UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 For the quarterly period
ended June 30, 1998 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.)
380 Allwood Road 07012
Clifton, New Jersey (Zip Code)
(Address of principal executive offices)
(973) 471-1005
(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 4, 1998 was 6,637,517.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1998
INDEX
Page
Part I - Financial Information (unaudited)
Item 1 - Financial Statements
Consolidated Delivery & Logistics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of June 30, 1998 and
December 31, 1997 3
Condensed Consolidated Statements of Income for the Three
and Six Months Ended June 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Part II - Other Information
Item 1 - Legal Proceedings 13
Item 4 - Submission of Matters to a Vote of Security Holders 14
Item 6 - Exhibits and Reports on Form 8-K 15
Signature 16
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share information)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------------- -------------------
(Unaudited) (Note 1)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,281 $1,812
Accounts receivable, net 19,477 21,275
Prepaid expenses and other current assets 2,492 2,992
------------------- -------------------
Total current assets 23,250 26,079
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 5,727 5,667
OTHER ASSETS 4,293 4,403
NONCURRENT ASSETS OF DISCONTINUED
OPERATIONS - 10
------------------- -------------------
Total assets $33,270 $36,159
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $4,500 $7,360
Current maturities of long-term debt 2,475 3,280
Accounts payable and accrued liabilities 13,095 12,868
Net liabilities of discontinued operations 111 52
------------------- -------------------
Total current liabilities 20,181 23,560
LONG-TERM DEBT 2,398 2,240
OTHER LONG-TERM LIABILITIES 1,529 1,745
------------------- -------------------
Total liabilities 24,108 27,545
------------------- -------------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value; 2,000,000 shares
authorized; no shares issued and outstanding - -
Common stock, $.001 par value; 30,000,000 shares
authorized; 6,637,517 and 6,666,884 shares issued
and outstanding at June 30, 1998 and December 31,
1997, respectively 7 7
Additional paid-in capital 9,026 9,026
Treasury stock, 29,367 shares at cost at June 30, 1998 (162) -
Retained earnings (accumulated deficit) 291 (419)
------------------- -------------------
Total stockholders' equity 9,162 8,614
------------------- -------------------
Total Liabilities and stockholders' equity $33,270 $36,159
=================== ===================
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
--------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Revenue $44,592 $41,700 $87,278 $82,109
Cost of revenue 34,347 31,880 67,625 62,948
--------------- ------------- ------------ ---------------
Gross profit 10,245 9,820 19,653 19,161
Selling, general, and
administrative expenses 9,358 9,262 18,181 18,974
--------------- ------------- ------------ ---------------
Operating income 887 558 1,472 187
Other (income) expense:
Gain on sale of subsidiary - - - (816)
Other income, net (91) (119) (171) (214)
Interest expense 234 274 498 518
--------------- ------------- ------------ ---------------
Income from continuing operations
before income taxes 744 403 1,145 699
Provision for income taxes 275 160 435 279
--------------- ------------- ------------ ---------------
Income from continuing operations 469 243 710 420
Loss from discontinued operations,
net of tax - 25 - 91
--------------- ------------- ------------ ---------------
Net Income $469 $218 $710 $329
=============== ============= ============ ===============
Basic income (loss) per share:
Continuing operations $.07 $.04 $.11 $.06
Discontinued operations - (.01) - (.01)
--------------- ------------- ------------ ---------------
Net income per share $.07 $.03 $.11 $.05
=============== ============= ============ ===============
Diluted income (loss) per share:
Continuing operations $.07 $.04 $.10 $.06
Discontinued operations - (.01) - (.01)
--------------- ------------- ------------ ---------------
Net income per share $.07 $.03 $.10 $.05
=============== ============= ============ ===============
Basic weighted average common
shares outstanding 6,653 6,659 6,660 6,682
=============== ============= ============ ===============
Diluted weighted average common
shares outstanding 6,848 6,659 6,824 6,682
=============== ============= ============ ===============
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
-----------------------------
1998 1997
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $710 $329
Adjustments to reconcile net income to net cash provided by
operating activities -
Gain on disposal of equipment and leasehold improvements (11) (10)
Gain on sale of subsidiary - (816)
Depreciation and amortization 1,231 820
Changes in operating assets and liabilities
(Increase) decrease in -
Accounts receivable, net 1,798 1,711
Prepaid expenses and other current assets 339 (694)
Other assets (139) (238)
Increase (decrease) in -
Accounts payable and accrued liabilities 227 329
Other long-term liabilities (216) 80
------------- ------------
Net cash provided by operating activities 3,939 1,511
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment and leasehold improvements 11 26
Additions to equipment and leasehold improvements (1,182) (540)
------------- ------------
Net cash used in investing activities (1,171) (514)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings (repayments), net (2,860) 1,050
Proceeds from long-term debt 150 -
Repayments of long-term debt (658) (643)
Deferred financing costs - (84)
------------- ------------
Net cash (used in) provided by financing activities (3,368) 323
------------- ------------
CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS 69 (488)
------------- ------------
Net (decrease) increase in cash and cash equivalents (531) 832
CASH AND CASH EQUIVALENTS, beginning of period 1,812 1,757
------------- ------------
CASH AND CASH EQUIVALENTS, end of period $1,281 $2,589
============= ============
</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
condensed consolidated balance sheet at December 31, 1997, 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,
1998, are not necessarily indicative of the results that may be
expected for any other interim period or for the year ending December
31, 1998. Certain reclassifications have been made to prior year
amounts to conform with the current presentation, including the
reclassification of the Company's fulfillment and direct mail business
as a discontinued operation (see Note 3). 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,
1997.
(2) SUBORDINATED DEBENTURES:
On April 1, 1998 the Company converted $740,000 of the $2 million of 8%
Subordinated Convertible Debentures (the " 8% Debentures") to 10%
Subordinated Convertible Debentures (the "10% Debentures") and issued
$150,000 of additional 10% Debentures. The 10% Debentures are
convertible into common stock of the Company at a conversion price of
$5.50 per share, accrue interest at 10% per annum which is payable
quarterly, mature on August 21, 2000 and extend the initial repayment
date by one year from August 1998 to August 1999. The 10% Debentures
are redeemable by the Company, in whole or in part, without premium or
penalty at any time on or after August 18, 1999, at their face amount
plus accrued and unpaid interest, if any, to the date of redemption.
