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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-14474
--------------------------------
AMERTRANZ WORLDWIDE HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware 11-3309110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
7001B Cessna Drive, P.O. Box 35329
Greensboro, North Carolina 27425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 668-7500
Inapplicable
(Former name, former address and former fiscal year if changed
from last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x/ No
At May 8, 1998, the number of shares outstanding of the registrant's common
stock was 8,419,094.
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<PAGE>
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TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements:
Consolidated Balance Sheets,
March 31, 1998 and June 30, 1997 3
Consolidated Statements of Operations
for the Three and Nine Months Ended
March 31, 1998 and 1997 4
Consolidated Statements of Shareholders'
Deficit for the Year Ended June 30, 1997 and
the Nine Months Ended March 31, 1998 5
Consolidated Statements of Cash Flows
for the Nine Months Ended March 31,
1998 and 1997. 6
Notes to Unaudited Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 13
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, 1998 June 30, 1997
-------------- -------------
<S> <C> <C>
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 406,872 $ 1,382,243
Accounts receivable, net of allowance for doubtful
accounts of $622,980 and $782,607, respectively 16,382,301 12,490,694
Prepaid expenses and other current assets 665,667 743,569
------------ ------------
Total current assets 17,454,840 14,616,506
PROPERTY AND EQUIPMENT, net 925,488 734,900
OTHER ASSETS 94,080 223,768
GOODWILL, net of accumulated amortization of
$1,156,357 and $709,091, respectively 13,798,667 14,245,932
------------ ------------
Total assets $ 32,273,075 $ 29,821,106
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 7,446,348 $ 8,131,715
Accrued expenses 2,436,133 2,364,219
Accrued transportation expenses 5,382,448 3,303,366
Reserve for restructuring 1,306,059 2,681,956
Note payable to bank 6,346,095 6,467,558
Note payable to affiliate 500,754 500,754
Notes payable to creditors 53,835 -----
Current portion of long-term debt due to affiliate 3,046,867 3,633,273
Current portion of long-term debt 50,000 50,000
Dividends payable 58,437 12,875
Lease obligation-current portion 12,063 12,063
------------ ------------
Total current liabilities 26,639,039 27,157,779
LONG-TERM DEBT DUE TO AFFILIATE 4,000,000 4,000,000
LONG TERM DEBT 50,000 87,500
LEASE OBLIGATION--LONG-TERM 6,251 6,251
------------ ------------
Total liabilities $ 30,695,290 $ 31,251,530
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, $10 par value; 2,500,000 shares authorized,
610,546 and 498,000 shares issued and outstanding respectively 6,105,460 4,980,000
Common stock, $.01 par value; 15,000,000 shares authorized,
8,419,094 and 6,826,504 shares issued and outstanding,
respectively 84,190 68,265
Paid-in capital 22,496,331 20,972,256
Accumulated deficit (27,096,946) (27,439,695)
Less: Treasury stock, 106,304 shares held at cost (11,250) (11,250)
------------ ------------
Total stockholders' equity (deficit) 1,577,785 (1,430,424)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 32,273,075 $ 29,821,106
============ ============
</TABLE>
The accompanying notes are an integral part of this
consolidated balance sheet.
3
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31, Nine Months Ended March 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operating revenue $23,825,874 $18,546,423 $74,000,028 $53,266,287
Cost of transportation 18,785,521 13,515,324 57,829,361 39,807,691
------------ ------------ ------------ ------------
Gross profit 5,040,353 5,031,099 16,170,667 13,458,596
Selling, general and
administrative expenses 4,556,100 5,673,847 14,529,621 16,361,301
Operating income (loss) 484,253 (642,748) 1,641,046 (2,902,705)
Interest (expense) (329,160) (307,117) (1,066,256) (1,089,254)
Other (expense) income, net (20,282) (7,170) 168,783 75,313
------------ ------------ ------------ ------------
Income (loss) before income taxes 134,811 (957,035) 743,573 (3,916,646)
Provision for income taxes 30,000 11,817 95,000 11,817
------------ ------------ ------------ ------------
Net income (loss) $ 104,811 $ (968,852) $ 648,573 $ (3,928,463)
============ ============ ============ =============
Net income (loss) per share:
Basic $ 0.00 $ (0.16) $ 0.05 $ (0.67)
============ ============ ============ ============
Diluted(1) $ 0.00 $ - $ 0.03 $ -
============ ============ ============ ============
Weighted average shares
outstanding:
Basic 8,371,663 5,926,504 7,793,813 5,901,322
============ ============ ============ ============
Diluted(1) 15,109,576 - 13,212,070 -
============ ============ ============ ============
</TABLE>
(1) Diluted loss per share in 1997 was anti-dilutive.
The accompanying notes are an integral part of this
consolidated statement.
