<PAGE>
Registration No. 33-78746
As filed with the Securities and Exchange Commission on October 5, 1995
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________________
COMPUCOM SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-2363156
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10100 N. Central Expressway
Dallas, Texas 75231
(214) 265-3600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Robert J. Boutin
Chief Financial Officer
CompuCom Systems, Inc.
10100 N. Central Expressway
Dallas, Texas 75231
(214) 265-3600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
N. Jeffrey Klauder Dom H. Wyant
Morgan, Lewis & Bockius LLP Jones, Day, Reavis & Pogue
2000 One Logan Square 3500 One Peachtree Center
Philadelphia, PA 19103 303 Peachtree St., N.E.
Atlanta, GA 30308
_________________
Approximate date of commencement of proposed sale to which this
Registration Statement relates: As soon as practicable after the effective date
of this Post-Effective Amendment No. 1.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to Registration Statement on Form
S-3 relates to an underwritten public offering by certain selling stockholders
of 4,200,000 shares of Common Stock of the Registrant (together with up to
630,000 shares which may be sold upon exercise of an underwriters' over-
allotment option) through an underwriting syndicate co-managed by The Robinson-
Humphrey Company, Inc. and Hambrecht & Quist LLC. This offering will be
commenced as promptly as practicable following effectiveness of this Post-
Effective Amendment No. 1 pursuant to Section 8(c) of the Securities Act of
1933, as amended. The balance of the 8,409,091 shares originally registered on
this Registration Statement on Form S-3 will be de-registered following the
completion of the offering contemplated by this Post-Effective Amendment.
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 5, 1995
4,200,000 SHARES
COMPUCOM SYSTEMS, INC.
[LOGO]
COMMON STOCK
_______________________________
All of the 4,200,000 shares of Common Stock, par value $.01 per share
(the "Common Stock"), of CompuCom Systems, Inc., a Delaware corporation
("CompuCom" or the "Company"), offered hereby are being sold by certain
stockholders of the Company (the "Selling Stockholders"). See "Selling
Stockholders." The Company will not receive any of the proceeds from the sale
of shares of Common Stock offered hereby.
The Common Stock is listed on the Nasdaq National Market under the symbol
"CMPC." On October 4, 1995, the last sale price of the Common Stock as
reported on the Nasdaq National Market was $6.125.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.
_____________________________
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.
<TABLE>
<CAPTION>
=============================================================================================
Underwriting Proceeds to Selling
Price to Public Discount/(1)/ Stockholders/(2)/
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............. $ $ $
- ---------------------------------------------------------------------------------------------
Total/(3)/............ $ $ $
=============================================================================================
</TABLE>
(1) See "Underwriting" for information concerning indemnification arrangements
with the Underwriters.
(2) Before deducting expenses of the offering payable by the Selling
Stockholders estimated to be $122,000. In addition, the Company will pay
certain expenses estimated at $10,000.
(3) Certain of the Selling Stockholders have granted the Underwriters a 30-day
option to purchase up to an additional 630,000 shares of Common Stock at the
Price to Public, less the Underwriting Discount, solely to cover over-
allotments, if any. If such option is exercised in full, the total Price to
Public, Underwriting Discount, and Proceeds to Selling Stockholders will be
$________, $________ and $________, respectively. See "Underwriting."
_________________________
The Common Stock is offered severally by the Underwriters named herein,
subject to prior sale, when, as and if delivered to and accepted by them,
subject to their right to reject orders, in whole or in part, and to certain
other conditions. It is expected that delivery of certificates representing the
Common Stock will be made on or about ____________, 1995.
THE ROBINSON-HUMPHREY HAMBRECHT & QUIST
COMPANY, INC.
, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at its New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048, and its
Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
omits certain of the information contained in the Registration Statement and the
exhibits thereto, in accordance with the rules and regulations of the
Commission. For further information concerning the Company and the Common
Stock, reference is made to the Registration Statement and the exhibits filed
therewith, which may be inspected without charge at the office of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of which may be
obtained from the Commission at prescribed rates. Any statements contained
herein concerning the provisions of any documents are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated by reference in this Prospectus: (i)
Annual Report on Form 10-K for the fiscal year ended December 31, 1994; (ii)
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1995 and
June 30, 1995; and (iii) the description of the Company's Common Stock which is
contained in a registration statement filed under the Exchange Act, including
any statements or reports filed for the purpose of updating such description.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of this offering shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of the filing of such documents. Any statement contained
in a document incorporated by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in any accompanying prospectus
supplement modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Requests should be directed in writing to Robert
J. Boutin, Chief Financial Officer, CompuCom Systems, Inc., 10100 N. Central
Expressway, Dallas, Texas 75231, (214) 265-3600.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-2-
<PAGE>
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET
MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE
"UNDERWRITING."
-3-
<PAGE>
_______________________________________________________________________________
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and the financial statements, including the notes thereto,
appearing elsewhere in this Prospectus or incorporated by reference herein.
Unless otherwise indicated, all information in this Prospectus assumes that the
Underwriters' over-allotment option will not be exercised. Investors should
carefully consider the information set forth under the caption "Risk Factors."
THE COMPANY
The Company sells personal computer products and provides systems
integration services, including product configuration, field engineering,
network management, help desk services and network project management. The
Company has increased its net revenues and net earnings from 1990 through 1994
at compounded annual rates of 38% and 42%, respectively, in part through the
enhancement of its product and services capabilities.
The Company is an authorized dealer of major personal computer products
for a number of manufacturers, including Compaq Computer Corporation,
International Business Machines Corporation, Hewlett-Packard Company, Toshiba
America Information Systems, and Apple Computer, Inc. The Company also offers a
broad selection of networking and related products, computer-related peripheral
equipment and a range of computer equipment and software from a number of
vendors, including 3Com Corporation, Digital Equipment Corporation, Intel
Corporation, Kingston Technologies, Lotus Development Corporation, Microsoft
Corporation, NEC Technologies, Inc., and Novell Corporation.
The Company provides a range of integration services from the Company's
offices and on-site at the customer's location. The Company's revenues from its
services business currently represent less than 10% of total revenues, although
such services business is an integral part of the Company's strategy to provide
customers with an "end-to-end" solution to their technology needs. The
Company's services business has increased primarily through internal growth
augmented by a series of strategic acquisitions. These acquisitions have
broadened the variety of network management platforms, increased remote network
monitoring capabilities and greatly expanded the Company's systems engineer
resources. From January 1, 1994 through June 30, 1995, the Company increased the
number of its services employees from approximately 530 to approximately 970.
Products and services are sold by a direct sales force of approximately
220 sales representatives. The Company maintains product distribution centers in
Woolwich, New Jersey and Stockton, California and operates approximately 40
sales and services centers located in and servicing large metropolitan areas
nationwide. Services and support personnel are located at the two distribution
centers, at the Company's headquarters in Dallas, Texas, at various local
sales offices and at customer sites. The Company's distribution centers are
highly automated and employ advanced inventory management and order processing
technologies that allow the Company to configure personal computer products and
receive, process and ship customer orders accurately and efficiently.
Customer support, prompt delivery, product variety and availability, and
price are key elements in attracting new and retaining current customers. In
particular, knowledgeable, experienced sales and services personnel who
understand customer needs are important factors in the growth of the Company's
services business. The Company seeks to address these requirements by continuing
to expand its services and support organization, training sales and services
personnel, and developing its vendor relationships to provide a customer driven
product line at competitive prices. Also crucial to the Company's continued
success is the expansion of its integrated, comprehensive information system
that enables the Company to track and respond to its customers' requirements
more efficiently.
The Company's predecessor was incorporated in Michigan in 1981, and was
reincorporated in Delaware, and changed its name to CompuCom Systems, Inc., in
1989. The principal executive offices of the Company are located at 10100 N.
Central Expressway, Dallas, Texas 75231 and its telephone number at that address
is (214) 265-3600.
