-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dmq/OJy2TAHiXuh/vhcurdViSGoiIi1hQCY7PEnkwRIMCc3rNtx52rbu4NSykWn8 bRbe0V5lQmTH8FCSPhGm4A== 0000893220-96-001682.txt : 19961016 0000893220-96-001682.hdr.sgml : 19961016 ACCESSION NUMBER: 0000893220-96-001682 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960809 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961015 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIDIGITAL INC CENTRAL INDEX KEY: 0001003934 STANDARD INDUSTRIAL CLASSIFICATION: SERVICE INDUSTRIES FOR THE PRINTING TRADE [2790] IRS NUMBER: 133856672 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27664 FILM NUMBER: 96643328 BUSINESS ADDRESS: STREET 1: 20 WEST 20TH ST CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2123370330 MAIL ADDRESS: STREET 1: 20 WEST 20TH ST CITY: NEW YORK STATE: NY ZIP: 10011 8-K/A 1 UNIDIGITAL INC. FORM 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 8-K/A AMENDMENT NO. 1 TO CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) October 15, 1996 (August 9, 1996) Unidigital Inc. --------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-27664 13-3856672 - -------------------------------------------------------------------------------- (State of Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 20 West 20th Street, New York, New York 10011 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (zip code) (212) 337-0330 ----------------------------------- (Registrant's telephone number, including area code) ----------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. As reported in the Current Report on Form 8-K dated August 19, 1996 filed by Unidigital Inc. (the "Company"), on August 9, 1996, the Company, through a wholly-owned subsidiary, consummated the acquisition of certain assets of Cardinal Communications Group, Inc. ("Cardinal") and C-Max Graphics, Inc. ("C-Max"; C-Max and Cardinal are referred to collectively as the "Seller"), located in New York City. The Company hereby files this Amendment No. 1 on Form 8-K/A to file the financial statements and related pro forma financial statements required pursuant to Item 7 of Form 8-K with respect to such transaction. -2- 3 (a) Financial Information of Business Acquired. CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. COMBINED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 TOGETHER WITH REPORT OF INDEPENDENT AUDITORS -3- 4 [MAHONEY COHEN RASHBA & POKART, CPA, PC LETTERHEAD] INDEPENDENT AUDITOR'S REPORT The Board of Directors Cardinal Communications Group, Inc. and C-Max Graphics, Inc. We have audited the accompanying combined balance sheet of Cardinal Communications Group, Inc. and C-Max Graphics, Inc. as of December 31, 1995, and the related combined statements of operations and (accumulated deficit) retained earnings and cash flows for the years ended December 31, 1995 and 1994. These financial statements are the responsibility of the Companies' 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 audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of Cardinal Communications Group, Inc. and C-Max Graphics, Inc. as of December 31, 1995, and the combined results of their operations and their cash flows for the years ended December 31, 1995 and 1994 in conformity with generally accepted accounting principles. The accompanying combined financial statements have been prepared assuming that the Companies will continue as going concerns. As discussed in Note 2 to the combined financial statements, the Companies have suffered recurring losses from operations and their total liabilities exceed their total assets. This raises substantial doubt about the Companies' ability to 5 continue as going concerns. Management's plans in regard to these matters are also described in Note 2. The combined financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ MAHONEY COHEN RASHBA & POKART, CPA, PC ------------------------------------------ April 25, 1996 6 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Combined Balance Sheets