4
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE YEAR ENDED JUNE 30, 1997 AND THE
NINE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in Treasury Stock Accumulated
Shares Amount Shares Amount Capital Shares Amount (Deficit) Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1996 - - 3,626,504 $36,265 $8,567,675 106,304($11,250)($16,341,341) ($7,748,651)
Common stock issued in
connection with the IPO - - 2,300,000 $23,000 $11,013,288 - - - $11,036,288
Preferred stock issued in
exchange for a principal
reduction in the Exchange Note 200,000 2,000,000 - - - - - - 2,000,000
Common stock issued in connection
with the acquisition of Target - - 900,000 9,000 1,014,750 - - - 1,023,750
Acquisition of Consolidated 20,000 200,000 - - 371,000 - - - 571,000
Stock Options exercised - - - - 5,543 - - - 5,543
Preferred stock issued in
connection with the Private
Placement 257,500 2,575,000 - - - - - (372,145) 2,202,855
Cash dividends associated with the
Class C Preferred stock - - - - - - - (12,875) (12,875)
Preferred Stock dividends associated
with the Class A Preferred stock 20,500 205,000 - - - - - (205,000) -
Net loss - - - - - - - (10,508,334) (10,508,334)
------ --------- -------- ------ --------- ------- ------ ----------- -----------
Balance, June 30, 1997 498,000 $4,980,000 6,826,504 $68,265 $20,972,256 106,304($11,250)($27,439,695) ($1,430,424)
Additional costs associated with
the Private Placement - - - - - - - (34,908) (34,908)
Common stock issued in connection
with the conversion of Class A
Preferred Stock (110,250)(1,102,500) 1,102,500 11,025 1,091,475 - - - 0
Stock options exercised - - 52,590 525 (525) - - - 0
Preferred stock issued for repayment
of secured long-term debt of
Amertranz Worldwide, Inc. 100,000 1,000,000 - - - - - - 1,000,000
Preferred stock issued for the purchase
of $1,581,800 of trade debt of
Amertranz Worldwide, Inc. 158,180 1,581,800 - - - - - - 1,581,800
Common stock issued in connection
with the conversion of Class B
Preferred Stock (20,000) (200,000) 200,000 2,000 198,000 - - - 0
Common stock issued in connection
with the conversion of Class C
Preferred Stock (23,750) (237,500) 237,500 2,375 235,125 - - - 0
Preferred stock dividends associated
with the Class A Preferred Stock 6,887 68,870 (68,870) 0
Preferred Stock dividends associated
with the Class B Preferred Stock 1,479 14,790 (14,790) 0
Cash dividends associated with the
Class C Preferred Stock - - - - - - - (187,256) (187,256)
Net Profit - - - - - - - 648,573 648,573
------ --------- -------- ------ --------- ------- ------ ---------- ----------
Balance, March 31, 1998(unaudited)610,546 $6,105,460 8,419,094 $84,190 $22,496,331 106,304($11,250)($27,096,946) $1,577,785
======= ========== ========= ======= =========== =============== ============ ==========
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
5
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 648,573 $(3,928,463)
Bad debt expense (159,627) 61,580
Depreciation and amortization 660,671 636,139
Decrease in debt issuance costs - 103,466
Adjustments to reconcile net income to net cash used in operating activities-
Increase in accounts receivable (3,731,978) (2,528,379)
Decrease (increase) in prepaid expenses and other current assets 77,902 (396,901)
Decrease in other assets 129,688 32,608
Increase (decrease) in accounts payable and accrued expenses 1,712,490 (612,152)
------------ -----------
Net cash used in operating activities (662,281) (6,632,102)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (403,994) (395,668)
Acquisition of Consolidated Air Services, net of cash acquired - 105,602
------------ -----------
Net cash used in investing activities (403,994) (290,066)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering - net of costs - 12,304,696
Issuance of common stock - 23,000
Additional costs relating to the Private Placement (34,908) -
Dividends paid (128,819) -
Net (repayment) borrowings from note payable to bank (121,463) 4,125,038
Proceeds (repayment) of short-term debt 413,594 (4,444,393)
Repayment of long-term debt (37,500) (1,666,670)
Repayment of revolving loan due to affiliate - (3,454,407)
Payment of lease obligations - (15,560)
------------ ------------
Net cash provided by financing activities: 90,904 6,871,704
------------ -----------
Net (decrease) increase in cash and cash equivalents ($975,371) ($50,464)
CASH AND CASH EQUIVALENTS, beginning of the period 1,382,243 377,490
------------ -----------
CASH AND CASH EQUIVALENTS, end of the period $ 406,872 $ 327,026
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for:
Interest 648,629 268,745
Income taxes 136,937 34,759
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
6
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Unaudited)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTMENT AND FINANCING ACTIVITIES:
<TABLE>
<CAPTION>
Nine Months Ended March 31,
1998 1997
---- ----
<S> <C> <C>
TIA, Inc. conversion of 110,250 Class A Preferred Shares $(1,102,500) -
Issuance of Common Stock for TIA, Inc. conversion of
110,250 Class A Preferred Shares $ 11,025 -
Issuance of Common Stock for Stock Options exercised $ 334 -
Issuance of 100,000 Class D Preferred Stock for repayment
of secured long-term debt of Amertranz Worldwide, Inc. $ 1,000,000 -
Issuance of 158,180 Class E Preferred Stock for the purchase
of $1,581,800 of trade debt of Amertranz Worldwide, Inc. $ 1,581,800 -
Conversion of 20,000 Class B Preferred Shares $ (200,000) -
Issuance of Common Stock for conversion of 20,000
of Class B Preferred Shares 2,000 -
Conversion of 23,750 Class C Preferred Shares $ (237,500) -
Issuance of Common Stock for conversion of 23,750
Class C Preferred Shares $ 2,375 -
Issuance of Preferred Stock as partial repayment of long-term debt - $2,000,000
Issuance of Preferred Stock for the acquisition of Consolidated Air
Services ("Consolidated") - $ 200,000
Issuance of Note payable to Consolidated Stockholders - $ 150,000
On October 10, 1996, Consolidated merged with and into the Company
pursuant to the terms of a merger agreement dated as of September 30, 1996. In
conjunction with the acquisition, the resulting goodwill is as follows:
Net assets assumed - $ (121,539)
Purchase Price - $ 786,428
------------ -----------
Goodwill - $ 664,889
------------ -----------
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
7
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Notes to Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q and Regulation S-X related to
interim period financial statements and, therefore, do not include all
information and footnotes required by generally accepted accounting principles.
