SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
FORM 8-K/A
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 10, 1996
AMERTRANZ WORLDWIDE HOLDING CORP.
(Exact name of Registrant as specified in charter)
Delaware 0001-14474 11-3309110
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification
Number)
2001 Marcus Avenue
Lake Success, New York 11042
(516) 326-9000
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
Not Applicable
(Former name or former address of Registrant, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On October 10, 1996, Consolidated Air Services, Inc., an Arizona
Corporation ("Consolidated") merged (the "Merger") with and into Amertranz
Worldwide Holding Corp. (the "Company") pursuant to the terms of an Agreement of
Merger dated as of September 30, 1996 (the "Agreement of Merger").
Consolidated was engaged in the freight forwarding business with
offices in the Los Angeles, California area, Scottsdale, Arizona and Newark, New
Jersey. For the 12-month period ended June 30, 1996, Consolidated had net sales
of $5,995,000, and net income of $347,000. Pursuant to the Merger, the Company
acquired all of the assets of Consolidated, consisting principally of office and
freight forwarding assets, accounts receivable and customer lists, and assumed
all of Consolidated's liabilities.
Prior to the Merger, all issued and outstanding stock of Consolidated
was owned by David W. Hockersmith and Douglas E. Hockersmith (collectively, the
"Consolidated Stockholders"). In the Merger, all of the issued and outstanding
shares of Consolidated were exchanged for an aggregate of 20,000 shares of the
Company's Class B Preferred Stock. Each share of the Company's Class B Preferred
Stock is convertible, at the option of the holder thereof at any time after
October 10, 1997, into 10 shares of the Company's Common Stock. In addition, the
Company issued a promissory note to the Consolidated Stockholders in the
aggregate principal amount of $150,000.
Pursuant to the terms of the Agreement of Merger, the Consolidated
Stockholders will receive up to an additional 50,000 shares of the Company's
Common Stock in the aggregate if, following the Merger, the Company meets
certain revenue targets as set forth in the Agreement of Merger.
Subsequent to June 30, 1996 (the date of Consolidated's financial
statements included herewith) and prior to the Merger, Consolidated distributed
to the Consolidated Stockholders $640,000 representing part of Consolidated's
accumulated subchapter S earnings. This distribution was made $40,000 in cash,
and $600,000 pursuant to the terms of a promissory note. As part of the Merger,
the Company assumed this obligation along with all other obligations of
Consolidated.
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Item 7. Financial Statements and Exhibits.
The following financial statements, pro forma financial information and
exhibits are filed herewith and set forth following the signatures hereto:
PAGE
(a) Financial Statements of Business Acquired
CONSOLIDATED AIR SERVICES, INC.
Report of Independent Public Accountants F-1
Balance Sheet as of June 30, 1996 F-2
Statement of Operations for the Year Ended June 30, 1996 F-3
Statement of Shareholders' Equity for the Year Ended June 30, 1996 F-4
Statement of Cash Flows for the Year Ended June 30, 1996 F-5
Notes to Financial Statements F-6
PAGE
(b) Pro Forma Financial Information
AMERTRANZ WORLDWIDE HOLDING CORP.
Pursuant to Rule 3-05(b) of Regulation S-X as currently in effect,
financial statements for the business acquired are not required to be furnished.
Accordingly, pro forma financial information with respect to the transaction
described in Item 2 above is not required to be furnished pursuant to this Item.
(c) Exhibits
The following exhibit is filed herewith:
Exhibit No.
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2.1 Agreement of Merger dated as of September 30, 1996 by and E-1
among Amertranz Worldwide, Inc., a Delaware corporation;
Amertranz Worldwide Holding Corp., a Delaware corporation;
Consolidated Air Services, Inc., an Arizona corporation; and
David W. Hockersmith and Douglas E. Hockersmith*
* Previously filed
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the
Agreement of Merger are briefly described on the index thereto (on page E-37)
but have been omitted from this filing. The Company will furnish supplementally
a copy of any omitted schedule or exhibit to the Commission upon request.
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<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.
AMERTRANZ WORLDWIDE HOLDING CORP.
Date: November 26, 1996 By: /s/ Stuart Hettleman
---------------------------------
Stuart Hettleman, President
C66364.198
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Consolidated Air Services, Inc.:
We have audited the accompanying balance sheet of CONSOLIDATED AIR SERVICES,
INC. (an Arizona S corporation) as of June 30, 1996, and the related statements
of operations, shareholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consolidated Air Services, Inc.
as of June 30, 1996, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
September 12, 1996.
F-1
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CONSOLIDATED AIR SERVICES, INC.
BALANCE SHEET
JUNE 30, 1996
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 253,729
Accounts receivable, net of allowance for doubtful accounts
of $12,000 646,675
Prepaid expenses 39,211
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Total current assets 939,615
PROPERTY AND EQUIPMENT, net 148,431
OTHER ASSETS 50,228
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$1,138,274
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 228,355
Accrued expenses 168,063
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Total current liabilities 396,418
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SHAREHOLDERS' EQUITY:
Common stock, $1 par value, 1,000 shares issued and
outstanding 1,000
Retained earnings 740,856
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Total shareholders' equity 741,856
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$1,138,274
==========
The accompanying notes to financial statements are an integral part
of this balance sheet.