ASSETS (Note 4) December 31, May 31, 1995 1996 ------------ ----------- (Unaudited) Current assets: Accounts receivable and unbilled jobs, net of allowance for doubtful accounts of approximately $50,000 in 1995 and $72,000 in 1996 $ 2,161,546 $ 1,562,508 Inventory of supplies 118,206 118,206 Other current assets 64,454 44,849 ----------- ----------- Total current assets 2,344,206 1,725,563 Property and equipment - at cost, net (Notes 3, 4 and 5) 3,171,369 2,992,116 Deposits 56,441 32,043 ----------- ----------- $ 5,572,016 $ 4,749,722 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Cash overdraft $ 9,385 $ 292,710 Notes payable - bank (Note 4) 1,609,000 1,439,000 Current portion of long-term debt (Note 5) 759,352 725,010 Loan payable - stockholders (Note 6) 175,859 200,859 Accounts payable 1,006,386 825,555 Accrued expenses 343,750 246,120 ---------- ---------- Total current liabilities 3,903,732 3,729,254 Long-term liabilities: Long-term debt, net of current portion (Note 5) 1,869,236 1,584,790 Subordinated debt (Note 6) 140,000 140,000 ---------- ---------- Total long-term liabilities 2,009,236 1,724,790 Commitments (Notes 5 and 6) Stockholders' deficit Common stock (Note 9) 109,600 109,600 Accumulated deficit (445,552) (808,922) ---------- ---------- (335,952) (699,322) Less: Treasury stock, 1 share, at cost (Note 9) 5,000 5,000 ========== ========== Total stockholders' deficit (340,952) (704,322) ---------- ---------- $5,572,016 $4,749,722 ========== ==========
See accompanying notes. -2- 7 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Combined Statements of Operations and (Accumulated Deficit) Retained Earnings
Years Ended December 31, Five Months ------------------------- Ended May 31, 1995 1994 1996 ----------- ----------- ------------- (Unaudited) Net Sales (Note 8) $9,668,125 $9,256,235 $3,393,951 Cost of goods sold 6,076,182 5,708,147 1,970,690 ---------- ---------- ---------- Gross profit 3,591,943 3,548,088 1,423,261 Operating expenses: Selling and shipping 1,716,090 1,560,896 692,182 General and administrative 2,323,578 2,020,864 986,020 ---------- ---------- ---------- Total operating expenses 4,039,668 3,581,760 1,678,202 Operating loss (447,725) (33,672) (254,941) Other expense (income): Interest expense 445,427 263,044 145,779 Interest and other income (44,247) (22,587) (37,350) ---------- ---------- ---------- Net other expense 401,180 240,457 108,429 ---------- ---------- ---------- Net loss (848,905) (274,129) (363,370) Distributions to stockholders - (56,000) - Retained earnings (accumulated deficit), beginning of year 403,353 733,482 (445,552) ---------- ---------- ---------- (Accumulated deficit) retained earnings, end of period $ (445,552) $ 403,353 $ (808,922) ========== ========== ==========
See accompanying notes. -3- 8 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Combined Statements of Cash Flows
Years Ended December 31, Five Months ------------------------- Ended May 31, 1995 1994 1996 ----------- ----------- ------------- (Unaudited) Cash flows from operating activities: Net loss $ (848,905) $ (274,129) $ (363,370) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 512,318 278,624 218,750 Bad debt expense 364,581 85,315 28,785 Deferred income tax benefit - (4,000) - Change in assets and liabilities: Accounts receivable and unbilled jobs (551,306) (52,741) 570,253 Inventory of supplies 7,388 (5,413) - Other current assets (22,462) 87,184 19,605 Deposits 19,754 (73,714) 24,398 Accounts payable 635,041 119,685 (180,831) Accrued expenses 22,343 63,031 (97,629) ---------- ---------- ---------- Net cash provided by operating activities 138,752 223,842 219,961 Cash flows from investing activities: Cash purchase of property and equipment and cash used in investing activities (375,752) (173,433) (39,498) Cash flows from financing activities: Cash overdraft 9,385 - 283,325 Proceeds from long-term debt 495,796 250,000 - Net proceeds from bank 180,000 80,000 - Principal payments to bank - - (170,000) Principal payments on long-term debt (639,200) (387,999) (318,788) Net proceeds from stockholders' loan 160,959 - 25,000 Distributions to stockholders - (56,000) - ---------- ---------- ---------- Net cash provided by (used in) financing activities 206,940 (113,999) (180,463) ---------- ---------- ---------- Net decrease in cash (30,060) (63,590) - Cash, beginning of year 30,060 93,650 - ---------- ---------- ---------- Cash, end of period $ - $ 30,060 $ - ========== ========== ==========
See accompanying notes. -4- 9 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Combined Statements of Cash Flows (Concluded)
