<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 1996
------------
CORPORATE EXPRESS, INC.
- ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Colorado 0-24642 84-0978360
- ------------------------------------------------------------------------------
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
325 Interlocken Parkway
Broomfield, Colorado 80021
- ------------------------------------------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
(303) 373-2800
- ------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- ------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On May 15, 1996, the Registrant completed the acquisition (the
"Acquisition") of all of the issued and outstanding stock of ASAP Software
Express, Inc., an Illinois corporation ("ASAP"), which Acquisition is effective
April 22, 1996. The Acquisition was made pursuant to the terms of a certain
Stock Purchase Agreement (the "Stock Purchase Agreement") dated April 22, 1996,
as amended by the Amendment to Stock Purchase Agreement effective as of April
22, 1996, by and among the Registrant, ASAP and all of the Shareholders of ASAP
(the "ASAP Shareholders"). Pursuant to the terms of the Stock Purchase
Agreement, the Registrant purchased all of the issued and outstanding capital
stock of ASAP from the ASAP Shareholders, consisting of 679,800 shares of common
stock and 6,118,200 shares of non-voting common stock, in exchange for aggregate
consideration of $97,611,037, subject to certain adjustments, comprised of
$52,500,000 paid in cash and $45,111,037 in promissory notes issued by the
Company. The source of the cash used in the transaction was the Company's cash
on hand and its credit facility with Bank of America Illinois. At the time of
the Acquisition, ASAP had cash on hand of approximately $13.7 million, which sum
is expected to be available to finance operations of ASAP or to be used to
satisfy the promissory notes issued in connection with the Acquisition. The
nature and amount of consideration paid in connection with the Acquisition was
determined based on negotiations between the Registrant and the ASAP
Shareholders. Prior to the Acquisition, there was no material relationship
between the Registrant or any of its affiliates, directors or officers or any
associates thereof and the ASAP Shareholders or ASAP. The foregoing summary of
the Acquisition is qualified in its entirety by reference to the Stock Purchase
Agreement referenced as Exhibit 2.1 and incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(a) Financial statements of Businesses Acquired.
ASAP Software Express, Inc.
. Report of Independent Auditors
. Consolidated Balance Sheets
. Consolidated Statements of Income
. Consolidated Statements of Stockholders' Equity
. Consolidated Statements of Cash Flows
. Notes to Consolidated Financial Statements
(b) Pro Forma Financial Information.
Corporate Express, Inc. and ASAP Software Express, Inc.
. Unaudited Pro Forma Combined Financial Data
. Pro Forma Combined Balance Sheet
. Pro Forma Combined Statement of Operations
(c) Exhibits.
2.1* Stock Purchase Agreement dated April 22, 1996 by and among Corporate
Express, Inc., ASAP Software Express, Inc. and the Shareholders of
ASAP Software Express, Inc.
2.2* Amendment to Stock Purchase Agreement effective as of April 22, 1996
by and among Corporate Express, Inc., ASAP Software Express, Inc. and
the Shareholders of ASAP Software Express, Inc.
________________________
* Previously filed.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORPORATE EXPRESS, INC.
(Registrant)
/s/ Joanne Farver
-----------------------
Date: June 19, 1996 By: Joanne C. Farver
Title: Vice President - Controller
<PAGE>
Report of Independent Auditors
The Board of Directors
ASAP Software Express, Inc.
