U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
FORM 10-QSB/A2
(MarkOne)
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended May 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act
For the transition period from __________ to __________
Commission file number 0-27664
UNIDIGITAL INC.
--------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3856672
- ------------------------------- ------------------------------------
State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
229 West 28th Street, New York, New York 10001
----------------------------------------------
(Address of Principal Executive Offices)
(212) 244-7820
---------------------------
(Issuer's Telephone Number,
Including Area Code)
Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes: X No:
---- ----
State the number of shares outstanding of each of the Issuer's classes of
common stock, as of June 30, 1998:
Class Number of Shares
- ----- ----------------
Common Stock, $.01 par value 3,902,634
Transitional Small Business Disclosure Format (check one):
Yes: No: X
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UNIDIGITAL INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements.............................................1
CONSOLIDATED BALANCE SHEETS
as at May 31, 1998 (unaudited)
and August 31, 1997 (audited)........................................2
CONSOLIDATED INCOME STATEMENTS
For the Three Months and Nine
Months Ended May 31, 1998 and May 31, 1997
(unaudited)..........................................................3
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
May 31, 1998 and May 31, 1997
(unaudited)..........................................................4
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)...............................................5
SIGNATURES...................................................................11
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
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<TABLE>
<CAPTION>
UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
May 31, August 31,
1998 1997
-------- ------
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents...................................... $ 162,098 $ 3,202,766
Accounts receivable (less allowance for doubtful
accounts of $553,499 and $266,000 at
May 31, 1998 and August 31, 1997, respectively).............. 14,546,337 9,752,807
Deferred financing costs, net.................................. 1,107,204 463,931
Prepaid expenses............................................... 3,201,952 1,529,664
Other current assets........................................... 3,645,179 765,760
------------- -------------
Total current assets....................................... 22,662,770 15,714,928
Property and equipment, net....................................... 13,807,594 11,899,475
Intangible assets, net............................................ 27,252,774 5,330,923
Other assets...................................................... 342,123 87,964
------------- -------------
Total assets............................................... $ 64,065,261 $ 33,033,290
============= =============
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses.......................... $ 7,258,029 $ 5,181,684
Current portion of capital lease obligations................... 2,230,281 1,998,443
Current portion of long-term debt.............................. 2,942,775 10,018,332
Income taxes payable........................................... 890,412 551,235
Loans and notes payable to stockholders........................ 168,906 154,591
------------- -------------
Total current liabilities.................................. 13,490,403 17,904,285
Capital lease obligations, net of current portion................. 3,275,900 2,875,577
Long-term debt, net of current portion............................ 32,393,333 2,127,796
Deferred income taxes............................................. 543,970 445,000
Loans and notes payable to stockholders, net of current portion... 207,495 207,496
------------- -------------
Total liabilities.......................................... 49,911,101 23,560,154
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STOCKHOLDERS' EQUITY
Preferred stock -- authorized 5,000,000 shares,
$.01 par value each; none issued or outstanding................ -- --
Common stock -- authorized 10,000,000 shares,
$.01 par value each; 3,902,634 and 3,243,243 shares
issued and outstanding at May 31, 1998 and
August 31, 1997, respectively.................................. 39,206 32,432
Additional paid-in capital........................................ 9,814,625 6,291,613
Retained earnings................................................. 4,237,005 3,237,984
Cumulative foreign translation adjustment......................... 63,324 (88,893)
------------- -------------
Total stockholders' equity................................. 14,154,160 9,473,136
------------- -------------
Total liabilities and stockholders' equity................. $ 64,065,261 $ 33,033,290
============= =============
</TABLE>
The Notes to Consolidated Financial Statements are made a part hereof.
