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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) August 5, 1997 (May 22, 1997)
Unidigital Inc.
----------------
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
Delaware 0-27664 13-3856672
- ---------------------------- ------------------------ --------------------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.)
of Incorporation)
</TABLE>
545 West 45th Street, New York, New York 10036
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(212) 397-0800
----------------------------------------------
(Registrant's telephone number, including area code)
20 West 20th Street, New York, New York 10011
------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
As reported in the Current Report on Form 8-K dated June 6, 1997 filed
by Unidigital Inc. (the "Company"), on May 22, 1997, the Company, through its
wholly-owned subsidiary, Elements (UK) Limited, consummated the acquisition of
all of the issued and outstanding capital stock of Libra City Corporate Printing
Limited and its subsidiaries (the "Seller"), a London-based financial printer.
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>
(a) Financial Information of Business Acquired.
LIBRA CITY CORPORATE PRINTING LIMITED
REPORT AND FINANCIAL STATEMENTS
31st DECEMBER 1996
-3-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Directors
F.E. Allen
R.D. Bishop
R. Cort
K. Dellow
Secretary and Registered Office
K. Dellow
Truscott House, 32-42 East Road, London N1 6AD
Auditors
Moore Stephens
Chartered Accountants
St. Paul's House, Warwick Lane, London, EC4P 4BN
Report of the Directors
The directors present their report and the audited financial statements for the
year ended 31st December 1996.
Review of Activities
The principal activity of the group during the year was that of printers. The
directors foresee no significant changes in the future activities of the group.
Review of Performance
The confidence expressed in last year's review regarding the outlook for 1996
has been amply justified by the actual outturn which showed a substantial
improvement on 1995. The current year has started steadily and the directors are
hopeful that the outcome for the year will not be dis-similar to 1996.
Results and Dividends
The group profit after tax amounted to (pound)209,344. A dividend of (pound)4.25
per share amounting to (pound)66,385 was paid during the year. The remaining
balance of (pound) 142,959 is to be transferred to reserves.
-4-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Report of the Directors (Continued)
Directors' Interests
The interests, as defined by the Companies Act 1985, of the directors in the
ordinary share capital of the company during the year were as follows:
Holding at
----------
31st December 31st December
1996 1995
------------- --------------
F.E. Allen 7,263 7,263
R.D. Bishop 704 704
R. Cort - -
K. Dellow 312 312
Charitable Contributions
During the year the group has made contributions of (pound)186 to United Kingdom
charitable organisations, including (pound)100 to the Variety Club of Great
Britain.
Auditors
The auditors, Moore Stephens, are willing to continue in office. A resolution
for their reappointment and authorising the directors to fix their remuneration
will be submitted to the annual general meeting.
By Order of the Board
K. DELLOW
Secretary
-5-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Statement of Directors Responsibilities
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper records which disclose with
reasonable accuracy at any time the financial position of the company and enable
them to ensure that the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the company and hence
for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
-6=
<PAGE>
Report of the Auditors to the Members of
Libra City Corporate Printing Limited
We have audited the financial statements on pages 5 to 16 which have been
prepared under the historical cost convention and the accounting policies set
out on page 8.
Respective Responsibilities of Directors and Auditors
As described on page 3 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
Basis of Opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state
of the affairs of the company and the group at 31st December 1996 and of the
group profit for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
St. Paul's House, MOORE STEPHENS
London, EC4P 4BN
22nd April 1997 Chartered Accountants
Registered Auditor
-7-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Consolidated Profit and Loss Account
For the year ended 31st December 1996
<TABLE>
<CAPTION>
Note 1996 1995
---- ---- ----
<S> <C> <C> <C>
Turnover 1(c),2 3,964,753 3,230,800
Cost of sales 2,735,850 2,333,506
--------- ---------
Gross Profit 1,228,903 897,294
Net operating expenses 899,254 715,451
--------- ---------
Operating Profit 3 329,649 181,843
Interest received 20,725 26,690
Interest payable and similar
charges 5 (37,140) (50,248)
--------- ---------
Profit on Ordinary Activities
before Taxation 313,234 158,285
Taxation on Ordinary Activities 6 103,890 53,245
--------- ---------
Profit on Ordinary Activities
after Taxation 209,344 105,040
Dividends 7 (66,385) (66,385)
--------- ---------
Retained Profit for the
Financial Year (pound) 142,959 (pound) 38,655
========= =========
Summary of Retained Profits
At 1st January 1996 516,201 477,546
Retained profit for the
financial year 142,959 38,655
--------- ---------
At 31st December 1996 (pound) 659,160 (pound) 516,201
========= =========
</TABLE>
The group has no recognised gains or losses other than those included in the
profit and loss account.
