER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $611
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances on stockholder loan receivable (12)
Additions to equipment and leasehold improvements (104)
-------------------
Net cash used in investing activities (116)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital lease obligations (232)
Repayments of long-term debt (255)
-------------------
Net cash used in financing activities (487)
-------------------
Net increase in cash and cash equivalents 8
CASH AND CASH EQUIVALENTS, beginning of period 15
===================
CASH AND CASH EQUIVALENTS, end of period $23
===================
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $3,913 $7,705
COST OF REVENUES 1,958 5,075
------------- ------------
Gross profit 1,955 2,630
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,001 2,612
------------- ------------
Operating income (loss) (46) 18
OTHER (INCOME) EXPENSE:
Other (income) expense, net (28) 8
Interest expense 4 41
------------- ------------
LOSS BEFORE INCOME TAXES (22) (31)
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 14 6
------------- ------------
Net loss $(36) $(37)
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
NATIONAL COURIER, INC. AND NATIONAL EXPRESS, INC.
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(207)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (63)
-------------------
Net cash used in investing activities (63)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 185
-------------------
Net cash provided by financing activities 185
-------------------
Net decrease in cash and cash equivalents (85)
CASH AND CASH EQUIVALENTS, beginning of period 85
===================
CASH AND CASH EQUIVALENTS, end of period $0
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $3,367 $6,726
COST OF REVENUES 2,519 5,119
------------- ------------
Gross profit 848 1,607
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 726 1,379
------------- ------------
Operating income 122 228
OTHER (INCOME) EXPENSE:
Other income, net (38) (63)
Interest expense 29 28
------------- ------------
INCOME BEFORE INCOME TAXES 131 263
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 12 108
------------- ------------
Net income $119 $155
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
SILVER STAR EXPRESS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $482
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments on stockholder receivable 36
Advances on notes receivable (26)
Payments on notes receivable 44
Additions to equipment and leasehold improvements (46)
-------------------
Net cash provided by investing activities 8
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (121)
Distributions to stockholders (1,031)
-------------------
Net cash used in financing activities (1,152)
-------------------
Net decrease in cash and cash equivalents (662)
CASH AND CASH EQUIVALENTS, beginning of period 1,329
===================
CASH AND CASH EQUIVALENTS, end of period $667
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $3,975 $5,910
COST OF REVENUES 3,257 4,179
------------- ------------
Gross profit 718 1,731
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 737 1,425
------------- ------------
Operating income (loss) (19) 306
OTHER (INCOME) EXPENSE, net
Other (income), net (145) 0
Interest expense 24 24
------------- ------------
INCOME BEFORE INCOME TAXES 102 282
PRO FORMA PROVISION FOR (BENEFIT FROM) INCOME TAXES (Note 2) (37) 113
------------- ------------
Net income $139 $169
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
CLICK MESSENGER SERVICE, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $214
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (37)
-------------------
Net cash used in investing activities (37)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 16
Payments under capital lease obligations (131)
Distributions to stockholders (28)
-------------------
Net cash used in financing activities (143)
-------------------
Net increase in cash and cash equivalents 34
CASH AND CASH EQUIVALENTS, beginning of period 50
===================
CASH AND CASH EQUIVALENTS, end of period $84
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $2,864 $5,460
COST OF REVENUES 1,867 3,504
------------- ------------
Gross profit 997 1,956
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 931 1,797
------------- ------------
Operating income 66 159
OTHER (INCOME) EXPENSE, net
Other income, net (47) (76)
Interest expense 2 2
------------- ------------
INCOME BEFORE INCOME TAXES 111 233
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 8 95
------------- ------------
Net income $103 $138
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
CROWN COURIER SYSTEMS, INC. & BESTWAY DISTRIBUTION SYSTEMS, INC.
