8-K 1 a4409733.txt DAISYTEK 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (date of earliest event reported): June 3, 2003 Daisytek International Corporation (Exact Name of Registrant as Specified in Charter) Delaware 0-25400 75-2421746 --------------- -------------- ----------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) 1025 Central Expressway South, Suite 200 Allen, Texas 75013 (Address of Principal Executive Offices, including zip code) (972) 881-4700 (Registrant's Telephone Number, including area code) N/A (Former Name or Former Address, if Changed Since Last Report) ITEM 3. BANKRUPTCY OR RECEIVERSHIP On June 3, 2003, Daisytek International Corporation (the "Company") filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, under Case No. 03-35724-SAF-11. Joint administration of the Company's Chapter 11 case has been granted in connection with the petitions filed by Company subsidiaries Daisytek, Incorporated, Arlington Industries, Inc., Daisytek Latin America, Inc., Tapebargains.com, Virtual Demand, Inc., B.A. Pargh Company, The Tape Company and Digital Storage, Inc. under Chapter 11 on May 7, 2003. All of these Chapter 11 cases are being jointly administered under Case No. 03-342762-HDH-11. Daisytek International Corporation remains in possession of its assets and properties, and continues to operate its businesses and manage its properties as "debtor-in-possession" pursuant to the Bankruptcy Code. On June 3, 2003, the Company issued a news release relating to the foregoing. A copy of the news release is filed herewith as Exhibit 99.1. ITEM 5. OTHER EVENTS The Company accepted the resignations of Daniel T. Owen and Peter P.J. Vikanis from the Company's board of directors, effective upon the Company's filing of the Chapter 11 petition on June 3, 2003. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired Not applicable (b) Pro forma financial information Not applicable (c) Exhibits 99.1 Press Release dated June 3, 2003. SIGNATURE 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. DAISYTEK INTERNATIONAL CORPORATION By: /s/ ERIC T. LOGAN ----------------------------------- Eric T. Logan Interim Chief Financial Officer Dated: June 5, 2003 Index to Exhibits Exhibit Number Description ------- ----------- 99.1 Press Release dated June 3, 2003.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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 21, 2003

Daisytek International Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware		0-25400		75-2421746
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

1025 Central Expressway South, Suite 200

Allen, Texas 75013

(Address of Principal Executive Offices, including zip code)

(972) 881-4700

(Registrant’s Telephone Number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

On May 16, 2003, Daisytek International Corporation (“Daisytek”) announced that the board of directors of U.K.-based ISA International plc (“ISA,” a wholly-owned subsidiary of Daisytek) had appointed a Voluntary Administrator, PriceWaterhouseCoopers, to assume day-to-day management of the ISA operations. Subsequently, on May 21, 2003, the Voluntary Administrator sold the business and assets of the U.K. and Republic of Ireland businesses and the equity in the Swedish and Norway subsidiaries for an undisclosed sum to a newly formed entity called ISA Trading Limited. The Voluntary Administrator continues to progress on sale and restructuring options for the German and French businesses.

As a result of the appointment of the Voluntary Administrator and the sales completed on May 21, 2003, as well as anticipated future sales or restructuring activities, Daisytek anticipates that no value in ISA International plc will be retained by Daisytek.

Daisytek began using consolidation accounting for its investment in ISA International plc effective May 7, 2002.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

(a) Financial statements of businesses acquired.

Not applicable

(b) Pro forma financial information.

Pro forma financial information required pursuant to Article 11 of Regulation S-X as of December 31, 2002 and for the nine months ended December 31, 2002 is filed herewith beginning on page P-1.

99.1 Press release issued by Daisytek International Corporation dated May 21, 2003.

99.2 Press release issued by PriceWaterhouseCoopers dated May 21, 2003.

SIGNATURE

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.

DAISYTEK INTERNATIONAL CORPORATION By: /s/ ERIC T. LOGAN Eric T. Logan Interim Chief Financial Officer

Dated: June 4, 2003

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The unaudited pro forma financial information of Daisytek International Corporation (together with its subsidiaries, “Daisytek” or the “Company”) gives effect to the disposition of ISA International plc (“ISA”), a pan-European distributor of computer supplies, which indirectly owns 47% of Kingfield Heath Ltd., a U.K.-based wholesaler of office products. The unaudited pro forma balance sheet data at December 31, 2002 presents adjustments for the ISA disposition as if the transaction was completed on December 31, 2002. The unaudited pro forma statement of operations data for the nine months ended December 31, 2002 presents adjustments for the ISA disposition as if the transaction had been completed on May 7, 2002. Daisytek began using consolidation accounting for its investment in ISA International plc effective May 7, 2002. Prior to May 7, 2002, the Company’s investment in ISA was accounted for using the cost method.

The unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements and the related notes thereto of the Company that have previously been reported. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the disposition of ISA had been consummated at the dates indicated, nor is it indicative of future operating results or financial position.

P-1

DAISYTEK INTERNATIONAL CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

AT DECEMEBER 31, 2002

(In thousands)

	Company Historical			ISA Disposition (1)			Company Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	11,738		$	(231	)	$	11,507
Accounts receivable, prepaid expenses and other current assets		278,057			(74,773	)		203,284
Inventories, net		190,698			(40,996	)		149,702
Total current assets		480,493			(116,000	)		364,493
Property and equipment, net		41,098			(7,957	)		33,141
Other assets		15,605			(10,685	)		4,920
Goodwill, net		73,078			(29,807	)		43,271
Total assets	$	610,274		$	(164,449	)	$	445,825
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	26,225		$	(23,253	)	$	2,972
Trade accounts payable, accrued expenses and other current liabilities		208,024			(78,457	)		129,567
Total current liabilities		234,249			(101,710	)		132,539
Long-term debt, less current portion		198,571			(30,638	)		167,933
Commitments and contingencies
Shareholders’ equity:
Preferred stock		—			—			—
Common stock		203			—			203
Additional paid-in capital		123,676			—			123,676
Retained earnings		79,115			(32,101	)		47,014
Accumulated other comprehensive loss		(13,848	)		—			(13,848	)
Treasury stock at cost		(11,692	)		—			(11,692	)
Total shareholders’ equity		177,454			(32,101	)		145,353
Total liabilities and shareholders’ equity	$	610,274		$	(164,449	)	$	445,825

See accompanying note to Unaudited Pro Forma Financial Information.

P-2

DAISYTEK INTERNATIONAL CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2002

(In thousands, except per share data)

	Company Historical			ISA Disposition			Company Pro Forma
Net revenues	$	1,334,020		$	(384,143	)	$	949,877
Cost of revenues		1,215,865			(335,786	)		880,079
Gross profit		118,155			(48,357	)		69,798
Selling, general and administrative expenses		139,135			(43,941	)		95,194
Income from operations		(20,980	)		(4,416	)		(25,396	)
Interest expense, net		11,397			(2,433	)		8,964
Loss from continuing operations before income taxes		(32,377	)		(1,983	)		(34,360	)
Benefit for income taxes		7,004			1,000			8,004
Loss from continuing operations before equity in net income of affiliate and minority interest		(25,373	)		(983	)		(26,356	)
Equity in net income of affiliate and minority interest		1,220			(1,220	)		—
Loss from continuing operations	$	(24,153	)	$	(2,203	)	$	(26,356	)
Net loss per common share:
Basic	$	(1.32	)				$	(1.44	)
Diluted	$	(1.32	)				$	(1.44	)
Weighted average common and common share equivalents outstanding:
Basic		18,282						18,282
Diluted		18,282						18,282

P-3

NOTE TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

Note 1. Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet

Adjustments reflect the disposition of ISA. As a result of the appointment of the Voluntary Administrator and the sales completed on May 21, 2003, as well as anticipated future sales or restructuring activities, Daisytek anticipates that no value in ISA International plc will be retained by Daisytek.

Adjustments are as follows (in thousands):

Decrease in current assets	$	133,285
Decrease in property, plant and equipment, net of accumulated depreciation		7,957
Decrease in other assets		10,685
Decrease in goodwill and other intangible assets, net of accumulated amortization		29,807
Decrease in current liabilities		101,710
Decrease in long-term debt		30,638
Net ISA assets disposed of		49,386
Decrease in retained earnings resulting from the disposition of ISA, net of tax at the Company’s assumed tax rate of 35%		32,101
Increase in deferred tax asset resulting from the loss on disposition of ISA, using the Company’s assumed tax rate of 35%		17,285

P-4

Index to Exhibits

Exhibit Number		Description
99.1		Press release issued by Daisytek International Corporation dated May 21, 2003.
99.2		Press release issued by PriceWaterhouseCoopers dated May 21, 2003.

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