-8-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Balance Sheets as at 31st December 1996
(All amounts in pounds)
<TABLE>
<CAPTION>
1996 1995
----------------------- ------------------------
Note Group Company Group Company
---- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C>
Fixed Assets
Tangible assets 9 267,129 267,129 246,423 246,423
Investments 10 -- 1,241,893 -- 1,241,893
---------- ---------- ---------- ----------
267,129 1,509,022 246,423 1,488,316
---------- ---------- ---------- ----------
Current Assets
Stocks 11 154,786 154,786 107,450 107,450
Debtors 12 777,782 777,782 944,232 944,232
Cash at bank and in hand 681,991 681,991 511,661 511,661
---------- ---------- ---------- ----------
1,614,559 1,614,559 1,563,343 1,563,343
Creditors, amounts
falling due within
one year 13 872,653 1,250,718 (923,964) (1,302,029)
---------- ---------- ---------- ----------
Net Current Assets 741,906 363,841 639,379 261,314
---------- ---------- ---------- ----------
Total Assets Less
Current Liabilities 1,009,035 1,872,863 885,802 1,749,630
Creditors, amounts
falling due after
more than one year 13 (62,764) (62,764) (82,490) (82,490)
---------- ---------- ---------- ----------
946,271 1,810,099 803,312 1,667,140
========== ========== ========== ==========
Capital and Reserves
Called up share
capital 15 15,620 15,620 15,620 15,620
Merger reserves 16 271,491 1,313,776 271,491 1,313,776
Profit and loss account 16 659,160 480,703 516,201 337,744
---------- ---------- ---------- ----------
Shareholder funds 21 946,271 1,810,099 803,312 1,667,140
========== ========== ========== ==========
</TABLE>
These financial statements were approved by the Board on 22nd April 1997.
F.E. ALLEN )
) Directors
R. CORT )
-9-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Cash Flow Statement
For the year ended 31st December 1996
<TABLE>
<CAPTION>
Note 1996 1995
---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Cash Inflow from
Operating Activities 17 542,748 325,393
Returns on Investments and
Servicing of Finance
Interest received 20,725 26,690
Interest paid (37,140) (50,248)
Dividends paid (132,770) (12,496)
-------- -------
Net Cash Outflow from
Returns on Investments
and Servicing of Finance (149,185) (36,054)
Corporation Tax Paid
(including A.C.T.) (50,552) (57,997)
Investing Activities
Payments to acquire
fixed assets (51,694) (22,290)
Receipts from sale of
tangible fixed assets 3,850 7,738
------- -------
Net Cash Outflow
from Investing Activities (47,844) (14,552)
------- -------
Net Cash Inflow
before Financing 295,167 216,790
Financing
Capital element of finance
lease rentals 124,837 (115,545)
------- --------
Net Cash Outflow from
Financing 124,837 (115,545)
------- --------
Increase in Cash
and Cash Equivalents 19 (pound) 170,330 (pound) 101,245
======= =======
</TABLE>
-10-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes
Principal Accounting Policies
(a) Basis of accounting
The financial statements have been prepared under the
historical cost convention and in accordance with applicable
accounting standards.
(b) Basis of consolidation
The financial statements incorporate the results of all
subsidiary companies of Libra City Corporate Printing Limited
for the year ended 31st December 1996. All turnover arises
from continuing operations.
(c) Turnover
Turnover represents sales invoiced during the year net of
Value Added Tax.
(d) Goodwill
Goodwill arising on consolidation is written off directly
against reserves.
(e) Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost, less accumulated
depreciation.
Depreciation is calculated to write off the cost of fixed
assets over their estimated useful lives at the following
rates per annum:
Leasehold improvements - over the life of the lease
Plant and machinery - 25% straight line
Office equipment - 10% straight line
Motor vehicles - 33 1/3% straight line
Depreciation is charged both in the year of acquisition and disposal.