The 10% Debentures are redeemable at the option of the holder, in whole
but not in part, without premium or penalty, at any time after August
21, 1999. As a result of the above transaction, the 10% Debentures,
totaling $890,000, have been classified as long-term debt. The
remaining 8% Debentures, totaling $1.26 million are payable in August
1998 and have been classified as current-maturities of long-term debt
in the accompanying condensed consolidated balance sheet as of June 30,
1998.
(3) DISCONTINUED OPERATIONS:
In October 1997, the Company announced its intention to pursue a plan
to dispose of its fulfillment and direct mail business. On December 31,
1997, the Company sold certain assets of its fulfillment and direct
mail business. Accordingly, the financial position and operating
results of the Company's fulfillment and direct mail business have been
segregated from continuing operations and reclassified as a
discontinued operation in the accompanying condensed consolidated
financial statements.
The net assets (liabilities) of discontinued operations are comprised
of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------------------- --------------------
<S> <C> <C>
Current assets $48 $3,829
Current liabilities (159) (3,881)
--------------------- --------------------
Net current liabilities (111) (52)
Equipment and leasehold improvements - 10
--------------------- --------------------
Net liabilities of discontinued operations ($111) ($42)
===================== ====================
</TABLE>
<PAGE>
(4) LITIGATION:
On March 19, 1997, a purported class action complaint, captioned
Gapszewicz v. Consolidated Delivery & Logistics, Inc., et al. (97 Civ.
1939), was filed in the United States District Court for the Southern
District of New York (the "Court") against the Company, certain of the
Company's present and former executive officers, and the co-managing
underwriters of the Company's initial public offering (the "Offering").
The gravamen of the complaint is that the Company's registration
statement for the Offering contained misstatements and omissions of
material fact in violation of the federal securities laws and that the
Company's financial statements included in the registration statement
were false and misleading and did not fairly reflect the Company's true
financial condition. The complaint seeks the certification of a class
consisting of purchasers of the Company's Common Stock from November
21, 1995 through February 27, 1997, rescission of the Offering,
attorneys' fees and other damages. In April 1997, five other complaints
containing allegations identical to the Gapszewicz complaint were filed
in the same federal court against the Company. On May 27, 1997, these
six complaints were consolidated into a single action entitled "In re
Consolidated Delivery & Logistics, Inc. Securities Litigation". On July
16, 1997, the Company and the underwriter defendants filed a motion to
dismiss the complaint. In response, the plaintiffs filed an amended
complaint on October 20, 1997. A motion to dismiss the amended
complaint was filed by the Company and the underwriter defendants on
December 15, 1997. The motion was denied on May 11, 1998. A tentative
settlement has been agreed between the parties subject to the
completion of confirmatory discovery and court approval. The Company
believes the full amount of the settlement will be covered by the
Company's applicable insurance.
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, including the above action, will have a material adverse
effect on the financial position or results of operations of the
Company and its subsidiaries.
(5) EARNINGS PER SHARE:
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS 128"), in the quarter
ended December 31, 1997. SFAS 128 establishes standards for the method
of computation, presentation and disclosure for earnings per share
("EPS") and requires the presentation of basic and diluted EPS.
Previously reported EPS amounts were not affected by the adoption of
this new standard. The conversion of the debentures into common stock
(see Note 2) were antidilutive for 1998 and 1997. The effect of the
stock options were antidilutive for 1997.
A reconciliation of weighted average common shares outstanding to
weighted average common shares outstanding assuming dilution follows
(in thousands) -
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- ------------------------------
1998 1997 1998 1997
--------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Basic weighted average
common shares oustanding 6,653 6,659 6,660 6,682
Effect of dilutive securities:
Stock options 195 - 164 -
--------------- ------------- ------------- ------------
Diluted weighted average
common shares outstanding 6,848 6,659 6,824 6,682
=============== ============= ============= ============
</TABLE>
<PAGE>
(6) SUBSEQUENT EVENTS:
On July 2, 1998, the Company acquired all of the assets and certain
liabilities of Metro Courier Network, Inc. ("Metro"), a provider of
same-day, on-call and scheduled courier services in Massachusetts,
Maine and New Hampshire. The purchase price for the assets was $4.25
million plus contingent payments, consisting of $2.5 million in cash
and a $1.75 million convertible note (the "Note"). The Note will bear
interest at the rate of 7% per annum, with interest payable quarterly,
and is due July 2001. The Note is subordinate to all indebtedness due
or to become due to the Company's senior lender, First Union Commercial
Corporation or its affiliates. The Note is convertible in its entirety
at the option of the holder at any time through July 1, 2001 into fully
paid shares of the Company's common stock at a conversion price of $7
per share. The Note is convertible in its entirety at the option of the
Company when the average closing sales price of the Company's common
stock equals or exceeds $7 per share over a ninety day period. In
addition, a contingent earn out in the aggregate amount of up to $1.5
million is payable to Metro based on the achievement of certain
financial goals by the newly formed division during the two year period
following the closing.
On August 5, 1998, the Company acquired all of the outstanding shares
of the capital stock of KBD Services, Inc. ("KBD"), a ground-based
provider of time critical delivery and scheduled courier services in
North and South Carolina. The purchase price was approximately $4
million consisting of $2.0 million in cash, a $1.46 million 7%
subordinated convertible note (the "KBD Note") and a $500,000 7%
contingent subordinated convertible note (the "Contingent Note"). The
KBD Note is due August 5, 2003 with interest payable quarterly
commencing October 1, 1998 and is convertible in its entirety at the
option of the holder at any time through July 1, 2003 into fully paid
shares of the Company's common stock at a conversion price of $6 per
share. The Company may convert all or any part of the KBD Note into
fully paid shares of the Company's common stock at a conversion price
of $6 per share when the average closing sales price of the Company's
stock equals or exceeds $6 over a thirty day period. The Contingent
Note is subject to a dollar for dollar reduction or discharge if KBD's
earnings before interest and taxes is less than $700,000 for the year
ending July 31, 1999 and is due with interest on the finally determined
principal on November 1, 1999. The holder or the Company may convert
the Contingent Note in its entirety into fully paid shares of the
Company's common stock at a conversion price of $6 after September 16,
1999 through October 20, 1999. The KBD Note and the Contingent Note are
subordinate to all indebtedness due or to become due to the Company's
senior lender, First Union Commercial Corporation or its affiliates.
