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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
[x] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended July 31, 1997 Commission File Number 1-6528
Wallace Computer Services, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 36-2515832
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2275 Cabot Drive Lisle, Illinois 60532
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 588-5000
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, $1.00 par value New York Stock Exchange
Series A Preferred Stock Purchase New York Stock Exchange
Rights
Securities registered pursuant to Section 12(g) of the Act: None
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. X Yes No
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State the aggregate market value of the voting stock held by nonaffiliates of
the registrant.
$1,597,041,468 (based on the October 15, 1997, closing price of these shares on
the New York Stock Exchange)
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
As of October 15, 1997, 43,017,952 shares of Common Stock were
outstanding.
Documents incorporated by reference:
1. Annual Report to Stockholders for 1997 - Parts I, and II of this Form
10-K
2. Definitive Proxy Statement - Part III of this Form 10-K
Indicate by check mark if the disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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The undersigned Registrant hereby amends the following Items of its Annual
Report on Form 10-K for the annual period ended July 31, 1997, as set forth in
the pages attached hereto:
Part I, Item 1. Business, is hereby amended and restated as follows:
The second paragraph of clause (a) shall be deleted in its entirety and
replaced with the following paragraphs:
Since the introduction of the W.I.N.(TM) system (Wallace Information Network
(TM)) in 1993, the Registrant has become a leader in Total Print and
Integrated Supply Management services. At the time of its introduction, the
W.I.N. system represented one of the first complete forms management tools in
the market. It is a software tool that helps supply chain managers uncover
cost saving opportunities on the purchases and management of all custom and
stock business supplies by bringing complete, current data about every
shipment and item in inventory to the customer's desktop for analysis and
decision-making. Three hundred forty two mid-to-large-sized organizations are
presently utilizing the W.I.N. system as the central information tool for the
Registrant's supply management services, representing over $400 million in
annual sales. The W.I.N. system and other material software used in the
Registrant's operations are proprietary to the Registrant.
Integrated Supply Management (ISM) is a new vendor and cost-reduction
strategy being used by U.S. businesses today. The Registrant's ISM program,
BW SINGLE SOURCE(TM), is an integration of not only the business supplies, but
more importantly, all the management services and control mechanisms to help
companies streamline supply chain processes to reduce waste and excess costs.
By applying its ISM services, the Registrant has generated
first-year-customer cost savings of 15 - 20%. Companies can effectively
outsource the work of managing supplies, reducing the purchasing department's
workload and cutting supplies costs, with mechanisms that let the customers
retain control.
The Registrant's Total Print Management encompasses the entire scope of
printing by merging forms management with commercial print management. This
integration allows all the functionality of forms management to be adapted
for its customers' commercial printing needs as well as creating a database
that references characteristics important to all of the customer's printing
needs. Customers not only benefit from this combined management but also from
the tracking and evaluation systems included with Total Print Management. In
essence, Total Print Management is a complete "beginning-to-end" service that
the Registrant can manage for all of its customer's printed supplies.
Part II, Item 7. Management Discussion and Analysis of Financial Condition and
Results of Operations is hereby amended by appending the following text:
Year 2000 Issue. Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed and
developed without considering the impact of the upcoming change of the
century. If not corrected, many computer applications could fail or create
erroneous results by or at the year 2000.
The Registrant does not believe that it will incur material product
liability as a result of the year 2000 issue. However, many of the
Registrant's internal systems were not designed to
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allow for four digit dates. The Registrant has completed an inventory
of all affected software, firmware and hardware (including imbedded chips)
material to its operations. The Registrant is remediating the problem by
modifying its software and in certain cases, purchasing new software
packages. The project is currently on schedule for completion prior to March
31, 1999. The Registrant is establishing a redundant data center where
material systems will be tested commencing in September, 1998. The
Registrant does not expect the year 2000 issue to have a material affect on
its operations.
The Registrant has been working with key suppliers and customers to
ensure that flow of products and services not be disrupted as a result of
failure of the supplier or customer to become year 2000 compliant. While the
Registrant is receiving assurances that no such interruption will occur, the
Registrant cannot ensure third parties will become compliant when promised
and that the flow of goods and services will not be interrupted. Inability
to acquire raw materials or to distribute finished goods could have a
material impact on the Registrant's operations. In addition, a customer's
inability to place EDI orders could have a short term impact on operations.
The Registrant currently estimates the costs of remediation at $7.5 million.
Of the $7.5 million, $1 million has been allocated to purchase new
financial software packages which will add additional functionality and will
therefore be capitalized. The balance of $6.3 million will be expensed as
incurred. Expenses of $267,000 were incurred in fiscal 1997 and $1,076,000
for six months ended January 31, 1998. The Registrant estimates expense for
fiscal years 1998 and 1999 at $3.0 million each year. The Registrant does
not anticipate that the costs of remediation will have a material effect on
its financial condition.
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Wallace Computer Services, Inc. Fiscal 1997 10-K/A
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on April 6, 1998.
Wallace Computer Services, Inc.
By /s/ Michael J. Halloran
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Michael J. Halloran
Vice President, Chief Financial
Officer and Assistant Secretary
(principal accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in capacities indicated, on April 6, 1998.
/s/ Robert J. Cronin /s/ John C. Pope
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Robert J. Cronin John C. Pope
Director, President and Director
Chief Executive Officer
/s/ Richard F. Doyle /s/ Robert P. Rittereiser
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Richard F. Doyle Robert P. Rittereiser
Director Director
/s/ Albert W. Isenman III /s/ Neele E. Stearns
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Albert W. Isenman III Neele E. Stearns, Jr.
Director Director
/s/ William N. Lane III
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William N. Lane III
Director
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