(f) Stocks and work in progress
Stocks and work in progress are valued at the lower of cost
and net realisable value after making due allowance for
obsolete and slow moving items. Cost is determined on a first
in first out basis.
(g) Deferred taxation
Provision is made by the liability method for all timing
differences which are expected to be reversed in the
foreseeable future.
(h) Leased assets
Assets held under finance leases are capitalised as tangible
fixed assets at their fair
-11-
<PAGE>
value. Finance charges are allocated to accounting years using the sum
of digits method. Operating lease payments are taken to the profit and
loss account when due.
(i) Pension costs
Contributions to individuals pension schemes are charged to
expenditure as incurred.
-12-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
2. Turnover
The turnover and pre-tax profit are attributable to the principal
activities of the group.
All turnover originated in the United Kingdom.
Turnover has been restated in 1995 to include carriage previously
included in distribution costs.
3. Operating Profit
<TABLE>
<CAPTION>
Operating profit is stated after charging/(crediting): 1996 1995
------ -----
(pound) (pound)
<S> <C> <C>
Directors' emoluments (Note 4) 245,020 197,100
Auditors' remuneration - Audit 16,500 16,500
- Other 2,849 -
Depreciation of fixed assets owned 28,322 16,819
Depreciation of fixed assets leased 110,578 115,730
Profit on disposal of fixed assets (3,204) (11,745)
Hire of equipment 7,714 6,751
========= =========
</TABLE>
4. Directors and Employees
Directors' Emoluments
<TABLE>
<CAPTION>
Staff costs include the following emoluments in
respect of directors of the company: 1996 1995
---- ----
<S> <C> <C>
Fees and salaries 225,000 179,475
Other emoluments, including pension contributions 20,020 17,625
------- -------
(pound) 245,020 (pound) 197,100
======= =======
</TABLE>
Included within fees and salaries is an amount of (pound)10,000 relating to
consultancy services provided by a firm owned by Mr. R. Cort (one of the
directors).
Directors' emoluments, excluding
pension contributions are
as follows:
1996 1995
---- ----
The highest paid director (pound) 106,373 (pound) 85,033
======= ======
-13-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
4. Directors and Employees (Continued)
The number of other directors, whose emoluments were within the ranges was:
1996 1995
------ -----
Number Number
(pound)5,000 -(pound)10,000 1 -
(pound)10,001 -(pound)15,000 - 1
(pound)35,001 -(pound)40,000 - 1
(pound)40,001 -(pound)45,000 1 -
(pound)45,001 -(pound)50,000 1 1
====== ======
Staff Costs
Staff costs during the year were as follows:
1996 1995
---- ----
Wages and salaries 989,496 847,306
Social security costs 95,138 83,685
Other pension costs 38,665 42,891
--------- ------
(pound) 1,123,299 (pound) 973,882
========= =======
The average weekly number of persons employed by the group during the year was
31 (1995 -31).
The company operates a defined contribution pension scheme for
employees. The charge for the year was (pound)39,929; included in the balance
sheet is an accrual for (pound)6,411.
5. Interest Payable
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
On bank loans, overdrafts and other loans
repayable within 5 years by instalments 37,140 50,248
----------- ---------
(pound) 37,140 (pound) 50,248
=========== =========
</TABLE>
6. Tax on Ordinary Activities
<TABLE>
<CAPTION>
1996 1995
------ ----
<S> <C> <C>
United Kingdom corporation tax payable
based on the result for the year as
adjusted for tax purposes at 33%
(1995 - 25%) 105,000 58,000
Overprovision in previous years (1,110) (4,755)
Deferred tax (note 14) - -
----------- -------
(pound) 103,890 (pound) 53,245
========== ======
</TABLE>
-14-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
7. Dividends Paid on the
Ordinary Shares:
1996 1995
------ ----
Final dividended paid of (pound)4.25 per
share (1995(pound)4.25) 66,385 66,385
------ -------
(pound) 66,385 (pound) 66,385
======= =======
8. Profit for the Financial Year
Libra City Corporate Printing Limited has taken advantage of the
Companies Act exemption from presentation of its own profit and loss
account. The result of the holding company for the financial year amounts
to a profit of (pound)142,959 (1995: profit of (pound)38,655).
