<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
October 15, 1996 (August 9, 1996)
Unidigital Inc.
---------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-27664 13-3856672
- --------------------------------------------------------------------------------
(State of Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
20 West 20th Street, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (zip code)
(212) 337-0330
-----------------------------------
(Registrant's telephone number,
including area code)
-----------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
As reported in the Current Report on Form 8-K dated August 19, 1996
filed by Unidigital Inc. (the "Company"), on August 9, 1996, the Company,
through a wholly-owned subsidiary, consummated the acquisition of certain assets
of Cardinal Communications Group, Inc. ("Cardinal") and C-Max Graphics, Inc.
("C-Max"; C-Max and Cardinal are referred to collectively as the "Seller"),
located in New York City.
The Company hereby files this Amendment No. 1 on Form 8-K/A to file the
financial statements and related pro forma financial statements required
pursuant to Item 7 of Form 8-K with respect to such transaction.
-2-
<PAGE> 3
(a) Financial Information of Business Acquired.
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995
TOGETHER WITH REPORT OF INDEPENDENT AUDITORS
-3-
<PAGE> 4
[MAHONEY COHEN RASHBA & POKART, CPA, PC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Cardinal Communications Group, Inc.
and C-Max Graphics, Inc.
We have audited the accompanying combined balance sheet of Cardinal
Communications Group, Inc. and C-Max Graphics, Inc. as of December 31, 1995, and
the related combined statements of operations and (accumulated deficit) retained
earnings and cash flows for the years ended December 31, 1995 and 1994. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of
Cardinal Communications Group, Inc. and C-Max Graphics, Inc. as of December 31,
1995, and the combined results of their operations and their cash flows for the
years ended December 31, 1995 and 1994 in conformity with generally accepted
accounting principles.
The accompanying combined financial statements have been prepared
assuming that the Companies will continue as going concerns. As discussed in
Note 2 to the combined financial statements, the Companies have suffered
recurring losses from operations and their total liabilities exceed their total
assets. This raises substantial doubt about the Companies' ability to
<PAGE> 5
continue as going concerns. Management's plans in regard to these matters are
also described in Note 2. The combined financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ MAHONEY COHEN RASHBA & POKART, CPA, PC
------------------------------------------
April 25, 1996
<PAGE> 6
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Combined Balance Sheets
<TABLE>
<CAPTION>
ASSETS (Note 4) December 31, May 31,
1995 1996
------------ -----------
(Unaudited)
<S> <C> <C>
Current assets:
Accounts receivable and unbilled jobs,
net of allowance for doubtful accounts
of approximately $50,000 in 1995 and
$72,000 in 1996 $ 2,161,546 $ 1,562,508
Inventory of supplies 118,206 118,206
Other current assets 64,454 44,849
----------- -----------
Total current assets 2,344,206 1,725,563
Property and equipment - at cost, net
(Notes 3, 4 and 5) 3,171,369 2,992,116
Deposits 56,441 32,043
----------- -----------
$ 5,572,016 $ 4,749,722
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Cash overdraft $ 9,385 $ 292,710
Notes payable - bank (Note 4) 1,609,000 1,439,000
Current portion of long-term debt (Note 5) 759,352 725,010
Loan payable - stockholders (Note 6) 175,859 200,859
Accounts payable 1,006,386 825,555
Accrued expenses 343,750 246,120
---------- ----------
Total current liabilities 3,903,732 3,729,254
Long-term liabilities:
Long-term debt, net of current portion (Note 5) 1,869,236 1,584,790
Subordinated debt (Note 6) 140,000 140,000
---------- ----------
Total long-term liabilities 2,009,236 1,724,790
Commitments (Notes 5 and 6)
Stockholders' deficit
Common stock (Note 9) 109,600 109,600
Accumulated deficit (445,552) (808,922)
---------- ----------
(335,952) (699,322)
Less: Treasury stock, 1 share, at cost (Note 9) 5,000 5,000
========== ==========
Total stockholders' deficit (340,952) (704,322)
---------- ----------
$5,572,016 $4,749,722
========== ==========
</TABLE>
See accompanying notes.