However, in the opinion of management, all adjustments (consisting of normal
recurring adjustments and accruals) considered necessary for a fair presentation
of the consolidated financial position of the Company and its subsidiaries at
March 31, 1998 and their consolidated results of operations and cash flows for
the three and nine months ended March 31, 1998 have been included. The results
of operations for the interim periods are not necessarily indicative of the
results that may be expected for the entire year. Reference should be made to
the annual financial statements, including footnotes thereto, included in the
Amertranz Worldwide Holding Corp. (the "Company") Form 10-K for the year ended
June 30, 1997.
Note 2 - Earnings Per Share
For the periods ended March 31, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share". In accordance with
the requirements of SFAS No. 128, net earnings per common share amounts ("basic
EPS") were computed by dividing net earnings after deducting preferred stock
dividend requirements, by the weighted average number of common shares
outstanding and contingently issuable shares (which satisfy certain conditions)
and excluding any potential dilution. Net earnings per common share amounts -
assuming dilution ("diluted EPS") were computed by reflecting potential dilution
from the exercise of stock options. SFAS No. 128 requires the presentation of
both basic EPS and diluted EPS on the face of the income statement. Earnings per
share amounts for the same prior-year periods have been restated to conform with
the provisions of SFAS No.
128.
A reconciliation between the numerators and denominators of the basic and
diluted EPS computations for net earnings for the three and nine months ended
March 31, 1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, 1998 March 31, 1998
---------------------------------- --------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amounts (Numerator) (Denominator) Amounts
<S> <C> <C> <C> <C> <C> <C>
Net earnings $104,811 $648,573
Preferred stock dividends (142,098) (270,917)
-------- --------
BASIC EPS
Net earnings attributable to common
stock ($37,287) 8,371,663 $0.00 $377,656 7,793,813 $0.05
===== =====
EFFECT OF DILUTIVE SECURITIES
Convertible Preferred Stock 6,556,104 5,223,818
Stock options 181,809 194,439
Stock warrants 0 0
------- -------
DILUTED EPS
Net earnings attributable to common
stock and assumed preferred
conversions and option exercises ($37,287) 15,109,576 $0.00 $377,656 13,212,070 $0.03
========= ========== ===== ======== ========== =====
8
</TABLE>
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, 1997 March 31, 1997
---------------------------------- --------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amounts (Numerator) (Denominator) Amounts
<S> <C> <C> <C> <C> <C> <C>
Net loss ($968,852) ($3,928,463)
Preferred stock dividends 0 0
---------- -----------
BASIC EPS
Net loss attributable to common stock ($968,852) 5,926,504 ($0.16) ($3,928,463) 5,901,322 ($0.67)
========== ========= ======= ============ ========= =======
</TABLE>
No diluted EPS is presented, as the effect of dilutive securities would be
anti-dilutive on loss per common share.
Options to purchase 150,000 shares of common stock were not included in the
computation of diluted EPS because the exercise price of those options were
greater than the average market price of the common shares. The options were
still outstanding at the end of the period.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains certain forward-looking
statements reflecting the Company's current expectations with respect to its
operations, performance, financial condition, and other developments. Such
statements are necessarily estimates reflecting the Company's best judgement
based upon current information and involve a number of risks and uncertainties.
While it is impossible to identify all such factors, factors which could cause
actual results to differ materially from expectations are: (i) the Company's
historic losses and ability to maintain recent profitability, (ii) competitive
practices in the industries in which the Company competes, (iii) the Company's
dependence on current management, (iv) the impact of current and future laws and
governmental regulations affecting the transportation industry in general and
the Company's operations in particular, (v) general economic conditions, and
(vi) other factors which may be identified from time to time in the Company's
Securities and Exchange Commission filings and other public announcements. There
can be no assurance that these and other factors will not affect the accuracy of
such forward-looking statements. Forward-looking statements are preceded by an
asterisk (*).
RESULTS OF OPERATIONS
The following discussion relates to the combined results of operation
of the Company for the three and nine month periods ended March 31, 1998,
compared to results of operation for the three and nine month periods ended
March 31, 1997.
Three Months ended March 31, 1998 and 1997
Operating Revenue. Operating revenue increased to $23.8 million for the
three months ended March 31, 1998 from $18.5 million for the three months ended
March 31, 1997, a 28.5% increase. Of this increase, 56.4% resulted from growth
in the Company's Caribbean Air Services, Inc. ("CAS") subsidiary and the balance
was due to the operations of the Company's Target Airfreight, Inc. ("Target")
subsidiary which the Company acquired in May 1997.
Cost of Transportation. Cost of transportation was 78.8% of operating
revenue for the three months ended March 31, 1998, and 72.9% of operating
revenue for the three months ended March 31, 1997. This increase is due to (i)
the February 2, 1998 start up of a new service between Indianapolis and
Aquadilla, Puerto Rico by the Company's CAS subsidiary, (ii) the Company's
Target subsidiary's international freight forwarding services, which
historically reflect a higher cost of transportation as a percentage of sales,
and (iii) the Company's Target subsidiary's agency network which (a) reflects a
higher cost of transportation as a result of the expensing of commissions earned
by the agent as a reduction to transportation cost (while the Amertranz
subsidiary reflected this cost as an increase to selling, general and
administrative expenses), and (b) is significantly larger than the Amertranz
agency network.