________________________________________________________________________________
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<PAGE>
________________________________________________________________________________
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Selling Stockholders............ 4,200,000
Common Stock to be outstanding after the offering (1)....... 43,047,515
Nasdaq National Market Symbol............................... CMPC
</TABLE>
____________
(1) Does not include (i) 2,954,209 shares of Common Stock reserved for issuance
upon conversion of 2,000,000 outstanding shares of Series B Cumulative
Convertible Preferred Stock, $10 stated value ("Series B Stock"), (ii)
4,491,801 shares of Common Stock reserved for issuance upon the exercise of
options outstanding under the Company's 1983 Stock Option Plan, 1984 Non-
Qualified Stock Option Plan, 1993 Stock Option Plan and 1995 Stock Option
Plan for Directors (together, the "Option Plans"), (iii) 2,096,300 shares
of Common Stock available for future grants of options under the Option
Plans, or (iv) 103,331 shares reserved for issuance upon the exercise of
outstanding warrants and other stock awards.
SUMMARY FINANCIAL DATA
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended
Year Ended December 31, June 30,
---------------------------------------------------------- ---------------------------
1990 1991 1992 1993 1994 1994 1995
-------- -------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net revenues............... $343,325 $528,560 $713,035 $1,015,482 $1,255,813 $587,482 $674,197
Cost of revenues.......... 289,409 446,149 608,316 870,773 1,085,012 510,728 569,042
-------- -------- -------- ---------- ---------- -------- --------
Gross margin............... 53,916 82,411 104,719 144,709 170,801 76,754 105,155
Selling, general and
administrative expense... 42,397 65,530 82,586 112,901 130,402 59,294 81,247
Depreciation and
amortization expense..... 884 1,998 2,912 4,178 4,621 2,190 2,997
-------- -------- -------- ---------- ---------- -------- --------
Operating income........... 10,635 14,883 19,221 27,630 35,778 15,270 20,911
Interest expense.......... 4,579 6,654 7,507 8,722 11,346 5,229 6,497
-------- -------- -------- ---------- ---------- -------- --------
Earnings before income
taxes..................... 6,056 8,229 11,714 18,908 24,432 10,041 14,414
Income taxes.............. 2,423 3,209 4,451 7,469 9,773 4,017 5,765
-------- -------- -------- ---------- ---------- -------- --------
Net earnings............... $ 3,633 $ 5,020 $ 7,263 $ 11,439 $ 14,659 $ 6,024 $ 8,649
======== ======== ======== ========== ========== ======== ========
Earnings per common share:
Primary.................... $.13 $.16 $ .23 $ .34 $ .40 $ .17 $ .22
Fully diluted.............. .13 .16 .22 .29 .34 .14 .19
</TABLE>
<TABLE>
<CAPTION>
June 30, 1995
-----------------------------
Actual As Adjusted (1)
----------- --------------
<S> <C> <C>
SELECTED BALANCE SHEET DATA:
Total assets....................................$ 406,363 $406,363
Long-term debt.................................. 113,417 113,417
Convertible subordinated notes.................. 18,405 -
Stockholders' equity............................ 102,806 121,211
</TABLE>
- ---------------------
(1) Adjusted to give effect to the conversion of $18,500,000 in principal
amount of the Company's 9% Convertible Subordinated Notes into 8,409,087
shares of Common Stock. None of such convertible notes will be outstanding
upon the commencement of the offering contemplated hereby. See "Selling
Stockholders."
________________________________________________________________________________
-5-
<PAGE>
RISK FACTORS
In evaluating the Company and its business, prospective investors should
consider carefully the following risk factors in addition to the other
information contained herein.
Competition. The Company is engaged in fields within the computer industry
characterized by a high level of competition. Many established personal
computer manufacturers (including many of the Company's own vendors), systems
integrators and other resellers of personal computer or networking products
compete with the Company in the configuration and distribution of computer
systems and equipment. In the highly fragmented computer services area, the
Company competes with several larger competitors, other corporate resellers
pursuing high-end services opportunities, as well as several smaller computer
services companies. Some of these competitors have financial, technical,
manufacturing, sales, marketing and other resources which are substantially
greater than those of the Company. In addition, the computer products and
services industry is characterized by intense price competition, which may
adversely affect the Company's results of operations. There can be no assurance
that the Company will be able to continue to compete successfully with existing
or new competitors.
Inventory Management. The personal computer industry is characterized by
rapid product improvement and technological change resulting in relatively short
product life cycles and rapid product obsolescence, placing inventory at
considerable valuation risk. Certain of the Company's suppliers provide price
protection practices to the Company intended to reduce the risk of inventory
devaluation by absorbing temporary price reductions and long-term price declines
associated with aging product life cycles. The Company also has the option of
returning a certain percentage of its current product inventories each quarter
to certain manufacturers as it assesses each product's current and
forecasted demand schedule. There can be no assurance, however, that suppliers
will continue such policies, that unforeseen new product developments will not
affect the Company adversely, or that the Company can adequately manage its
existing and future inventory.
Attraction and Retention of Technical Employees. The Company's services
business involves the delivery of professional services and is labor-intensive.
The success of the services business will depend in large part upon the
Company's ability to attract, develop, motivate and retain highly skilled
technical employees who are in particularly great demand and are likely to
remain a limited resource for the foreseeable future. Although the Company
expects to continue to be able to attract and retain sufficient numbers of
highly skilled technical employees and project managers for the foreseeable
future, there can be no assurance that the Company will be able to do so. The
inability to attract and hire additional technical personnel, or the loss of a
significant number of the Company's technical personnel, could have a material
adverse impact on the Company, including its ability to secure and retain
customers.
Management of Growth. The Company's significant growth during the past
several years has resulted in increased responsibilities for both existing and
new management personnel. In addition, the Company is in the process of
expanding its focus to emphasize growth in the service integration business.
There can be no assurance that the Company will be successful in managing its
expansion, and the failure to do so could adversely affect the Company's
financial position and results of operations.
Product Supply. The fields within the computer industry in which the Company
competes continue to experience significant product supply shortages and
customer order backlogs due to the inability of certain manufacturers to supply
certain products on a timely basis. In addition, certain vendors have initiated
new channels of distribution that increase competition for the available product
supply. There can be no assurance that vendors will be able to maintain an
adequate supply of products to fulfill the Company's customer orders on a timely
basis. Failure to obtain adequate product supplies could have a material adverse
effect on the Company's results of operations.
Dependence on Major Vendors. A substantial portion of the Company's revenues
are derived from sales of computer systems including Compaq, IBM and HP personal
computer products. During 1994, sales of Compaq and IBM personal computer
products each accounted for at least 20% of the Company's 1994 net revenues
while sales of HP products accounted for approximately 11% of 1994 net revenues.
The Company's agreements with these vendors contain provisions providing for
periodic renewals and that permit termination by the vendor without cause,
generally upon 30 to 90 days' notice, depending on the vendor. In addition, the
Company's business is dependent upon pricing
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<PAGE>
and related terms, product availability and dealer authorizations provided by
its major vendors. The loss of a major vendor or the deteriorization of the
Company's relationship with a major vendor could have a material adverse effect
on the Company's business. Additionally, there can be no assurance that these
relationships will continue as presently in effect or that changes by one or
more of these key vendors in their volume discount schedules or other marketing
programs applicable to the Company would not adversely affect the Company.
Potential Fluctuations in Operating Results. The Company's results may vary
significantly from quarter to quarter depending on certain factors including,
but not limited to, demand for personal computers, customer order deferrals,
availability of products and general economic conditions. The Company seeks to
control its expense levels, but such controls are in part based on anticipated
revenues. Therefore, the Company may be unable to adjust spending in a timely
manner to compensate for any unexpected revenue shortfall. As a result,
quarterly period-to-period comparisons of the Company's financial results are
not necessarily meaningful and should not be relied upon as an indication of
future performance.
