-----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, EdL82K1+v0lamynVAOuaBxQQGJfOd1h28h4fXDahba97UxKCIdHl5C4LrNk2Hg3B A+66/lRqC9cjEykIYu8LSA== 0000950115-97-001176.txt : 19970806 0000950115-97-001176.hdr.sgml : 19970806 ACCESSION NUMBER: 0000950115-97-001176 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970804 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970805 SROS: NASD 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: 0831 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27664 FILM NUMBER: 97651809 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 CURRENT REPORT 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) August 5, 1997 (May 22, 1997) Unidigital Inc. ---------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-27664 13-3856672 - ---------------------------- ------------------------ -------------------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.) of Incorporation)
545 West 45th Street, New York, New York 10036 ---------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (212) 397-0800 ---------------------------------------------- (Registrant's telephone number, including area code) 20 West 20th Street, New York, New York 10011 ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. As reported in the Current Report on Form 8-K dated June 6, 1997 filed by Unidigital Inc. (the "Company"), on May 22, 1997, the Company, through its wholly-owned subsidiary, Elements (UK) Limited, consummated the acquisition of all of the issued and outstanding capital stock of Libra City Corporate Printing Limited and its subsidiaries (the "Seller"), a London-based financial printer. 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- (a) Financial Information of Business Acquired. LIBRA CITY CORPORATE PRINTING LIMITED REPORT AND FINANCIAL STATEMENTS 31st DECEMBER 1996 -3- Libra City Corporate Printing Limited and its Subsidiary Companies Directors F.E. Allen R.D. Bishop R. Cort K. Dellow Secretary and Registered Office K. Dellow Truscott House, 32-42 East Road, London N1 6AD Auditors Moore Stephens Chartered Accountants St. Paul's House, Warwick Lane, London, EC4P 4BN Report of the Directors The directors present their report and the audited financial statements for the year ended 31st December 1996. Review of Activities The principal activity of the group during the year was that of printers. The directors foresee no significant changes in the future activities of the group. Review of Performance The confidence expressed in last year's review regarding the outlook for 1996 has been amply justified by the actual outturn which showed a substantial improvement on 1995. The current year has started steadily and the directors are hopeful that the outcome for the year will not be dis-similar to 1996. Results and Dividends The group profit after tax amounted to (pound)209,344. A dividend of (pound)4.25 per share amounting to (pound)66,385 was paid during the year. The remaining balance of (pound) 142,959 is to be transferred to reserves. -4- Libra City Corporate Printing Limited and its Subsidiary Companies Report of the Directors (Continued) Directors' Interests The interests, as defined by the Companies Act 1985, of the directors in the ordinary share capital of the company during the year were as follows: Holding at ---------- 31st December 31st December 1996 1995 ------------- -------------- F.E. Allen 7,263 7,263 R.D. Bishop 704 704 R. Cort - - K. Dellow 312 312 Charitable Contributions During the year the group has made contributions of (pound)186 to United Kingdom charitable organisations, including (pound)100 to the Variety Club of Great Britain. Auditors The auditors, Moore Stephens, are willing to continue in office. A resolution for their reappointment and authorising the directors to fix their remuneration will be submitted to the annual general meeting. By Order of the Board K. DELLOW Secretary -5- Libra City Corporate Printing Limited and its Subsidiary Companies Statement of Directors Responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping proper records which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. -6= Report of the Auditors to the Members of Libra City Corporate Printing Limited We have audited the