F-2
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1996
NET SALES $ 5,995,390
COST OF SALES 3,180,125
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Gross profit 2,815,265
GENERAL AND ADMINISTRATIVE EXPENSES 2,479,393
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Income from operations 335,872
OTHER INCOME (EXPENSE):
Interest 12,608
Other (1,143)
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NET INCOME $ 347,337
==============
The accompanying notes to financial statements are an integral
part of this statement.
F-3
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED JUNE 30, 1996
Common Retained
Stock Earnings Total
----- -------- -----
BALANCE AT JUNE 30, 1995 $ 1,000 $ 722,519 $ 723,519
Net income - 347,337 347,337
Distributions to shareholders - (329,000) (329,000)
----------- ------------ ------------
BALANCE AT JUNE 30, 1996 $ 1,000 $ 740,856 $ 741,856
=========== ============ ============
The accompanying notes to financial statements are an integral
part of this statement.
F-4
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 347,337
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation 46,154
Changes in certain assets and liabilities-
Accounts receivable 126,685
Prepaid expenses (48,077)
Accounts payable (42,670)
Accrued expenses 11,797
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Net cash provided by operating activities 441,226
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (76,949)
Net cash used in investing activities (76,949)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease (5,856)
Distributions to shareholders (329,000)
Net cash used in financing activities (334,856)
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Net increase in cash and cash equivalents 29,421
CASH AND CASH EQUIVALENTS, beginning of year 224,308
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CASH AND CASH EQUIVALENTS, end of year $ 253,729
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 875
=============
The accompanying notes to financial statements are an integral
part of this statement.
F-5
<PAGE>
CONSOLIDATED AIR SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(1) NATURE OF OPERATIONS:
Consolidated Air Services, Inc. (the Company), an Arizona S corporation, is
primarily engaged in domestic and international air freight forwarding that
offers a full range of logistic and transportation services. The Company is
headquartered in Scottsdale, Arizona, with offices in Los Angeles, California
and Newark, New Jersey. The Company also has sales offices in Dallas, Texas and
San Diego, California.
The Company focuses primarily on the fashion and retail industry. It has carved
a respected niche in this industry by offering a detailed menu of services
unique to this industry. Fashion services currently provide approximately 70% of
the Company's revenue. The balance is derived from industries ranging from
publishing and medical equipment, to television and video equipment.
The Company provides various levels of services ranging from Overnight, Second
Day, Deferred Service, Same Day and Surface Consolidations. The Company focuses
on heavyweight shipments rather than small packages which are handled by many
companies specializing in that competitive market. The Company has established a
control center in Scottsdale, Arizona to provide a central point of contact for
customers anywhere in the world. This center is staffed 24 hours a day.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Revenue Recognition
Revenues and direct related costs are recognized upon shipment of freight.
Income Taxes
The Company has elected to operate under Subchapter S of the Internal Revenue
Code and thus, is not directly subject to income taxes. As a result, there is no
provision or benefit for income taxes reflected in the accompanying financial
statements, since detailed items of revenue and expenses are reported on the
individual returns of the shareholders. The shareholders of the Company are
liable for income taxes on the earnings of the Company.
F-6
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Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less
are considered to be cash equivalents.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable and
accounts payable approximate fair value because of the short-term maturity of
these financial instruments.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosures 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.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist of cash and accounts receivable. The Company places its cash
with high quality financial institutions.
Concentrations of credit risk with respect to accounts receivable are limited
due to the large number of customers comprising the Company's customer base. The
Company performs ongoing credit evaluations of its customers, but does not
require collateral to support customer receivables. The Company established an
allowance for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends, and other information.
(3) PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost. Depreciation of property and
equipment is provided using the straight-line method and is included in general
and administrative expense. The following estimated useful lives are used for
depreciation:
Leasehold improvements 7-10 years
Equipment 5-7 years
Computer equipment 5-7 years
Furniture and fixtures 5 years
Vehicles 5 years
Maintenance and repairs are charged directly to expense as incurred.
Expenditures of major renewals and betterments to property and equipment are
capitalized. For the year ended June 30, 1996, maintenance and repair expenses
was approximately $46,000.
F-7
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Property and equipment consist of the following at June 30, 1996:
Leasehold improvements $ 9,608
Equipment 92,467
Computer equipment 168,697
Furniture and fixtures 52,903
Vehicles 78,956
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402,631
Less- Accumulated depreciation 254,200
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$ 148,431
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(4) COMMITMENTS AND CONTINGENCIES:
Lease Obligations
The Company leases various property and equipment under noncancelable operating
leases including trucks used to pick up freight. Rent expense was approximately
$223,880 for the year ended June 30, 1996. As of June 30, 1996, future minimum
lease payments under noncancelable operating leases are as follows:
Year Ending
June 30,
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1997 $ 295,871
1998 194,627
1999 86,735
2000 755
(5) SIGNIFICANT CUSTOMER:
Sales to one customer for the year ended June 30, 1996 represented 15% of
revenue.
F-8