Gross Profit. As a result of the factors described in the previous
paragraph, gross profit for the three months ended March 31, 1998 decreased to
21.2% of operating revenue from 27.1% of operating revenue for the three months
ended March 31, 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were 19.1% of operating revenue for the three months
ended March 31, 1998, and 30.6% of operating revenue for the three months ended
March 31, 1997. This decrease was primarily due to (i) the closing of the
Company's Amertranz Worldwide, Inc. ("Amertranz") subsidiary on June 23, 1997
(while the Amertranz subsidiary was included for the period January 1, 1997
through March 31, 1997); and (ii) the historically lower selling, general and
administrative expenses as a percentage of sales of the Company's Target
subsidiary (acquired in May 1997), and the inclusion of those results in the
Company's consolidated results of operations for the March 31, 1998 fiscal
quarter.
Net Income. The Company realized net income of $104,811 for the three
months ended March 31, 1998, compared to a net loss of ($968,852) for the three
months ended March 31, 1997. This increase was due to the
10
<PAGE>
increased operating revenue from growth in the Company's CAS subsidiary, the
operations of the Company's Target subsidiary and the decrease in expenses as a
result of the closing of the Company's Amertranz subsidiary.
Nine Months ended March 31, 1998 and 1997
Operating Revenue. Operating revenue increased to $74.0 million for the
nine months ended March 31, 1998 from $53.3 million for the nine months ended
March 31, 1997, a 38.9% increase. Of this increase, 46.1% resulted from growth
in the Company's CAS subsidiary and the balance was due to the operations of the
Company's Target subsidiary which the Company acquired in May 1997.
Cost of Transportation. Cost of transportation was 78.1% of operating
revenue for the nine months ended March 31, 1998, and 74.7% of operating revenue
for the nine months ended March 31, 1997. This increase is due to (i) the
February 2, 1998 start up of a new service between Indianapolis and Aquadilla,
Puerto Rico by the Company's CAS subsidiary, (ii) the Company's Target
subsidiary's international freight forwarding services, which historically
reflect a higher cost of transportation as a percentage of sales, and (iii) the
Company's Target subsidiary's agency network which (a) reflects a higher cost of
transportation as a result of the expensing of commissions earned by the agent
as a reduction to transportation cost (while the Amertranz subsidiary reflected
this cost as an increase to selling, general and administrative expenses), and
(b) is significantly larger than the Amertranz agency network.
Gross Profit. As a result of the factors described in the previous
paragraph, gross profit for the nine months ended March 31, 1998 decreased to
21.9% of operating revenue from 25.3% of operating revenue for the nine months
ended March 31, 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were 19.6% of operating revenue for the nine months
ended March 31, 1998, and 30.7% of operating revenue for the nine months ended
March 31, 1997. This decrease was primarily due to (i) the closing of the
Company's Amertranz subsidiary prior to the beginning of the nine months ended
March 31, 1998 (while the Amertranz subsidiary was included for the period July
1, 1996 through March 31, 1997); and (ii) the historically lower selling,
general and administrative expenses as a percentage of sales of the Company's
Target subsidiary (acquired in May 1997), and the inclusion of those results in
the Company's consolidated results of operations for the nine months ended March
31, 1998.
Net Income. The Company realized net income of $648,573 for the nine
months ended March 31, 1998, compared to a net loss of ($3,928,463) for the nine
months ended March 31, 1997. This increase was due to the increased operating
revenue from growth in the Company's CAS subsidiary, the operations of the
Company's Target subsidiary, the decrease in expenses as a result of the closing
of the Company's Amertranz subsidiary, and $187,129 of debt cancellation income
(see "Liquidity and Capital Resources", below).
LIQUIDITY AND CAPITAL RESOURCES
General. During the nine months ended March 31, 1998, net cash used by
operating activities was $662,000. Cash used in investing activities was
$404,000, which primarily consisted of capital expenditures. Cash provided by
financing activities was $91,000, which primarily consisted of the non-payment
of interest on the short term debt due to affiliate.
Following the closing of the Company's Amertranz subsidiary, the
Company entered into an Extension and Composition Agreement dated as of November
7, 1997 (the "Composition Agreement") with certain general unsecured creditors
of the Company's Amertranz subsidiary, whereby $1,581,799 of trade debt of the
Amertranz subsidiary was acquired by the Company in exchange for the issuance of
158,180 shares of the Company's Class E Preferred Stock.
In addition, and as part of the Composition Agreement, $312,140 of
trade debt of the Amertranz subsidiary was acquired by the Company from certain
unsecured creditors of the Amertranz subsidiary in exchange for the Company's
obligation to pay a reduced amount totaling $125,185. This transaction resulted
in $187,129 of debt cancellation income.
11
<PAGE>
On November 28, 1997, the Company acquired $1,000,000 of secured debt
of the Amertranz subsidiary in exchange for the issuance of 100,000 shares of
its Class D Preferred Stock. While repayment of this $1,000,000 was subordinated
to the Company's obligations under its accounts receivable financing facility,
the total outstanding indebtedness of the Company (on a consolidated basis) has
been reduced by a like amount.
Currently, approximately $2.0 million of the Company's outstanding
accounts payable represent unsecured trade payables of the Company's closed
Amertranz subsidiary. In addition, $3.5 million of the Company's current
liabilities represent obligations which, by their terms, are subordinated to the
Company's revolving credit obligations under its accounts receivable financing
facility.
Capital expenditures. Capital expenditures for the nine months ended
March 31, 1998 were $403,994.
* Working Capital Requirements. Cash needs of the Company are currently
met by funds generated from operations and the Company's accounts receivable
financing facility. As of March 31, 1998, the Company had $1,559,000 available
under its accounts receivable financing facility, and approximately $407,000
from operations. The Company believes that its current financial resources will
be sufficient to finance its operations and obligations for the short term.