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $205
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements (135)
-------------------
Net cash used in investing activities (135)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Other borrowings 31
Distributions to stockholders (260)
Payments on notes payable to stockholders (60)
-------------------
Net cash used in financing activities (289)
-------------------
Net decrease in cash and cash equivalents (219)
CASH AND CASH EQUIVALENTS, beginning of period 525
===================
CASH AND CASH EQUIVALENTS, end of period $306
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $2,421 $4,824
COST OF REVENUES 1,861 3,804
------------- ------------
Gross profit 560 1,020
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 546 905
------------- ------------
Operating income 14 115
OTHER (INCOME) EXPENSE:
Other (income) expense, net (5) 25
Interest expense 50 118
------------- ------------
LOSS BEFORE INCOME TAXES (31) (28)
PROVISION FOR INCOME TAXES 0 1
------------- ------------
Net loss $(31) $(29)
============= ============
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
COURT COURIER SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS USED IN OPERATING ACTIVITIES: $(55)
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of equipment (5)
-------------------
Net cash used in investing activities (5)
-------------------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from long-term debt 80
Payments on long-term debt (17)
Payments under capital lease obligations (15)
-------------------
Net cash provided by financing activities 48
-------------------
Net decrease in cash and cash equivalents (12)
CASH AND CASH EQUIVALENTS, beginning of period 23
===================
CASH AND CASH EQUIVALENTS, end of period $11
===================
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
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 six months
ended June 30, 1995, are not necessarily indicative of the results that may be
expected for a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
<PAGE>
ORBIT/LIGHTSPEED COURIER SYSTEMS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $2,308 $4,386
COST OF REVENUES 1,404 3,133
------------- ------------
Gross profit 904 1,253
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 727 936
------------- ------------
Operating income 177 317
INTEREST EXPENSE 5 8
------------- ------------
INCOME BEFORE INCOME TAXES 172 309
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 69 124
------------- ------------
Net income $103 $185
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
ORBIT/LIGHTSPEED COURIER SYSTEMS, INC. AND RELATED COMPANIES
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $338
-------------------
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 (100)
Proceeds from long-term debt 109
Distributions to stockholders (150)
Repayments of notes payable (80)
-------------------
Net cash used in financing activities (221)
-------------------
Net increase in cash and cash equivalents 58
CASH AND CASH EQUIVALENTS, beginning of period 71
===================
CASH AND CASH EQUIVALENTS, end of period $129
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $2,487 $4,384
COST OF REVENUES 2,120 3,791
------------- ------------
Gross profit 367 593
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 370 627
------------- ------------
Operating loss (3) (34)
OTHER (INCOME) EXPENSE:
Other expense, net 5 7
Interest expense 2 8
------------- ------------
LOSS BEFORE INCOME TAXES (10) (49)
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 0 0
------------- ------------
Net loss $(10) $(49)
------------- ------------
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
DISTRIBUTION SOLUTIONS INTERNATIONAL, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $166
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of equipment (77)
Increase in stockholder receivable (40)
-------------------
Net cash used in investing activities (117)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (10)
Proceeds from long-term debt 18
Repayments of long-term debt (29)
-------------------
Net cash used in financing activities (21)
-------------------
Net increase in cash and cash equivalents 28
CASH AND CASH EQUIVALENTS, beginning of period 2
===================
CASH AND CASH EQUIVALENTS, end of period $30
===================
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
CONDENSED COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $1,432 $2,897
COST OF REVENUES 757 1,573
------------- ------------
Gross profit 675 1,324
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 621 1,277
------------- ------------
Operating income 54 47
OTHER (INCOME) EXPENSE:
Other expense, net 40 0
Interest expense 7 14
------------- ------------
INCOME BEFORE INCOME TAXES 7 33
PRO FORMA PROVISION FOR INCOME TAXES (Note 2) 3 14
------------- ------------
Net income $4 $19
============= ============
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
OLYMPIC COURIER SYSTEMS, INC. AND RELATED COMPANY
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $49
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES: 0
-------------------
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 36
CASH AND CASH EQUIVALENTS, beginning of period 0
===================
CASH AND CASH EQUIVALENTS, end of period $36
===================
</TABLE>
See accompanying notes to condensed combined financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<S> <C> <C>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1995 1995
------------- ------------
REVENUES $1,040 $1,990
COST OF REVENUES 907 1,655
------------- ------------
Gross profit 133 335
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 129 354
------------- ------------
Operating income (loss) 4 (19)
OTHER (INCOME) EXPENSE:
Other expense, net 20 27
Interest expense 3 5
------------- ------------
LOSS BEFORE INCOME TAXES (19) (51)
PRO FORMA BENEFIT FROM INCOME TAXES (Note 2) (8) (21)
------------- ------------
Net loss $(11) $(30)
============= ============
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
AMERICAN COURIER EXPRESS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<S> <C>
For the Six
Months Ended June
30,
1995
-------------------
(Note 1)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: $(29)
-------------------
CASH FLOWS USED IN INVESTING ACTIVITIES: 0
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 75
Payments under capital lease obligations (14)
Repayments of long-term debt (3)
-------------------
Net cash provided by financing activities 58
-------------------
Net increase in cash and cash equivalents 29
CASH AND CASH EQUIVALENTS, beginning of period 14
===================
CASH AND CASH EQUIVALENTS, end of period $43
===================
</TABLE>
See accompanying notes to condensed financial
statements.