financial statements on pages 5 to 16 which have been prepared under the historical cost convention and the accounting policies set out on page 8. Respective Responsibilities of Directors and Auditors As described on page 3 the company's directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of Opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of the affairs of the company and the group at 31st December 1996 and of the group profit for the year then ended and have been properly prepared in accordance with the Companies Act 1985. St. Paul's House, MOORE STEPHENS London, EC4P 4BN 22nd April 1997 Chartered Accountants Registered Auditor -7- Libra City Corporate Printing Limited and its Subsidiary Companies Consolidated Profit and Loss Account For the year ended 31st December 1996
Note 1996 1995 ---- ---- ---- Turnover 1(c),2 3,964,753 3,230,800 Cost of sales 2,735,850 2,333,506 --------- --------- Gross Profit 1,228,903 897,294 Net operating expenses 899,254 715,451 --------- --------- Operating Profit 3 329,649 181,843 Interest received 20,725 26,690 Interest payable and similar charges 5 (37,140) (50,248) --------- --------- Profit on Ordinary Activities before Taxation 313,234 158,285 Taxation on Ordinary Activities 6 103,890 53,245 --------- --------- Profit on Ordinary Activities after Taxation 209,344 105,040 Dividends 7 (66,385) (66,385) --------- --------- Retained Profit for the Financial Year (pound) 142,959 (pound) 38,655 ========= ========= Summary of Retained Profits At 1st January 1996 516,201 477,546 Retained profit for the financial year 142,959 38,655 --------- --------- At 31st December 1996 (pound) 659,160 (pound) 516,201 ========= =========
The group has no recognised gains or losses other than those included in the profit and loss account. -8- Libra City Corporate Printing Limited and its Subsidiary Companies Balance Sheets as at 31st December 1996 (All amounts in pounds)
1996 1995 ----------------------- ------------------------ Note Group Company Group Company ---- ----- ------- ----- ------- Fixed Assets Tangible assets 9 267,129 267,129 246,423 246,423 Investments 10 -- 1,241,893 -- 1,241,893 ---------- ---------- ---------- ---------- 267,129 1,509,022 246,423 1,488,316 ---------- ---------- ---------- ---------- Current Assets Stocks 11 154,786 154,786 107,450 107,450 Debtors 12 777,782 777,782 944,232 944,232 Cash at bank and in hand 681,991 681,991 511,661 511,661 ---------- ---------- ---------- ---------- 1,614,559 1,614,559 1,563,343 1,563,343 Creditors, amounts falling due within one year 13 872,653 1,250,718 (923,964) (1,302,029) ---------- ---------- ---------- ---------- Net Current Assets 741,906 363,841 639,379 261,314 ---------- ---------- ---------- ---------- Total Assets Less Current Liabilities 1,009,035 1,872,863 885,802 1,749,630 Creditors, amounts falling due after more than one year 13 (62,764) (62,764) (82,490) (82,490) ---------- ---------- ---------- ---------- 946,271 1,810,099 803,312 1,667,140 ========== ========== ========== ========== Capital and Reserves Called up share capital 15 15,620 15,620 15,620 15,620 Merger reserves 16 271,491 1,313,776 271,491 1,313,776 Profit and loss account 16 659,160 480,703 516,201 337,744 ---------- ---------- ---------- ---------- Shareholder funds 21 946,271 1,810,099 803,312 1,667,140 ========== ========== ========== ==========
These financial statements were approved by the Board on 22nd April 1997. F.E. ALLEN ) ) Directors R. CORT ) -9- Libra City Corporate Printing Limited and its Subsidiary Companies Cash Flow Statement For the year ended 31st December 1996
Note 1996 1995 ---- ---- ---- Net Cash Inflow from Operating Activities 17 542,748 325,393 Returns on Investments and Servicing of Finance Interest received 20,725 26,690 Interest paid (37,140) (50,248) Dividends paid (132,770) (12,496) -------- ------- Net Cash Outflow from Returns on Investments and Servicing of Finance (149,185) (36,054) Corporation Tax Paid (including A.C.T.) (50,552) (57,997) Investing Activities Payments to acquire fixed assets (51,694) (22,290) Receipts from sale of tangible fixed assets 3,850 7,738 ------- ------- Net Cash Outflow from Investing Activities (47,844) (14,552) ------- ------- Net Cash Inflow before Financing 295,167 216,790 Financing Capital element of finance lease rentals 124,837 (115,545) ------- -------- Net Cash Outflow from Financing 124,837 (115,545) ------- -------- Increase in Cash and Cash Equivalents 19 (pound) 170,330 (pound) 101,245 ======= =======