9. Tangible Fixed Assets
Group and Company
<TABLE>
<CAPTION>
Plant and
Machinery
and Motor Office
Vehicles Equipment Total
-------- --------- -----
<S> <C> <C> <C>
Cost
At 1st January 1996 420,869 87,769 508,638
Additions 26,368 139,084 164,452
Disposals (20,180) - (20,180)
-------- ------- --------
At 31st December 1996 (pound) 426,057 (pound) 226,853 (pound) 652,910
======= ======= =======
Depreciation
At 1st January 1996 233,986 28,229 262,215
Charge for the year 104,868 34,032 138,900
Eliminated on disposals (15,334) - (15,334)
-------- ------ --------
At 31st December 1996 (pound) 323,520 (pound) 62,261 (pound) 385,781
======= ====== =======
Net book value
At 31st December 1996 (pound) 102,537 (pound) 164,592 (pound) 267,129
======= ======= =======
At 31st December 1995 (pound) 186,883 (pound) 59,540 (pound) 246,423
======= ====== =======
</TABLE>
Tangible fixed assets include assets held under finance leases with a net
book value of (pound)186,449 (1995: (pound)197,589).
-15-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
10. Fixed Asset Investments
Company
-------
Investment in subsidiary companies at cost
At 1st January 1996 and at
31st December 1996 (pound) 1,241,893
=========
The interests of Libra City Corporate Printing Limited in subsidiary
companies were:
<TABLE>
<CAPTION>
Proportion Proportion
of ordinary of ordinary
shares held shares held
directly indirectly
----------- -----------
<S> <C> <C>
Libra City Printers Limited 100% -
Libra City Printers (International) Limited - 100%
Libra City (Annual Reports) Limited - 100%
Cityset Communications Limited 100% -
Cityset Printers Limited - 100%
</TABLE>
All of the above companies are incorporated in the United Kingdom, none
of them being listed on a recognised stock exchange.
11. Stocks
Stocks comprise:
Group and company
1996 1995
------ -----
Raw Materials and
consumables 30,664 30,873
Work in progress 124,122 76,577
-------- -------
(pound) 154,786 (pound) 107,450
======= =======
12. Debtors
Group and company
1996 1995
------ -----
Trade debtors 614,226 820,686
Other debtors 132,584 99,276
Prepayments and accrued
income 30,972 24,270
------- -------
(pound) 777,782 (pound) 944,232
======= =======
-16-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
13. Creditors, amounts falling due within
one year
<TABLE>
<CAPTION>
1996 1995
---- ----
Group Company Group Company
----- ------- ----- -------
<S> <C> <C> <C> <C>
Trade creditors 465,404 465,404 558,375 558,375
Owed to group companies - 378,344 - 378,344
Corporation tax 105,000 105,000 54,876 54,876
Dividends payable - - 66,385 66,385
Other taxation and social
security payable 114,189 114,189 67,072 67,072
Accruals 75,115 74,834 70,970 70,691
Obligations under finance
leases 112,947 112,947 106,286 106,286
------- ---------- ------- ----------
(pound) 872,655 (pound)1,250,718 (pound) 923,964 (pound) 1,302,029
======= ========= ======= =========
</TABLE>
Creditors, amounts falling due after more
than one year
<TABLE>
<CAPTION>
Group and company
1996 1995
------ -----
<S> <C> <C>
Obligations under finance
leases 62,764 82,490
------ ------
(pound) 62,764 (pound) 82,490
====== ======
Obligations under finance leases comprise:
Group and company
1996 1995
------ -----
Gross obligations 206,469 226,282
Less future finance
charges payable (30,758) (37,506)
------- -------
(pound) 175,711 (pound) 188,776
======= =======
</TABLE>
-17-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
13. Creditors (Continued)
Net obligations are due as follows:
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C> <C>
Within one year 112,947 106,286
In the second to fifth
years inclusive 62,764 82,490
-------- --------
(pound) 175,711 (pound) 188,776
======= =======
</TABLE>
14. Provisions for Liabilities and charges
Group and company
The movements on the deferred tax account
are as follows:
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C> <C>
Provision at 1st January 1995 - -
Transfer to profit and loss account - -
-------- --------
Provision at 31st December 1995 (pound) - (pound) -
====== ======
15. Called Up Share Capital
1996 1995
------ -----
Authorised, allotted, called up and fully paid:
15,620 ordinary shares of(pound)1 each (pound) 15,620 (pound) 15,620
====== ======