The above transactions will be accounted for under the purchase method.
(7) NEW ACCOUNTING PRONOUNCEMENTS:
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of
an Enterprise and Related Information" ("SFAS 131"). SFAS 131
introduces a new model for segment reporting, called the "management
approach." The management approach is based on the way that management
organizes segments within a company for making operating decisions and
assessing performance. Reportable segments are based on products and
services, geography, legal structure, management structure - any manner
in which management disaggregates a company. The management approach
replaces the notion of industry and geographic segments in current
accounting standards. SFAS 131 is effective for fiscal years beginning
after December 15, 1997 and early adoption is encouraged. However, SFAS
131 need not be applied to interim statements in the initial year of
application. SFAS 131 requires restatement of all prior period
information reported. The Company intends to adopt this standard when
required and is in the process of determining the effect of SFAS 131 on
the Company's consolidated financial statements.
In March 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 98-1, "Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use." The statement is intended to eliminate
the diversity in practice in accounting for internal-use software costs
and improve financial reporting. The statement is effective for fiscal
years beginning after December 15, 1998. The Company is in the process
of determining the effect of this statement on the Company's
consolidated financial position and results of operations.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The following discussion of the Company's results of operations and of its
liquidity and capital resources should be read in conjunction with the Condensed
Consolidated Financial Statements of the Company and the related Notes thereto
appearing elsewhere herein.
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, the prospects for settlement of litigation, the
ability to lower costs through increased route density, the effects of Year 2000
compliance 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. Actual results may vary from these forward-looking
statements due to many factors including but not limited to: lack of
satisfactory acquisition candidates and/or an inability to conclude acquisitions
on satisfactory terms; acquisition limitations under the terms of the existing
credit facility; inability to obtain acquisition financing on satisfactory
terms, the effect of economic and market conditions, the ability of the Company
to execute its strategic plan, the impact of competition and the Company's
reported results varying materially from management's current expectations.
Investors are further cautioned that the Company's financial results can vary
from quarter to quarter, and the financial results reported for the first six
months may not necessarily be indicative of future results. For more information
about the Company, please review the Company's most recent Form 10-K filed with
the Securities and Exchange Commission.
RESULTS OF OPERATIONS
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
Revenue for the first half of 1998 increased by $5.2 million, or 6.3% to $87.3
million from $82.1 million for the first half of 1997. Revenue in the Company's
ground delivery divisions accounted for the increase primarily due to newly
added customers combined with an expansion of routes with existing customers in
the contract distribution business in the Northeast and Southeast regions. Air
courier revenue remained relatively consistent for the first six months of 1998
and 1997.
Cost of revenue increased by $4.7 million, or 7.5%, to $67.6 million for the
first six months of 1998 from $62.9 million for the first six months of 1997.
The increase in revenue from contract distribution business described above
typically produces higher initial costs, which caused a greater increase in cost
of revenue (7.5%) when compared to the increase in revenue (6.3%). The Company
believes that these costs tend to decrease on a proportionate rate as additional
volume or new contracts are added thereby increasing route density.
Selling, general and administrative expenses decreased by $800,000, or 4.2%, to
$18.2 million from $19.0 million for the first six months of 1998 and 1997,
respectively. The Company's ground delivery divisions contributed $600,00 and
its air delivery division contributed $200,000 of the decrease reflecting the
Company's continuing policy of consolidation and cost reduction.
As a result of the factors discussed above, operating income increased by $1.3
million to $1.5 million from $200,000 for the first six months of 1998 and 1997,
respectively.
Income from continuing operations before income taxes increased by $400,000, or
57.1%, to $1.1 million for the first six months of 1998 from $700,000 in the
first six months of 1997. Income from continuing operations before income taxes
for the first six months of 1997 included a gain of $816,000 recognized on the
disposition of the Company's contract logistics subsidiary.
Three Months ended June 30, 1998 Compared to the Three Months Ended June 30,
1997.
Revenue for the second quarter of 1998 increased by $2.9 million, or 7.0% to
$44.6 million from $41.7 million for the second quarter of 1997. Revenue in the
Company's ground delivery divisions contributed to the increase primarily due to
continuing services to customers added in the first quarter of 1998 combined
with an expansion of routes with existing customers in the contract distribution
business in the Northeast and Southeast regions. Air courier revenue remained
relatively consistent for the three months ended June 30, 1998 and 1997
respectively.
<PAGE>
Cost of revenue increased by $2.4 million, or 7.5%, to $34.3 million for the
three months ended June 30, 1998 from $31.9 million for the three months ended
June 30, 1997. The increase in revenue from contract distribution business
described above typically produces higher initial costs, causing a greater
increase in cost of revenue (7.5%) when compared to the increase in revenue
(7.0%). The Company believes that these costs tend to decrease on a
proportionate rate as additional volume or new contracts are added thereby
increasing route density.
Selling, general and administrative expenses increased by $100,000, or 1.1%, to
$9.4 million from $9.3 million for the three months ended June 30, 1998 and
1997, respectively. The primary contributor to the increase in selling, general
and administrative expense was an increase in sales and marketing salaries
reflecting the Company's expanding sales force.