-10- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes Principal Accounting Policies (a) Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. (b) Basis of consolidation The financial statements incorporate the results of all subsidiary companies of Libra City Corporate Printing Limited for the year ended 31st December 1996. All turnover arises from continuing operations. (c) Turnover Turnover represents sales invoiced during the year net of Value Added Tax. (d) Goodwill Goodwill arising on consolidation is written off directly against reserves. (e) Tangible fixed assets and depreciation Tangible fixed assets are stated at cost, less accumulated depreciation. Depreciation is calculated to write off the cost of fixed assets over their estimated useful lives at the following rates per annum: Leasehold improvements - over the life of the lease Plant and machinery - 25% straight line Office equipment - 10% straight line Motor vehicles - 33 1/3% straight line Depreciation is charged both in the year of acquisition and disposal. (f) Stocks and work in progress Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow moving items. Cost is determined on a first in first out basis. (g) Deferred taxation Provision is made by the liability method for all timing differences which are expected to be reversed in the foreseeable future. (h) Leased assets Assets held under finance leases are capitalised as tangible fixed assets at their fair -11- value. Finance charges are allocated to accounting years using the sum of digits method. Operating lease payments are taken to the profit and loss account when due. (i) Pension costs Contributions to individuals pension schemes are charged to expenditure as incurred. -12- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 2. Turnover The turnover and pre-tax profit are attributable to the principal activities of the group. All turnover originated in the United Kingdom. Turnover has been restated in 1995 to include carriage previously included in distribution costs. 3. Operating Profit
Operating profit is stated after charging/(crediting): 1996 1995 ------ ----- (pound) (pound) Directors' emoluments (Note 4) 245,020 197,100 Auditors' remuneration - Audit 16,500 16,500 - Other 2,849 - Depreciation of fixed assets owned 28,322 16,819 Depreciation of fixed assets leased 110,578 115,730 Profit on disposal of fixed assets (3,204) (11,745) Hire of equipment 7,714 6,751 ========= =========
4. Directors and Employees Directors' Emoluments
Staff costs include the following emoluments in respect of directors of the company: 1996 1995 ---- ---- Fees and salaries 225,000 179,475 Other emoluments, including pension contributions 20,020 17,625 ------- ------- (pound) 245,020 (pound) 197,100 ======= =======
Included within fees and salaries is an amount of (pound)10,000 relating to consultancy services provided by a firm owned by Mr. R. Cort (one of the directors). Directors' emoluments, excluding pension contributions are as follows: 1996 1995 ---- ---- The highest paid director (pound) 106,373 (pound) 85,033 ======= ====== -13- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 4. Directors and Employees (Continued) The number of other directors, whose emoluments were within the ranges was: 1996 1995 ------ ----- Number Number (pound)5,000 -(pound)10,000 1 - (pound)10,001 -(pound)15,000 - 1 (pound)35,001 -(pound)40,000 - 1 (pound)40,001 -(pound)45,000 1 - (pound)45,001 -(pound)50,000 1 1 ====== ====== Staff Costs Staff costs during the year were as follows: 1996 1995 ---- ---- Wages and salaries 989,496 847,306 Social security costs 95,138 83,685 Other pension costs 38,665 42,891 --------- ------ (pound) 1,123,299 (pound) 973,882 ========= ======= The average weekly number of persons employed by the group during the year was 31 (1995 -31). The company operates a defined contribution pension scheme for employees. The charge for the year was (pound)39,929; included in the balance sheet is an accrual for (pound)6,411. 5. Interest Payable