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<TABLE>
<CAPTION>
UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED INCOME STATEMENTS
------------------------------
(unaudited)
Three Months Ended, Nine Months Ended,
------------------- ------------------
May 31, May 31, May 31, May 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net sales................................... $13,994,679 $7,664,033 $32,845,094 $18,157,668
----------- ---------- ----------- -----------
Expenses
Cost of sales............................... 7,692,922 4,239,289 17,597,651 9,624,915
Selling, general and
administrative expenses ................. 4,203,955 2,273,727 10,943,509 6,018,091
Expenses incurred due to restructuring...... 246,930 -- 246,930 --
----------- ----------- ------------ -----------
Total operating expenses.................... 12,143,807 6,513,016 28,788,090 15,643,006
----------- ----------- ----------- -----------
Income from operations...................... 1,850,872 1,151,017 4,057,004 2,514,662
Interest expense............................ 840,208 396,921 1,388,359 695,660
Interest expense - deferred financing costs. 219,583 -- 695,721 --
Interest and other expenses (income)........ 40,670 (67,175) 126,604 (60,792)
----------- ----------- ----------- ------------
Income before income taxes.................. 750,411 821,271 1,846,320 1,879,794
Provision for income taxes.................. 306,815 281,162 704,299 634,378
----------- ----------- ----------- -----------
Net income before extraordinary item........... 443,596 540,109 1,142,021 1,245,416
Extraordinary item-loss on early retirement of
debt (net of income tax benefit of $137,000) (143,000) -- (143,000) --
----------- ----------- ----------- ----------
Net income..................................... $ 300,596 $ 540,109 $ 999,021 $ 1,245,416
=========== ============ =========== ===========
Basic earnings (loss) per common share:
Earnings before extraordinary item.......... $ 0.12 $ 0.17 $ 0.34 $ 0.39
Extraordinary item.......................... (0.04) -- (0.04) --
----------- ------------ ----------- -----------
Net income.................................. $ 0.08 $ 0.17 $ 0.30 $ 0.39
=========== ============ =========== ===========
Diluted earnings (loss) per common share:
Earnings before extraordinary item.......... $ 0.11 $ 0.17 $ 0.31 $ 0.39
Extraordinary item.......................... (0.04) -- (0.04) --
----------- ------------ ----------- -----------
Net income.................................. $ 0.07 $ 0.17 $ 0.27 $ 0.39
=========== ============ =========== ===========
Shares used to compute net income per share:
Basic....................................... 3,724,459 3,228,083 3,403,721 3,203,121
=========== =========== =========== ===========
Diluted..................................... 4,036,427 3,253,163 3,640,752 3,217,789
=========== =========== =========== ===========
</TABLE>
The Notes to Consolidated Financial Statements are made a part hereof.
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<TABLE>
<CAPTION>
UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(unaudited)
Nine Months Ended,
---------------------------
May 31, May 31,
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 999,021 $ 1,245,416
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization............................ 2,684,088 1,346,217
Provision for deferred income taxes...................... 91,069 (73,530)
Provision for bad debts.................................. 31,600 77,182
Net changes in assets and liabilities net of effects of
businesses acquired:
Accounts receivable...................................... (3,272,035) (1,376,573)
Prepaid expenses and other current assets................ (3,493,771) (1,841,527)
Other assets............................................. (91,550) (6,184)
Accounts payable and accrued expenses.................... 776,256 2,004,481
Income taxes payable..................................... 316,976 181,743
----------- -----------
Net cash (used in) provided by operating activities......... (1,958,346) 1,557,225
----------- -----------
INVESTING ACTIVITIES
Additions to property and equipment......................... (836,694) (959,996)
Business acquisitions....................................... (21,245,349) (5,320,902)
----------- -----------
Net cash used in investing activities....................... (22,082,043) (6,280,898)
----------- -----------
FINANCING ACTIVITIES
Net proceeds from bank borrowings........................... 22,386,042 5,721,404
Payments of capital lease obligations....................... (1,421,939) (1,493,261)
Payments of notes for cancellation of options
and acquisition of business................................ -- (177,893)
IPO issuance costs.......................................... -- (4,214)
Stockholder loans........................................... -- 687
Common stock issued......................................... 20,134 460
----------- -----------
Net cash provided by financing activities................... 20,984,237 4,047,183
----------- -----------
Effect of foreign exchange rates on cash.................... 15,484 6,152
----------- -----------
Net decrease in cash and cash equivalents................... (3,040,668) (670,338)
Cash and cash equivalents at beginning of period............ 3,202,766 4,145,514
----------- -----------
Cash and cash equivalents at end of period.................. $ 162,098 $ 3,475,176
=========== ===========
SUPPLEMENTAL DISCLOSURES
Interest paid............................................... $ 406,943 $ 685,467
=========== ===========
Income taxes paid........................................... $ 159,443 $ 706,879
=========== ===========
Noncash transactions:
Equipment acquired under capital lease obligations.......... $ 1,310,243 $ 2,025,673
=========== ===========
</TABLE>
The Notes to Consolidated Financial Statements are made a part hereof.
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
NOTE A - BASIS OF PRESENTATION:
The information presented for May 31, 1998, and for the three-month and the
nine-month periods ended May 31, 1998 and May 31, 1997, is unaudited, but, in
the opinion of the management of Unidigital Inc., its wholly-owned subsidiaries
and its and their subsidiaries, affiliated companies and predecessors
(collectively, the "Company"), the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) which the Company considers necessary for the fair presentation of the
Company's financial position as of May 31, 1998, the results of their operations
for the three-month and the nine-month periods ended May 31, 1998 and May 31,
1997 and their cash flows for the nine-month periods ended May 31, 1998 and May
31, 1997.