We have audited the accompanying consolidated balance sheets of ASAP Software
Express, Inc. as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of ASAP Software
Express, Inc. at December 31, 1995 and 1994, and the consolidated results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
February 19, 1996,
except paragraph one of Note 9, for which the date is
May 13, 1996 and paragraph two of Note 9, for which the date is
May 15, 1996
<PAGE>
ASAP Software Express, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31
1995 1994
-------------------------
<S> <C> <C>
Assets
Current assets:
Cash $17,004,419 $ 7,458,235
Accounts receivable, less allowance for doubtful
accounts of $938,492 in 1995 and $497,384 in 1994 24,642,892 18,345,059
Inventories 4,197,481 4,650,280
Prepaid expenses and other 128,441 139,794
-------------------------
Total current assets 45,973,233 30,593,368
Property, plant and equipment:
Building 1,284,954 1,279,354
Land and improvements 1,222,383 1,222,383
Equipment 1,855,768 1,562,425
Furniture and fixtures 439,541 397,652
-------------------------
4,802,646 4,461,814
Less: Accumulated depreciation 1,356,189 948,323
-------------------------
3,446,457 3,513,491
Other 57,828 64,955
-------------------------
Total assets $49,477,518 $34,171,814
=========================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $29,212,540 $20,025,907
Accrued liabilities 1,811,115 846,013
Income taxes payable (Note 3) 207,805 140,465
Current portion of long-term debt 78,616 72,339
-------------------------
Total current liabilities 31,310,076 21,084,724
Real estate mortgage (Note 7) 1,820,636 1,899,252
Minority interest (Note 2) 125,480 127,116
Stockholders' equity:
Common stock, no par value; 7,500,000 and
750,000 shares authorized, and 6,798,000 and
750,000 shares issued and outstanding in 1995
and 1994, respectively 95,172 105,000
Retained earnings 16,126,154 10,955,722
-------------------------
Total stockholders' equity 16,221,326 11,060,722
-------------------------
Total liabilities and stockholders' equity $49,477,518 $34,171,814
=========================
</TABLE>
See accompanying notes.
2
<PAGE>
ASAP Software Express, Inc.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>
Net revenues $157,794,897 $114,031,728 $73,891,655
Costs and expenses:
Cost of sales 132,500,027 94,109,457 60,059,266
Selling, general, and
administrative expenses 15,038,863 13,673,220 10,352,554
-----------------------------------------
147,538,890 107,782,677 70,411,820
-----------------------------------------
Income before income taxes 10,256,007 6,249,051 3,479,835
Income taxes 200,000 150,000 56,011
-----------------------------------------
Net income $ 10,056,007 $ 6,099,051 $ 3,423,824
=========================================
</TABLE>
See accompanying notes.
3
<PAGE>
ASAP Software Express, Inc.
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C>
Number Common Retained
of Shares Stock Earnings
------------------------------------
Balance, January 1, 1993 750,000 $105,000 $4,424,082
Net income - - 3,423,824
Distributions to stockholders - - (1,521,717)
------------------------------------
Balance, December 31, 1993 750,000 105,000 6,326,189
Net income - - 6,099,051
Distributions to stockholders - - (1,469,518)
------------------------------------
Balance, December 31, 1994 750,000 105,000 10,955,722
Net income - - 10,056,007
Distributions of stockholders
(Note 3) - - (3,788,349)
Repurchase of common stock (70,200) (9,828) (1,097,226)
------------------------------------
Balance, December 31, 1995 679,800 $ 95,172 $16,126,154
====================================
</TABLE>
See accompanying notes.