1996 1995 ---- ---- On bank loans, overdrafts and other loans repayable within 5 years by instalments 37,140 50,248 ----------- --------- (pound) 37,140 (pound) 50,248 =========== =========
6. Tax on Ordinary Activities
1996 1995 ------ ---- United Kingdom corporation tax payable based on the result for the year as adjusted for tax purposes at 33% (1995 - 25%) 105,000 58,000 Overprovision in previous years (1,110) (4,755) Deferred tax (note 14) - - ----------- ------- (pound) 103,890 (pound) 53,245 ========== ======
-14- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 7. Dividends Paid on the Ordinary Shares: 1996 1995 ------ ---- Final dividended paid of (pound)4.25 per share (1995(pound)4.25) 66,385 66,385 ------ ------- (pound) 66,385 (pound) 66,385 ======= ======= 8. Profit for the Financial Year Libra City Corporate Printing Limited has taken advantage of the Companies Act exemption from presentation of its own profit and loss account. The result of the holding company for the financial year amounts to a profit of (pound)142,959 (1995: profit of (pound)38,655). 9. Tangible Fixed Assets Group and Company
Plant and Machinery and Motor Office Vehicles Equipment Total -------- --------- ----- Cost At 1st January 1996 420,869 87,769 508,638 Additions 26,368 139,084 164,452 Disposals (20,180) - (20,180) -------- ------- -------- At 31st December 1996 (pound) 426,057 (pound) 226,853 (pound) 652,910 ======= ======= ======= Depreciation At 1st January 1996 233,986 28,229 262,215 Charge for the year 104,868 34,032 138,900 Eliminated on disposals (15,334) - (15,334) -------- ------ -------- At 31st December 1996 (pound) 323,520 (pound) 62,261 (pound) 385,781 ======= ====== ======= Net book value At 31st December 1996 (pound) 102,537 (pound) 164,592 (pound) 267,129 ======= ======= ======= At 31st December 1995 (pound) 186,883 (pound) 59,540 (pound) 246,423 ======= ====== =======
Tangible fixed assets include assets held under finance leases with a net book value of (pound)186,449 (1995: (pound)197,589). -15- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 10. Fixed Asset Investments Company ------- Investment in subsidiary companies at cost At 1st January 1996 and at 31st December 1996 (pound) 1,241,893 ========= The interests of Libra City Corporate Printing Limited in subsidiary companies were:
Proportion Proportion of ordinary of ordinary shares held shares held directly indirectly ----------- ----------- Libra City Printers Limited 100% - Libra City Printers (International) Limited - 100% Libra City (Annual Reports) Limited - 100% Cityset Communications Limited 100% - Cityset Printers Limited - 100%
All of the above companies are incorporated in the United Kingdom, none of them being listed on a recognised stock exchange. 11. Stocks Stocks comprise: Group and company 1996 1995 ------ ----- Raw Materials and consumables 30,664 30,873 Work in progress 124,122 76,577 -------- ------- (pound) 154,786 (pound) 107,450 ======= ======= 12. Debtors Group and company 1996 1995 ------ ----- Trade debtors 614,226 820,686 Other debtors 132,584 99,276 Prepayments and accrued income 30,972 24,270 ------- ------- (pound) 777,782 (pound) 944,232 ======= ======= -16- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 13. Creditors, amounts falling due within one year
1996 1995 ---- ---- Group Company Group Company ----- ------- ----- ------- Trade creditors 465,404 465,404 558,375 558,375 Owed to group companies - 378,344 - 378,344 Corporation tax 105,000 105,000 54,876 54,876 Dividends payable - - 66,385 66,385 Other taxation and social security payable 114,189 114,189 67,072 67,072 Accruals 75,115 74,834 70,970 70,691 Obligations under finance leases 112,947 112,947 106,286 106,286 ------- ---------- ------- ---------- (pound) 872,655 (pound)1,250,718 (pound) 923,964 (pound) 1,302,029 ======= ========= ======= =========
Creditors, amounts falling due after more than one year
Group and company 1996 1995 ------ ----- Obligations under finance leases 62,764 82,490 ------ ------ (pound) 62,764 (pound) 82,490 ====== ====== Obligations under finance leases comprise: Group and company 1996 1995 ------ ----- Gross obligations 206,469 226,282 Less future finance charges payable (30,758) (37,506) ------- ------- (pound) 175,711 (pound) 188,776 ======= =======