Supplemental Disclosure of Cash Flow Information Years Ended December 31, Five Months ------------------------- Ended May 31, 1995 1994 1996 ----------- ----------- ------------- (Unaudited) Cash paid during the period for: Interest $443,363 $ 263,044 $161,751 ======== ========== ======== Supplemental Schedule of Non-Cash Investing and Financing Activities Equipment acquired under capital lease obligations $409,510 $1,480,634 $ - ======== ========== ========
See accompanying notes. -5- 10 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 1 - THE COMPANIES The combined financial statements include the accounts of Cardinal Communications Group, Inc. and C-Max Graphics, Inc. (collectively, the "Companies"). The Companies are affiliated through common stockholders' interests. In view of the foregoing, the combined financial statements are deemed to be more meaningful than the separate financial statements of the respective entities. All material intercompany items and transactions have been eliminated in combination. The Companies provide desk top, prepress, design and printing services primarily to major corporate accounts and publishing companies in the New York metropolitan area. Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying combined financial statements have been prepared assuming that the Companies will continue as going concerns. The Companies, at December 31, 1995, have a working capital deficiency of $1,559,526 and a stockholders' deficiency of $340,952, which raise substantial doubt about their ability to continue as going concerns. The Companies' ability to continue as going concerns is dependent upon profitable operations, raising additional capital and support from their stockholders. The stockholders will continue to reorganize their business and streamline its operations, as well as monitor overhead and administrative expenses. The combined financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Companies be unable to continue as going concerns. USE OF ESTIMATES The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. INVENTORY OF SUPPLIES Inventory of supplies is valued at the lower of cost (first-in, first-out method) or market. -6- 11 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) PROPERTY AND EQUIPMENT Property and equipment is stated at cost. Depreciation is computed by straight-line and accelerated methods over the estimated useful lives of the assets, ranging from 3 to 33 years. Leasehold improvements are amortized over the lesser of the term of the related lease or the estimated useful lives of the assets. ADVERTISING COSTS The Companies follow the policy of expensing advertising costs at the time the advertising takes place. Advertising costs charged to operations for the years ended December 31, 1995 and 1994 amounted to $62,117 and $83,743, respectively. RECLASSIFICATION Certain 1994 amounts have been reclassified to conform to the presentation used in 1995. REVENUE RECOGNITION Revenue is recognized upon completion of work. INCOME TAXES The Companies, with the consent of their stockholders, elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, corporate income or loss and any tax credits earned are included in the stockholders' individual income tax returns. Accordingly, no provision for federal taxes or credits is reflected in the accompanying combined financial statements. The Companies are subject to New York State Corporation and New York City General Corporation tax. CASH FLOWS The Companies present cash flows under the indirect method by reconciling net loss to net cash flow. -7- 12 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 3 - PROPERTY AND EQUIPMENT At December 31, 1995, property and equipment consist of: Land $ 36,886 Building and improvements 711,023 Leasehold improvements 524,056 Production and other equipment 2,688,474 Furniture and fixtures 274,694 ---------- 4,235,133 Property and equipment held under capital leases: Production equipment 3,372,064 ---------- 7,607,197 Less: Accumulated depreciation and amortization 4,435,828 ---------- $3,171,369 ==========
