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PROSPECTUS
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306,612 SHARES
GRAPHIC INDUSTRIES, INC.
COMMON STOCK
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THIS PROSPECTUS RELATES TO 306,612 SHARES (THE "SHARES") OF COMMON
STOCK, $.10 PAR VALUE ("COMMON STOCK"), OF GRAPHIC INDUSTRIES, INC. (THE
"COMPANY"). THE SHARES MAY BE OFFERED BY CERTAIN SHAREHOLDERS OF THE COMPANY
(THE "SELLING SHAREHOLDERS") FROM TIME TO TIME IN TRANSACTIONS IN THE OPEN
MARKET, IN NEGOTIATED TRANSACTIONS OR A COMBINATION OF SUCH METHODS OF SALE, AT
FIXED PRICES WHICH MAY BE CHANGED, AT MARKET PRICES PREVAILING AT THE TIME OF
SALE, AT PRICES RELATED TO SUCH PREVAILING MARKET PRICES OR AT NEGOTIATED
PRICES. THE SELLING SHAREHOLDERS MAY EFFECT SUCH TRANSACTIONS BY SELLING THE
SHARES TO OR THROUGH BROKER-DEALERS, AND SUCH BROKER-DEALERS MAY RECEIVE
COMPENSATION IN THE FORM OF DISCOUNTS, CONCESSIONS OR COMMISSIONS FROM THE
SELLING SHAREHOLDERS AND/OR THE PURCHASERS OF THE SHARES FOR WHOM SUCH BROKER-
DEALERS MAY ACT AS AGENTS OR TO WHOM THEY SELL AS PRINCIPALS, OR BOTH (WHICH
COMPENSATION AS TO A PARTICULAR BROKER-DEALER MIGHT BE IN EXCESS OF CUSTOMARY
COMMISSIONS). SEE "SALE OF THE SHARES."
THE SELLING SHAREHOLDERS ACQUIRED THE SHARES FROM THE COMPANY ON
NOVEMBER 1, 1995, IN CONNECTION WITH THE COMPANY'S ACQUISITION OF A COMPANY
OWNED BY THE SELLING SHAREHOLDERS. INCLUDED IN THE SHARES COVERED BY THIS
PROSPECTUS ARE 30,661 SHARES OF COMMON STOCK ISSUED INTO ESCROW IN CONNECTION
WITH THIS ACQUISITION. SEE "RECENT DEVELOPMENTS." THE SELLING SHAREHOLDERS MAY
BE DEEMED TO BE "UNDERWRITERS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). SEE "SELLING SHAREHOLDERS" AND "SALE OF THE
SHARES."
NONE OF THE PROCEEDS FROM THE SALE OF THE SHARES BY THE SELLING
SHAREHOLDERS WILL BE RECEIVED BY THE COMPANY. THE COMPANY HAS AGREED TO BEAR
ALL EXPENSES (OTHER THAN SELLING COMMISSIONS) IN CONNECTION WITH THE
REGISTRATION AND SALE OF THE SHARES BEING OFFERED BY THE SELLING SHAREHOLDERS,
AND THE COMPANY AND THE SELLING SHAREHOLDERS HAVE AGREED TO INDEMNIFY EACH OTHER
AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT.
THE COMMON STOCK IS LISTED ON THE NASDAQ NATIONAL MARKET SYSTEM. ON
JANUARY 25, 1996, THE LAST REPORTED SALE PRICE OF THE COMMON STOCK OF THE
COMPANY REPORTED ON THE NASDAQ NATIONAL MARKET SYSTEM WAS $ 9.75 PER SHARE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is February 9, 1996.
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AVAILABLE INFORMATION
THE COMPANY HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") A REGISTRATION STATEMENT ON FORM S-3 (THE "REGISTRATION
STATEMENT"), OF WHICH THIS PROSPECTUS FORMS A PART, COVERING THE SHARES TO BE
SOLD PURSUANT TO THIS OFFERING.
AS PERMITTED BY THE RULES AND REGULATIONS OF THE COMMISSION, THIS
PROSPECTUS OMITS CERTAIN INFORMATION, EXHIBITS AND UNDERTAKINGS CONTAINED IN THE
REGISTRATION STATEMENT. SUCH ADDITIONAL INFORMATION, EXHIBITS AND UNDERTAKINGS
CAN BE INSPECTED AT AND OBTAINED FROM THE COMMISSION AS SET FORTH BELOW. FOR
ADDITIONAL INFORMATION REGARDING THE COMPANY, THE COMMON STOCK AND RELATED
MATTERS AND DOCUMENTS, REFERENCE IS MADE TO THE REGISTRATION STATEMENT AND
EXHIBITS THERETO.