-17- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 13. Creditors (Continued) Net obligations are due as follows:
1996 1995 ------ ----- Within one year 112,947 106,286 In the second to fifth years inclusive 62,764 82,490 -------- -------- (pound) 175,711 (pound) 188,776 ======= =======
14. Provisions for Liabilities and charges Group and company The movements on the deferred tax account are as follows:
1996 1995 ------ ----- Provision at 1st January 1995 - - Transfer to profit and loss account - - -------- -------- Provision at 31st December 1995 (pound) - (pound) - ====== ====== 15. Called Up Share Capital 1996 1995 ------ ----- Authorised, allotted, called up and fully paid: 15,620 ordinary shares of(pound)1 each (pound) 15,620 (pound) 15,620 ====== ======
-18- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 16. Reserves
Profit and Merger Loss Reserve Account Total ------- ---------- ----- Group At 1st January 1996 271,491 516,201 787,692 Retained profit for the year - 142,959 142,959 --- ------- ------- At 31st December 1996 Company (pound) 271,491 (pound) 659,160 (pound) 930,651 ======= ======= ======= At 1st January 1996 1,313,776 337,744 1,651,520 Retained profit for the year - 142,959 142,959 --------- ------- ---------- At 31st December 1996 (pound) 1,313,776 (pound) 480,703 (pound) 1,794,479 ========= ======= =========
17. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities 1996 1995 ------ ----- Operating profit 329,649 181,843 Depreciation charges 138,900 132,549 Profit on sale of tangible fixed assets (3,204) (11,745) Increase in stock (47,336) (36,894) Decrease/(Increase) in debtors 166,450 (54,657) Decrease in creditors (41,711) 114,297 ------- ------- Net cash inflow from operating activities (pound) 542,748 (pound) 325,393 ======= ======= -19- Libra City Corporate Printing Limited and its Subsidiary Companies Financial Statements for the year ended 31st December 1996 Notes (Continued) 18. Analysis of Changes in Cash and Cash Equivalents During the Year 1996 1995 ------ ----- Balance at 1st January 1996 511,661 410,416 Net cash inflow 170,330 101,245 ------- ------- Balance at 31st December 1996 (pound) 681,991 (pound) 511,661 ======= ======= 19. Analysis of the Balances of Cash and Cash Equivalents as Shown in the Balance Sheet
Change 1996 1995 in year ------ ------ ------- Cash at bank and in hand (pound) 681,991 (pound) 511,661 (pound) 170,330 ======= ======= =======
20. Analysis of Changes in Financing During the Year
1996 1995 ------ ----- Balance at 1st January 1996 188,776 239,827 Cash outflow from finance lease payments (124,837) (115,547) Inception of finance lease 111,772 64,496 ------- -------- Balance at 31st December 1996 (pound) 175,711 (pound) 188,776 ======= ======= 21. Reconciliation of Movements in Shareholders Funds 1996 1995 ------ ----- Profit for the financial year 209,344 105,040 Dividends (66,385) (66,385) ------- -------- Net increase in shareholders funds 142,959 38,655 Shareholders funds at 31st December 1995 803,312 764,657 ------- ------- Shareholders funds at 31st December 1996 (pound) 946,271 (pound) 803,312 ======= =======
-20- For Information of Management Only Libra City Corporate Printing Limited Trading Profit and Loss Account For the year ended 31st December 1996
1996 1995 ------------------------- ---------------------------- Sales 3,964,753 3,230,800 Cost of Sales Opening stock and WIP 107,450 70,556 Wages and salaries 637,764 553,026 Purchases 2,036,381 1,746,725 Repairs to plant and machinery 17,296 332 Depreciation: Plant and machinery 84,032 63,566 Hire of plant and machinery 7,714 6,751 ------ ------ 2,890,637 2,440,956 Less: Closing stocks and WIP (154,786) (107,450) --------- --------- 2,735,851 2,333,506 ---------- ---------- Gross Profit 1,228,902 897,294 Selling and Marketing costs (page 19) 155,924 112,455 Distribution costs (page 19) (11,321) (49,182) -------- -------- 144,603 63,273 -------- ------- Contribution to Overheads 1,084,299 834,021 Establishment costs (page 19) 180,812 187,603 Administrative expenses (page 19) 328,819 267,475 -------- -------- 509,631 455,078 -------- -------- Trading Profit 574,668 378,943 Directors Costs Directors' remuneration 225,000 179,475 Directors' pension costs 20,020 17,625 ------- ------- 245,020 197,100 -------- -------- Operating Profit Carried Forward 329,648 181,843