As a result of the factors discussed above, operating income increased by
$329,000 to $887,000 from $558,000 for the three months ended June 30,1998 and
1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Working capital increased by $600,000 to $3.1 million at June 30, 1998 from $2.5
million at December 31, 1997. Cash and cash equivalents decreased by $500,000 to
$1.3 million at June 30, 1998 from $1.8 million at December 31, 1997. The
decrease in cash is primarily due to a net reduction in Company debt of $3.3
million and the acquisition of equipment and leasehold improvements in the
amount of $1.2 million, which is offset by cash provided from operations in the
amount of $4.0 million.
As of April 1, 1998 the Company converted $740,000 of its $2 million 8%
Subordinated Convertible Debentures to 10% Subordinated Convertible Debentures
and issued an additional $150,000 of the 10% Subordinated Convertible
Debentures. Pursuant to an agreement with the Company's lender, First Union
National Bank, the conversion will not affect availability under the terms of
the Company's credit facility. At June 30, 1998 the Company had $7.0 million
available under its credit facility.
As discussed in Note 6 to the financial statements the Company closed on two
acquisitions, subsequent to June 30, 1998, requiring the use of $2.5 million on
July 2, 1998 and $2.0 million on August 5, 1998, which was financed by
borrowings under the Company's credit facility.
The Company has engaged First Union Capital Markets, a Division of Wheat First
Securities, Inc., as an exclusive placement agent for the proposed sale of $20
million senior subordinated notes to provide additional financing to fund the
Company's anticipated acquisitions for which negotiations are being conducted
currently.
Management believes that cash flows from operations, together with its existing
and anticipated borrowing capacity, as discussed above, are sufficient to
support the Company's operations and general business and liquidity requirements
for the foreseeable future, including anticipated acquisitions.
Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and
Related Information" ("SFAS 131"). SFAS 131 introduces a new model for segment
reporting, called the "management approach." The management approach is based on
the way that management organizes segments within a company for making operating
decisions and assessing performance. Reportable segments are based on products
and services, geography, legal structure, management structure - any manner in
which management disaggregates a company. The management approach replaces the
notion of industry and geographic segments in current accounting standards. SFAS
131 is effective for fiscal years beginning after December 15, 1997 and early
adoption is encouraged. However, SFAS 131 need not be applied to interim
statements in the initial year of application. SFAS 131 requires restatement of
all prior period information reported. The Company intends to adopt this
standard when required and is in the process of determining the effect of SFAS
131 on the Company's consolidated financial statements.
In March, 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." The statement is intended to eliminate the diversity in practice
in accounting for internal-use software costs and improve financial reporting.
The statement is effective for fiscal years beginning after December 15, 1998.
The Company is in the process of determining the effect of this statement on the
Company's consolidated financial position and results of operations.
<PAGE>
Year 2000 Compliance
The Company is currently in the process of evaluating its information technology
infrastructure for the Year 2000 compliance. The Company does not expect that
the cost to modify its information technology infrastructure to be Year 2000
compliant will be material to its financial position or results of operations.
The Company does not anticipate any material disruption in its operations as a
result of any failure by the Company to be in compliance. The Company is in the
process of obtaining information concerning the Year 2000 compliance status of
its suppliers and customers. In the event that any of the Company's significant
suppliers or customers does not successfully and timely achieve Year 2000
compliance, the Company's business or operations could be adversely affected.
Inflation
Inflation has not had a material impact on the Company's results of operations.
<PAGE>
Part II - OTHER INFORMATION
Item 1 - Legal Proceedings.
On March 19, 1997, a purported class action complaint, captioned Gapszewicz v.
Consolidated Delivery & Logistics, Inc., et al. (97 Civ. 1939), was filed in the
United States District Court for the Southern District of New York (the "Court")
against the Company, certain of the Company's present and former executive
officers, and the co-managing underwriters of the Company's initial public
offering (the "Offering"). The gravamen of the complaint is that the Company's
registration statement for the Offering contained misstatements and omissions of
material fact in violation of the federal securities laws and that the Company's
financial statements included in the registration statement were false and
misleading and did not fairly reflect the Company's true financial condition.
The complaint seeks the certification of a class consisting of purchasers of the
Company's Common Stock from November 21, 1995 through February 27, 1997,
rescission of the Offering, attorneys' fees and other damages. In April 1997,
five other complaints containing allegations identical to the Gapszewicz
complaint were filed in the same federal court against the Company. On May 27,
1997, these six complaints were consolidated into a single action entitled "In
re Consolidated Delivery & Logistics, Inc. Securities Litigation". On July 16,
1997, the Company and the underwriter defendants filed a motion to dismiss the
complaint. In response, the plaintiffs filed an amended complaint on October 20,
1997. A motion to dismiss the amended complaint was filed by the Company and the
underwriter defendants on December 15, 1997. The motion was denied on May 11,
1998. A tentative settlement has been agreed between the parties subject to the
completion of confirmatory discovery and court approval. The Company believes
the full amount of the settlement will be covered by the Company's applicable
insurance.
In February 1996, Liberty Mutual Insurance Company ("Liberty Mutual") filed an
action against Securities Courier Corporation, a subsidiary of the Company, Mr.
Vincent Brana and certain other parties in the United States District Court for
the Southern District of New York alleging, among other things, that Securities
Courier had fraudulently obtained automobile liability insurance from Liberty
Mutual in the late 1980s and early 1990s at below market rates. This suit, which
claims common law fraud, fraudulent inducement, unjust enrichment and violations
of the civil provisions of the Federal RICO statute, among other things, seeks
an unspecified amount of compensatory and punitive damages from the defendants,
as well as attorneys' fees and other expenses. Under the terms of its
acquisition of Securities Courier, the Company has certain rights to
indemnification from Mr. Brana. Discovery is currently pending and as a result
the Company is unable to make a determination as to the merits of the claim. The
Company does not believe that an adverse determination in this matter would
result in a material adverse effect on the consolidated financial position or
results of operations of the Company.
The Company is, from time to time, a party to litigation arising in the normal
course of its business, most of which involves claims for personal injury and
property damage incurred in connection with its same-day ground and air delivery
operations. Management believes that none of these actions, including the
actions described above, will have a material adverse effect on the consolidated
financial position or results of operations of the Company.