</TABLE>
-18-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
16. Reserves
<TABLE>
<CAPTION>
Profit and
Merger Loss
Reserve Account Total
------- ---------- -----
<S> <C> <C> <C>
Group
At 1st January 1996 271,491 516,201 787,692
Retained profit for the year - 142,959 142,959
--- ------- -------
At 31st December 1996
Company (pound) 271,491 (pound) 659,160 (pound) 930,651
======= ======= =======
At 1st January 1996 1,313,776 337,744 1,651,520
Retained profit for the year - 142,959 142,959
--------- ------- ----------
At 31st December 1996 (pound) 1,313,776 (pound) 480,703 (pound) 1,794,479
========= ======= =========
</TABLE>
17. Reconciliation of Operating Profit to
Net Cash Inflow from Operating Activities
1996 1995
------ -----
Operating profit 329,649 181,843
Depreciation charges 138,900 132,549
Profit on sale of tangible
fixed assets (3,204) (11,745)
Increase in stock (47,336) (36,894)
Decrease/(Increase) in debtors 166,450 (54,657)
Decrease in creditors (41,711) 114,297
------- -------
Net cash inflow from operating
activities (pound) 542,748 (pound) 325,393
======= =======
-19-
<PAGE>
Libra City Corporate Printing Limited
and its Subsidiary Companies
Financial Statements for the year ended 31st December 1996
Notes (Continued)
18. Analysis of Changes in Cash and Cash
Equivalents During the Year
1996 1995
------ -----
Balance at 1st January 1996 511,661 410,416
Net cash inflow 170,330 101,245
------- -------
Balance at 31st December 1996 (pound) 681,991 (pound) 511,661
======= =======
19. Analysis of the Balances of Cash and Cash
Equivalents as Shown in the Balance Sheet
<TABLE>
<CAPTION>
Change
1996 1995 in year
------ ------ -------
<S> <C> <C> <C>
Cash at bank and in hand (pound) 681,991 (pound) 511,661 (pound) 170,330
======= ======= =======
</TABLE>
20. Analysis of Changes in Financing During the Year
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C> <C>
Balance at 1st January 1996 188,776 239,827
Cash outflow from finance lease payments (124,837) (115,547)
Inception of finance lease 111,772 64,496
------- --------
Balance at 31st December 1996 (pound) 175,711 (pound) 188,776
======= =======
21. Reconciliation of Movements in Shareholders Funds
1996 1995
------ -----
Profit for the financial year 209,344 105,040
Dividends (66,385) (66,385)
------- --------
Net increase in shareholders funds 142,959 38,655
Shareholders funds at 31st December 1995 803,312 764,657
------- -------
Shareholders funds at 31st December 1996 (pound) 946,271 (pound) 803,312
======= =======
</TABLE>
-20-
<PAGE>
For Information of Management Only
Libra City Corporate Printing Limited
Trading Profit and Loss Account
For the year ended 31st December 1996
<TABLE>
<CAPTION>
1996 1995
------------------------- ----------------------------
<S> <C> <C> <C> <C>
Sales 3,964,753 3,230,800
Cost of Sales
Opening stock and WIP 107,450 70,556
Wages and salaries 637,764 553,026
Purchases 2,036,381 1,746,725
Repairs to plant and
machinery 17,296 332
Depreciation:
Plant and machinery 84,032 63,566
Hire of plant and
machinery 7,714 6,751
------ ------
2,890,637 2,440,956
Less: Closing stocks
and WIP (154,786) (107,450)
--------- ---------
2,735,851 2,333,506
---------- ----------
Gross Profit 1,228,902 897,294
Selling and Marketing
costs (page 19) 155,924 112,455
Distribution costs
(page 19) (11,321) (49,182)
-------- --------
144,603 63,273
-------- -------
Contribution to Overheads 1,084,299 834,021
Establishment costs
(page 19) 180,812 187,603
Administrative expenses
(page 19) 328,819 267,475
-------- --------
509,631 455,078
-------- --------
Trading Profit 574,668 378,943
Directors Costs
Directors' remuneration 225,000 179,475
Directors' pension
costs 20,020 17,625
------- -------
245,020 197,100
-------- --------
Operating Profit
Carried Forward 329,648 181,843
</TABLE>
-21-
<PAGE>
For Information of Management Only
Libra City Corporate Printing Limited
Trading Profit and Loss Account (Continued)
For the year ended 31st December 1996
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C> <C> <C> <C>
Operating Profit
Brought Forward 329,649 181,843
Other Income and Expenses
Interest receivable (20,725) (26,690)
Lease charges 37,140 50,248
--------- --------
16,415 23,558
--------- --------