-21- For Information of Management Only Libra City Corporate Printing Limited Trading Profit and Loss Account (Continued) For the year ended 31st December 1996
1996 1995 ------ ----- Operating Profit Brought Forward 329,649 181,843 Other Income and Expenses Interest receivable (20,725) (26,690) Lease charges 37,140 50,248 --------- -------- 16,415 23,558 --------- -------- Profit before Taxation 313,234 158,285 Taxation (103,890) (53,245) -------- ------- Profit after Taxation 209,344 105,040 Dividends (66,385) (66,385) --------- ------- Retained Profit for the Financial Year (pound) 142,959 (pound) 38,655 ======== =======
-22- For Information of Management Only Libra City Corporate Printing Limited Trading Profit and Loss Account For the year ended 31st December 1996 (Continued) 1996 1995 ------ ----- Selling and Marketing Costs Wages and salaries 59,994 54,205 Advertising and publicity 6,499 5,710 Travel and motor expenses 11,300 4,048 Entertaining 73,210 43,570 Bad and doubtful debts 4,921 4,922 ------ ----- (pound) 155,924 (pound) 112,455 ======= ======= Distribution Costs Wages and salaries 17,421 18,904 Travel and motor expenses 35,818 29,330 Carriage (less recharges) (64,560) (97,416) ------- ------- (pound) (11,321) (pound) (49,182) ======= ======= Establishment Costs Rent and rates 14,645 14,961 Repairs and maintenance 38,670 37,630 Cleaning 9,420 5,160 Profit on disposal of fixed assets (3,204) (11,745) Depreciation 54,900 68,983 Heat and light 14,573 16,253 Insurance 29,430 31,698 General expenses 22,378 24,663 -------- -------- (pound) 180,812 (pound) 187,603 ======= ======= Administration Expenses Wages and salaries 131,495 139,251 Travel and motor expenses 2,833 2,593 Staff pension 18,675 11,266 Printing, postage and stationery 84,308 10,780 Telephone 22,254 39,873 Audit and accountancy 18,275 17,389 Consultancy 10,116 9,770 Legal and professional - 826 Bank charges 723 821 Hire of equipment 8,618 9,351 Health insurance 9,342 11,055 Sundry expenses 18,804 11,632 Subscriptions and membership 3,376 2,868 --------- --------- (pound) 328,819 (pound) 267,475 ======= ======= -23- (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 and certain liabilities of the Seller by the Company. The Pro Forma Income Statements for the nine months ended May 31, 1997 and the twelve months ended August 31, 1996 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 Annual Report on Form 10-KSB for the fiscal year ended August 31, 1996, the Company's Quarterly Report on Form 10-QSB for the quarter ended May 31, 1997, the Company's Current Report on Form 8-K dated June 6, 1997 (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. -24- UNIDIGITAL INC. Pro Forma Condensed Statement of Operations (Unaudited) Nine Months Ended May 31, 1997
Unidigital Libra May 31, 1997 May 31, 1997 Adjustments Pro forma ------------ ------------ ----------- --------- Net sales................................. $18,157,668 $ 4,202,018 22,359,686 Cost of sales............................. 9,624,915 3,053,209 12,678,124 Selling, general and administrative expenses................. 4,784,420 1,270,444(a) 128,962 6,183,826 Corporate expenses........................ 1,233,671 -- 1,233,671 ----------- ----------- ------------ ----------- Total operating expenses........... 15,643,006 4,323,653 128,962 20,095,621 =========== =========== ============ =========== Income from operations.................... 2,514,662 (121,635) (128,962) 2,264,065 Interest expense.......................... 695,660 37,282(b) 441,000 1,173,942 Interest and other income................. (60,792) (21,584) (82,376) ----------- ----------- ------------ ----------- Income before income taxes................ 1,879,794 (137,333) (569,962) 1,172,499 =========== ============ ============= =========== Income taxes.............................. 634,378 (26,493)(c) (182,388) 425,497 ----------- ------------ ------------- ----------- NET INCOME (LOSS)......................... $ 1,245,416 $ (110,840) $ (387,574) $ 747,002 =========== ============ ============= =========== Net income per common share............... $ 0.39 $ 0.23 =========== =========== Net income per fully diluted earnings per share................................... $ 0.38 $ 0.23 =========== =========== Weighted average number of shares used in computing earnings per common share....... 3,203,121 3,203,121 =========== =========== Weighted average number of shares used in computing fully diluted earnings per share................................... 3,306,340 3,306,340 =========== ===========
