SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 26, 1998
WORKFLOW MANAGEMENT, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-24383 06-1507104
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
240 Royal Palm Way, Palm Beach, Florida 33480
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (561) 659-6551
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
A press release dated August 24, 1998, regarding first quarter operating
results and certain other matters with respect to Workflow Management, Inc. is
filed with this Form 8-K as Exhibit 99.1
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
The exhibits on the accompanying Exhibit Index are filed or incorporated
by reference as part of this Form 8-K and the Exhibit Index is incorporated
herein by reference.
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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.
WORKFLOW MANAGEMENT, INC.
By: /s/ Thomas B. D'Agostino
-----------------------------------
Thomas B. D'Agostino
Chairman of the Board,
President and Chief Executive
Officer
Date: August 26, 1998
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EXHIBIT INDEX
Exhibit No. Description of Exhibits
- ----------- -----------------------
99.1 Press release dated August 24, 1998
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
WORKFLOW MANAGEMENT, INC. REPORTS RESULTS FOR FIRST QUARTER OF FISCAL 1999
Signs Letters of Intent to Acquire Four Companies
Announces Stock Repurchase Program
PALM BEACH, Fla., August 24, 1998 - Workflow Management, Inc. (NASDAQ:
WORK) today announced that revenues for the first quarter of fiscal 1999 ended
July 25, 1998 increased 10.1% to $90.5 million over the comparable quarter last
year. Workflow reported operating income, before one time charges, of $5.3
million for the first quarter of fiscal 1999, as compared to operating income,
before one time charges, of $5.0 million in the first quarter of fiscal 1998 and
$5.2 million in the fourth quarter of fiscal 1998 on a pro forma basis. Net
income for the first fiscal quarter was $0.16 per diluted share on a pro forma
basis, as compared to net income of $0.18 per diluted share in last year's
comparable quarter, assuming a comparable number of shares outstanding. As
expected, net income was impacted by higher interest expense and corporate
overhead as a stand-alone company. Workflow Management completed the spin-off
from U.S. Office Products Company on June 9, 1998.
Workflow also announced today that it has signed letters of intent to
purchase four companies for an aggregate purchase price of $13.5 million. At
closing, the combined companies are expected to contribute annualized revenues
of approximately $22 million, annualized EBIT of approximately $3.1 million and
annualized earnings per share of approximately $0.05 per share. These accretive
acquisitions will increase Workflow's geographic footprint into one new market
and strengthen existing operations in two strategic markets. The transactions
include three document distribution companies, based in Puerto Rico, New York
City and Los Angeles, a new market. The fourth company is an envelope
manufacturer, based in New York City, which will further strengthen Workflow's
position as the leading manufacturer of envelopes in that region. The
acquisitions are expected to close by the end of September 1998.
Tom D'Agostino, Chairman and Chief Executive Officer, commented, "Today's
announcements reflect our success in implementing both our organic and
consolidation growth strategies, as well as our long-term commitment to building
shareholder value. In less than three months since our spin-off from U.S. Office
Products, we are beginning to reap the benefits of a more focused and aggressive
management effort. Our first quarter financial results reflect our continued
success in cross-selling our multi-platform businesses, integrating recent
acquisitions and building customized outsourcing programs."
Steve Gibson, Chief Financial Officer, commented, "Our first quarter
results reflect strength across all of our product lines, which are performing
at or above our expectations. We are very pleased with the increase in revenue
and the operating income growth that each of our units has achieved. As
expected, our bottom line results were impacted by higher interest expense and
corporate overhead."
Mr. D'Agostino continued, "Our announced acquisitions will strengthen and
expand our product lines, while contributing to our revenue and profit growth.
At closing, all three document distribution companies will be integrated into
GetSmart, our Internet-based transaction and information system. Leveraging this
proprietary technology, we foresee tremendous cross-selling opportunities,
particularly in the outsourcing industry. Internet sales in our product
distribution line now approach 50% of our revenues. Our technology will also
support our efforts to improve operating margins through the consolidation of
operations, improved purchasing programs and the implementation of cost
controls. With a strong financial position and solid organic growth, we will
continue to pursue accretive acquisitions in the highly fragmented graphic arts
industry."
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<PAGE>
Workflow also announced today that its Board of Directors has approved a
share repurchase program of up to two million shares of its common stock.
"Reflecting our long-term commitment to increasing shareholder value, we
are implementing a share repurchase program," stated Mr. D'Agostino. "We do not
believe Workflow's current share price adequately reflects the value of our
proprietary technology, integrated manufacturing and distribution infrastructure
and growth prospects. As a result, we believe that the repurchase is a good
investment and is in the best interests of the company and our shareholders.
Demand for our services remains strong and we are confident that we will
continue to increase the value of our company through the aggressive
implementation of our growth plans."
Workflow Management, Inc. is a leading graphic arts company providing
documents, envelopes and commercial printing to over 22,000 businesses in North
America. Workflow also offers various electronic print and facilities management
services, which allow customers to realize cost savings by outsourcing non-core
operations. The company has 17 manufacturing facilities in seven states and five
Canadian provinces, 26 distribution centers, eight print-on-demand centers and
59 sales offices, with more than 2,100 employees. The company's shares are
traded on the Nasdaq Stock Market under the symbol: WORK.