<PAGE>
ASAP Software Express, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>
Operating activities
Net income $10,056,007 $ 6,099,051 $ 3,423,824
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 427,203 346,452 213,676
Provision for uncollectible accounts 441,108 355,930 74,254
Minority interest (1,636) (56,654) 183,770
Changes in operating assets and liabilities:
Accounts receivable (6,738,941) (7,938,500) (5,542,245)
Inventories 452,799 (261,981) (1,192,744)
Prepaid expenses and other 11,353 (96,566) 85,475
Accounts payable and accrued liabilities 10,151,735 8,769,260 6,775,647
Income taxes payable 67,340 74,184 30,463
-----------------------------------------
Total adjustments 4,810,961 1,192,125 628,296
-----------------------------------------
Net cash provided by operating activities 14,866,968 7,291,176 4,052,120
Investing activities
Increase in other assets 7,127 21,908 (67,352)
Proceeds from disposal of equipment 20,195 -- --
Advance to Romar Company -- -- 164,080
Acquisition of plant and equipment (380,364) (444,441) (3,143,838)
-----------------------------------------
Net cash used in investing activities (353,042) (422,533) (3,047,110)
Financing activities
Distributions to stockholders (Note 3) (3,788,349) (1,469,518) (1,521,717)
Repurchase of common stock (1,107,054) -- --
Proceeds from long-term debt -- 2,000,000 1,900,420
Payments on long-term debt (72,339) (1,928,829) --
Payments on capital lease obligations -- -- (23,072)
-----------------------------------------
Net cash (used in) provided by financing activities (4,967,742) (1,398,347) 355,631
-----------------------------------------
Net increase in cash 9,546,184 5,470,296 1,360,641
Cash at beginning of year 7,458,235 1,987,939 627,298
-----------------------------------------
Cash at end of year $17,004,419 $ 7,458,235 $ 1,987,939
=========================================
</TABLE>
See accompanying notes.
<PAGE>
ASAP Software Express, Inc.
Notes to Consolidated Financial Statements
December 31, 1995
1. Description of Business
ASAP Software Express, Inc. (ASAP) is a distributor of various personal computer
software titles and certain add-on computer hardware products. ASAP sells to a
multitude of regional and national customers varying across several industry
groups.
2. Summary of Significant Accounting Policies
Inventories
Inventories consist of goods held for resale and are stated at the lower of cost
or market using the moving weighted-average method.
Property, Plant and Equipment
Property, plant, and equipment is carried at cost, less accumulated
depreciation. Depreciation is provided using the straight-line and accelerated
methods over 3 to 31.5 years. The estimated useful life on personal computers
and related equipment acquired after January 1, 1994 is three years (five years
for acquisitions prior to January 1, 1994).
Consolidation
The consolidated financial statements include the accounts of ASAP and Romar
Company (Romar), a joint venture with ASAP as a 75% venturer along with a
third-party venturer. Romar completed the acquisition of land and development
of an office and warehouse facility for ASAP. All significant intercompany
transactions have been eliminated.
Revenue Recognition
Net revenues include the sale of shrink wrap product and licenses for the use of
software purchased from the software publishers. Revenue from product sales is
recognized as shipments are made. Revenue from the sale of intangibles
(software licenses and maintenance agreements) is recorded when the customer is
invoiced.
<PAGE>
ASAP Software Express, Inc.
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Accounting for the Impairment of Long-Lived Assets
In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed of, which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the asset's
carrying amount. Statement No. 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company will adopt Statement No.
121 in first quarter of 1996, and, based on current circumstances, does not
believe the effect of adoption will be material.
3. Income Taxes
ASAP is taxed as an S corporation under the applicable provisions of the
Internal Revenue Code. No provision for federal income taxes is generally
recorded in the financial statements of an S corporation as the results of its
operations are includable in the income tax returns of its stockholders.
Distributions to stockholders of $3,788,349 in 1995; $1,469,518 in 1994; and
$1,521,717 in 1993 approximate federal and state taxes paid or to be paid by
stockholders, related to operations of ASAP. ASAP remains responsible for income
taxes in certain states.
Cash paid for income taxes, net of refunds, was approximately $158,000 in 1995,
$75,000 in 1994, and $28,000 in 1993.
<PAGE>
ASAP Software Express, Inc.
Notes to Consolidated Financial Statements (continued)
4. Profit-Sharing Plan
ASAP has a qualified, trusteed, profit-sharing and 401(K) plan covering
substantially all employees. The plan provides for deferred salary
contributions by the plan participants. Company contributions are determined at
the discretion of the Company's Board of Directors but may not exceed the
maximum amount deductible for federal income tax purposes. A contribution of
approximately $269,000 was expensed in 1995 ($227,000 in 1994 and $203,000 in
1993).