The consolidated financial statements included herein have been prepared by
the Company in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB and Item 310
of Regulation S-B. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
consolidated financial statements should be read in conjunction with the
Company's audited financial statements for the year ended August 31, 1997, which
were included as part of the Company's Annual Report on Form 10-KSB.
The consolidated financial statements include the accounts of Unidigital
Inc. and its direct and indirect subsidiaries. All significant intercompany
balances have been eliminated.
This Form 10-QSB has been amended (the "Form 10-QSB/A") to reflect the
correction of the impact of an extraordinary loss related to the refinancing of
certain of the Company's debt in March 1998. The impact of such correction was
to reduce net income for the three and nine months ended May 31, 1998 by
approximately $167,000. See Note E.
The Form 10-QSB/A has been further amended to correct the reporting of
"Extraordinary item-loss on early retirement of debt," in the amount of
$143,000, which initially had been reported under the column "Three Months
Ended, May 31, 1997" of the Consolidated Income Statements. The reporting of
this item has been corrected to appear under the column "Nine Months Ended, May
31, 1998" of the Consolidated Income Statements.
Interim results are not necessarily indicative of results that may be
expected for the full fiscal year.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND BUSINESS:
Unidigital Inc., a Delaware corporation, is the parent holding company of
five wholly-owned operating subsidiaries, Unidigital Elements (NY), Inc.,
formerly known as LinoGraphics Corporation ("Elements (NY)"), Elements (UK)
Limited ("Elements (UK)"), Unidigital Elements (SF), Inc., formerly known as
LinoGraphics (Delaware) Corporation ("Elements (SF)"), Unison (NY), Inc.,
formerly known as Unidigital/Cardinal Corporation ("Unison (NY)") and Unison
(MA), Inc., formerly known as Unidigital/Boris Corporation ("Unison (MA)").
Elements (NY) engages in the on-demand print and digital prepress business in
New York City. Elements (UK)
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
engages in the on-demand print and digital prepress business in London. In
addition, Elements (UK) through its wholly-owned subsidiary, Regent Group
Limited, operates a financial digital print business in London. Elements (SF)
owns and operates the San Francisco on-demand prepress business and retouching
studio. Unison (NY) engages in the digital prepress and digital printing
business, and provides general printing, color separation and large format
printing services to advertising agencies and corporations primarily in the New
York City area. Unison (MA) engages in the business of digital imaging and
photographic processing in the Boston area.
FOREIGN CURRENCY TRANSLATION:
The portion of the Company's financial statements relating to the Company's
United Kingdom operations are translated into United States Dollars using
period-end exchange rates ((pound) 1.00 = $1.62 at August 31, 1997 and $1.67 at
May 31, 1998, respectively, for balance sheet accounts) and average exchange
rates ((pound) 1.00 = $1.64 for the year ended August 31, 1997; and $1.68 and
$1.64 for the three month periods ended May 31, 1998 and May 31, 1997,
respectively; and $1.68 and $1.64 for the nine month periods ended May 31, 1998
and May 31, 1997, respectively, for income statement accounts). The translation
difference is reflected as a separate component of stockholders' equity.
EARNINGS PER SHARE:
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share," which is
required to be adopted for years ending after December 15, 1997. Accordingly,
the Company has adopted the provisions of the new statement.
The following table sets forth the computation of basic and dilutive
earnings per share:
<TABLE>
<CAPTION>
Three Months Ended, Nine Months Ended,
---------------------------------- --------------------------------
May 31, May 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator for basic and diluted earnings per
share-net income available for common
stockholders............................... $ 300,596 $ 540,109 $ 999,021 $ 1,245,416
=========== ============ ============ ============
Denominator:
Denominator for basic earnings per share-
weighted average shares.................... 3,724,459 3,228,083 3,403,721 3,203,121
Effect of dilutive securities:
Stock options.............................. 109,555 17,128 64,896 11,978
Warrants................................... 202,413 7,953 172,135 2,690
----------- ----------- ----------- -----------
Denominator for diluted earnings per
share-adjusted weighted-average shares and
assumed conversions........................ 4,036,427 3,253,163 3,640,752 3,217,789
=========== =========== =========== ===========
</TABLE>
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
The following securities have been excluded from the dilutive per share
computation as they are antidilutive:
Three Months Ended, Nine Months Ended,
------------------------------------------------------
May 31, May 31,
1998 1997 1998 1997
------------------------------------------------------
Stock options............ 11,000 153,500 11,000 153,500
Warrants................. 25,000 92,000 117,000 92,000
NOTE C - STOCKHOLDERS' EQUITY:
COMMON STOCK:
As at June 30, 1998, 3,902,634 shares of common stock, $0.01 par value (the
"Common Stock"), were issued and outstanding.