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<PAGE> 7
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Combined Statements of Operations and (Accumulated Deficit)
Retained Earnings
<TABLE>
<CAPTION>
Years Ended December 31, Five Months
------------------------- Ended May 31,
1995 1994 1996
----------- ----------- -------------
(Unaudited)
<S> <C> <C> <C>
Net Sales (Note 8) $9,668,125 $9,256,235 $3,393,951
Cost of goods sold 6,076,182 5,708,147 1,970,690
---------- ---------- ----------
Gross profit 3,591,943 3,548,088 1,423,261
Operating expenses:
Selling and shipping 1,716,090 1,560,896 692,182
General and administrative 2,323,578 2,020,864 986,020
---------- ---------- ----------
Total operating expenses 4,039,668 3,581,760 1,678,202
Operating loss (447,725) (33,672) (254,941)
Other expense (income):
Interest expense 445,427 263,044 145,779
Interest and other income (44,247) (22,587) (37,350)
---------- ---------- ----------
Net other expense 401,180 240,457 108,429
---------- ---------- ----------
Net loss (848,905) (274,129) (363,370)
Distributions to stockholders - (56,000) -
Retained earnings (accumulated
deficit), beginning of year 403,353 733,482 (445,552)
---------- ---------- ----------
(Accumulated deficit) retained
earnings, end of period $ (445,552) $ 403,353 $ (808,922)
========== ========== ==========
</TABLE>
See accompanying notes.
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<PAGE> 8
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Combined Statements of Cash Flows
<TABLE>
<CAPTION>
Years Ended December 31, Five Months
------------------------- Ended May 31,
1995 1994 1996
----------- ----------- -------------
(Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (848,905) $ (274,129) $ (363,370)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 512,318 278,624 218,750
Bad debt expense 364,581 85,315 28,785
Deferred income tax benefit - (4,000) -
Change in assets and liabilities:
Accounts receivable and
unbilled jobs (551,306) (52,741) 570,253
Inventory of supplies 7,388 (5,413) -
Other current assets (22,462) 87,184 19,605
Deposits 19,754 (73,714) 24,398
Accounts payable 635,041 119,685 (180,831)
Accrued expenses 22,343 63,031 (97,629)
---------- ---------- ----------
Net cash provided by
operating activities 138,752 223,842 219,961
Cash flows from investing activities:
Cash purchase of property and
equipment and cash used in
investing activities (375,752) (173,433) (39,498)
Cash flows from financing activities:
Cash overdraft 9,385 - 283,325
Proceeds from long-term debt 495,796 250,000 -
Net proceeds from bank 180,000 80,000 -
Principal payments to bank - - (170,000)
Principal payments on long-term debt (639,200) (387,999) (318,788)
Net proceeds from stockholders' loan 160,959 - 25,000
Distributions to stockholders - (56,000) -
---------- ---------- ----------
Net cash provided by (used
in) financing activities 206,940 (113,999) (180,463)
---------- ---------- ----------
Net decrease in cash (30,060) (63,590) -
Cash, beginning of year 30,060 93,650 -
---------- ---------- ----------
Cash, end of period $ - $ 30,060 $ -
========== ========== ==========
</TABLE>
See accompanying notes.
-4-
<PAGE> 9
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Combined Statements of Cash Flows (Concluded)
<TABLE>
<CAPTION>
Supplemental Disclosure of Cash Flow Information
Years Ended December 31, Five Months
------------------------- Ended May 31,
1995 1994 1996
----------- ----------- -------------
(Unaudited)
<S> <C> <C> <C>
Cash paid during the period for:
Interest $443,363 $ 263,044 $161,751
======== ========== ========
Supplemental Schedule of Non-Cash Investing and Financing Activities
Equipment acquired under capital
lease obligations $409,510 $1,480,634 $ -
======== ========== ========
</TABLE>
See accompanying notes.
-5-
<PAGE> 10
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 1 - THE COMPANIES
The combined financial statements include the accounts of Cardinal
Communications Group, Inc. and C-Max Graphics, Inc. (collectively, the
"Companies"). The Companies are affiliated through common stockholders'
interests. In view of the foregoing, the combined financial statements are
deemed to be more meaningful than the separate financial statements of the
respective entities. All material intercompany items and transactions have
been eliminated in combination.