<PAGE>
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 six months ended June
30, 1995, are not necessarily indicative of the results that may be expected for
a full year.
In September 1995, the Company and its stockholders entered into a
definitive agreement with Consolidated Delivery & Logistics, Inc. ("CDL")
pursuant to which the Company merged with CDL. All outstanding shares of the
Company were exchanged for cash and shares of CDL's common stock concurrent with
the consummation of the initial public offering of the common stock of CDL.
(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.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition
Overview
The following discussion of the Company's results of operations and of
its liquidity and capital resources should be read in conjunction with the
Consolidated Financial Statements of the Company and the related notes thereto
appearing elsewhere in this Quarterly Report. Simultaneously, with the closing
of the Company's initial public offering in November 1995, separate wholly-owned
subsidiaries of the Company merged with each of the eleven Founding Companies.
Prior to the Merger, each of the Founding Companies operated as a separate
independent entity. The Company selected October 1, 1995 as the effective date
of the Merger. For the three and six month periods ended June 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.
During the three months ended June 30, 1996, the Company acquired three
businesses, accounted for as purchase transactions. The total consideration paid
for these businesses is contingent upon future activity and is estimated to be
$2,700,000 in cash and 50,312 shares of Common Stock at $8 per share. The excess
of purchase price over net assets acquired is being amortized on a straight line
basis over 25 years.
Noncomparability - 1996 vs. 1995
Because the eleven Founding Companies operated as separate independent
entities prior to the Merger, comparisons between the consolidated results of
the Company for the three and six months ended June 30, 1996, and the historical
results of the eleven Founding Companies for the three and six months ended June
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 unrelated Founding Companies. For example,
a) Olympic, Orbit/Lightspeed and the Manhattan Division of Click were
combined into one Manhattan Division of the Company, b) the balance of
Click, Court and American began the process of consolidating into the
Northeast Division of the Company and c) work was rationalized and
reallocated among the former Founding Companies, such as, for example,
having SureWay take on some of the air courier services formerly performed
by National.
3. The Company had approximately $2,100,000 in expenses in the first half of
1996 ($1,000,000 for the second quarter of 1996) related to corporate
overhead and the costs of being a public company which would not have been
necessary or incurred for the eleven separate companies in 1995.
4. Most of the Founding Companies were operated as Subchapter S corporations
in 1995.
The financial information presented in this report includes a) the
actual financial results of the Company for the three and six months ended June
30, 1995, before it had any material assets or operations, b) the actual
financial results of the Company for the three and six months ended June 30,
1996, c) the actual historical results for each of the Founding Companies for
the three and six months ended June 30, 1995, and d) combined historical results
of the unrelated Founding Companies for the three and six months ended June 30,
1995. For all the reasons set forth above and others, combined results are not
indicative of results which would have been achieved if the Founding Companies
had actually been combined during those periods, and may not be comparable to or
indicative of future performance. Nonetheless, the following section discusses
consolidated 1996 results compared to combined historical 1995 results to
indicate general trends affecting operations, as well as trends within the
material Founding Companies. The following section should be read with the
foregoing caveats as to noncomparability in mind.
Actual Consolidated Six Months Ended June 30, 1996, Compared to Pro Forma
Combined Historical Six Months Ended June 30, 1995
Revenues for the first half of 1996 increased $8.0 million, or
10.8%, to $81.7 million from $73.7 million for the first half of 1995 primarily
as a result of increased air and ground delivery revenues, as well as increases
in revenues in the Company's logistics business. Revenues at National increased
$0.5 million from $7.7 million for the six months ended June 30, 1995 to $8.2
million for the six months ended June 30, 1996. Revenues at Securities Courier
decreased by $210,000 from $8.6 million to $8.4 million while Sureway increased
its revenues by $5.9 million from $20.8 million for the first half of 1995 to
$26.7 million for the first half of 1996. The increase at Sureway resulted from
a growth in its air courier business as well as its logistics business. For the
first half of 1996, ground delivery revenues increased approximately $3.6
million (8.0%), air delivery revenues increased approximately $3.7 million
(17.5%) and logistics revenues increased by approximately $0.7 million (9.1%)
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 half 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 logistics revenues resulting from the loss of several
important project bids during the first quarter of 1996.