<PAGE>
Item 4 - Submission of Matters to a Vote of Security Holders.
On June 17, 1998, 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. Ratification of By-law amendment authorizing staggered terms
for the Board of Directors.
Votes For: 3,188,524
Votes Against: 228,778
Abstentions: 18,222
2. Election of Directors.
<TABLE>
<CAPTION>
Name of Director Votes For Authority Withheld
------------------------ ------------- -----------------------
<S> <C> <C>
Class I
Albert W. Van Ness, Jr. 5,676,746 96,370
Labe Leibowitz 5,502,579 270,537
Kenneth W. Tunnell 5,676,846 96,260
Class II
William T. Beaury 5,502,579 270,537
Michael Brooks 5,527,469 245,647
Jon F. Hanson 5,676,846 96,270
Class III
William T. Brannan 5,676,846 96,270
Marilu Marshall 5,676,846 96,270
John S. Wehrle 5,676,846 96,270
</TABLE>
3. Approval of the Employee Stock Purchase Plan.
Votes For: 3,312,365
Votes Against: 58,741
Abstentions: 28,102
4. Approval of the Amendment of the Employee Stock Compensation
Program.
Votes For: 3,264,863
Votes Against: 106,073
Abstentions: 28,272
5. Approval of the Amendments to the Independent Director Stock
Option Plan.
Votes For: 5,601,780
Votes Against: 98,748
Abstentions: 36,272
<PAGE>
6. Ratification of the selection by the Board of Directors of
Arthur Andersen LLP as the Company's independent auditors for
1998.
Votes For: 5,724,955
Votes Against: 37,341
Abstentions: 10,820
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
3.2 Amended and Restated By-laws of Consolidated
Delivery & Logistics, Inc.
27.1 Financial Data Schedule (for electronic submission
only)
(b) Report on Form 8-K filed on July 16, 1998 concerning the
Company's acquisition of all of the assets and certain
liabilities of Metro Courier Network, Inc.
<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: August 14, 1998 CONSOLIDATED DELIVERY & LOGISTICS, INC.
By: /s/ Albert W. Van Ness, Jr.
----------------------------------
Albert W. Van Ness, Jr.
Chairman of the Board, Chief Executive
Officer and Chief Financial Officer
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
<PAGE>
EXHIBIT INDEX
3.2 Amended and Restated By-laws of Consolidated Delivery &
Logistics, Inc.
27.1 Financial Data Schedule (for electronic submission only)
<PAGE>
Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
CONSOLIDATED DELIVERY & LOGISTICS, INC.
(adopted as of September 8, 1995, as amended through November 6, 1997)
ARTICLE I
OFFICES
The principal place of business or office of the Corporation
as well as all branch or subordinate places of business or offices may be
established at any time by the board of directors (the "Board") at any place or
places where the Corporation is qualified to do business or where qualification
is not required.
ARTICLE II
SHAREHOLDERS
2.1. Annual Meeting. -- The annual meeting of Shareholders
shall be held upon not less than ten (10) nor more than sixty (60) days written
notice of the time, place and purposes of the meeting. The meeting shall be held
at the time and at the place determined by the Board. At the meeting, the
Shareholders shall elect Directors and transact any other business that properly
comes before the meeting.
2.2. Special Meetings. -- A special meeting of
Shareholders may be called for any purpose by either the Chairman of the Board
or the Board. The meeting shall be held at the time and at the place determined
by either the Chairman of the Board, or the Board.
2.3. Record Date. -- The Board may fix in advance a
record date for determination of Shareholders entitled to notice of and to vote
at any meeting of Shareholders. The record date shall not be more than sixty
(60) days nor less than ten (10) days before the date of the meeting.
2.4. Notice of Meeting. -- Whenever Shareholders are required
or permitted to take any action at a meeting, a written notice of the meeting
shall be given which shall state the place, date and hour of the meeting, and in
the case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the written notice of any meeting
shall be given personally or by mail, not less than ten (10) nor more than sixty
(60) days before the date of the meeting, to each Shareholder entitled to vote
at such meeting. If mailed, notice shall be deemed given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his address
as it appears on the records of the Corporation.
2.5 Adjournments. -- When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the Corporation may transact any business which might
have been transacted at the original meeting. If, however, the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each Shareholder of record entitled to vote at the meeting. Any
previously scheduled meeting of the Shareholders may be postponed, and unless
the Certificate of Incorporation otherwise provides, any special meeting of the
Shareholders may be canceled by resolution of the Board upon public notice given
prior to the date previously scheduled for such meeting.
2.6. Quorum. -- The presence at a meeting in person or by
proxy of the holders of shares entitled to cast a majority of the votes of all
shares entitled to vote shall constitute a quorum for the purpose of transacting
business. In the absence of a quorum, the presiding officer at the meeting or
the Shareholders present, even though less than a quorum, may adjourn the
meeting to another time and place and, except as provided in the Section 2.5 of
these By-Laws, notice of the adjourned meeting need not be given.
2.7 Presiding Officer and Secretary. -- The Chairman
of the Board, or in his absence the President, shall preside at all Shareholder
meetings. The Secretary, or in his absence the appointee of the presiding
officer of the meeting, shall act as the Secretary of the meeting.
2.8 Vote of Shareholders.
a. Action without a Meeting. -- Whenever the
vote of the holders of shares of any class or series is required or permitted to
be taken for or in connection with any corporate action, the meeting and vote of
such holders may be dispensed with if such action is taken with the written
consent of such holders having a majority of the total number of votes which
might have been cast for or in connection with the proposed corporate action if
a meeting were held; provided that such written consent shall not be given by
holders having less than the minimum percentage of the vote required by statute
for such action, and further provided that prompt notice is given to all such
holders of the taking of corporate action without a meeting and by less than
unanimous written consent.
b. Votes per Share. -- Except as otherwise provided
these By-Laws or by the Certificate of Incorporation, each holder of record of
stock of the Corporation entitled to vote on any matter at any meeting of
Shareholders shall be entitled to one vote for each share of such stock
registered in his name on the stock ledger of the Corporation on the record date
for the determination of the Shareholders entitled to vote at the meeting.