Control by Safeguard Scientifics, Inc. Safeguard Scientifics, Inc.
("Safeguard") currently owns 21,463,184 shares of Common Stock and, after giving
effect to the issuance of 8,409,087 shares of Common Stock upon conversion of
the Company's 9% Convertible Subordinated Notes, will own approximately 49.9% of
the outstanding Common Stock assuming no additional purchases. In addition,
Safeguard owns 2,000,000 shares of Series B Stock. The Series B Stock is
currently convertible into approximately 2,954,209 shares of Common Stock at a
rate of $6.77 per share of Common Stock, subject to anti-dilution adjustments.
The shares of Series B Stock are entitled to one vote for each share of Common
Stock into which such shares may be converted, except that, for so long as
Safeguard owns at least 40% of the Company's outstanding voting securities, in
the election of directors the shares of Series B Stock are entitled to five
votes for each share of Common Stock into which such shares of Series B Stock
may be converted. Consequently, after giving effect to the conversion of the
Company's 9% Convertible Subordinated Notes into 8,409,087 shares of Common
Stock, Safeguard has approximately 62.7% of the outstanding voting power of the
Company's capital stock with respect to the election of directors and
approximately 53.1% of the outstanding voting power of the Company's capital
stock with respect to all other matters upon which the holders of Common Stock
may vote. As a result, Safeguard will have the voting power to elect the
Company's entire Board of Directors and have the practical ability to control
all other matters requiring stockholder approval. In addition, the Company has
certain arrangements pursuant to which Safeguard provides various
administrative, legal and financial services in return for an annual fee. The
Company has been informed that Safeguard plans to maintain at least a 50%
economic interest in the Company and may do so, among other ways, by purchasing
Common Stock in open market transactions from time to time, in privately
negotiated transactions with other stockholders of the Company, by purchasing
shares in the offering contemplated hereby, or by acquiring newly issued shares
from the Company.
Limited Trading Market; Shares Eligible for Future Sale. At September 30,
1995, and after giving effect to the issuance of 8,409,087 shares of Common
Stock upon conversion of the Company's 9% Convertible Subordinated Notes, the
Company had 43,047,515 shares of Common Stock outstanding, not including (i)
2,954,209 shares of Common Stock reserved for issuance upon conversion of
2,000,000 outstanding shares of Series B Stock, (ii) 4,491,801 shares of Common
Stock reserved for issuance upon the exercise of options outstanding under the
Company's Option Plans, (iii) 2,096,300 shares of Common Stock available for
future grants of options under the Option Plans, or (iv) 103,331 shares reserved
for issuance upon the exercise of outstanding warrants and other stock awards.
At September 30, 1995, and after giving effect to the issuance of 8,409,087
shares of Common Stock upon conversion of the Company's 9% Convertible
Subordinated Notes, 20,409,735 shares of Common Stock were held by non-
affiliates of the Company, having an aggregate market value of $125,009,626
(based on the closing price on the Nasdaq National Market on October 4, 1995).
Safeguard owns 21,463,184 of the outstanding shares of Common Stock as of
September 30, 1995. Safeguard has "demand" and "piggyback" registration rights
with respect to certain of those shares as well as an additional 2,954,209
shares of Common Stock issuable upon conversion of the Series B Stock. In
addition, the Company has granted registration rights covering approximately
4,642,716 shares of Common Stock (of which 93,331 shares are covered by
currently effective registration statements). Finally, shares issued upon
exercise of outstanding options under the Company's Option Plans are registered
for resale on Form S-8. In connection with the offering contemplated hereby, the
holders of approximately 26,559,369 shares of Common Stock have agreed, subject
to certain limited exceptions, not to offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock, without the consent of The Robinson-
Humphrey Company, Inc., for a period of 90 days from the date of this
Prospectus. The Company is unable to predict the effect that sales made under
Rule 144, under registration statements, or otherwise, may have on the then
prevailing market price of the Common Stock although
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<PAGE>
any substantial sale of restricted securities pursuant to Rule 144 or under
registration statements may have an adverse effect, particularly in view of the
limited trading market for the Common Stock.
No Dividends. To date, the Company has not paid any cash dividends on its
Common Stock, and does not expect to declare or pay any cash or other dividends
in the foreseeable future. Further, the Company's bank loan agreements restrict
the Company from declaring or paying dividends or other distributions on its
Common Stock.
SELLING STOCKHOLDERS
In September 1992, the Company sold $18,500,000 in principal amount of 9%
Convertible Subordinated Notes Due September 24, 2002 (the "Convertible Notes").
The Convertible Notes are convertible into shares of Common Stock at a
conversion price of $2.20 per share of Common Stock. During September 1995, the
Company gave notice of its intention to redeem the Convertible Notes and, prior
to the commencement of the offering contemplated hereby, the Convertible Notes
will be converted into an aggregate of 8,409,087 shares of Common Stock. The
4,209,087 shares of Common Stock received by the Selling Stockholders upon
conversion of the Convertible Notes which are not being sold in this offering
(assuming no exercise of the over-allotment option) are eligible for immediate
resale under Rule 144 under the Securities Act.
The following table sets forth information regarding the beneficial
ownership of Common Stock by the Selling Stockholders as of the date of this
Prospectus and as adjusted to reflect the sale of the shares of Common Stock
offered hereby. Unless otherwise indicated, each of the Selling Stockholders
has sole voting and investment power with respect to the shares beneficially
owned. No Selling Stockholder has had any material relationship with the
Company within the past three years other than through its ownership of a
Convertible Note or shares of Common Stock issued upon conversion thereof.
<TABLE>
<CAPTION>
Shares Being Shares Beneficially
Shares Beneficially Owned Sold in the Owned After the
Selling Stockholder Prior to the Offering Offering(1) Offering(1)
------------------- --------------------- ----------- -----------
Total Percent(2) Total Percent(2)
----- ---------- ----- ----------
<S> <C> <C> <C> <C> <C>
Massachusetts Mutual Life Insurance Company (3) 2,500,000 5.8% 185,000 2,315,000 5.4%
First Interstate Bank of Oregon 1,590,909 3.7% 1,590,909 0 0%
as Agent for Oregon Equity Fund
MassMutual Corporate Investors (3) 1,363,636 3.2% 100,910 1,262,726 2.9%
Delaware State Employees' Retirement Fund 1,136,363 2.6% 1,136,363 0 0%
MassMutual Participation Investors (3) 681,818 1.6% 50,457 631,361 1.5%
State of Delaware Retirement Plan -
Froley, Revy 454,545 1.1% 454,545 0 0%
ICI American Holdings Pension Trust 249,090 * 249,090 0 0%
The Northern Trust Company as Trustee for
Nalco Chemical Company Retirement Trust 227,272 * 227,272 0 0%
Zeneca Holdings Pension Trust 205,454 * 205,454 0 0%
</TABLE>
______________________
(1) Does not reflect any exercise of the Underwriters' over-allotment option.
(2) The percentage for each Selling Stockholder is determined based upon
43,047,515 shares of Common Stock outstanding.
(3) Each of Massachusetts Mutual Life Insurance Company, MassMutual Corporate
Investors and MassMutual Participation Investors have agreed to grant the
Underwriters a 30-day option to purchase up to 346,500, 189,000, and 94,500
additional shares of Common Stock, respectively, solely to cover over-
allotments, if any. See "Underwriting."
* Less than 1%
-8-
<PAGE>
UNDERWRITING
Subject to the terms and conditions of an Underwriting Agreement, the
Underwriters named below, for whom The Robinson-Humphrey Company, Inc. and
Hambrecht & Quist LLC are acting as representatives (the "Representatives"),
have severally agreed to purchase from the Selling Stockholders, and the Selling
Stockholders have agreed to sell to the Underwriters, the respective number of
shares of Common Stock set forth opposite each Underwriter's name below.