Note 4 - NOTES PAYABLE - BANK The Companies have a line of credit with a bank up to $1,500,000, of which $1,110,000 has been borrowed as of December 31, 1995 and is payable on demand. In addition, unless demanded earlier, loans payable to the bank of $499,000 at December 31, 1995 are payable in monthly principal installments of $10,000 through July 1997. This loan is secured by land and building. Bank debt is collateralized by substantially all of the assets of the Companies and guaranteed by their stockholders. Interest is payable monthly at 1% above the bank's prime rate. The current rate charged is 9.5%. Note 5 - LONG-TERM DEBT At December 31, 1995, long-term debt consists of: Notes payable - other, in monthly installments ranging from $5,373 to $6,393, including interest at rates of 10% to 10-1/2%. These notes mature on various dates through September 1997 $ 304,698 ---------- Total carried forward $ 304,698 ----------
-8- 13 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 5 - LONG TERM DEBT (CONTINUED) Total brought forward $ 304,698 Mortgage notes, payable in monthly installments ranging from $285 to $3,733, including interest at rates ranging from 5-1/2% to 11-1/2%. These notes mature on various dates through March 2015, are collateralized by land and building having a book value of $519,688 and are guaranteed by the stockholders of the Companies 397,559 Various capital lease obligations secured by specific equipment having a book value of $2,371,865, due in monthly installments ranging from $209 to $20,548, including interest, and maturing on various dates through April 2000. Certain of these obligations are guaranteed by the stockholders of the Companies 1,926,331 ---------- 2,628,588 Less: Current portion 759,352 ---------- Long-term debt, net of current portion $1,869,236 ==========
Cost and accumulated amortization in connection with equipment acquired under capital lease obligations amounted to $3,372,064 and $1,010,944, respectively, at December 31, 1995. -9- 14 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 3 - LONG-TERM DEBT (CONTINUED) Maturities of long-term debt, including obligations under capital leases, are as follows:
Years Ending December 31, ------------ 1996 $ 927,356 1997 787,135 1998 477,337 1999 408,317 2000 122,813 Thereafter 322,387 ---------- 3,045,345 Less: Amount representing interest 416,757 ---------- $2,628,588 ==========
Note 6 - RELATED PARTY TRANSACTIONS Loans due to stockholders aggregating $140,000 are subordinated to the bank debt and are non-interest bearing. The stockholders have agreed not to request payment before January 1997. At December 31, 1995, the Companies owed $175,859 to the stockholders which is non-interest bearing and due on demand. The Companies rent office and production facilities from their stockholders on a month-to-month basis. Rent and occupancy expense was $113,501 and $143,416 in 1995 and 1994, respectively. Note 7 - PROFIT-SHARING PLAN The Companies have a 401(k) profit-sharing plan covering all eligible employees. Contributions to the plan are based on the discretion of the Companies' management. There were no contributions made in 1995 and 1994. -10- 15 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 8 - CONCENTRATION OF RISK Accounts receivable from trade customers are generally due within 30 days. The Companies perform periodic credit evaluations of their customers' financial condition and generally do not require collateral. Credit losses have been within management's expectations. One customer accounted for approximately 16% of the Companies' net sales in 1994. The Companies place their cash with financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. Note 9 - STOCKHOLDERS' EQUITY At December 31, 1995, common stock and treasury stock consisted of the following: Common stock: Cardinal Communications Group, Inc., no par value: Authorized - 200 shares Issued - 91 shares Outstanding - 90 shares $109,500 C-Max Graphics, Inc., no par value: Authorized - 200 shares Issued and outstanding - 100 shares 100 -------- $109,600 ======== Treasury stock: Cardinal Communications Group, Inc. 1 share, at cost $ 5,000 ========