Except as otherwise provided in Section 2.8(d), the method of voting and the
manner in which votes are counted shall be discretionary with the presiding
officer at the meeting.
c. Vote by Proxy. -- Each Shareholder entitled to vote
at a meeting of Shareholders may authorize another person or persons to act for
him by proxy, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless such proxy provides for a longer period.
Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission duly authorizing another to act as
proxy may be substituted or used in lieu of the original writing or transmission
for any and all purposes for which the original writing or transmission could be
used, provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction for the entire original writing or
transmission.
A duly executed proxy shall be irrevocable if it so states and
if, and only as long as it is, coupled with an interest sufficient in law to
support an irrevocable power. A Shareholder may revoke any proxy which is not
irrevocable by attending the meeting in person, by filing an instrument in
writing revoking the proxy or by filing another duly executed proxy bearing a
later date with the Secretary of the Corporation.
d. Election of Directors. -- Whenever Directors are to be
elected at a meeting, they shall be elected by a plurality of the votes cast at
the meeting by the Shareholders entitled to vote thereat. The vote for election
of Directors shall be by written ballot. Whenever any corporate action, other
than the election of Directors, is to be taken by vote of Shareholders at a
meeting, it shall, except as otherwise required by the Certificate of
Incorporation or by these By-Laws, be authorized by a majority of the votes cast
at the meeting by the Shareholders entitled to vote thereat.
2.9 Judges of Election. -- The Board may at any time appoint
two or more persons to serve as judges of election at any meeting of
Shareholders to act as judges and tellers with respect to all votes by ballot at
such meeting. If any judge appointed is absent or refuses to act, or if his
office becomes vacant and is not filled by the Board, the judges then present
may act, provided that such judges constitute a majority of the judges
appointed. Otherwise, if there is a failure to elect or appoint judges, the
presiding officer of the meeting may appoint one or more judges for such
meeting. No Director or Officer of the Corporation shall be eligible for
election or appointment as judge. The judges appointed to act at any meeting of
the Shareholders, before entering upon the discharge of their duties, shall be
sworn faithfully to execute the duties of judges at such meeting with strict
impartiality and according to the best of their ability, and the oath so taken
shall be subscribed by them.
2.10. List of Shareholders Entitled to Vote. -- The Secretary
shall prepare and make, at least ten (10) days before every meeting of
Shareholders, a complete list of Shareholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each Shareholder and
the number of shares registered in the name of each Shareholder. Such list shall
be open to the examination of any Shareholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any Shareholder who is present. The share ledger
shall be the only evidence as to who are the Shareholders entitled to examine
the share ledger, the list of Shareholders or the books of the Corporation, or
to vote in person or by proxy at any meeting of Shareholders.
ARTICLE III
BOARD OF DIRECTORS
3.1 Number and Term of Office - (a) The Board of
Directors shall consist of not less than three (3) nor more than twenty-one (21)
directors, the actual number of which is to be fixed from time to time by the
Board.
(b) The Board shall be divided into three
classes, the members of each class to serve for three years.
The number of directors in each class shall be fixed by the
Board at the time the number of directors is fixed, and the
number of directors in each class shall be as nearly equal as
possible as the then total number of directors constituting
the entire Board permits. This paragraph may only be amended
by the shareholders of the Corporation.
(c) At the annual meeting of stockholders at
which the stockholders approve the provision in the by-laws
authorizing a classified Board, directors of the first class
shall be elected to hold office for a term expiring at the
next succeeding annual meeting of stockholders, directors of
the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting of
stockholders, and directors of the third class shall be
elected to hold office for a term expiring at the third
succeeding annual meeting. At each annual meeting thereafter,
directors shall be elected to fill the directorships of the
class of directors whose terms have expired. Those directors
shall hold office until the third successive annual meeting
after their election and until their successors have been
elected and qualified, so that the term of office of one class
of directors shall expire at each annual meeting.
3.2. Regular Meetings. -- A regular meeting of the Board
shall be held without notice immediately following and at the same place as the
annual Shareholders' meeting for the purpose of electing Officers and conducting
any other business that may come before the meeting. The Board may decide to
have additional regular meetings that may be held without notice.
3.3. Special Meetings. -- A special meeting of the Board may
be called for any purpose at any time by the Chairman or by the Board. The
meeting shall be held upon not less than one (1) day notice if given by
telegram, orally (either by telephone or in person), by same-day courier service
or by facsimile transmission, upon not less than two (2) days notice if given by
overnight courier delivery service, or upon not less than five (5) days notice
if given by depositing the notice in the United States mails, first class
postage prepaid. The notice shall be deemed given at the time it is given
orally, the facsimile transmission is originated (and there is no reason to
believe it was not received), it is delivered to the overnight courier service,
or it is deposited in the United States mails. The notice shall specify the time
and place and may, but need not, specify the purposes of the meeting.
3.4. Action Without Meeting. -- The Board or any committee
thereof may act without a meeting if, prior or subsequent to the action, each
member of the Board or of such committee consents in writing to the action. The
written consent or consents shall be filed with the proceedings of the Board or
committee.
3.5. Use of Communications Equipment. -- Any Director
may participate in a meeting of the Board by means of conference telephone or
any other means of communication by which all persons participating in the
meeting are able to hear each other.
3.6. Quorum; Votes Required. -- The presence at a meeting of
persons entitled to cast a majority of the votes of the entire Board shall
constitute a quorum for the transaction of business. Any action approved by a
majority of the votes of Directors present at a meeting at which a quorum is
present shall be the act of the Board. In the absence of a quorum, the Directors
present may adjourn any meeting from time to time until a quorum is present and
no notice of an adjourned meeting need be given other than by announcement at
the meeting which is being adjourned. At such adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the meeting originally called.