However, the Company's actual working capital needs for the long and short terms
will depend upon numerous factors, including the Company's operating results,
the cost of increasing the Company's sales and marketing activities, changes in
law which affect doing business in Puerto Rico, and competition, none of which
can be predicted with certainty. To the extent the Company's long term working
capital needs are not met from these sources, additional financing will be
necessary.
* Management's Plans. During prior fiscal years, the Company incurred
significant losses, primarily attributed to the Company's Amertranz subsidiary's
operations. The Company closed the Amertranz subsidiary prior to the end of its
June 30, 1997 fiscal year. As part of the closing of the Amertranz subsidiary,
its business was combined with the Company's Target subsidiary. To date, Target
has successfully integrated many of the customers of the Amertranz subsidiary
into Target's operations. Management believes that the Company's results of
operations for the nine months ended March 31, 1998 indicate that the closing of
the Amertranz subsidiary while retaining many of its customers has contained the
significant losses which the Company had incurred during the previous fiscal
years. Furthermore, the Company's negotiations with the creditors of the
Amertranz subsidiary have resulted, to date, in an aggregate $2.8 reduction in
the Company's indebtedness on a consolidated basis.
* Results of the Company's operations for the nine months ended March
31, 1998 indicate that: (i) the closing of the Amertranz subsidiary is having a
significant positive impact on operating results; (ii) many customers of the
Amertranz subsidiary have been retained and are being successfully integrated
into the operations of the Target subsidiary; and (iii) the operations of the
Company's CAS subsidiary continue to be profitable. There can be no assurance
that management's actions outlined above to stem the Company's losses and return
to profitability will continue to be successful.
12
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
(a) Exhibits:
Exhibit No.
- - --------------
3.1 Certificate of Incorporation of Registrant, as amended (incorporated
by reference to Exhibit 3.1 to the Registrant's Quarterly Report on
Form 10-Q for the Quarter Ended December 31, 1997, File No. 001-14474)
3.2 By-Laws of Registrant, as amended
4.1 Warrant Agent Agreement (incorporated by reference to Exhibit 4.3 to
the Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
4.2 Form of Amendment No. 1 to Warrant Agent Agreement dated June 13, 1997
(incorporated by reference to Exhibit 4.7 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-30351)
4.3 Agreement of Merger, dated as of April 17, 1997, by and between the
Registrant, Target International Services, Inc. (name subsequently
changed to Target Airfreight, Inc.), Target Air Freight, Inc., and
Christopher A. Coppersmith (incorporated by reference to Exhibit 4.4
to the Registrant's Registration Statement on Form S-3, Registration
No. 333-30351)
4.4 Agency Agreement, dated May 8, 1997, by and between the Registrant and
GKN Securities Corp. with respect to the Registrant's June 13, 1997
Private Placement (incorporated by reference to Exhibit 4.5 to the
Registrant's Registration Statement on Form S-3, Registration No.
333-30351)
4.5 Form of Subscription Agreement, dated June 13, 1997, with respect to
the Registrant's June 13, 1997 Private Placement (incorporated by
reference to Exhibit 4.6 to the Registrant's Registration Statement on
Form S-3, Registration No. 333-30351)
4.6 Certificate of Designations with respect to the Registrant's Class A
Preferred Stock (contained in Exhibit 3.1)
4.7 Certificate of Designations with respect to the Registrant's Class B
Preferred Stock (contained in Exhibit 3.1)
4.8 Certificate of Designations with respect to the Registrant's Class C
Preferred Stock (contained in Exhibit 3.1)
4.9 Certificate of Designations with respect to the Registrant's Class D
Preferred Stock (contained in Exhibit 3.1)
4.10 Certificate of Designations with respect to the Registrant's Class E
Preferred Stock (contained in Exhibit 3.1)
4.11 Form of Underwriter's Purchase Option (incorporated by reference to
Exhibit 4.4 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.1 1996 Stock Option Plan, as amended (incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended December 31, 1997, File No. 001-14474)
10.2 Accounts Receivable Management and Security Agreement, dated January
16, 1997 by and between BNY Financial Corp., as Lender, and Amertranz
Worldwide, Inc., Caribbean Air Services, Inc., and Consolidated Air
Services, Inc., as Borrowers, and guaranteed by Amertranz Worldwide
Holding Corp. ("BNY Facility Agreement") (incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 1997, File No. 001-14474)
10.3 Letter Amendment to BNY Facility Agreement, dated April 16, 1997 ("BNY
Letter Amendment") (incorporated by reference to Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997, File No. 001-14474)
10.4 Shadow Warrant entered into in connection with the BNY Letter
Amendment (incorporated by reference to Exhibit 10.3 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997, File No. 001-14474)
10.5 Letter Amendment to BNY Facility Agreement, dated September 25, 1997
(incorporated by reference to Exhibit 10.5 to the Registrant's Annual
Report on Form 10-K for the Fiscal year Ended June 30, 1997, File No.