-25- UNIDIGITAL INC. Pro Forma Condensed Statement of Operations (Unaudited) Twelve Months Ended August 31, 1996
Unidigital Libra August 31, 1996 August 31, 1996 Adjustments Pro forma --------------- --------------- ----------- --------- Net sales................................. $11,659,818 $ 6,410,040 18,069,858 Cost of sales............................. 5,621,668 4,305,600 9,927,268 Selling, general and administrative expenses................. 3,593,302 1,254,240(a) 171,950 5,019,492 Corporate expenses........................ 456,172 -- 456,172 ----------- ----------- ------------ ----------- Total operating expenses........... 9,671,142 5,559,840 171,950 15,402,932 =========== =========== ============ =========== Income from operations.................... 1,988,676 850,200 (171,950) 2,666,926 Interest expense.......................... 326,805 63,960(b) 588,000 978,765 Interest and other income................. (232,397) (35,880) (268,277) ----------- ----------- ------------ ----------- Income before income taxes................ 1,894,268 822,120 (759,950) 1,956,438 =========== =========== ============ =========== Income taxes.............................. 1,064,327 274,560(c) (243,184) 1,095,703 ----------- ----------- ------- ----------- NET INCOME (LOSS)......................... $ 829,941 $ 547,560 $ (516,766) $ 860,735 =========== =========== ============= =========== Net income per common share............... $ 0.31 $ 0.33 =========== =========== Net income per fully diluted earnings per share............................... $ 0.30 $ 0.32 =========== =========== Weighted average number of shares used in computing earnings per common share....... 2,643,828 2,643,828 =========== =========== Weighted average number of shares used in computing fully diluted earnings per share................................... 2,725,646 2,725,646 =========== ===========
-26- UNIDIGITAL INC. Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited) For purposes of determining the pro forma effect of the transaction on Unidigital's Pro Forma Condensed Statement of Operations for the nine months ended May 31, 1997 and the fiscal year ended August 31, 1996, respectively, the following pro forma adjustments have been made: Cash Consideration from Issuance of Five Year Notes Payable $ 3,000,000 Management Bonus Pool $ 410,000 Value of Five Year Warrants to purchase up to 300,000 shares $ 588,000 -------------- Total Consideration $ 3,998,000 ============== Total value of Net Assets Acquired $ 1,418,752 -------------- Goodwill $ 2,579,248 ==============
9 Months Ended Year Ended May 31, 1997 August 31, 1996 -------------- --------------- (a) Amortization of Goodwill over 15 years $ 128,962 $ 171,950 (b) Amortization of financing costs of five year warrants $ 441,000 $ 588,000 (c) Pro Forma Tax Adjustment $ (182,388) $ (243,184)
-27- (c) Exhibits. Exhibit No. Description of Exhibit ----------- ---------------------- 10.1 Share Purchase Agreement by Way of Deed dated May 22, 1997 by and among Unidigital Inc., Elements (UK) Limited, Libra City Corporate Printing Limited, Francis Allen, Robin Bishop, Kenneth Dellow, Edward Tylee, Invesco English and International Trust, and Baronsmead Investment Trust (included as an exhibit to the Company's Form 8-K dated June 6, 1997 and incorporated by reference herein). -28- 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/ William E. Dye ---------------------------- William E. Dye, President and Chief Executive Officer (Principal Executive Officer) By: /s/ Michael Brown ------------------------------ Michael Brown, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: August 5, 1997 -29- -----END PRIVACY-ENHANCED MESSAGE-----