The Companies provide desk top, prepress, design and printing services
primarily to major corporate accounts and publishing companies in the New York
metropolitan area.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying combined financial statements have been prepared
assuming that the Companies will continue as going concerns. The Companies, at
December 31, 1995, have a working capital deficiency of $1,559,526 and a
stockholders' deficiency of $340,952, which raise substantial doubt about their
ability to continue as going concerns. The Companies' ability to continue as
going concerns is dependent upon profitable operations, raising additional
capital and support from their stockholders. The stockholders will continue to
reorganize their business and streamline its operations, as well as monitor
overhead and administrative expenses. The combined financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts and classification of liabilities that
might be necessary should the Companies be unable to continue as going concerns.
USE OF ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
INVENTORY OF SUPPLIES
Inventory of supplies is valued at the lower of cost (first-in,
first-out method) or market.
-6-
<PAGE> 11
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation is computed by
straight-line and accelerated methods over the estimated useful lives of the
assets, ranging from 3 to 33 years.
Leasehold improvements are amortized over the lesser of the term of
the related lease or the estimated useful lives of the assets.
ADVERTISING COSTS
The Companies follow the policy of expensing advertising costs at the
time the advertising takes place. Advertising costs charged to operations for
the years ended December 31, 1995 and 1994 amounted to $62,117 and $83,743,
respectively.
RECLASSIFICATION
Certain 1994 amounts have been reclassified to conform to the
presentation used in 1995.
REVENUE RECOGNITION
Revenue is recognized upon completion of work.
INCOME TAXES
The Companies, with the consent of their stockholders, elected to be
taxed under the provisions of Subchapter S of the Internal Revenue Code. Under
those provisions, corporate income or loss and any tax credits earned are
included in the stockholders' individual income tax returns. Accordingly, no
provision for federal taxes or credits is reflected in the accompanying
combined financial statements. The Companies are subject to New York State
Corporation and New York City General Corporation tax.
CASH FLOWS
The Companies present cash flows under the indirect method by
reconciling net loss to net cash flow.
-7-
<PAGE> 12
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 3 - PROPERTY AND EQUIPMENT
At December 31, 1995, property and equipment consist of:
<TABLE>
<S> <C>
Land $ 36,886
Building and improvements 711,023
Leasehold improvements 524,056
Production and other equipment 2,688,474
Furniture and fixtures 274,694
----------
4,235,133
Property and equipment held under capital leases:
Production equipment 3,372,064
----------
7,607,197
Less: Accumulated depreciation and amortization 4,435,828
----------
$3,171,369
==========
</TABLE>
Note 4 - NOTES PAYABLE - BANK
The Companies have a line of credit with a bank up to $1,500,000, of
which $1,110,000 has been borrowed as of December 31, 1995 and is payable on
demand. In addition, unless demanded earlier, loans payable to the bank of
$499,000 at December 31, 1995 are payable in monthly principal installments of
$10,000 through July 1997. This loan is secured by land and building.
Bank debt is collateralized by substantially all of the assets of the
Companies and guaranteed by their stockholders. Interest is payable monthly at
1% above the bank's prime rate. The current rate charged is 9.5%.
Note 5 - LONG-TERM DEBT
At December 31, 1995, long-term debt consists of:
<TABLE>
<S> <C>
Notes payable - other, in monthly installments
ranging from $5,373 to $6,393, including interest
at rates of 10% to 10-1/2%. These notes mature
on various dates through September 1997 $ 304,698
----------
Total carried forward $ 304,698
----------
</TABLE>
-8-
<PAGE> 13
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 5 - LONG TERM DEBT (CONTINUED)
<TABLE>
<S> <C>
Total brought forward $ 304,698
Mortgage notes, payable in monthly installments
ranging from $285 to $3,733, including interest
at rates ranging from 5-1/2% to 11-1/2%. These
notes mature on various dates through March 2015,
are collateralized by land and building having a
book value of $519,688 and are guaranteed by the
stockholders of the Companies 397,559
Various capital lease obligations secured by
specific equipment having a book value of
$2,371,865, due in monthly installments ranging
from $209 to $20,548, including interest, and
maturing on various dates through April 2000.