<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
The Robinson-Humphrey Company, Inc...
Hambrecht & Quist LLC................
----------------
Total........................... 4,200,000
================
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to the approval of certain legal matters by counsel and
to various other conditions. The nature of the Underwriters' obligations is
such that they are committed to purchase all of the shares of Common Stock
offered hereby if any are purchased.
The Underwriters propose to offer the shares of Common Stock being purchased
directly to the public at the public offering price set forth on the cover page
of this Prospectus and to certain other dealers at such price less a concession
not in excess of $_______ per share of Common Stock. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $_______ per share
to certain other dealers. After this offering, the public offering price and
other selling terms may be changed.
Certain of the Selling Stockholders have granted to the Underwriters a 30-
day option to purchase up to an additional 630,000 shares of Common Stock at the
public offering price less the underwriting discount set forth on the cover page
of this Prospectus, to cover over-allotments, if any. If the Underwriters
exercise the over-allotment option in full, such Selling Stockholders will sell
to the Underwriters an aggregate of 630,000 shares of Common Stock. See "Selling
Stockholders." If the Underwriters exercise their over-allotment option, the
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares of Common
Stock to be purchased by each of them as shown in the above table bears to the
4,200,000 shares of Common Stock offered hereby. The Underwriters may exercise
such option only to cover over-allotments made in connection with the sale of
the 4,200,000 shares of Common Stock offered hereby.
The Selling Stockholders, the Company, its executive officers and directors
and Safeguard, for a period of 90 days from the date of this Prospectus, have
agreed that they will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock of the Company without the prior written consent of
The Robinson-Humphrey Company, Inc., except for the sale of shares of Common
Stock offered hereby and, with respect to such executive officers and directors,
the Selling Stockholders and Safeguard, except for bona fide gifts or transfers
effected other than on any securities exchange or in the over-the-counter market
to donees or transferees that agree to be bound by such restriction.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against, and to contribute to losses arising out of, certain
liabilities under the Securities Act, subject to certain limitations.
The Underwriters have advised the Company that they do not intend to confirm
sales of Common Stock to any account over which they exercise discretionary
authority.
In connection with the offering contemplated hereby, certain underwriters
and selling group members (if any) or their respective affiliates who are
qualified registered market makers on the Nasdaq National Market may engage in
passive market making transactions in the Common Stock on the Nasdaq National
Market in accordance with Rule 10b-6A under the Exchange Act during the two
business day period before commencement of offers of sales of the Common Stock.
The passive market making transactions must comply with applicable volume and
price limits and be identified as such. In general, a passive market maker may
display its
-9-
<PAGE>
bid at a price not in excess of the highest independent bid for the security;
however if all independent bids are lowered below the passive market maker's
bid, such bid must be lowered when certain purchase limits are exceeded.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Morgan, Lewis & Bockius LLP, Philadelphia,
Pennsylvania. Certain legal matters will be passed upon for the Underwriters by
Jones, Day, Reavis & Pogue, Atlanta, Georgia, and for the Selling Stockholders
by Choate, Hall & Stewart, Boston, Massachusetts.
EXPERTS
The consolidated financial statements and schedule of CompuCom Systems, Inc.
and subsidiaries as of December 31, 1994 and 1993 and for each of the years in
the three-year period ended December 31, 1994 included and incorporated by
reference herein, have been included and incorporated by reference herein in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified public
accountants, included and incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
-10-
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report.............................................................. F-2
Consolidated Balance Sheets as of December 31, 1993 and 1994 and June 30, 1995 (unaudited) F-3
Consolidated Statements of Operations for the years ended December 31, 1992, 1993 and 1994
and the six months ended June 30, 1994 and 1995 (unaudited)............................... F-4
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1992,
1993 and 1994 and the six months ended June 30, 1995 (unaudited).......................... F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1992, 1993 and 1994
and the six months ended June 30, 1994 and 1995 (unaudited)............................... F-6
Notes to Consolidated Financial Statements................................................ F-7
</TABLE>
F-1
<PAGE>
Independent Auditors' Report
----------------------------
The Stockholders and Board of Directors
CompuCom Systems, Inc.:
We have audited the accompanying consolidated balance sheets of CompuCom
Systems, Inc. and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1994. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CompuCom
Systems, Inc. and subsidiaries as of December 31, 1994 and 1993, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1994 in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
Dallas, Texas
February 8, 1995
F-2
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
December 31, December 31, June 30, 1995
Assets 1993 1994 (unaudited)
------ --------------- --------------- ---------------
<S> <C> <C> <C>
Current assets:
Cash $ 3,941 $ 4,076 $ 4,094
Receivables, less allowance for doubtful accounts
of $1,872 in 1993, $1,942 in 1994 and $2,100 at June 30, 1995 207,721 233,589 215,791
Inventories 124,282 155,561 150,141
Other 1,705 2,145 1,737
--------------- --------------- ---------------
Total current assets 337,649 395,371 371,763
Property and equipment:
Land, building and improvements 5,703 5,842 5,869
Furniture, fixtures and other equipment 12,592 15,302 17,771
Leasehold improvements 1,770 2,414 2,859
--------------- --------------- ---------------
20,065 23,558 26,499
Less accumulated depreciation and amortization (5,225) (7,648) (9,429)
--------------- --------------- ---------------
Net property and equipment 14,840 15,910 17,070
Cost in excess of fair value of tangible net assets
purchased, less accumulated amortization 10,274 12,498 12,229
Other assets 2,308 5,752 5,301
--------------- --------------- ---------------
$ 365,071 $ 429,531 $ 406,363
=============== =============== ===============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 150,914 $ 154,342 $ 132,215
Accrued liabilities 29,746 37,623 34,110
--------------- --------------- ---------------
Total current liabilities 180,660 191,965 166,325
Long-term debt 107,316 118,974 113,417
Deferred income taxes 3,485 6,010 5,410
Convertible subordinated notes 17,880 18,214 18,405
Stockholders' equity:
Series B preferred stock, $10 stated value. Authorized 3,000,000
shares; issued and outstanding 2,000,000. 20,000 20,000
Common stock, $.01 par value. Authorized 70,000,000
shares; issued and outstanding 31,331,245 shares
in 1993, 33,694,764 shares in 1994 and 34,059,764 at June 30, 1995 313 337 341
Additional paid-in capital 23,984 28,164 28,774
Retained earnings from July 1, 1987 31,433 45,867 53,691
--------------- --------------- ---------------
Total stockholders' equity 55,730 94,368 102,806
--------------- --------------- ---------------
$ 365,071 $ 429,531 $ 406,363
=============== =============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Six months Six months
Year ended Year ended Year ended Ended Ended
December 31, December 31, December 31, June 30, 1994 June 30, 1995
1992 1993 1994 (unaudited) (unaudited)
-------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 713,035 $ 1,015,482 $ 1,255,813 $ 587,482 $ 674,197
Cost of revenues 608,316 870,773 1,085,012 510,728 569,042
-------------- --------------- --------------- --------------- ---------------
Gross margin 104,719 144,709 170,801 76,754 105,155
Expenses:
Selling 58,843 82,205 97,915 46,019 61,546
General and administrative 23,743 30,696 32,487 13,275 19,701
Interest 7,507 8,722 11,346 5,229 6,497
Depreciation and amortization 2,912 4,178 4,621 2,190 2,997