3.7. Vacancies in Board of Directors. -- Any vacancy in the
Board, including a vacancy caused by an increase in the number of Directors, may
be filled by a majority of the votes of the remaining Directors, even though
less than a quorum of the Board, or by a sole remaining Director, and Directors
so chosen shall hold office for a term expiring at the next annual meeting of
Shareholders. No decrease in the number of Directors constituting the Board
shall shorten the term of any incumbent Director.
3.8 Compensation of Directors. -- Directors who are not
Officers of the Corporation shall receive such compensation as may be fixed by
the Board for service on the Board or any committee thereof.
3.9 Removal. -- Any Director or Directors may be removed from
office at any time either with or without by the affirmative vote of (i) the
majority of the holders of voting power of the then outstanding shares of stock
of the Corporation entitled to vote generally in the election of Directors,
voting together as a single class, or (ii) a majority of the Board.
ARTICLE VI
COMMITTEES OF THE BOARD
4.1 Executive Committee. -- The Corporation shall have an
Executive Committee consisting of seven members, including (i) the Chairman of
the Board, the President and the Executive Officer appointed as Chief Financial
Officer, each of whom shall be ex-officio members and (ii) four (4) additional
Directors appointed by the Board. The Chairman of the Board, or in his absence,
the President, shall preside at meetings of the Executive Committee.
The Executive Committee shall exercise such powers as may be
assigned to it by the Board and may consider and make recommendations to the
Board regarding any matters relating to the affairs of the Corporation.
Meetings of the Executive Committee shall be held at such
times and places as the Executive Committee shall determine or upon call of the
Chairman of the Board or the President. One-third of the members of the
Executive Committee, including at least one ex-officio member and at least one
other member, shall constitute a quorum of the Executive Committee for the
transaction of business.
4.2 Other Committees. -- The Board may from time to
time, by resolution adopted by a majority of the whole Board, designate one or
more other committees, each committee to consist of two or more Directors of the
Corporation. Any such committee shall exercise those powers as may be assigned
to it by the Board.
4.3 Committee Rules; Quorum; Manner of Acting. -- Each
committee may adopt rules consistent with these By-Laws governing the method of
calling meetings and determining the time and place for holding such meetings.
One-half of any committee for which a quorum is not otherwise set forth in these
By-Laws shall constitute a quorum for the transaction of business, unless the
Board shall otherwise provide, and the act of a majority of the members of such
committee present at a meeting at which a quorum is present shall be the act of
such committee.
ARTICLE V
WAIVERS OF NOTICE
Any notice required by these By-Laws, by the Certificate of
Incorporation, or by the Delaware General Corporation Law may be waived in
writing by any person entitled to notice. The waiver, or waivers, may be
executed either before or after the event with respect to which the notice is
waived. Each Director or Shareholder attending a meeting without protesting the
lack of proper notice prior to the conclusion of such meeting shall be deemed
conclusively to have waived notice of the meeting.
ARTICLE VI
OFFICERS
6.1. Titles. -- The Corporation shall have the following
Officers: a Chairman of the Board, a President, one or more Vice Presidents,
including Executive Vice Presidents and Senior Vice Presidents, a Secretary and
a Treasurer. In addition, such other Officers as may be appointed by the Board
at any time or from time to time. The Board may by resolution delegate to the
Executive Committee, and to such other Officers as the Board may designate, the
authority (i) to appoint Officers below the level of Executive Vice President or
its equivalent, (ii) to assign powers and duties to any Officer below the level
of Executive Vice President or its equivalent, (iii) to rescind or terminate the
appointment of any Officer below the level of Executive Vice President or its
equivalent, and (iv) to accept the resignation of any Officer. Any one or more
Vice Presidents may be designated Senior Executive Vice President, Executive
Vice President or Senior Vice President. One person may hold any two or more
offices and perform the duties thereof.
6.2 Appointment, Term and Compensation of Officers. -- The
Chairman of the Board and the President shall be appointed by the Board to hold
office until the next annual meeting of the Board and until their successors are
appointed and qualified. The term of office of all other Officers shall be at
the pleasure of the Board. Subject to the terms of any agreement binding on the
Corporation, the compensation of all Officers of the Corporation shall be fixed
by resolution of the Board, except that the Board may authorize the Chairman or
the President to fix the compensation of any person in any official position and
to delegate such authority to any other Officers designated by the Board.
6.3 Duties and Authority of the Chairman of the Board. -- The
Chairman of the Board shall be the Chief Executive Officer of the Corporation.
Subject only to the direction and control of the Board, the Chairman have
general charge and supervision over, and responsibility for, the business and
affairs of the Corporation. Unless otherwise directed by the Board, all other
Officers shall be subject to the authority and supervision of the Chairman. The
Chairman may enter into and execute in the name of the Corporation contracts and
other instruments in the regular course of business which are authorized, either
generally or specifically, by the Board. The Chairman shall have the general
powers and duties of management usually vested in the Chairman of a business
corporation and shall have such other powers and duties as may be prescribed by
the Board.
6.4 Duties and Authority of President. -- In the event of the
Chairman's absence or inability to act, or if the Board has so designated, the
President shall be the Chief Executive Officer of the Corporation. Otherwise,
the President shall be the Chief Operating Officer of the Corporation and shall
be responsible only to the Chairman and to the Board for those areas of
operation of the business and affairs of the Corporation as shall be delegated
to the President by the Board or by the Chairman. Unless otherwise specified by
the Board or by the Chairman, all other Officers of the Corporation (except the
Chairman) shall be subject to the authority and supervision of the President.
The President may enter into and execute in the name of the corporation
contracts or other instruments in the regular course of business that are
authorized, either generally or specifically, by the Board.
6.5 Duties and Authority of Vice Presidents. -- Each Vice
President shall perform the duties and have the authority that may be delegated
to him or her from time to time by the Chairman, by the President or by the
Board. In the absence of the President, or in the event of the President's
death, inability, or refusal to act (unless the Board determines otherwise), the
Vice President designated as successor for these purposes by the Board or, if
there is none, the most Senior Vice President, shall perform the duties and be
vested with the authority of the President.