Gross profit for the first half of 1996 increased $2.8 million, or
12.6%, to $25.1 million from $22.3 million for the first half of 1995 primarily
as a result of increased air and ground delivery revenues. Gross profit at
Securities Courier increased $0.8 million and at Sureway by $2.6 million for the
first half of 1996 over the first half of 1995. The increase at Securities
Courier is due to a reduction in insurance and payroll due to the increased
purchasing power of the Company. The increase in gross profit at National
Courier of approximately $100,000 was due mainly to increased operating
efficiency. These increases were partially offset by lower margins in the
Company's logistics business as a result of the loss of several project bids as
described above. Gross profit margin for the first half of 1996 increased to
30.8%, as compared to 30.2% for the first half 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 half of 1996 increased $4.4 million, or 22.2%, to
$24.0 million from $19.6 million for the first half of 1995. As a percentage of
revenues, SG&A increased to 29.4% for the first half of 1996 from 26.6% for the
same period of 1995. Approximately $2.3 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 $2.1 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 half of
1996 decreased $1.5 million, or 57.0%, to $1.1 million from $2.6 million for the
same period in 1995. Operating margin decreased to 1.4% in the first half of
1996 from 3.1% for the first half of 1995.
The provision for income taxes for the first half of 1996 decreased
$0.6 million, or 61.5%, to $0.4 million from $1.0 million for the first half of
1995 primarily as a result of a lower level of taxable income.
For the reasons discussed above, net income for the first half of 1996
decreased $0.8 million, or 60.0%, to $0.6 million from $1.4 million for the
first half of 1995.
Actual Consolidated Three Months Ended June 30, 1996, Compared to Pro Forma
Combined Historical Three Months Ended June 30, 1995
Revenues for the second quarter of 1996 increased $1.8 million, or
4.6%, to $41.5 million from $39.7 million for the second quarter of 1995
primarily as a result of increased air and ground delivery revenues. Revenues at
National increased $150,000. Securities Courier revenues remained the same at
$4.3 million while Sureway increased its revenues by $2.1 million to $13.7
million for the second quarter of 1996. The increase at Sureway resulted from
growth in both its air courier and logistics businesses. For the second quarter
of 1996, ground delivery revenues increased approximately $0.8 million (3.5%),
air delivery revenues increased approximately $1.2 million (10.5%) and logistics
revenues decreased by approximately $220,000 (5.0%) over the comparable period
in 1995. The increase in air delivery revenues during the second quarter of 1996
was largely attributable to new customers in the computer hardware and software
industries and to increased demand from existing customers.
Gross profit for the second quarter of 1996 increased $0.7 million, or
5.8%, to $12.7 million from $12.0 million for the second quarter of 1995
primarily as a result of increased air and ground delivery revenues discussed
above.
SG&A for the second quarter of 1996 increased $1.4 million, or 13.2%,
to $12.0 million from $10.6 million for the second quarter of 1995. As a
percentage of revenues, SG&A increased to 28.9% for the second quarter of 1996
from 26.7% for the same period of 1995. 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 second
quarter of 1996 decreased $744,000, or 53.2%, to $655,000 from $1,399,000 for
the same period in 1995.
For the reasons discussed above, net income decreased by $376,000 from
$708,000 for the three months ended June 30, 1995, to $332,000 for the three
months ended June 30, 1996.
Liquidity and Capital Resources
Working capital at June 30, 1996, amounted to $6,253,000, as compared
to $7,542,000 at December 31, 1995. The decrease is primarily attributable to a
decline in net income and changes in current assets and liabilities. During the
six months ended June 30, 1996, net cash used by operating activities was $3.7
million. Cash used in investing activities was $2.3 million, which primarily
consisted of funds used for the acquisitions of three companies during the
second quarter of 1996 and equipment purchases. 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 (formerly United Jersey Bank, N.A.) 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 June
30, 1996, was approximately $12,500,000, of which approximately $6,000,000 was
available for future borrowings. Interest rates on borrowings are based on
margins over the banks lending rates or the London inter-bank borrowing rate
(Libor). The credit agreement has certain restrictive covenants, with which the
Company was in compliance at June 30, 1996.