Certain of these obligations are guaranteed by
the stockholders of the Companies 1,926,331
----------
2,628,588
Less: Current portion 759,352
----------
Long-term debt, net of current portion $1,869,236
==========
</TABLE>
Cost and accumulated amortization in connection with equipment
acquired under capital lease obligations amounted to $3,372,064 and $1,010,944,
respectively, at December 31, 1995.
-9-
<PAGE> 14
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 3 - LONG-TERM DEBT (CONTINUED)
Maturities of long-term debt, including obligations under capital
leases, are as follows:
<TABLE>
<CAPTION>
Years Ending
December 31,
------------
<S> <C>
1996 $ 927,356
1997 787,135
1998 477,337
1999 408,317
2000 122,813
Thereafter 322,387
----------
3,045,345
Less: Amount representing interest 416,757
----------
$2,628,588
==========
</TABLE>
Note 6 - RELATED PARTY TRANSACTIONS
Loans due to stockholders aggregating $140,000 are subordinated to the
bank debt and are non-interest bearing. The stockholders have agreed not to
request payment before January 1997.
At December 31, 1995, the Companies owed $175,859 to the stockholders
which is non-interest bearing and due on demand.
The Companies rent office and production facilities from their
stockholders on a month-to-month basis. Rent and occupancy expense was
$113,501 and $143,416 in 1995 and 1994, respectively.
Note 7 - PROFIT-SHARING PLAN
The Companies have a 401(k) profit-sharing plan covering all eligible
employees. Contributions to the plan are based on the discretion of the
Companies' management. There were no contributions made in 1995 and 1994.
-10-
<PAGE> 15
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 8 - CONCENTRATION OF RISK
Accounts receivable from trade customers are generally due within 30
days. The Companies perform periodic credit evaluations of their customers'
financial condition and generally do not require collateral. Credit losses
have been within management's expectations.
One customer accounted for approximately 16% of the Companies' net
sales in 1994.
The Companies place their cash with financial institutions. Accounts
at each institution are insured by the Federal Deposit Insurance Corporation up
to $100,000.
Note 9 - STOCKHOLDERS' EQUITY
At December 31, 1995, common stock and treasury stock consisted of the
following:
<TABLE>
<S> <C>
Common stock:
Cardinal Communications Group, Inc., no par value:
Authorized - 200 shares
Issued - 91 shares
Outstanding - 90 shares $109,500
C-Max Graphics, Inc., no par value:
Authorized - 200 shares
Issued and outstanding - 100 shares 100
--------
$109,600
========
Treasury stock:
Cardinal Communications Group, Inc.
1 share, at cost $ 5,000
========
</TABLE>
Note 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Companies' financial instruments at December 31, 1995 consist
primarily of cash, trade accounts receivable and payable, capital leases and
debt instruments. The carrying amounts of cash, trade accounts receivable and
payable are considered to approximate their fair value due to short
maturities. The Companies estimate the carrying value of the debt instruments
approximates their fair value due to the market rate of interest. The fair
value of loans from stockholders and subordinated debt could not be readily
determined, since they are non-interest bearing.
-11-
<PAGE> 16
CARDINAL COMMUNICATIONS GROUP, INC.
AND C-MAX GRAPHICS, INC.
Notes to Combined Financial Statements
Note 11 - INTERIM PERIODS (UNAUDITED)
In the opinion of the Companies, the accompanying unaudited combined
financial statements include all adjustments (which consist only of normal
recurring items) necessary to present fairly the financial position as of May
31, 1996, and the results of operations and cash flows for the five months
ended may 31, 1996. The results for the five months ended May 31, 1996, are
not necessarily indicative of the results to be expected for the year.
-12-
<PAGE> 17
(b) Pro Forma Financial Information (unaudited).
PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Financial Statements are based on the
historical financial statements of the Company, adjusted to give effect to the
acquisition of certain assets of the Seller by the Company. The Pro Forma
Balance Sheet assumes the acquisition occurred as of the most recent balance
sheet date prior to the acquisition date of August 9, 1996. The Pro Forma
Income Statements for the nine months ended May 31, 1996 and the twelve months
ended August 31, 1995 assume that the acquisition occurred as of the first day
of the applicable period.