6.6 Duties and Authority of Treasurer. -- Unless otherwise
designated by the Board, the Treasurer shall be the Chief Financial Officer of
the Company. The Treasurer, or any Assistant Treasurer, shall have custody of
the funds and securities of the corporation and shall keep or cause to be kept
regular books of account for the Corporation. The Treasurer, and each Assistant
Treasurer, shall perform such other duties and possess such other powers as are
incident to their respective offices or as shall be assigned to him or her by
the Chairman, by the President or by the Board.
6.7 Duties and Authority of Secretary. -- The Secretary, or
any Assistant Secretary, shall cause notices of all meetings to be served as
prescribed in these By-Laws and shall keep or cause to be kept the minutes of
all meetings and written consents of the Shareholders and the Board. The
Secretary, and each Assistant Secretary, shall perform such other duties and
possess such other powers as are incident to their respective offices or as
shall be assigned to him or her by the Chairman, by the President or by the
Board.
ARTICLE VII
CAPITAL STOCK AND OTHER SECURITIES
7.1. Issuance of Stock and Other Securities.--Certificates of
any class of capital stock of the Corporation and certificates representing any
other securities of the Corporation shall be signed by the Chairman, the
President, or any Vice President and countersigned by the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer. The signature of
each Officer may be an engraved or printed facsimile. If an Officer or transfer
agent or registrar whose facsimile signature has been placed upon certificates
ceases to hold the official capacity in which he or she signed, the certificates
may continue to be used. The certificates may, but need not, be sealed with the
seal of the Corporation, or a facsimile of the seal. The certificates shall be
countersigned and registered in whatever manner the Board may prescribe.
7.2. Lost, Stolen and Destroyed Certificates.--In case of
lost, stolen or destroyed certificates, new certificates may be issued to take
their place upon receipt by the Corporation of an appropriate affidavit
accompanied by bond of indemnity and under whatever regulations may be
prescribed by the Board. The giving of a bond of indemnity may be waived.
7.3. Transfer of Securities.--The shares of the capital stock
or any other registered securities of the Corporation shall be transferable on
the books of the Corporation by the holder thereof in person or by that person's
authorized agent, or by the transferee, upon surrender for cancellation to the
transfer agent of an outstanding certificate or certificates for the same number
of shares or other security with an assignment and authorization to transfer
endorsed thereon or attached thereto, duly executed, together with such proof of
the authenticity of the signature and of the power of the assignor to transfer
the securities as the Corporation or its agents may require.
7.4. Record Date for Dividends or Rights.--The Board may fix a
record date in advance as of which shares of stock shall be held of record to
entitle a Shareholder to the payment of any dividend, to the allotment of
rights, or to exercise rights in respect to any change, conversion or exchange
of capital stock of the Corporation. The record date shall not precede by more
than sixty (60) days the date of the dividend payment, or the allotment of
rights, or the date when the change, conversion or exchange of capital stock
shall take effect. Only Shareholders of record on the record date shall be
entitled to receive or exercise the rights or benefits when they shall accrue,
notwithstanding any transfer of any stock on the books of the Corporation
subsequent to the record date.
7.5. Issuance of Shares.--Shares of the capital stock of the
Corporation which have been authorized but not issued may be sold or issued from
time to time for such consideration as may be determined by the Board.
ARTICLE VIII
CORPORATE SEAL
The Seal of the Corporation shall be in such form as may be
approved from time to time by the Board and said seal, or a facsimile thereof,
may be imprinted or affixed by any process or in any manner reproduced. The
Secretary and any other Officers authorized by resolution of the Board shall be
empowered to use and attest the corporate seal on all documents.
ARTICLE IX
MISCELLANEOUS
9.1. Inspection of Corporate Records. -- The share register,
or duplicate share register, and minutes of proceedings of the Shareholders
shall be open to inspection for any proper purpose upon the written demand of
any person who has been a Shareholder of record or holder of a voting trust
certificate for at least six months immediately preceding that person's demand,
or any person holding, or so authorized in writing by the holders of, at least
five percent of the outstanding shares of any class. The inspection may be made
at any reasonable time not less than five days after the person has given
written notice of the demand to the Corporation. The inspection may be made in
person or by an agent or attorney and shall include the right to make extracts.
Demand for inspection shall be made in writing upon the President or Secretary
of the Corporation.
9.2. Checks, Drafts, Etc.--All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness, issued in
the name of or payable to the Corporation, shall be signed or endorsed by the
person or persons and in such manner, manually or by facsimile signature, as
shall be determined from time to time by the Board.
9.3. Execution of Contracts.--The Board may authorize any
Officer or Officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation. The authority may be
general or confined to specific instances. No Officer, agent or employee shall
have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable for any purpose or for
any amount unless so authorized by the Board or these By-Laws.
9.4. Voting Shares of Other Corporations.--The Chairman, the
President, or any Vice President are each authorized to vote, represent and
exercise on behalf of this Corporation all rights incident to any and all shares
of stock of any other corporation or corporations standing in the name of this
Corporation. The authority herein granted may be exercised by those Officers
either in person or by proxy or by power of attorney duly executed by the
Officer.
ARTICLE X
AMENDMENTS TO AND EFFECT OF BY-LAWS
10.1. Force and Effect of By-Laws. -- These By-Laws are
subject to the provisions of the Delaware General Corporation Law and the
Corporation's certificate of incorporation, as each may be amended from time to
time. If any provision in these By-Laws is inconsistent with a provision in that
Act or the certificate of incorporation, the provision of that Act or the
certificate of incorporation shall govern.
10.2. Amendments to By-Laws. -- These By-Laws may be
altered, amended, or repealed by the Shareholders or the Board. Any by-law
adopted or amended by the Shareholders may be amended or repealed by the Board,
unless the resolution of the Shareholders adopting the by-law expressly reserves
to the Shareholders the right to amend or repeal it.
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule for the First Quarter 1998
</LEGEND>
<CIK> 0001000779
<NAME> Consolidated Delivery & Logistics, Inc.
<MULTIPLIER> 1,000
<CURRENCY> $1.00
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
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0
0
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