001-14474)
13
<PAGE>
10.6 Loan and Security Agreement dated October 25,1995 between Amertranz
Worldwide, Inc. and TIA, Inc., as amended January 24, 1996, assigned
by TIA, Inc. to the Registrant (incorporated by reference to Exhibit
10.5 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.7 Form of Amended and Restated Promissory Note of Amertranz Worldwide,
Inc. payable to TIA, Inc. in principal amount of $800,000, assigned by
TIA, Inc. to the Registrant (incorporated by reference to Exhibit 10.6
to the Registrant's Registration Statement on Form S-1, Registration
No. 333-03613)
10.8 Revolving Credit Promissory Note dated February 7, 1996 of Caribbean
Air Services, Inc. payable to TIA, Inc. and Caribbean Freight System,
Inc. in the principal amount of $4,000,000 (incorporated by reference
to Exhibit 10.9 to the Registrant's Registration Statement on Form
S-1, Registration No. 333-03613)
10.9 Promissory Note dated February 7, 1996 of Amertranz Worldwide Holding
Corp. payable to TIA, Inc. and Caribbean Freight System, Inc. in the
principal amount of $10,000,000 (incorporated by reference to Exhibit
10.10 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.10 Employment Agreement dated June 24, 1996 between Amertranz Worldwide
Holding Corp. and Stuart Hettleman (incorporated by reference to
Exhibit 10.13 to the Registrant's Annual Report on Form 10-K for the
Fiscal Year Ended June 30, 1996, File No. 001-14474)
10.11 Employment Agreement dated June 24, 1996 between Amertranz Worldwide
Holding Corp. and Richard A. Faieta (incorporated by reference to
Exhibit 10.14 to the Registrant's Annual Report on Form 10-K for the
Fiscal Year Ended June 30, 1996, File No. 001-14474)
10.12 Cargo Aircraft Charter Agreement dated February 28, 1994 between TIA,
Inc. and Florida West Airlines, Inc., as amended and assigned November
29, 1995 (incorporated by reference to Exhibit 10.15 to the
Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
10.13 Lease Agreement dated March 31, 1994 between The Equitable Life
Assurance Society of the U.S. and Integrity Logistics, Inc. for the
premises at 2001 Marcus Avenue, Lake Success, New York (incorporated
by reference to Exhibit 10.16 to the Registrant's Registration
Statement on Form S-1, Registration No. 333- 03613)
10.14 Lease Agreement dated August 7, 1990 between S Partners and Caribbean
Freight System, Inc. for the premises at 7001 Cessna Drive,
Greensboro, North Carolina, as amended and extended April 9, 1994
(incorporated by reference to Exhibit 10.17 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-03613)
10.15 Lease Agreement for Los Angeles Facility (incorporated by reference to
Exhibit 10.17 to the Registrant's Annual Report on Form 10-K for the
Fiscal year Ended June 30, 1997, File No. 001-14474)
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
14
<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 thereunto duly authorized.
Dated: May 8, 1998 AMERTRANZ WORLDWIDE HOLDING CORP.
Registrant
/s/ Stuart Hettleman
---------------------
President, Chief Executive Officer
/s/ Philip J. Dubato
---------------------
Vice President, Chief Financial Officer
C73401.198
15
<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
AMERTRANZ WORLDWIDE HOLDING CORP.
(AS AMENDED THROUGH APRIL 21, 1998)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. - The registered office shall be
established and maintained at c/o the corporation, 2001 Marcus Avenue, Lake
Success,, New York 11042 and the corporation shall be the registered agent of
this corporation in charge thereof.
SECTION 2. OTHER OFFICES. - The corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. - Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Delaware.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as shall be stated in the notice
of the meeting.
SECTION 2. OTHER MEETINGS. - Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting.
SECTION 3. VOTING. - Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-Laws shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to vote held by such stockholder, but no
proxy shall be voted after three years from its date unless such proxy provides
for a longer period. Upon the demand of any stockholder, the vote for directors
and the vote upon any question before the meeting, shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of the State of Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
<PAGE>
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 4. QUORUM . - Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote shall be present. At any such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof. If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote the meeting.
SECTION 5. SPECIAL MEETINGS. - Special meetings of the stockholders
for any purpose or purposes may be called by the President or Secretary, or by
resolution of the directors. Stockholders holding at least 10% of the
outstanding shares entitled to vote at a stockholders' meeting shall also have
the right to call special meetings of the stockholders.
SECTION 6. NOTICE OF MEETINGS. - Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than that
stated in the notice shall be transacted at any meeting without the unanimous
consent of all the stockholders entitled to vote thereat.
SECTION 7. ACTION WITHOUT MEETING. - Unless otherwise provided
by the Certificate of Incorporation, any action required to be taken at any
annual or special meeting of stockholders, or any action which may be taken at
any annual or special meeting, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. - The number of directors shall be as
designated from time to time by resolution of the Board of Directors. The
directors shall be elected at the annual meeting of the stockholders and each
director shall be elected to serve until his successor shall be elected and
shall qualify. A director need not be a stockholder.
SECTION 2. RESIGNATIONS. - Any director, member of a committee or
other officer may resign at any time. Such resignation shall be made in writing,
and shall take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it effective.
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SECTION 3. VACANCIES - If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. - Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.
SECTION 5. FILLING OF VACANCIES. - In the case of any vacancy
in the Board of Directors through death, resignation, disqualification, removal
or other cause, the remaining directors, by affirmative vote of the majority
thereof, may elect a successor to hold office for the unexpired portion of the
term of a director whose place shall be vacant, and until the election of his
successor, or until he shall be removed, prior thereto in accordance with these
By-Laws. In the event of the number of directors being increased as provided in
these By-Laws, the additional directors so provided for shall be elected by the
directors already in office, and shall hold office until the next annual meeting
of stockholders and thereafter until his or their successors shall be elected.
SECTION 6. POWERS. - The Board of Directors shall exercise all of the
powers of the corporation except such as are by law, or by the Certificate of
Incorporation of the corporation or by these By-Laws conferred upon or reserved
to the stockholders.