-------------- --------------- --------------- --------------- ---------------
93,005 125,801 146,369 66,713 90,741
-------------- --------------- --------------- --------------- ---------------
Earnings before income taxes 11,714 18,908 24,432 10,041 14,414
Income taxes 4,451 7,469 9,773 4,017 5,765
-------------- --------------- --------------- --------------- ---------------
Net earnings $ 7,263 $ 11,439 $ 14,659 $ 6,024 $ 8,649
============== =============== =============== =============== ===============
Earnings per common share:
Primary $ .23 $ .34 $ .40 $ .17 $ .22
Fully diluted $ .22 $ .29 $ .34 $ .14 $ .19
Average common shares outstanding:
Primary 30,876 33,888 35,714 35,919 35,992
Fully diluted 33,651 42,958 44,123 44,328 44,935
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
------------------------------- -------------------------------
Shares Amount Shares Amount
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Balances at December 31, 1991 243,750 $ 2,438 29,131,929 $ 291
Retirement of preferred stock (243,750) (2,438)
Issuance of common stock 83,850 1
Exercise of common stock warrants 200,000 2
Exercise of options 527,250 6
Net earnings
-------------- -------------- -------------- --------------
Balances at December 31, 1992 29,943,029 300
Issuance of common stock 430,000 4
Exercise of convertible notes/common
stock warrants 566,666 5
Exercise of options 391,550 4
Net earnings
-------------- -------------- -------------- --------------
Balances at December 31, 1993 31,331,245 313
Issuance of preferred stock 2,000,000 20,000
Issuance of common stock 335,665 3
Exercise of common stock warrants 1,426,666 14
Exercise of options 601,188 7
Preferred stock dividend
Net earnings
-------------- -------------- -------------- --------------
Balances at December 31, 1994 2,000,000 20,000 33,694,764 337
Exercise of common stock warrants (unaudited) 5,000
Exercise of options (unaudited) 360,000 4
Preferred stock dividend (unaudited)
Net earnings (unaudited)
-------------- -------------- -------------- --------------
Balances at June 30, 1995 (unaudited) 2,000,000 $20,000 34,059,764 $341
============== ============== ============== ==============
<CAPTION>
Additional Total
Paid-in Retained Stockholders'
Capital Earnings Equity
-------------- -------------- --------------
<S> <C> <C> <C>
Balances at December 31, 1991 $ 20,041 $ 12,731 $ 35,501
Retirement of preferred stock (2,438)
Issuance of common stock 209 210
Exercise of common stock warrants 298 300
Exercise of options 760 766
Net earnings 7,263 7,263
-------------- -------------- --------------
Balances at December 31, 1992 21,308 19,994 41,602
Issuance of common stock 1,249 1,253
Exercise of convertible notes/common
stock warrants 1,094 1,099
Exercise of options 333 337
Net earnings 11,439 11,439
-------------- -------------- --------------
Balances at December 31, 1993 23,984 31,433 55,730
Issuance of preferred stock 20,000
Issuance of common stock 1,197 1,200
Exercise of common stock warrants 2,213 2,227
Exercise of options 770 777
Preferred stock dividend (225) (225)
Net earnings 14,659 14,659
-------------- -------------- --------------
Balances at December 31, 1994 28,164 45,867 94,368
Exercise of common stock warrants (unaudited) 8 8
Exercise of options (unaudited) 602 606
Preferred stock dividend (unaudited) (825) (825)
Net earnings (unaudited) 8,649 8,649
-------------- -------------- --------------
Balances at June 30, 1995 (unaudited) $28,774 $53,691 $102,806
============== ============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Year ended Year ended Year ended
December 31, December 31, December 31,
1992 1993 1994
-------------- -------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 7,263 $ 11,439 $ 14,659
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,912 4,178 4,621
Other 140
Deferred income taxes 3,720 1,667 2,525
Changes in assets and liabilities:
Receivables (11,027) (82,375) (25,546)
Inventories (1,415) (25,159) (34,207)
Other current assets (851) 75 (145)
Accounts payable 2,160 45,387 4,899
Accrued liabilities and other 942 14,638 7,127
-------------- -------------- --------------
Net cash provided by (used in) operating activities 3,844 (30,150) (26,067)
-------------- -------------- --------------
Cash flows from investing activities:
Capital expenditures, net (7,408) (6,584) (5,018)
Business acquisitions net of cash acquired (457) (2,741)
-------------- -------------- --------------
Net cash used in investing activities (7,865) (6,584) (7,759)
-------------- -------------- --------------
Cash flows from financing activities:
Net borrowings (repayments) under bank credit facility (9,990) 37,031 11,332
Issuance of convertible subordinated notes,
net of debt issue costs 17,754
Issuance (retirement) of preferred stock (1,179) 20,000
Retirement of subordinated debentures (4,115)
Exercise of warrants and options 349 351 2,854
Preferred stock dividend (225)
-------------- -------------- --------------
Net cash provided by financing activities 2,819 37,382 33,961
-------------- -------------- --------------
Net increase (decrease) in cash (1,202) 648 135
Cash at beginning of period 4,495 3,293 3,941
-------------- -------------- --------------
Cash at end of period $ 3,293 $ 3,941 $ 4,076
============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Six months ended Six months ended
June 30, 1994 June 30, 1995
(unaudited) (unaudited)
--------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 6,024 $ 8,649
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,190 2,997
Other (406)
Deferred income taxes 558 (606)
Changes in assets and liabilities:
Receivables 14,453 19,035
Inventories (33,689) 5,420
Other current assets 75 408
Accounts payable (6,995) (22,359)
Accrued liabilities and other (2,420) (3,062)
-------------- --------------
Net cash provided by (used in) operating activities (20,210) 10,482
-------------- --------------
Cash flows from investing activities:
Capital expenditures, net (1,743) (2,758)
Business acquisitions net of cash acquired (1,754)
-------------- --------------
Net cash provided by (used in) investing activities (1,743) (4,512)
-------------- -------------
Cash flows from financing activities:
Net borrowings (repayments) under bank credit facility 9,151 (5,615)
Issuance of convertible subordinated notes,
net of debt issue costs
Issuance (retirement) of preferred stock 10,000
Retirement of subordinated debentures
Exercise of warrants and options 2,631 488
Preferred stock dividend (825)
------------- --------------
Net cash provided by (used in) financing activities 21,782 (5,952)
------------- --------------
Net increase (decrease) in cash (171) 18
Cash at beginning of period 3,941 4,076
------------- --------------
Cash at end of period $ 3,770 $ 4,094
============= ==============
</TABLE>
F-6
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
(1) Summary of Significant Accounting Policies
------------------------------------------
Description of Business
-----------------------
CompuCom Systems, Inc. and subsidiaries (the "Company") is a
personal computer ("PC") services integration company that provides
services to corporate customers ranging from product procurement and
configuration to network integration and support through sales and
service locations nationwide.
Principles of Consolidation
---------------------------
The consolidated financial statements include the financial
statements of the Company and its subsidiaries. All significant
intercompany balances and transactions have been eliminated.
Inventories
-----------
Inventories are stated at the lower of average cost or market.
Substantially all inventories are finished goods.
Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation is
calculated on the straight-line method over the estimated useful lives
of the assets. Leasehold improvements are amortized over the lesser
of the estimated useful lives of the assets or the remaining term of
the lease using the straight-line method.
Cost in Excess of Fair Value of Tangible Net Assets Purchased
-------------------------------------------------------------
Cost in excess of fair value of tangible net assets purchased
represents goodwill and customer lists and is amortized using the
straight-line method over a 7 or 10 year period. Accumulated
amortization at December 31, 1993 and 1994 was $3,551,000 and
$5,142,000, respectively. The Company continually evaluates goodwill
for indications of impairment based on projected undiscounted net cash
flows from operations of the related business unit.
Revenue Recognition
-------------------
Product revenues are recognized upon shipment with provisions
made for anticipated returns, which historically have been immaterial.
Service revenues are recognized when the service is rendered.