Profit before Taxation 313,234 158,285
Taxation (103,890) (53,245)
-------- -------
Profit after Taxation 209,344 105,040
Dividends (66,385) (66,385)
--------- -------
Retained Profit for the
Financial Year (pound) 142,959 (pound) 38,655
======== =======
</TABLE>
-22-
<PAGE>
For Information of Management Only
Libra City Corporate Printing Limited
Trading Profit and Loss Account
For the year ended 31st December 1996 (Continued)
1996 1995
------ -----
Selling and Marketing Costs
Wages and salaries 59,994 54,205
Advertising and publicity 6,499 5,710
Travel and motor expenses 11,300 4,048
Entertaining 73,210 43,570
Bad and doubtful debts 4,921 4,922
------ -----
(pound) 155,924 (pound) 112,455
======= =======
Distribution Costs
Wages and salaries 17,421 18,904
Travel and motor expenses 35,818 29,330
Carriage (less recharges) (64,560) (97,416)
------- -------
(pound) (11,321) (pound) (49,182)
======= =======
Establishment Costs
Rent and rates 14,645 14,961
Repairs and maintenance 38,670 37,630
Cleaning 9,420 5,160
Profit on disposal of fixed assets (3,204) (11,745)
Depreciation 54,900 68,983
Heat and light 14,573 16,253
Insurance 29,430 31,698
General expenses 22,378 24,663
-------- --------
(pound) 180,812 (pound) 187,603
======= =======
Administration Expenses
Wages and salaries 131,495 139,251
Travel and motor expenses 2,833 2,593
Staff pension 18,675 11,266
Printing, postage and stationery 84,308 10,780
Telephone 22,254 39,873
Audit and accountancy 18,275 17,389
Consultancy 10,116 9,770
Legal and professional - 826
Bank charges 723 821
Hire of equipment 8,618 9,351
Health insurance 9,342 11,055
Sundry expenses 18,804 11,632
Subscriptions and membership 3,376 2,868
--------- ---------
(pound) 328,819 (pound) 267,475
======= =======
-23-
<PAGE>
(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 and certain liabilities of the Seller by the
Company. The Pro Forma Income Statements for the nine months ended May 31, 1997
and the twelve months ended August 31, 1996 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 Annual Report on Form 10-KSB for the fiscal
year ended August 31, 1996, the Company's Quarterly Report on Form 10-QSB for
the quarter ended May 31, 1997, the Company's Current Report on Form 8-K dated
June 6, 1997 (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.
-24-
<PAGE>
UNIDIGITAL INC.
Pro Forma Condensed Statement of Operations (Unaudited)
Nine Months Ended May 31, 1997
<TABLE>
<CAPTION>
Unidigital Libra
May 31, 1997 May 31, 1997 Adjustments Pro forma
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales................................. $18,157,668 $ 4,202,018 22,359,686
Cost of sales............................. 9,624,915 3,053,209 12,678,124
Selling, general and
administrative expenses................. 4,784,420 1,270,444(a) 128,962 6,183,826
Corporate expenses........................ 1,233,671 -- 1,233,671
----------- ----------- ------------ -----------
Total operating expenses........... 15,643,006 4,323,653 128,962 20,095,621
=========== =========== ============ ===========
Income from operations.................... 2,514,662 (121,635) (128,962) 2,264,065
Interest expense.......................... 695,660 37,282(b) 441,000 1,173,942
Interest and other income................. (60,792) (21,584) (82,376)
----------- ----------- ------------ -----------
Income before income taxes................ 1,879,794 (137,333) (569,962) 1,172,499
=========== ============ ============= ===========
Income taxes.............................. 634,378 (26,493)(c) (182,388) 425,497
----------- ------------ ------------- -----------
NET INCOME (LOSS)......................... $ 1,245,416 $ (110,840) $ (387,574) $ 747,002
=========== ============ ============= ===========
Net income per common share............... $ 0.39 $ 0.23
=========== ===========
Net income per fully diluted earnings per
share................................... $ 0.38 $ 0.23
=========== ===========
Weighted average number of shares used in
computing earnings per common share....... 3,203,121 3,203,121
=========== ===========
Weighted average number of shares used in
computing fully diluted earnings per
share................................... 3,306,340 3,306,340
=========== ===========
</TABLE>
-25-
<PAGE>
UNIDIGITAL INC.