PREFERRED STOCK:
As at June 30, 1998, there were no shares of preferred stock, $0.01 par
value, issued or approved for issuance.
NOTE D - STOCK OPTION PLANS:
Pursuant to the 1997 Equity Incentive Plan, as amended (the "Plan"), the
Company granted options to purchase an aggregate of 222,599 shares of its Common
Stock during the nine months ended May 31, 1998. All options were granted at
their fair market value.
Subsequent to the end of the quarter, on July 13, 1998, the Company granted
options to purchase 40,000 shares of its Common Stock to Nicholas P. Gill in
connection with his employment as the Company's Vice President, Chief Financial
Officer and Secretary. Such options were granted at their fair market value
under the Plan.
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
NOTE E - LONG TERM DEBT AND NOTES PAYABLE:
At May 31, 1998, the Company's debt consisted of the following:
<TABLE>
<CAPTION>
Facility
Amount
Amount Outstanding
-----------------------------------
August 31, May 31, August 31,
1997 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
Credit facilities in the United Kingdom; interest at the bank's
overdraft rate plus 3%; facility amount is approximately
(pound)1,145,000 ($1,969,400) $1,969,400 $ -- $1,784,150
Credit facilities in the United Kingdom; interest at the bank's
overdraft rate plus 2%; facility amount is approximately
(pound)2,300,000 ($3,841,000) -- 2,557,358 --
Revolving line of credit; matures April 30, 2000, interest at
Alternate Base Rate or Adjusted LIBO Rate, as defined, plus
1/4% in the United States and 2.25% in the United Kingdom 4,500,000 -- 1,725,000
Lines of credit; interest at Alternate Base Rate or Adjusted LIBO
Rate, as defined, plus 1/4% in the United States and 2.25% in
the United Kingdom 5,250,000 -- 4,110,110
Term loan; matures March 31, 2003, payable in sixteen (16)
quarterly installments ranging from $750,000 to $1,500,000,
commencing June 30, 1999, together with a balloon payment of
$7,000,000 at March 31, 2003, plus interest at the Base Rate or
at the Eurodollar Rate, as defined, plus an Applicable Margin,
as defined, ranging from 0.75% to 3.0%; facility amount is
$25,000,000 -- 25,000,000 --
Revolving line of credit; matures March 24, 2003, interest at the
Base Rate or at the Eurodollar Rate, as defined, plus an
Applicable Margin, as defined,ranging from 0.75% to 3.0%;
facility amount is $10,000,000 -- 6,935,000 --
Acquisition line of credit; matures March 31, 2003, payable in
eleven (11) quarterly installments of 5.0% of the outstanding
balance at March 24, 2000 commencing June 30, 2000 and one (1)
installment of 45.0% of the outstanding balance at March 24, 2000,
plus interest at the Base Rate or at the Eurodollar Rate, as defined,
plus an Applicable Margin, as defined, ranging from
0.75% to 3.0%; facility amount is $5,000,000 -- -- --
SBA loan; matures December 1, 2014, monthly payments of $3,665,
interest at prime rate plus 2.74% 350,000 -- 334,368
Installment note due seller of Elements (SF); payable in eight (8)
quarterly installments of $11,600 including interest at 6% 85,000 21,250 42,500
Loans from private investors, beginning May 1997, maturing between
May 2002 and August 2002; interest at 10% for first six months,
11% for second six months and 12% thereafter 4,000,000 -- 4,000,000
Installment note due seller of Unison (MA); matures January 15,
1999, payable in two (2) annual installments of $75,000
including interest at 8.0% 150,000 114,167 150,000
Installment note due Kwik International; matures April 15, 2001,
payable in thirty-five (35) monthly installments of $20,833.33
and one (1) installment of $20,833.45 including interest at 5.7% -- 708,333 --
---------------- ------------------
35,336,108 12,146,128
Less current portion 2,942,775 10,018,332
---------------- ------------------
$ 32,393,333 $ 2,127,796
================ ==================
</TABLE>
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
The Company has borrowing arrangements with commercial banks in both New
York and London. On March 24, 1998, the Company terminated its financing
facilities with its former New York bank and entered into borrowing arrangements
with its current New York bank (the "Bank") in the aggregate amount of
$40,000,000, which consist of a: (i) $25,000,000 term loan; (ii) $10,000,000
revolving line of credit facility which is available for working capital
purposes; and (iii) $5,000,000 credit facility which is available for corporate
acquisition purposes. Such borrowings are guaranteed by the Company's United
States subsidiaries. In addition, the Company pledged all of its equity
interests in its United States subsidiaries and two-thirds of its equity
interests in its wholly-owned United Kingdom subsidiary as collateral for such
credit facilities. Interest under such credit facilities is, at the Company's
option, at the Base Rate or at the Eurodollar Rate, as defined, plus an
Applicable Margin, as defined, ranging from 0.75% to 3.0% depending on the
Company's consolidated debt to earnings ratio and the type of loan. As of May
31, 1998, the Company had an outstanding balance of $25,000,000 under the term
loan and $6,935,000 under the revolving credit facility. A portion of the
proceeds of such loans was used to repay in full promissory notes previously
issued by the Company in 1997 to certain private investors in the aggregate
principal amount of $4,000,000. In connection therewith, the Company recorded an
extraordinary loss of $143,000, net of income tax benefit of $137,000 related to
the write-off of deferred financing costs.