This press release contains "forward-looking statements," within the
meaning of federal securities laws, that involve risks and uncertainties. All
statements herein, other than those consisting solely of historical facts, that
address activities, events or developments that the company expects or
anticipates will or may occur in the future, including such things as proposed
acquisitions, business strategy, measures to implement strategy, competitive
strengths, goals, references to future success and other events, may be
forward-looking statements. Statements herein are based on certain assumptions
and analyses by the company in light of its experience and its perception of
historical trends, current conditions and potential future developments, as well
as other factors it believes are appropriate in the circumstances. However,
whether actual results, events and developments will conform with the company's
expectations is subject to a number of risks and uncertainties and important
factors could cause actual results, events and developments to differ materially
from those referenced in, contemplated by or underlying any forward-looking
statements herein, including, among others, the company's consummation of
proposed acquisitions and its ability to integrate acquired businesses into its
existing operations, the continued development and viability of the company's
operations, the company's ability to manage its growth, the impact of industry
and economic conditions, competition and other factors, many of which are beyond
the control of the company. Consequently, all forward-looking statements made
herein are qualified by these cautionary statements and the cautionary language
set forth in the company's most recent Form 10-K report and other documents
filed with the Securities and Exchange Commission, and there can be no assurance
that the actual results, events or developments referenced herein will occur or
be realized, including, but not limited to, the proposed acquisitions announced
herein.
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<TABLE>
Workflow Management, Inc.
Consolidated Statement of Operations
<CAPTION>
Actual Results
For The Three Months Ended
- ------------ ---------------------------------------------------
July 25, 1998 July 26, 1997
------------------ -----------------
(Unaudited) (Unaudited)
<S> <C>
Revenues $ 90,485 $ 82,163
Cost of revenues 65,948 60,268
------------------ -----------------
Gross profit 24,537 27.1% 21,895 26.6%
S, G & A expenses 19,069 16,871
Amortization expense 133 49
------------------ -----------------
Operating income before one-time charges 5,335 5.9% 4,975 6.1%
One-time charges:
Restructuring costs
Strategic restructuring plan 3,818
------------------ -----------------
Operating income after one-time charges 1,517 1.7% 4,975 6.1%
Interest expense and other 1,146 443
------------------ -----------------
Income before provision for income taxes 371 4,532
Provision for income taxes 163 1,829
------------------ -----------------
Net income
$ 208 $ 2,703
================== =================
EBITDA $ 3,146 3.5% $ 6,584 8.0%
EBITDA before one-time charges $ 6,964 7.7% $ 6,584 8.0%
GAAP EPS Data:
Basic $ 0.01 $ 0.19
Diluted $ 0.01 $ 0.19
EPS before one-time charges:
Net income before one-time charges $ 2,346 $ 2,703
Basic EPS before one-time charges $ 0.14 $ 0.19 (A)
Diluted EPS before one-time charges $ 0.14 $ 0.19 (A)
Weighted average shares outstanding:
Basic EPS data 16,265 14,171 (A)
Diluted EPS data 16,475 14,416 (A)
<PAGE>
<CAPTION>
Pro Forma Results
For The Three Months Ended
---------------------------------------------------
July 25, 1998 April 25, 1998
----------------- -----------------
(Unaudited) (Unaudited)
Revenues $ 90,485 $ 95,947
Cost of revenues 65,948 69,880
----------------- -----------------
Gross profit 24,537 27.1% 26,067 27.2%
S, G & A expenses 19,069 20,676
Amortization expense 133 184
----------------- -----------------
Operating income before one-time charges 5,335 5.9% 5,207 5.4%
One-time charges:
Restructuring costs 872
Strategic restructuring plan
----------------- -----------------
Operating income after one-time charges 5,335 5.9% 4,335 4.5%
Interest expense and other 1,146 595
----------------- -----------------
Income before provision for income taxes 4,189 3,740
Provision for income taxes 1,843 1,608
----------------- -----------------
Net income
$ 2,346 $ 2,132
================= =================
EBITDA $ 6,964 7.7% $ 6,460 6.7%
EBITDA before one-time charges $ 6,964 7.7% $ 7,332 7.6%
GAAP EPS Data:
Basic $ 0.16 $ 0.15
Diluted $ 0.16 $ 0.15
EPS before one-time charges:
Net income before one-time charges $ 2,346 $ 2,629
Basic EPS before one-time charges $ 0.16 $ 0.18
Diluted EPS before one-time charges $ 0.16 $ 0.18
Weighted average shares outstanding:
Basic EPS data 14,625 14,625
Diluted EPS data 14,642 14,625
</TABLE>
(A) The weighted average common shares outstanding and EPS amounts were
calculated using the common shares outstanding during the period for U.S.
Office Products Company ("USOP") prior to the distribution of its shares
under the USOP strategic restructuring plan implemented June 9, 1998. If
the number of common shares outstanding for USOP during such period were
equivalent to the number of shares presently outstanding for Workflow
Management, Inc., earnings per share would have been $0.18.
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