SECTION 7. COMMITTEES. - The Board of Directors may, by resolution or
resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of any member or
such committee or committees, the member or members thereof present at any such
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, or in these By-Laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but no such committee shall have
the power of authority in reference to amending the Certificate of
Incorporation, adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation; and unless the resolution, these By-Laws, or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock.
SECTION 8. MEETINGS. - The newly elected Board of Directors may hold
their first meeting for the purpose of organization and the transaction of
business, if a quorum be present, immediately after the annual meeting of the
stockholders; or the time and place of such meeting may be fixed by consent, in
writing, of all the directors.
Unless restricted by the incorporation document or elsewhere in these
By-laws, members of the Board of Directors or any committee designated by such
Board may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at such meeting.
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Regular meetings of the Board of Directors may be scheduled by a
resolution adopted by the Board. The Chairman of the Board or the President or
Secretary may call, and if requested by any two directors, must call special
meeting of the Board and give five days' notice by mail, or two days' notice
personally or by telegraph or cable to each director. The Board of Directors may
hold an annual meeting, without notice, immediately after the annual meeting of
shareholders.
SECTION 9. QUORUM. - A majority of the directors shall constitute a
quorum for the transaction of business. If at any meeting of the board there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
SECTION 10. COMPENSATION. - Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
SECTION 11. ACTION WITHOUT MEETING. - Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting, if prior to such action a written
consent thereto is signed by all members of the board, or of such committee as
the case may be, and such written consent is filed with the minutes of
proceedings of the board or committee.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. - The officers of the corporation shall be a
President, a Treasurer, and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualified. In addition, the Board of Directors may elect a Chairman, one or
more Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation need be directors.
The officers shall be elected at the first meeting of the Board of Directors
after each annual meeting. More than two offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS. - The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. - The Chairman of the Board of Directors, if one
be elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. - The President shall be the chief
executive officer of the corporation and shall have the general powers and
duties of supervision and management usually vested in the office of President
of a corporation. He shall preside at all meetings of the stockholders if
present thereat, and in the absence or non-election of the Chairman of the Board
of Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation . Except
as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts in behalf of the
corporation, and shall
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cause the seal to be affixed to any instrument requiring it and when so affixed
the seal shall be attested by the signature of the Secretary or the Treasurer or
Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE-PRESIDENT. - Each Vice-President shall have such
powers and shall perform such duties as shall be assigned to him by the
directors.
SECTION 6. TREASURER. - The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositaries as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as
may be ordered by the Board of Directors, or the President, taking proper
vouchers for such disbursements. He shall render to the President and Board of
Directors at the regular meetings of the Board of Directors, or whenever they
may request it, an account of all his transactions as Treasurer and of the
financial condition of the corporation. If required by the Board of Directors,
he shall give the corporation a bond for the faithful discharge of his duties in
such amount and with such surety as the board shall prescribe.
SECTION 7. SECRETARY. - The Secretary shall give, or cause to
be given, notice of all meetings of stockholders and directors, and all other
notices required by the law or by these By-Laws, and in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called as provided in these By-Laws. He shall
record all the proceedings of the meetings of the corporation and of the
directors in a book to be kept for that purpose, and shall perform such other
duties as may be assigned to him by the directors or the President. He shall
have the custody of the seal of the corporation and shall affix the same to all
instruments requiring it, when authorized by the directors or the President, and
attest the same.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. - Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK. - A certificate of stock, signed by
the Chairman or Vice-Chairman of the Board of Directors, if they be elected,
President or Vice-President, and the Treasurer or an Assistant Treasurer, or
Secretary or Assistant Secretary, shall be issued to each stockholder certifying
the number of shares owned by him in the corporation. When such certificates are
countersigned (1) by a transfer agent other than the corporation or its
employee, or, (2) by a registrar other than the corporation or its employee, the
signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES. - A new certificate of stock may be
issued in the place of any certificate theretofore issued by the corporation,
alleged to have been lost or destroyed, and the directors may, in their
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the corporation a bond, in such sum as they may direct,
not exceeding double the value of the stock, to indemnify the corporation
against any claim that may be made against it on account of the alleged loss of
any such certificate, or the issuance of any such new certificate.
SECTION 3. TRANSFER OF SHARES. - The shares of stock of the
corporation shall be transferrable only upon its books by the holders thereof in
person or by their duly authorized attorneys or legal representatives, and upon
such transfer the old certificate shall be surrendered to the
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corporation by the delivery thereof to the person in charge of the stock and
transfer books and ledgers, or to such other person as the directors may
designate, by whom they shall be cancelled, and new certificates shall thereupon
be issued. A record shall be made of each transfer and whenever a transfer shall
be made for collateral security, and not absolutely, it shall be so expressed in
the entry of the transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. - In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any date, which shall not be more than sixty nor less than
ten days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjournment meeting.
SECTION 5. DIVIDENDS. - Subject to the provisions of the Certificate
of Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. - The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "Corporate Seal, Delaware, 1996". Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7. FISCAL YEAR. - The fiscal year of the corporation shall be
determined By resolution of the Board of Directors.
SECTION 8. CHECKS. - All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. - Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail, postage, prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
Statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation of these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
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ARTICLE VI
AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof if
notice of the proposed alteration or repeal of By-Law or By-Laws to be made be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the stock issued and outstanding and entitled to vote thereat, or by
the affirmative vote of a majority of the Board of Directors, at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors, if notice of the proposed alteration or repeal of By-Law or By-Laws
to be made, be contained in the notice of such special meeting.