Vendor Programs
---------------
The Company receives volume rebates from certain manufacturers
related to sales of certain products which are recorded when earned as
a reduction of cost of goods sold. The Company also receives
manufacturer reimbursements for certain training, promotional and
marketing activities, which are recorded as earned as a reduction of
general and administrative expense.
F-7
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
Earnings Per Common Share
-------------------------
Primary earnings per common share is based on net earnings after
preferred stock dividend requirements, if any, and the weighted
average number of common shares outstanding during each year,
including stock options and warrants considered to be dilutive common
stock equivalents. Fully diluted earnings per common share assumes
full conversion of all convertible securities into common stock at the
later of the beginning of the year or date of issuance, and includes
the add-back of related interest and/or dividends.
Restructuring
-------------
In connection with the redirection of the Company and the
effective discontinuation of its previous business activities, the
accumulated deficit as of July 1, 1987 was reclassified as a reduction
of additional paid-in capital to better reflect the financial position
and new operating focus of the Company. Retained earnings represent
the cumulative net earnings of the Company since July 1, 1987, less
dividends.
Income Taxes
------------
The Company uses the asset and liability method of accounting for
income taxes. Under this method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Interim Financial Information
-----------------------------
In the opinion of management, the unaudited interim financial
information of the Company contains all adjustments, consisting only
of those of a normal recurring nature, necessary to present fairly the
Company's financial position as of June 30, 1995 and the results of
its operations and cash flows for the six months ended June 30, 1994
and 1995. The results of operations for the six months ended June 30,
1995 are not necessarily indicative of the results to be expected for
the full year.
(2) Long-term Debt
--------------
During March 1994, the Company executed an amendment to the August
1993 Financing and Security Agreement increasing the availability under the
Company's bank revolving credit facility ("Credit Facility") from $125
million to $150 million. The new facility provides for a fixed rate of
interest of 7.18% on $60 million of the outstanding principal balance. In
addition, for the remainder of the unpaid principal, the Company has the
option to elect the London Interbank Offered Rate ("LIBOR") plus 2.75% per
annum, subject to certain limitations, and/or an interest rate of 0.5%
above the prime rate per annum. Total borrowings are based on certain
limits, as defined, and are secured by substantially all the assets of the
Company. The Credit Facility subjects the Company to certain restrictions
and covenants related to, among others, tangible net worth, debt to
tangible net worth, net earnings, and limits the amount available for
capital expenditures and dividends. All unpaid principal borrowed and
unpaid accrued interest thereon, under the Credit Facility, are due March
1997.
During April 1995, the Company executed an amendment to the Credit
Facility to increase the availability under the Credit Facility from $150
million to $175 million. The other significant terms under the Credit
Facility remained the same.
The Company's highest level of borrowing was $114.6 million and $132
million in 1993 and 1994, respectively. The outstanding balance on the
bank credit facility at December 31, 1994 is $115.2 million.
A $3.9 million mortgage term loan on the corporate headquarters
building in Dallas, Texas is payable in monthly installments of $32,500
plus interest at 8.1%.
F-8
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
The Company paid interest of $7,633,000, $8,302,000 and $10,905,000,
and the weighted average interest rate on the bank credit facility was
approximately 7.5%, 7.2% and 7.3%, in 1992, 1993, and 1994, respectively.
(3) Convertible Subordinated Notes
-------------------------------
In 1992, the Company issued $18,500,000 of 9% Convertible Subordinated
Notes ("Notes") due in 2002. The Notes are convertible into 8,409,000
shares of the Company's common stock at $2.20 per share and are carried net
of unamortized debt issue costs. If not converted, payment in five equal
annual installments of $3.7 million, commencing in 1998, is required. The
Notes subject the Company to certain restrictions and covenants related to,
among others, tangible net worth, and certain ratios relating to operating
cash flow and incurrence of additional debt. In addition, the Note
Agreement provides for mandatory prepayment upon a change of control of the
Company, as defined. Under certain conditions, the Company may prepay all
or any part of the Notes on or after September 15, 1995 without prepayment
penalties.
(4) Income Taxes
------------
The provision for income taxes is comprised of the following (in
thousands):
<TABLE>
<CAPTION>
1992 1993 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Current:
Federal $ 400 $ 4,849 $ 6,437
State 331 953 655
Deferred 3,720 1,667 2,681
-------------- -------------- --------------
$ 4,451 $ 7,469 $ 9,773
============== ============== ==============
</TABLE>
Total income tax expense differed from the amounts computed by applying the
U.S. Federal income tax rate of 34% in 1992 and 35% in 1993 and 1994 to
earnings before income taxes as a result of the following (in thousands):
<TABLE>
<CAPTION>
1992 1993 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Computed "expected" tax expense $ 3,983 $ 6,618 $ 8,551
State taxes, net of U.S. Federal
income tax benefit 218 619 426
Other, net 250 232 796
-------------- -------------- --------------
$ 4,451 $ 7,469 $ 9,773
============== ============== ==============
</TABLE>
(Continued)
F-9
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
Total tax expense for the years ended December 31, 1992, 1993 and 1994 was
allocated as follows (in thousands):
<TABLE>
<CAPTION>
1992 1993 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Current tax expense $ 731 $ 5,802 $ 7,092
Deferred tax expense
Acquired tax benefit 2,733 1,118 183
Other 987 549 2,498
-------------- -------------- --------------
$ 4,451 $ 7,469 $ 9,773
============== ============== ==============
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1993 and 1994 are presented below (in thousands).
<TABLE>
<CAPTION>
1993 1994
-------------- --------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards and acquired tax benefits $ 1,902 $ 33
Inventories, principally due to additional costs inventoried
for tax purposes and reserves 2,167 2,064
Accounts receivable, principally due to allowance for
doubtful accounts 646 679
Other 914 816
-------------- --------------
Total gross deferred tax assets 5,629 3,592
Less valuation allowance 1,067
-------------- --------------
Net deferred tax assets 4,562 3,592
-------------- --------------
Deferred tax liabilities:
Tax net operating losses in excess of financial 6,812 7,976
Other 1,235 1,626
-------------- --------------
Total gross deferred tax liabilities 8,047 9,602
-------------- --------------
Net deferred tax liability $ 3,485 $ 6,010
============== ==============
</TABLE>
The valuation allowance of $1,067,000 at December 31, 1993 is no
longer required as a result of the 1994 utilization of net operating losses
for tax purposes.
There were $478,000, $3,040,000 and $9,934,000 of income taxes paid in
1992, 1993 and 1994, respectively, net of refunds. Taxes payable at
December 31, 1994 was approximately $857,000.
F-10
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
(5) Preferred Stock
---------------
The Company has authorized three million shares of preferred stock,
stated value $10. In 1994, Safeguard Scientifics, Inc., ("Safeguard")
entered into an agreement to purchase from the Company $20,000,000
(2,000,000 shares) of its Series B Cumulative Convertible Preferred Stock
("Series B Shares"). The Series B Shares are convertible into shares of
Common Stock based on a conversion price of $6.77 per share subject to
anti-dilutive adjustments. The Series B Shares are entitled to a 6% per
annum cumulative dividend payable out of legally available funds. The
Series B Shares are entitled to one vote for each share of Common Stock
into which such Series B Shares may be converted, except that in the
election of directors (as long as Safeguard owns at least 40% of the
Company's then outstanding voting securities, excluding the Series B
Shares), the Series B Shares will be entitled to five votes for each share
of Common Stock into which the Series B Shares may be converted. As of
December 31, 1994 there were $225,000 of undeclared, unpaid dividends
related to the Series B Shares.
(6) Stock Options and Warrants
--------------------------
The Company maintains three stock option plans covering certain key
employees and outside directors. The 1983 Stock Option Plan and the 1984
Non-Qualified Stock Option Plan expired by their terms in May 1993 and
January 1994, respectively. Therefore, the Company adopted a 1993 Stock
Option Plan under which the Company may grant qualified or non-qualified
stock options. To the extent allowable, all grants are incentive stock
options. All options granted under the plans to date have been at prices
which have been equal to the fair market value at the date of grant.