CERTAIN DOCUMENTS PREVIOUSLY FILED BY THE COMPANY WITH THE COMMISSION
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"), ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS. SEE "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE." COPIES OF ANY DOCUMENTS INCORPORATED HEREIN BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS THEY ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO
WHOM A PROSPECTUS IS DELIVERED UPON REQUEST TO THE SECRETARY, GRAPHIC
INDUSTRIES, INC., 2155 MONROE DRIVE, N.E., ATLANTA, GEORGIA 30324 (TELEPHONE:
(404) 874-3327).
THE COMPANY IS SUBJECT TO THE INFORMATIONAL AND REPORTING REQUIREMENTS
OF THE EXCHANGE ACT, AND ACCORDINGLY FILES REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION WITH THE COMMISSION. SUCH REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION FILED WITH THE COMMISSION, AS WELL AS THE REGISTRATION STATEMENT,
ARE AVAILABLE FOR INSPECTION AND COPYING AT THE PUBLIC REFERENCE FACILITIES
MAINTAINED BY THE COMMISSION AT ROOM 1024, 450 FIFTH STREET, N.W., JUDICIARY
PLAZA, WASHINGTON, D.C. 20549 AND AT CERTAIN REGIONAL OFFICES OF THE COMMISSION
LOCATED AT 500 WEST MADISON STREET, SUITE 1400, CHICAGO, ILLINOIS 60661 AND 7
WORLD TRADE CENTER, NEW YORK, NEW YORK 10048. COPIES OF SUCH MATERIAL CAN BE
OBTAINED FROM THE PUBLIC REFERENCE SECTION OF THE COMMISSION, 450 FIFTH STREET,
N.W., JUDICIARY PLAZA, WASHINGTON, D.C. 20549 AT PRESCRIBED RATES.
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THE COMPANY
The Company engages in all aspects of financial and corporate
printing, reprographic services, commercial printing, direct mail printing and
other graphic communications. It ranks approximately 17th in sales among
commercial printing firms in North America. The Company's competitive position
has been strengthened in recent years by its substantial capital investments in
advanced equipment, including computerized multicolor presses, prepress
equipment and laser scanners for color separations.
The Company has expanded its printing and graphic arts services and
its markets through a continuous program of acquisitions of established
companies in its industry and through internal growth and development. Since
its incorporation in 1970, the Company has grown from a regionally based
business with six operating companies to a network of 17 commercial printing
companies and a reprographics division with operations in the major U.S. market
regions of the Southeast, Northeast, Midwest and Southwest.
The Company's principal executive offices are located at 2155 Monroe
Drive, N.E., Atlanta, Georgia 30324. Its telephone number is (404) 874-3327.
RECENT DEVELOPMENTS
On November 1, 1995, the Company acquired Quadras, Inc. ("Quadras")
pursuant to an Agreement and Plan of Reorganization (the "Agreement") dated
November 1, 1995. Pursuant to the Agreement, QQQ, Inc., a corporation which
owned all of the outstanding stock of Quadras, was merged into Quadras
Acquisition Company, a wholly-owned subsidiary of the Company (the "Merger").
The Merger was effective on November 1, 1995, and the Shares were issued on that
date in exchange for all of the outstanding stock of QQQ, Inc., which was owned
by Ms. Sara S. Harris ("Harris") and Ms. Cynthia A. Morgan ("Morgan"). Of the
total Shares issued, 137,976 Shares were issued to Harris; 137,975 Shares were
issued to Morgan and 30,661 Shares were issued to NationsBank of Georgia, N.A.
as escrow agent (the "Escrow Shares"). The Escrow Shares are being held
pursuant to an Escrow Agreement dated November 1, 1995 (the "Escrow Agreement")
for six months from November 1, 1995 (which period may be extended if any claims
as defined in the Escrow Agreement are then pending) to cover any claims for
breaches of representations, warranties and covenants in the Agreement and
certain other matters. The Escrow Agreement provides for the release of the
Shares held in escrow either to Harris and Morgan, in which case they may be
sold hereunder, or to the Company, in which event they will be canceled. The
Escrow Shares may not be sold or transferred while they are subject to the
Escrow Agreement. Under the terms of the Agreement, the Company agreed to
register the Shares under the Securities Act for resale by the Selling
Shareholders and to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act. The Selling
Shareholders have also agreed to indemnify the Company against certain
liabilities, including liabilities under the Securities Act. The Registration
Statement of which this Prospectus is a part was filed with the Commission
pursuant to the registration provisions of the Agreement.