Note 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Companies' financial instruments at December 31, 1995 consist primarily of cash, trade accounts receivable and payable, capital leases and debt instruments. The carrying amounts of cash, trade accounts receivable and payable are considered to approximate their fair value due to short maturities. The Companies estimate the carrying value of the debt instruments approximates their fair value due to the market rate of interest. The fair value of loans from stockholders and subordinated debt could not be readily determined, since they are non-interest bearing. -11- 16 CARDINAL COMMUNICATIONS GROUP, INC. AND C-MAX GRAPHICS, INC. Notes to Combined Financial Statements Note 11 - INTERIM PERIODS (UNAUDITED) In the opinion of the Companies, the accompanying unaudited combined financial statements include all adjustments (which consist only of normal recurring items) necessary to present fairly the financial position as of May 31, 1996, and the results of operations and cash flows for the five months ended may 31, 1996. The results for the five months ended May 31, 1996, are not necessarily indicative of the results to be expected for the year. -12- 17 (b) Pro Forma Financial Information (unaudited). PRO FORMA FINANCIAL INFORMATION The following Pro Forma Financial Statements are based on the historical financial statements of the Company, adjusted to give effect to the acquisition of certain assets of the Seller by the Company. The Pro Forma Balance Sheet assumes the acquisition occurred as of the most recent balance sheet date prior to the acquisition date of August 9, 1996. The Pro Forma Income Statements for the nine months ended May 31, 1996 and the twelve months ended August 31, 1995 assume that the acquisition occurred as of the first day of the applicable period. The pro forma statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes thereto which are included in the Company's Registration Statement on Form SB-2 (Registrations No. 33-99656), the Company's Quarterly Report on Form 10-QSB for the quarter ended May 31, 1996, the Company's Current Report on Form 8-K dated August 19, 1996 (each as filed with the Securities and Exchange Commission) and the audited financial statements of the Seller that are filed herewith. The pro forma financial information does not purport to present what the Company's results of operations would actually have been if the acquisition of the Seller's assets had occurred on the assumed dates, as specified above, or to project the Company's financial condition or results of operations for any future period. -4- 18 UNIDIGITAL INC. PRO FORMA COMBINED BALANCE SHEET MAY 31, 1996 (Assumes 5-31-96 closing date) As reported As reported
ASSETS AND CARDINAL LIAB. NOT UNIDIGITAL ACQUISITION FINANCING ACQUIRED COMBINED ---------- ----------- --------- ---------- -------- ASSETS Cash/cash equivalents 4,765,963 (250,000) 4,515,963 Accounts receivable 3,309,343 1,634,508 (1,634,508) 3,309,343 Allowance for doubtful a/c (137,722) (72,000) 72,000 (137,722) Ppd exp/other current 497,065 163,055 (44,849) 615,271 ---------- --------- --------- ---------- ---------- Total current assets 8,434,649 1,725,563 (250,000) (1,607,357) 8,302,855 PP&E 5,464,839 2,992,116 1,900,000 (800,249) 9,556,706 Acc. Dept. (1,061,398) (1,061,398) Goodwill 790,851 790,851 Accum. Amort. (408) (408) Other assets 95,918 32,043 127,961 ---------- --------- --------- ---------- ---------- TOTAL ASSETS 13,724,451 4,749,722 1,650,000 (2,407,606) 17,716,567 ========== ========= ========= ========== ========== LIABILITIES & SH EQUITY Due to banks 1,320,174 1,731,710 1,400,000 (1,731,710) 2,720,174 Current portion of LT debt 157,500 725,010 882,510 Current portion cap lease 709,207 709,207 Current portion bus. acq. 306,323 306,323 AP and accrued 1,259,924 1,071,675 (179,359) 2,152,240 Income taxes payable 533,543 533,543 Loans pay S/H 694,139 200,859 (200,859) 694,139 Def income taxes - current 117,835 117,835 0 LT term bank debt 76,666 1,724,790 (1,000,000) 801,456 Noncurrent cap lease 1,129,455 1,129,455 Def. income taxes - LT 358,000 358,000 ---------- --------- --------- ---------- ---------- Total liabilities 6,662,766 5,454,044 1,400,000 (3,111,928) 10,404,882 Common stock 31,500 104,600 392 (104,600) 31,892 FX translation (25,034) (25,034) PAIC 5,319,480 249,608 5,569,088 R.E. 1,735,739 (808,922) 808,922 1,735,739 ---------- --------- --------- ---------- ---------- Total stockholders' equity 7,061,685 (704,322) 250,000 704,322 7,311,685 ---------- --------- --------- ---------- ---------- TOTAL EQUITIES 13,724,451 4,749,722 1,650,000 (2,407,606) 17,716,567 ========== ========= ========= ========== ==========
19 UNIDIGITAL INC. PRO FORMA COMBINED STATEMENT OF OPERATIONS NINE MONTHS ENDED MAY 31, 1996 (Assumes closing date of 9-1-95)