Generally, options vest five years after the date of grant and expire ten
years after the date of grant.
At December 31, 1994, the Company has reserved 4,728,000 shares of its
common stock for issuance under its stock option plans. There are 161,000
shares available for future grant under the 1993 Stock Option Plan. The
Company plans to increase the number of shares available for future grant
under the 1993 Stock Option Plan by 3,000,000 shares in 1995, subject to
approval by shareholders.
A summary of the status of the Company's stock option plans follows:
<TABLE>
<CAPTION>
Shares Price range
------------ ---------------
<S> <C> <C>
Outstanding at December 31, 1992 4,051,000 $ .50-2.81
Granted 1,481,000 2.25-3.13
Exercised (549,000) 1.00-2.81
Canceled (69,000) 1.00-2.81
------------
Outstanding at December 31, 1993 4,914,000 $ .50-3.13
Granted 612,000 3.94-4.75
Exercised (981,000) .50-3.38
Canceled (128,000) 1.00-4.13
------------
Outstanding at December 31, 1994 4,417,000 $ .50-4.75
============
Exercisable at December 31, 1994 2,773,000 $ .50-3.13
============
</TABLE>
F-11
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
Under the Stock Option Plan for Directors, 100,000 shares have been
reserved for issuance, subject to stockholder approval of the plan. Options
to non-employee directors are required to be granted at fair market value
with an initial 10,000 share grant upon election to the Board. Subsequent
service grants will be awarded to all non-employee directors in accordance
with formulas based upon years of service. Under this plan, 10,000 options
have been granted at an exercise price of $4.75 per share, of which none
were exercisable at December 31, 1994. Options under this plan vest 25%
each year commencing on the first anniversary of the grant date and expire
after 10 years.
In conjunction with certain subordinated debentures issued in 1991,
and repaid in 1992, warrants were issued to acquire approximately 1.4
million shares of common stock at a purchase price of $1.50 per share,
exercisable through April 1996. During 1994, approximately 1,177,000 of
these warrants were exercised, leaving approximately 128,000 of the
warrants remaining. In connection with an acquisition in 1987, the Company
issued warrants to the seller to purchase 250,000 shares of common stock at
$1.50 per share, which were subsequently exercised in February 1994.
(7) Related Party Transactions
--------------------------
In 1994, the Company sold the majority of its interest in a
subsidiary, PC Parts Express, Inc. ("PCPE") to a venture capital company
primarily owned by a former officer and director of the Company, in
exchange for cash, a secured note receivable, and warrants to purchase
additional PCPE common stock. Separately, the Company sold substantially
all of the assets with respect to its network training business to this
same venture capital company in exchange for a secured note receivable and
royalty agreement.
Included in other assets at December 31, 1994 is a $1,181,250 secured
term note receivable from an officer and director of the Company.
Interest on the note accrues at the rate of 6% per annum and is payable
annually beginning January 1, 1996. Principal is payable in two annual
installments of $590,625 each on August 31, 1996 and August 31, 1997.
Included in other assets at December 31, 1994 is a $600,000 secured
term note receivable from a former officer and director of the Company.
The outstanding principal balance and accrued interest at the prime rate
was paid in February 1995.
Safeguard owns approximately 63% of the Company's common stock as of
December 31, 1994. The Company pays Safeguard a fee for providing certain
administrative, legal and financial services to the Company. General and
administrative expenses include charges from Safeguard of $600,000 in 1992,
1993 and 1994.
(8) Leases
------
The Company has noncancelable operating leases for facilities and
equipment which expire at various dates from 1995 to 2004. Total rental
expense for operating leases was $5,161,000, $5,430,000 and $4,804,000 in
1992, 1993 and 1994, respectively. Future minimum lease payments under
noncancelable operating leases as of December 31, 1994 are $4,594,000 -
1995; $4,392,000 - 1996; $3,729,000 - 1997; $2,828,000 - 1998; $1,928,000 -
1999; and $2,696,000 - thereafter.
(9) Savings Plan
------------
The Company has a contributory 401(k) Plan for its employees and
matches one-half of the first 4% and one-fourth of the next 2% of employee
compensation, and employer participation is subject to certain vesting
requirements. Amounts expensed relating to the Plan were $372,000,
$501,000 and $597,000 in 1992, 1993 and 1994, respectively. In addition,
the Company also expensed $215,000 in common stock contributions to the
Plan during 1992. The 80,000 shares of common stock contributed for 1992
were made in the subsequent year.
F-12
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Information with respect to June 30, 1994 and 1995 is unaudited)
(10) Investments
-----------
In January 1994, the Company sold the majority of its interest in a
subsidiary, PC Parts Express, Inc., which subsequently changed its name to
PC Service Source ("PCSS"). In April 1994, PCSS completed an initial
public offering. After this transaction, the Company's ownership of PCSS
common stock was approximately 24%. The PCSS common stock owned by the
Company is unregistered and the sale of the stock is subject to certain
restrictions. The Company owned approximately 23% of the outstanding
common shares of PCSS at year end and accounts for this investment using
the equity method. At December 31, 1994, the Company's carrying value of
the PCSS stock was $1,735,000 and the market value was approximately
$8,200,000. In addition, the Company owns warrants for the purchase of
250,000 shares of PCSS common stock at an exercise price of $2.25.
(11) Contingencies
-------------
The Company is involved in various claims and legal actions arising in
the ordinary course of business with enterprises in both the public and
private sector. In the opinion of management, the ultimate disposition of
these matters will not have a material adverse effect on the Company's
consolidated financial position and results of operations.
(12) Quarterly Financial Data (Unaudited)
------------------------------------
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
------------ ------------ ------------ ------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
1993
----
Net revenues $ 200,856 $ 239,707 $ 256,507 $ 318,412
Gross margin 29,530 34,538 36,890 43,751
Net earnings 1,859 2,602 2,838 4,140
Earnings per common share:
Primary .06 .08 .08 .12
Fully diluted .05 .07 .07 .10
1994
----
Net revenues $ 280,857 $ 306,625 $ 306,654 $ 361,677
Gross margin 36,141 40,613 43,503 50,544
Net earnings 2,765 3,259 3,271 5,364
Earnings per common share:
Primary .08 .09 .09 .15
Fully diluted .07 .08 .08 .12
</TABLE>
Earnings per common share calculations are based on the weighted average
number of shares outstanding in each period. Therefore, the sum of the
quarters does not necessarily equal the year to date earnings per common
share.
F-13
<PAGE>
<TABLE>
<S> <C>
==================================================== ============================================
NO DEALER, SALES REPRESENTATIVE OR ANY
OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS 4,200,000 Shares
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, ANY SELLING STOCKHOLDER,
ANY OF THE UNDERWRITERS OR ANY OTHER PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT CompuCom Systems, Inc.
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF
OR THE DATE AS OF WHICH INFORMATION IS SET
FORTH HEREIN. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION Common Stock
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN
THE SHARES OF COMMON STOCK OFFERED HEREBY,
NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR
A SOLICITATION OF AN OFFER TO BUY, ANY OF
THE SHARES OF COMMON STOCK OFFERED HEREBY TO
ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL OR
UNAUTHORIZED, OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED
TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
_____________________
P R O S P E C T U S
_________________
_____________________
TABLE OF CONTENTS
Page
----
Available Information....................... 2
Incorporation of Certain Documents by Reference 2 The Robinson-Humphrey
Prospectus Summary.......................... 4 Company, Inc.
Risk Factors................................ 6
Selling Stockholders........................ 8
Underwriting................................ 9 Hambrecht & Quist
Legal Matters............................... 10
Experts..................................... 10
Index to Consolidated Financial Statements F-1
, 1995
==================================================== ============================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
____________________
Item 14. Other Expenses of Issuance and Distribution.