The credit facilities contain covenants which require the Company to
maintain certain earnings and debt to earnings ratio requirements based on the
combined operations of the Company and its subsidiaries. The credit facilities
are secured by a first priority lien on all of the assets of the Company and its
subsidiaries, a mortgage on the Company's facilities located at 545 West 45th
Street, New York, New York and a leasehold mortgage on the Company's facilities
acquired as part of the Kwik Acquisition (as defined below) located at 229 West
28th Street, New York, New York. The Company, the Bank and Richard J. Sirota
("Sirota"), the sole shareholder of Kwik (as defined below), entered into an
intercreditor subordination agreement with respect to the Bank's and Sirota's
relative interests in the Company.
The Company's agreement with the Bank restricts the Company's ability to
pay certain dividends without the Bank's prior written consent.
The Company's credit facility with its London bank provides for combined
lines of credit of (pound)2,300,000 (approximately $3,841,000) for working
capital for its United Kingdom operations. Such credit facility was increased
from (pound)1,400,000 (approximately $2,338,000) on May 13, 1998. These lines of
credit renew annually and bear interest at 2.0% over the Bank's Base Rate, as
defined. In addition, the Company is required to pay a service charge equal to
0.2% of invoice value. These lines of credit contain covenants which require the
Company's United Kingdom subsidiaries to maintain a minimum net worth of
(pound)500,000, limit borrowings up to specified amounts of accounts receivable
aged 120 days or less and are guaranteed by the Company for the principal amount
of up to (pound)500,000. Amounts outstanding are collateralized by
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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
substantially all of the Company's United Kingdom assets. As of May 31, 1998,
the Company had an outstanding balance of $2,557,358 under its United Kingdom
credit facility.
NOTE F - ACQUISITION:
On March 25, 1998, the Company, through its wholly-owned subsidiary, Unison
(NY), consummated the acquisition of substantially all of the assets of Kwik
International Color, Ltd. ("Kwik") located in New York City (the "Kwik
Acquisition"). Kwik provided general printing, color separation and large format
printing services. The Company intends to continue such line of business. The
assets purchased included Kwik's entire customer list, inventory, equipment,
cash, accounts receivable and trade name. The purchase price included cash
payments of $20,590,349, issuance of a 5.7% subordinated promissory note in the
principal amount of $750,000 (payable in 36 monthly installments commencing
April 15, 1998), issuance of 649,841 shares of restricted Common Stock of the
Company and the assumption of certain trade obligations of Kwik. Of the purchase
price, $1,000,000 in cash and $1,000,000 of restricted Common Stock of the
Company (190,589 shares) is being held in escrow for a period of two years to
satisfy any indemnification claims.
The Company funded the cash portion of the purchase price from proceeds of
a $25,000,000 term loan and a $10,000,000 revolving credit loan from the Bank.
See "Note E - Bank Credit Facilities."
The following supplemental pro forma information is presented as if the
Company had completed the Kwik Acquisition as of September 1, 1997 and 1996,
respectively:
Nine Months Ended May 31,
--------------------------------------
1998 1997
--------------------------------------
Net sales........................ 41,675,406 36,257,283
Income from operations........... 4,636,498 3,216,370
Net income....................... 594,383 1,778,271
Net income per share - basic..... 0.16 0.46
Net income per share - diluted... 0.14 0.46
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the Issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNIDIGITAL INC.
DATE: December 8, 1998
By: /s/William E. Dye
-----------------------------------
William E. Dye,
Chief Executive Officer
(Principal Executive, Financial
and Accounting Officer)
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