CARDINAL PRO FORMA UNIDIGITAL ACQUISITION ADJUSTMENTS FINANCING COMBINED ---------- ----------- ----------- ---------- -------- REVENUES Net Sales $8,557,322 $6,892,751 $ -- $ -- $15,450,073 OPERATING EXPENSES Cost of goods sold 3,852,896 3,795,425 -- -- 7,648,321 Selling, general & administrative 2,577,711 3,431,526 -- 3,750 6,012,987 Total officers comp. 381,484 -- (72,769) -- 308,715 ---------- --------- ------- -------- ---------- Total operating expenses 6,812,091 7,226,951 (72,769) 3,750 13,970,023 ---------- --------- ------- -------- ---------- Income from operations 1,745,231 (334,200) 72,769 (3,750) 1,480,050 Interest expense (231,591) (343,699) 120,000 (120,000) (575,290) Interest & other income 61,399 79,925 -- -- 141,324 ---------- --------- ------- -------- ---------- Income before tax 1,575,039 (597,974) 192,769 (123,750) 1,046,084 Income tax (906,711) 219,711 278,058 (408,942) ---------- --------- ------- -------- ---------- Net income (loss) $ 668,328 $ (597,974) $412,480 $154,308 $ 637,142 ========== ========= ======= ======== ========== EPS $ 0.21 $ 0.20 ========== ========== WEIGHTED AVG. SHS O/S 3,150,000 39,216 3,189,216
20 UNIDIGITAL INC. PURCHASE PRICE ALLOCATION ALLOCATION CARRYING OF PURCHASE VALUE PRICE REPORTED ADJUSTMENTS ----------- -------- ----------- Current assets $ 118,206 $1,725,563 $(1,607,357) Property and equipment 2,191,867 2,992,116 (800,249) Other assets 32,043 32,043 -- --------- --------- ----------- $2,342,116 $4,749,722 $(2,407,606) Current liabilities $1,992,116 $3,729,254 $(1,737,138) Long term liabilities 350,000 1,724,790 (1,374,790) --------- --------- ----------- Net assets 0 (704,322) 704,322 --------- --------- ----------- Stockholders' equity $ 0 $ (704,322) $ 704,322 The preliminary allocation of purchase price may change upon final determination of the fair value of the assets acquired. UNIDIGITAL INC. SOURCES: Lines of credit $1,400,000 Unidigital equity 250,000 --------- 1,650,000 USES: Cardinal Real Estate Acquisition: Cash payment 50,000 Accrued deal costs 200,000 Bank debt repayment 1,400,000 Issuance of Unidigital stock 250,000 --------- 1,900,000 --------- Working capital usage $ (250,000) ========= 21 UNIDIGITAL INC. PRO FORMA COMBINED STATEMENT OF OPERATIONS TWELVE MONTHS ENDED AUGUST 31,1995 (Assumes closing date of 9-1-94)
CARDINAL PRO FORMA UNIDIGITAL* ACQUISITION ADJUSTMENTS FINANCING COMBINED ---------- ----------- ----------- --------- ---------- REVENUES Net Sales $8,542,020 $ 9,209,885 $ -- $ -- $17,751,905 OPERATING EXPENSES Cost of goods sold 3,900,703 6,547,125 -- -- 10,447,828 Selling, general & administrative 2,227,524 3,453,138 -- 5,000 5,685,662 Total officers comp. 719,125 -- -- -- 719,125 --------- ---------- -------- -------- ---------- Total operating expenses 6,847,352 10,000,263 -- 5,000 16,852,615 --------- ---------- -------- -------- ---------- Income from operations 1,694,668 (790,378) -- (5,000) 899,290 Interest expense (194,995) (352,547) 160,000 (160,000) (547,542) Interest and other income -- 12,139 -- -- 12,139 --------- ---------- -------- -------- ---------- Income before tax 1,499,673 (1,130,786) -- (165,000) 363,887 Income tax (356,000) -- -- 525,815 169,815 --------- ---------- -------- -------- ---------- Net income (loss) $1,143,673 $(1,130,786) $ -- $360,815 $ 533,702 ========= ========== ======== ======== ========== EPS $ 0.36 $ 0.17 ========= ========== WEIGHTED AVG. SHS O/S 3,150,000 39,216 3,189,216
* Includes operations of Linographics and affiliates. 22 (c) Exhibits. EXHIBIT NO. DESCRIPTION OF EXHIBIT 10.1 Asset Purchase Agreement dated as of August 2, 1996 by and among Unidigital Inc., Unidigital/Cardinal Corporation, Cardinal Communications Group, Inc. ("Cardinal"), C-Max Graphics, Inc. ("C-Max"; C-Max and Cardinal are referred to collectively as the "Seller"), and each of Mark and Sheldon Darlow, the sole shareholders of the Seller (included as an exhibit to the Current Report on Form 8-K of the Company dated August 19, 1996 and incorporated by reference herein). -5- 23 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. Unidigital Inc. By: /s/ Kevin H. Rich --------------------------------- Kevin H. Rich, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: October 15, 1996 -6- -----END PRIVACY-ENHANCED MESSAGE-----