5. Leasing Arrangements
Under a 10-year lease with Romar for office and warehouse space (see Note 2),
annual rental payments are $351,000 through December 2002. The Company is also
responsible for certain real estate taxes, insurance, and maintenance. In
addition, the Company leases space in various locations from unrelated parties
under agreements with varying terms through August 1996.
Rent expense was approximately $514,000, $413,000, and $255,325 for the years
ended December 31, 1995, 1994, and 1993, respectively. Future rental payments
under satellite office and equipment leases are approximately $64,000 in 1996;
and $3,000 in 1997.
6. Line of Credit
ASAP has available a $4,500,000 unsecured line of credit with a commercial bank,
which was unused at December 31, 1995. The rate of interest charged by the bank
under this arrangement is the bank's prime lending rate (8.5% at December 31,
1995) or a LIBOR-based option. The line of credit is renewable annually each
June.
7. Real Estate Mortgage
In connection with the acquisition of land and development of an office and
warehouse facility, a loan agreement in the amount of $2,000,000 was entered
into in June 1994. The debt, which bears interest at an annual rate of 8.35%,
is collateralized by a mortgage on the property and provides for monthly
principal and interest payments of $19,520 through July 2009.
<PAGE>
ASAP Software Express, Inc.
Notes to Consolidated Financial Statements (continued)
7. Real Estate Mortgage (continued)
At December 31, 1995 principal maturities on the long-term debt are
approximately as follows:
<TABLE>
<CAPTION>
Year ending December 31:
<S> <C>
1996 $ 78,616
1997 85,437
1998 92,851
1999 100,908
2000 109,664
Thereafter 1,431,776
----------
$1,899,252
==========
</TABLE>
Cash paid for interest was approximately $162,000 in 1995; $169,000 in 1994; and
$40,000 in 1993.
8. Common Stock
In 1995, the Board of Directors declared a 10 for 1 stock split. The shares
issued in conjunction with the stock split are nonvoting.
In November 1995, the Board of Directors adopted the 1995 Equity Incentive Plan
(Plan). The Plan allows for the granting of stock appreciation rights and/or
nonqualified stock options to participants at the discretion of the Compensation
Committee. No options or stock appreciation rights had been granted as of
December 31, 1995.
9. Subsequent Events
On May 13, 1996, the Company made payments of approximately $3,600,000 in
conjunction with the exercise of stock appreciation rights, which had been
granted as of January 29, 1996.
On May 15, 1996, the Company executed a definitive purchase agreement to sell
all the outstanding common shares of the Company.
<PAGE>
CORPORATE EXPRESS, INC.
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following pro forma combined balance sheet as of March 2, 1996 is prepared
assuming the ASAP acquisition occurred on such date. The pro forma statement of
operations data include the ASAP results of operations assuming the acquisition
occurred at the beginning of the year. The ASAP balance sheet and statement of
operations included in the combined balance sheet and statement of operations is
for its fiscal year ended December 31, 1995.
The pro forma combined financial data are based on available information and on
certain assumptions and adjustments described in the accompanying notes which
Corporate Express believes are reasonable. The pro forma combined financial data
are provided for informational purposes only and do not purport to present the
results of operations of Corporate Express had the transactions assumed therein
occurred on or as of the dates indicated, nor are they necessarily indicative of
the results of operations which may be achieved in the future.
<PAGE>
CORPORATE EXPRESS, INC. AND ASAP SOFTWARE EXPRESS, INC.