ARTICLE VII
INDEMNIFICATION
SECTION 1. INDEMNIFICATION. - The corporation shall indemnify,
to the full extent that it shall have power under applicable law to do so and in
a manner permitted by such law, any person made or threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (hereinafter, a "Proceeding"),
by reason of the fact that such person is or was a director or officer of the
corporation,or is or was serving at the request of corporation as a director or
officer of another corporation, partnership, joint venture, trust, or other
enterprise. The corporation may indemnify, to the full extent that it shall have
power under applicable law to do so and in a manner permitted by such law, any
person made or threatened to be made party to any Proceeding, by reason of the
fact that such person is or was an employee or agent of the corporation, or is
or was serving at the request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust, or other enterprise.
SECTION 2. ADVANCEMENT OF EXPENSES. - With respect to any person made
or threatened to be made a party to any threatened, pending, or completed
Proceeding, by reason of the fact that such person is or was a director or
officer of the corporation, the corporation shall pay the expenses (including
attorneys' fees) incurred by such person in defending any such Proceeding in
advance of its final disposition (hereinafter an "advancement of expenses");
provided, however, that the payment of expenses (including attorneys' fees)
incurred by such person in advance of the final disposition of such Proceeding
shall be made only upon receipt of an undertaking (hereinafter an "undertaking")
by such person to repay all amounts advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such person is not entitled to
be indemnified for such expenses under this Article VII or otherwise; and
further provided that with respect to a Proceeding initiated against the
corporation by a director or officer of the corporation (including a person
serving at the request of the corporation as a director or officer shall be
entitled under this Section to the payment of expenses (including attorneys'
fees) incurred by such person in defending any counterclaim, cross-claim,
affirmative defense, or like claim of the corporation in connection with such
Proceeding in advance of the final disposition of such proceeding only if such
proceeding was authorized by the Board of Directors of the corporation. With
respect to any person made or threatened to be made a party to any Proceeding,
by reason of the fact that such person is or was an employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, the corporation may, in its discretion and
upon such terms and conditions, if any, as the corporation deems appropriate,
pay the expense (including attorneys' fees) incurred by such person in defending
any such Proceeding in advance of its final disposition.
SECTION 3. CLAIMS. - With respect to any person made or threatened to
be made a party to any Proceeding, by reason of the fact that such person is or
was a director or officer of the
- vii -
<PAGE>
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust,
or other enterprise, the rights to indemnification and to the advancement of
expenses conferred in Sections 1 and 2 of this Article VII shall be contract
rights. If a claim under Section 1 or 2 of this Article VII with respect to such
rights is not paid in full by the corporation within sixty days after a written
demand has been received by the corporation, except in the case of a claim for
an advancement of expenses by an officer or director of the corporation, in
which case the applicable period shall be twenty days, the person seeking to
enforce a right to indemnification or an advancement of expenses hereunder may
at any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the corporation to recover an advancement of expenses hereunder
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim. if successful in whole or in part in any such suit,
or in a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the person seeking to enforce a right
to indemnification or an advancement of expenses hereunder or the person from
whom the corporation seeks to recover an advancement of expenses shall also be
entitled to be paid the expenses (including attorneys' fees) of prosecuting or
defending such suit. In any suit brought by a person seeking to enforce a right
to indemnification hereunder (but not in a suit brought by a person seeking to
enforce a right to an advancement of expenses hereunder) it shall be a defense
that the person seeking to enforce a right to indemnification has not met any
applicable standard for indemnification under applicable law. In any suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the corporation shall be entitled to recover such
expenses upon a final adjudication that the person from whom the corporation
seeks to recover an advancement of expenses has not met any applicable standard
for indemnification under applicable law. With respect to any suit brought by a
person seeking to enforce a right to indemnification hereunder (including any
suit seeking to enforce a right to the advancement of expenses hereunder) or any
suit brought by the corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, neither the failure of the corporation to have
made a determination prior to commencement of such suit that indemnification of
such person is proper in the circumstances because such person has met the
applicable standards of conduct under applicable law, nor an actual
determination by the corporation that such person has not met such applicable
standards of conduct, shall create a presumption that such person has not met
the applicable standards of conduct or, in a case brought by such person seeking
to enforce a right to indemnification or to an advancement of expenses or the
person from whom the corporation seeks to recover an advancement of expenses is
not entitled to be indemnified, or to such an advancement of expenses, under
this Article VII or otherwise shall be on the corporation.
SECTION 4. NON-EXCLUSIVE RIGHTS. - The indemnification and advancement
of expenses provided in this Article VII shall not be deemed exclusive of any
other rights to which any person indemnified may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise, both
as to action in such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be such director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such person.
SECTION 5. INSURANCE. - The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the
provisions of this Article VII or otherwise.
- viii -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains financial information extracted from the financial
statements as of and for the period ended March 31, 1998 and is qualified in
this entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001009480
<NAME> AMERTRANZ WORLDWIDE HOLDING CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 407
<SECURITIES> 0
<RECEIVABLES> 17,005
<ALLOWANCES> 623
<INVENTORY> 0
<CURRENT-ASSETS> 17,455
<PP&E> 1,815
<DEPRECIATION> 889
<TOTAL-ASSETS> 32,273
<CURRENT-LIABILITIES> 26,639
<BONDS> 0
0
6,105
<COMMON> 84
<OTHER-SE> (4,612)
<TOTAL-LIABILITY-AND-EQUITY> 32,273
<SALES> 74,000
<TOTAL-REVENUES> 74,000
<CGS> 57,829
<TOTAL-COSTS> 57,829
<OTHER-EXPENSES> 14,530
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,066
<INCOME-PRETAX> 744
<INCOME-TAX> 95
<INCOME-CONTINUING> 649
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 649
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.03
</TABLE>