The pro forma statements should be read in conjunction with the audited
consolidated financial statements of the Company and the related notes thereto
which are included in the Company's Registration Statement on Form SB-2
(Registrations No. 33-99656), the Company's Quarterly Report on Form 10-QSB for
the quarter ended May 31, 1996, the Company's Current Report on Form 8-K dated
August 19, 1996 (each as filed with the Securities and Exchange Commission) and
the audited financial statements of the Seller that are filed herewith.
The pro forma financial information does not purport to present what
the Company's results of operations would actually have been if the acquisition
of the Seller's assets had occurred on the assumed dates, as specified above,
or to project the Company's financial condition or results of operations for
any future period.
-4-
<PAGE> 18
UNIDIGITAL INC.
PRO FORMA COMBINED BALANCE SHEET
MAY 31, 1996
(Assumes 5-31-96 closing date) As reported As reported
<TABLE>
<CAPTION>
ASSETS AND
CARDINAL LIAB. NOT
UNIDIGITAL ACQUISITION FINANCING ACQUIRED COMBINED
---------- ----------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash/cash equivalents 4,765,963 (250,000) 4,515,963
Accounts receivable 3,309,343 1,634,508 (1,634,508) 3,309,343
Allowance for doubtful a/c (137,722) (72,000) 72,000 (137,722)
Ppd exp/other current 497,065 163,055 (44,849) 615,271
---------- --------- --------- ---------- ----------
Total current assets 8,434,649 1,725,563 (250,000) (1,607,357) 8,302,855
PP&E 5,464,839 2,992,116 1,900,000 (800,249) 9,556,706
Acc. Dept. (1,061,398) (1,061,398)
Goodwill 790,851 790,851
Accum. Amort. (408) (408)
Other assets 95,918 32,043 127,961
---------- --------- --------- ---------- ----------
TOTAL ASSETS 13,724,451 4,749,722 1,650,000 (2,407,606) 17,716,567
========== ========= ========= ========== ==========
LIABILITIES & SH EQUITY
Due to banks 1,320,174 1,731,710 1,400,000 (1,731,710) 2,720,174
Current portion of LT debt 157,500 725,010 882,510
Current portion cap lease 709,207 709,207
Current portion bus. acq. 306,323 306,323
AP and accrued 1,259,924 1,071,675 (179,359) 2,152,240
Income taxes payable 533,543 533,543
Loans pay S/H 694,139 200,859 (200,859) 694,139
Def income taxes - current 117,835 117,835
0
LT term bank debt 76,666 1,724,790 (1,000,000) 801,456
Noncurrent cap lease 1,129,455 1,129,455
Def. income taxes - LT 358,000 358,000
---------- --------- --------- ---------- ----------
Total liabilities 6,662,766 5,454,044 1,400,000 (3,111,928) 10,404,882
Common stock 31,500 104,600 392 (104,600) 31,892
FX translation (25,034) (25,034)
PAIC 5,319,480 249,608 5,569,088
R.E. 1,735,739 (808,922) 808,922 1,735,739
---------- --------- --------- ---------- ----------
Total stockholders' equity 7,061,685 (704,322) 250,000 704,322 7,311,685
---------- --------- --------- ---------- ----------
TOTAL EQUITIES 13,724,451 4,749,722 1,650,000 (2,407,606) 17,716,567
========== ========= ========= ========== ==========
</TABLE>
<PAGE> 19
UNIDIGITAL INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED MAY 31, 1996
(Assumes closing date of 9-1-95)
<TABLE>
<CAPTION>
CARDINAL PRO FORMA
UNIDIGITAL ACQUISITION ADJUSTMENTS FINANCING COMBINED
---------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
REVENUES
Net Sales $8,557,322 $6,892,751 $ -- $ -- $15,450,073
OPERATING EXPENSES
Cost of goods sold 3,852,896 3,795,425 -- -- 7,648,321
Selling, general &
administrative 2,577,711 3,431,526 -- 3,750 6,012,987
Total officers comp. 381,484 -- (72,769) -- 308,715
---------- --------- ------- -------- ----------
Total operating expenses 6,812,091 7,226,951 (72,769) 3,750 13,970,023
---------- --------- ------- -------- ----------
Income from operations 1,745,231 (334,200) 72,769 (3,750) 1,480,050
Interest expense (231,591) (343,699) 120,000 (120,000) (575,290)
Interest & other income 61,399 79,925 -- -- 141,324
---------- --------- ------- -------- ----------
Income before tax 1,575,039 (597,974) 192,769 (123,750) 1,046,084
Income tax (906,711) 219,711 278,058 (408,942)
---------- --------- ------- -------- ----------
Net income (loss) $ 668,328 $ (597,974) $412,480 $154,308 $ 637,142
========== ========= ======= ======== ==========
EPS $ 0.21 $ 0.20
========== ==========
WEIGHTED AVG. SHS O/S 3,150,000 39,216 3,189,216
</TABLE>
<PAGE> 20
UNIDIGITAL INC.