PRO FORMA COMBINED BALANCE SHEET
MARCH 2, 1996
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Corporate
Express
and
ASAP
Corporate Pro Forma Pro Forma
ASSETS Express ASAP Adjustments Combined
--------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 28,664 $17,004 ($39,882)(1) $ 5,786
Receivables, net 293,420 24,643 318,063
Inventories 101,995 4,197 106,192
Other current assets 35,391 129 35,520
-------- ------- -------- ----------
Total current assets 459,470 45,973 (39,882) 465,561
Property and Equipment, net 109,499 3,446 112,945
Goodwill, net 324,603 94,983 (2) 419,586
Other assets, net 16,951 58 17,009
-------- ------- -------- ----------
Total assets $910,523 $49,477 $ 55,101 $1,015,101
======== ======= ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $137,132 $29,213 $166,345
Accrued liabilities 56,796 1,811 1,500 (3) 60,107
Accrued purchase costs 3,049 1,000 (4) 4,049
Accrued merger and related costs 24,880 24,880
Current portion of long-term debt and capital leases 20,151 79 45,111 (5) 65,341
Other non-current liabilities 219 208 427
-------- ------- -------- ----------
Total current liabilities 242,227 31,311 47,611 321,149
Capital lease obligations 9,568 9,568
Long-term debt 127,900 1,820 23,836 153,556
Deferred income taxes 7,374 7,374
Minority interest in subsidiaries 24,843 125 (125)(6) 24,843
Other non-current liabilities 2,097 2,097
-------- ------- -------- ----------
Total liabilities 414,009 33,256 71,322 518,587
Shareholders' equity:
Common stock 14 95 (95)(7) 14
Additional paid-in capital 502,559 502,559
Retained earnings (deficit) (6,712) 16,126 (16,126)(7) (6,712)
Foreign currency translation adjustment 653 653
-------- ------- -------- ----------
Total shareholders' equity 496,514 16,221 (16,221) 496,514
-------- ------- -------- ----------
Total liabilities and shareholders' equity $910,523 $49,477 $ 55,101 $1,015,101
======== ======= ======== ==========
</TABLE>
- -------------------
(1) Use of cash and line of credit to finance initial payment of the ASAP
acquisition and payment of ASAP shareholder distributions
(2) Increase to goodwill due to ASAP acquisition
(3) Increase in liabilities to reflect acquisition expense for transaction
(4) Reflects accruals for severance and closure of redundant facilities
(5) Increase in notes payable for subsequent payment due on ASAP acquisition
(6) Elimination of ASAP minority interest upon acquisition of ASAP and ASAP
minority interest
(7) Reflects elimination of ASAP historical shareholders' equity
<PAGE>
CORPORATE EXPRESS, INC. AND ASAP SOFTWARE EXPRESS, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED MARCH 2, 1996
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Corporate
Express
and
ASAP
Corporate Pro Forma Pro Forma
Express ASAP Adjustments Combined
----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $1,590,104 $ 157,795 $1,747,899
Cost of sales 1,173,255 132,500 1,305,755
Merger related inventory provisions 5,952 5,952
---------- --------- ----------- ----------
Gross profit 410,897 25,295 436,192
Warehouse operating and selling expenses 297,275 3,834 301,109
Corporate general & administrative expenses 46,980 11,205 2,312 (1) 60,497
Merger and other non-recurring charges 36,838 36,838
---------- --------- ----------- ----------
Operating profit (loss) 29,804 10,256 (2,312) 37,748
Interest expense, net 15,396 225 (2) 15,621
724 724
Other income ---------- --------- ----------- ----------
Income (loss) before income taxes 15,132 10,256 (2,537) 22,851
Income tax expense (benefit) 10,952 200 2,805 (3) 13,957
---------- --------- ----------- ----------
Income (loss) before minority interest 4,180 10,056 (5,342) 8,894
Minority interest 1,436 1,436
---------- --------- ----------- ----------
Income (loss) from continuing operations $ 2,744 $ 10,056 $ (5,342) $ 7,458
========== ========= =========== ==========
Net income (loss) per common share
Continuing operations $ 0.040 $ 0.110
========== ==========
Weighted average common shares outstanding 68,057 68,057
========== ==========
- ----------------
(1) Adjustment to reflect amortization of goodwill related to ASAP acquisition
(2) Adjustment to reflect interest expense on notes payable for subsequent payment due on ASAP acquisition
(3) Adjustment to reflect income tax expense at the Company's statutory tax rate
</TABLE>