- -----------------------------------------------------
Except for the Registration fee-Securities and Exchange Commission, which
the Company paid in May, 1994, and certain miscellaneous expenses, which shall
be borne by the Company, subject to certain agreements with the Company as to
the maximum amount payable by the Selling Stockholders, the following table sets
forth the estimated expenses to be incurred by the Selling Stockholders in
connection with this offering, in addition to underwriting discounts and
commissions. All amounts are estimated, except the Registration fee-Securities
and Exchange Commission and NASD filing fee.
<TABLE>
<S> <C>
Registration fee-Securities and Exchange Commission.. $ 14,497.27
NASD filing fee...................................... 4,400.00
Printing of registration statement, prospectus, etc.. 25,000.00
Blue sky fees and expenses........................... 7,500.00
Accounting services.................................. 25,000.00
Legal fees........................................... 50,000.00
Miscellaneous........................................ 10,000.00
-----------
Total............................................. $136,397.27
===========
</TABLE>
Item 15. Indemnification of Directors and Officers.
- ---------------------------------------------------
A. Section 145(a) of the Delaware General Corporation Law (the "GCL")
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she 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 or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145(b) of the GCL empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against such expenses actually and reasonably
incurred by him or her in connection with the defense or settlement of such
action or suit if he or she acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
or suit
II-1
<PAGE>
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnification for such expenses which the
court shall deem proper.
Section 145(c) of the GCL further provides that, to the extent a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith.
Section 145(f) of the GCL provides that the statutory provisions on
indemnification are not exclusive of indemnification provided pursuant to, among
other things, the certificate of incorporation, by-laws or indemnification
agreements. The Certificate of Incorporation and By-laws of the Company each
contain provisions regarding the indemnification of directors and officers of
the Company. Subject to certain limitations expressed therein, Article NINTH of
the Company's Certificate of Incorporation provides for the indemnification of
the Company's officers and directors to the fullest extent permitted by the GCL.
In addition, the By-laws of the Company provide expanded rights to
indemnification beyond the indemnification expressly authorized by the GCL in
the following respects:
1. indemnification will be available without regard to the tests applicable
to the indemnified person's conduct, unless indemnification against the
particular liability is expressly prohibited by applicable law;
2. indemnification is expressly authorized against penalties and punitive
damages, as well as against judgments and amounts paid in settlement of
derivative suits; and
3. under certain circumstances, expenses incurred by a director in defending
a third party or corporate proceeding are required to be paid by the
corporation on behalf of such director.
B. The Company has a directors' and officers' liability insurance policy
that affords directors and officers with insurance coverage for losses arising
from claims based on breaches of duty, negligence, error and other wrongful
acts.
Item 16. Exhibits and Financial Statements.
- -------------------------------------------
The following is a list of exhibits filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Document
- ------- --------------------------------------------------------------------
<S> <C>
1 Form of Underwriting Agreement*
4(a) Form of Stock Certificate evidencing Common Stock, $.01 par value,
of CompuCom Systems, Inc. (1)(Exhibit 4(b))
4(b) Form of Series E Warrant (2)(Exhibit 4(f))
4(c) CompuCom Systems, Inc. 1983 Stock Option Plan, as amended
(3)(Exhibit 4(k))
4(d) CompuCom Systems, Inc. 1993 Stock Option Plan (4)(Exhibit 4(f))
4(e) CompuCom Systems, Inc. 1984 Non-Qualified Stock Option Plan, as
amended (5)(Exhibit 4(g))
4(f) Securities Purchase Agreement, dated as of April 29, 1991, among
Gateway Venture Partners III, L.P., Radnor Venture Partners, L.P.
and CompuCom Systems, Inc. (6)(Exhibit 10.7)
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
4(g) Form of Securities Purchase Agreement, dated as of April 29, 1991
between CompuCom Systems, Inc. and certain members of its management
as listed on the schedule attached thereto, and including as
exhibits the Form of 15% Subordinated Debenture due October 29, 1992
and Form of Common Stock Purchase Warrant (3)(Exhibit 4(o))
4(h) Note Agreement and sample note representing the $18.5 million 9%
Convertible Subordinated Notes due September 24, 2002, issued by
CompuCom Systems, Inc. in September 1992 (7)(Exhibit 4)
4(i) Certificate of Designation dated March 31, 1994, establishing Series
B Cumulative Convertible Preferred Stock of CompuCom Systems, Inc.
(8)(Exhibit 4(i)).
4(j) Form of Stock Certificate evidencing Series B Cumulative Convertible
Preferred Stock, $0.1 par value, of CompuCom Systems, Inc.
(8)(Exhibit 4(h)).
5 Opinion of Morgan, Lewis & Bockius as to legality of securities
being registered (9)(Exhibit 5).
23.1 Independent Auditors' Consent of KPMG Peat Marwick LLP.
23.2 Consent of Morgan, Lewis & Bockius (included in Exhibit 5).
24 Power of Attorney (9)(Exhibit 25).
</TABLE>
__________
* To be filed by Amendment
(1) Filed on April 2, 1990 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(2) Filed on August 14, 1987 as an exhibit to Form 8-K (No. 0-14371) and
incorporated herein by reference.
(3) Filed on March 31, 1993 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(4) Filed on March 14, 1994 as an exhibit to the Registration Statement on Form
S-8 (No. 33-76382) and incorporated herein by reference.
(5) Filed on March 29, 1991 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(6) Filed May 15, 1991 as an exhibit to Form 8-K (No. 0-14371) and incorporated
herein by reference.
(7) Filed on November 13, 1992 as an exhibit to the Quarterly Report on Form 10-
Q (No. 0-14371) and incorporated herein by reference.
(8) Filed on May 15, 1994 as an exhibit to the Quarterly Report on Form 10-Q
(No. 0-14371) and incorporated herein by reference.
(9) Filed on May 11, 1994 as an exhibit to this Registration Statement on Form
S-3 (No. 33-78746).
Item 17. Undertakings.
- ----------------------
(a) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to direc tors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim
II-3
<PAGE>
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Post-
Effective Amendment No. 1 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Dallas, State of
Texas, on the 5th day of October, 1995.
COMPUCOM SYSTEMS, INC.
By: /s/ Edward R. Anderson
---------------------------------------
Edward R. Anderson
President and Chief Executive Officer
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------- ------------------- ------------
<S> <C> <C>
/s/ Edward R. Anderson President and Chief Executive October 5, 1995
- ------------------------
Edward R. Anderson Officer (Principal Executive
Officer) and Director
/s/ Robert J. Boutin Sr. Vice President-Finance, October 5, 1995
- ------------------------
Robert J. Boutin Chief Financial Officer
(Principal Financial and
Accounting Officer)
</TABLE>
DIRECTORS
*DANIEL F. BROWN
*JAMES W. DIXON
*MICHAEL J. EMMI
*RICHARD F. FORD
*IRA M. LUBERT
*WARREN V. MUSSER
*EDWARD N. PATRONE
*CHARLES A. ROOT
* By his signature set forth below Robert J. Boutin, pursuant to duly
authorized powers of attorney filed with the Securities and Exchange Commission,
has signed this Post-Effective Amendment No. 1 to Registration Statement on
behalf of the directors indicated above.
By: /s/ Robert J. Boutin
------------------------------------------------ October 5, 1995
Robert J. Boutin, Senior Vice President-Finance,
Chief Financial Officer (Attorney-in-Fact)
II-6
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
CompuCom Systems, Inc.:
We consent to the use of our reports included and incorporated herein by
reference and to the reference to our firm under the heading "Experts" in the
prospectus.
KPMG Peat Marwick LLP
Dallas, Texas
October 5, 1995