PURCHASE PRICE ALLOCATION
ALLOCATION CARRYING
OF PURCHASE VALUE
PRICE REPORTED ADJUSTMENTS
----------- -------- -----------
Current assets $ 118,206 $1,725,563 $(1,607,357)
Property and equipment 2,191,867 2,992,116 (800,249)
Other assets 32,043 32,043 --
--------- --------- -----------
$2,342,116 $4,749,722 $(2,407,606)
Current liabilities $1,992,116 $3,729,254 $(1,737,138)
Long term liabilities 350,000 1,724,790 (1,374,790)
--------- --------- -----------
Net assets 0 (704,322) 704,322
--------- --------- -----------
Stockholders' equity $ 0 $ (704,322) $ 704,322
The preliminary allocation of purchase price may change upon final
determination of the fair value of the assets acquired.
UNIDIGITAL INC.
SOURCES:
Lines of credit $1,400,000
Unidigital equity 250,000
---------
1,650,000
USES:
Cardinal Real Estate
Acquisition:
Cash payment 50,000
Accrued deal costs 200,000
Bank debt repayment 1,400,000
Issuance of Unidigital
stock 250,000
---------
1,900,000
---------
Working capital usage $ (250,000)
=========
<PAGE> 21
UNIDIGITAL INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED AUGUST 31,1995
(Assumes closing date of 9-1-94)
<TABLE>
<CAPTION>
CARDINAL PRO FORMA
UNIDIGITAL* ACQUISITION ADJUSTMENTS FINANCING COMBINED
---------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
REVENUES
Net Sales $8,542,020 $ 9,209,885 $ -- $ -- $17,751,905
OPERATING EXPENSES
Cost of goods sold 3,900,703 6,547,125 -- -- 10,447,828
Selling, general & administrative 2,227,524 3,453,138 -- 5,000 5,685,662
Total officers comp. 719,125 -- -- -- 719,125
--------- ---------- -------- -------- ----------
Total operating expenses 6,847,352 10,000,263 -- 5,000 16,852,615
--------- ---------- -------- -------- ----------
Income from operations 1,694,668 (790,378) -- (5,000) 899,290
Interest expense (194,995) (352,547) 160,000 (160,000) (547,542)
Interest and other income -- 12,139 -- -- 12,139
--------- ---------- -------- -------- ----------
Income before tax 1,499,673 (1,130,786) -- (165,000) 363,887
Income tax (356,000) -- -- 525,815 169,815
--------- ---------- -------- -------- ----------
Net income (loss) $1,143,673 $(1,130,786) $ -- $360,815 $ 533,702
========= ========== ======== ======== ==========
EPS $ 0.36 $ 0.17
========= ==========
WEIGHTED AVG. SHS O/S 3,150,000 39,216 3,189,216
</TABLE>
* Includes operations of Linographics and affiliates.
<PAGE> 22
(c) Exhibits.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10.1 Asset Purchase Agreement dated as of
August 2, 1996 by and among Unidigital
Inc., Unidigital/Cardinal Corporation,
Cardinal Communications Group, Inc.
("Cardinal"), C-Max Graphics, Inc.
("C-Max"; C-Max and Cardinal are
referred to collectively as the
"Seller"), and each of Mark and Sheldon
Darlow, the sole shareholders of the
Seller (included as an exhibit to the
Current Report on Form 8-K of the
Company dated August 19, 1996 and
incorporated by reference herein).
-5-
<PAGE> 23
SIGNATURES
----------
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, hereunto duly authorized.
Unidigital Inc.
By: /s/ Kevin H. Rich
---------------------------------
Kevin H. Rich, Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: October 15, 1996
-6-