On December 21, 1995, the Company entered into a $110 million
revolving credit facility with a group of lenders led by Nationsbank. The new
facility refinances the Company's floating rate borrowings and provides
additional borrowing capacity. The initial term of this revolving facility is
two years, renewable each year for an additional one year period. The interest
rate on this indebtedness is a floating rate which, at the Company's option from
time to time, will equal Nationsbank's prime rate or a specified margin (based
upon a specific financial ratio) over LIBOR. This indebtedness is secured by
substantially all the accounts receivable and inventories of the Company and its
subsidiaries.
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SELLING SHAREHOLDERS
Mesdames Harris and Morgan (the "Selling Shareholders") beneficially
owned the following Shares prior to this offering, and such Shares (including
the Escrow Shares when and if released to the Selling Shareholders pursuant to
the Escrow Agreement) are being offered hereby:
<TABLE>
<CAPTION>
Name of Selling Number of Shares Number of
Shareholder Owned Directly Escrow Shares* TOTAL
- ------------------- ---------------- -------------- -------
<S> <C> <C> <C>
Sara S. Harris 137,976 15,330 153,306
Cynthia A. Morgan 137,975 15,331 153,306
</TABLE>
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*Assumes complete release of all Escrow Shares to the Selling Shareholders.
Prior to the offering, each Selling Shareholder beneficially owned
approximately 2.2 percent of the outstanding shares of Common Stock as of the
date of this Prospectus (assuming complete release of the Escrow Shares to the
Selling Shareholders and calculated without regard to the shares of Common Stock
issuable upon conversion of shares of Class B Common Stock or any of the
Company's Convertible Debentures). Upon completion of the offering, assuming
all of the Shares being offered hereby are sold and that no other changes in the
Selling Shareholders' beneficial ownership occur prior to completion of this
offering, the Selling Shareholders will not beneficially own any shares of
Common Stock of the Company. Ms. Morgan currently serves as Chairman of Quadras
and Ms. Harris serves as President of Quadras.
SALE OF THE SHARES
The sale of the Shares by the Selling Shareholders may be effected
from time to time in transactions in the open market, in negotiated transactions
or through a combination of such methods of sale, at fixed prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Shareholders
may effect such transactions by selling the Shares to or through broker-dealers,
and such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for which such broker-dealers may act as agents or to whom they
sell as principals, or both (which compensation as to a particular broker-dealer
may be in excess of customary compensation).
The Selling Shareholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, and any commissions received
by them and profit on any resale of the Shares as principals might be deemed to
be underwriting discounts and commissions under the Securities Act.
LEGAL MATTERS
A legal opinion to the effect that the Shares are legally issued,
fully paid and nonassessable has been rendered by Lawrence M. Gold, P.C., 100
Galleria Parkway, Suite 695, Atlanta, Georgia 30339.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing or incorporated by reference in the Company's Annual Report on Form
10-K for the year ended January 31, 1995, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
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and incorporated herein by reference. Such consolidated financial statements
and schedule are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by this
reference:
(1) The Company's Annual Report on Form 10-K for the year ended
January 31, 1995 (Commission File No. 0-12204);
(2) The Company's Quarterly Report on Form 10-Q for the period
ended April 30, 1995 (Commission File No. 0-12204);
(3) The Company's Quarterly Report on Form 10-Q for the period
ended July 31, 1995 (Commission File No. 0-12204);
(4) The Company's Quarterly Report on Form 10-Q for the period
ended October 31, 1995 (Commission File No. 0-12204);
(5) The description of the Company's Common Stock contained in
the Company's Registration Statement filed pursuant to Section 12
of the Exchange Act on Form 8-A, as amended (Commission File
No. 0-12204).
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
date upon which this offering is terminated shall be deemed to be incorporated
by reference herein and to be part hereof from the date any such document is
filed.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which is also incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded. All information appearing in this Prospectus is qualified in its
entirety by the information and financial statements (including notes thereto)
appearing in the documents incorporated herein by reference, except to the
extent set forth in this paragraph.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SHARES OF COMMON STOCK IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
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