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 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.
<PAGE>
Part II - OTHER INFORMATION
Item 1 - Legal Proceedings.
The Company and its subsidiaries are from time to time, parties to
litigation arising in the normal course of their business, most of
which involves claims for personal injury and property damage incurred
in connection with their operations. Management believes that none of
these actions will have a material adverse effect on the financial
position or results of operations of the Company and its subsidiaries.
Item 2 - Changes in Securities. Not applicable
Item 3 - Defaults Upon Senior Securities. Not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders.
On June 6, 1996, the Company held its annual meeting of stockholders.
The following sets forth a brief description of each matter which was
acted upon, as well as the votes cast for, against or withheld for each
such matter, and, where applicable, the number of abstentions and
broker non-votes for each matter:
1. Election of Directors
<TABLE>
<S> <C> <C> <C> <C>
Name of Director Votes For Votes Against Authority Withheld
------
John Mattei 5,018,159 -- 1,008,540
------
William T. Brannan 5,955,120 -- 71,579
------
Joseph G. Wojak 5,187,979 -- 838,720
------
William T. Beaury 5,472,940 -- 553, 759
------
Vincent Brana 5,933,450 -- 93,249
------
Michael Brooks 5,954,520 -- 72,179
------
Juan Camandona 4,885,353 -- 1,141,346
------
Curtis Hight 5,894,972 -- 131,727
------
Howard E. Kronick 5,967,555 -- 59,144
------
Labe Leibowitz 5,873,802 -- 152,897
------
Thomas LoPresti 5,476,640 -- 550,059
------
David Mathia 4,923,958 -- 1,102,741
------
Philip Snyder 5,892,672 -- 134,027
------
Robert Wyatt 5,953,020 -- 73,679
------
Stephen J. Zrowka 5,969,955 -- 56,744
------
William M. Kearns, Jr. 5,952,370 -- 74,329
------
Kenneth W. Tunnell 5,955,220 -- 71,479
------
Albert W. Van Ness, Jr. 5,955,220 -- 71,479
</TABLE>
2. Ratification of the selection by the Board of Directors of
Arthur Andersen LLP as the Company's independent auditors for
1996:
Votes For: 5,006,709
Votes Against: 783,494
Abstentions: 236,496
<PAGE>
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)
<PAGE>
Appendix A to Item 601(c) of Regulation S-K
Commercial and Industrial Companies
Article 5 of Regulation S-X
<TABLE>
<S> <C> <C>
Item Number Item Descrition Item Amount
5-02(1) cash and cash items $1,778
5-02(2) marketable securities 0
5-02(3)(a)(1) notes and accounts receivable-trade 23,029
5-02(4) allowance for doubtful accounts (1,140)
5-02(6) inventory 0
5-02(9) total current assets 26,804
5-02(13) property, plant and equipment 11,697
5-02(14) accumulated depreciation (7,518)
5-02(18) total assets 34,874
5-02(21) total current liabilities 20,551
5-02(22) bonds, mortgages and similar debt 0
5-02(28) preferred stock-mandatory redemption 0
5-02(29) preferred stock-no mandatory redemption 0
5-02(30) common stock 7
5-02(31) other stockholders' equity 9,261
5-02(32) total liabilities and stockholders' equity 34,874
5-03(b)1(a) net sales of tangible products 0
5-03(b)1 total revenues 81,694
5-03(b)2(a) cost of tangible goods sold 0
5-03(b)2 total costs and expenses applicable to sales and revenues 56,571
5-03(b)3 other costs and expenses 23,549
5-03(b)5 provision for doubtful accounts and notes 447
5-03(b)(8) interest and amortization of debt discount 407
5-03(b)(10) income before taxes and other items 957
5-03(b)(11) income before taxes 957
5-03(b)(14) income/loss continuing operations 957
5-03(b)(15) discontinued operations 0
5-03(b)(17) extraordinary items 0
5-03(b)(18) cumulative effect-changes in accounting principles 0
5-03(b)(19) net income or loss 555
5-03(b)(20) earnings per share--primary .08
5-03(b)(20) earnings per share--fully diluted $.08
</TABLE>
<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: September 24, 1996 CONSOLIDATED DELIVERY & LOGISTICS, INC.
By:___________________________
Joseph G. Wojak
Executive Vice President, Chief
Financial Officer, Treasurer
and Secretary
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
<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: September 24, 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)