Pro Forma Condensed Statement of Operations (Unaudited)
Twelve Months Ended August 31, 1996
<TABLE>
<CAPTION>
Unidigital Libra
August 31, 1996 August 31, 1996 Adjustments Pro forma
--------------- --------------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales................................. $11,659,818 $ 6,410,040 18,069,858
Cost of sales............................. 5,621,668 4,305,600 9,927,268
Selling, general and
administrative expenses................. 3,593,302 1,254,240(a) 171,950 5,019,492
Corporate expenses........................ 456,172 -- 456,172
----------- ----------- ------------ -----------
Total operating expenses........... 9,671,142 5,559,840 171,950 15,402,932
=========== =========== ============ ===========
Income from operations.................... 1,988,676 850,200 (171,950) 2,666,926
Interest expense.......................... 326,805 63,960(b) 588,000 978,765
Interest and other income................. (232,397) (35,880) (268,277)
----------- ----------- ------------ -----------
Income before income taxes................ 1,894,268 822,120 (759,950) 1,956,438
=========== =========== ============ ===========
Income taxes.............................. 1,064,327 274,560(c) (243,184) 1,095,703
----------- ----------- ------- -----------
NET INCOME (LOSS)......................... $ 829,941 $ 547,560 $ (516,766) $ 860,735
=========== =========== ============= ===========
Net income per common share............... $ 0.31 $ 0.33
=========== ===========
Net income per fully diluted earnings
per share............................... $ 0.30 $ 0.32
=========== ===========
Weighted average number of shares used in
computing earnings per common share....... 2,643,828 2,643,828
=========== ===========
Weighted average number of shares used in
computing fully diluted earnings per
share................................... 2,725,646 2,725,646
=========== ===========
</TABLE>
-26-
<PAGE>
UNIDIGITAL INC.
Notes to Pro Forma Condensed Consolidated
Financial Statements (Unaudited)
For purposes of determining the pro forma effect of the transaction on
Unidigital's Pro Forma Condensed Statement of Operations for the nine months
ended May 31, 1997 and the fiscal year ended August 31, 1996, respectively, the
following pro forma adjustments have been made:
<TABLE>
<S> <C>
Cash Consideration from Issuance of Five Year Notes Payable $ 3,000,000
Management Bonus Pool $ 410,000
Value of Five Year Warrants to purchase up to 300,000 shares $ 588,000
--------------
Total Consideration $ 3,998,000
==============
Total value of Net Assets Acquired $ 1,418,752
--------------
Goodwill $ 2,579,248
==============
</TABLE>
<TABLE>
<CAPTION>
9 Months Ended Year Ended
May 31, 1997 August 31, 1996
-------------- ---------------
<S> <C> <C>
(a) Amortization of Goodwill over 15 years $ 128,962 $ 171,950
(b) Amortization of financing costs of five year warrants $ 441,000 $ 588,000
(c) Pro Forma Tax Adjustment $ (182,388) $ (243,184)
</TABLE>
-27-
<PAGE>
(c) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
10.1 Share Purchase Agreement by Way of Deed
dated May 22, 1997 by and among
Unidigital Inc., Elements (UK) Limited,
Libra City Corporate Printing Limited,
Francis Allen, Robin Bishop, Kenneth
Dellow, Edward Tylee, Invesco English
and International Trust, and Baronsmead
Investment Trust (included as an exhibit
to the Company's Form 8-K dated June 6,
1997 and incorporated by reference
herein).
-28-
<PAGE>
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/ William E. Dye
----------------------------
William E. Dye, President and
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Michael Brown
------------------------------
Michael Brown, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: August 5, 1997
-29-
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