-----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, DH8KTlGFe8iXTSLM5DKfN0oyc/ZQ3Lk6AC3hNkivFLnA5KiVklDVPGVJvwly4whm LolGWx+1v5EAHur53obx/A== 0000950152-97-005999.txt : 19970815 0000950152-97-005999.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950152-97-005999 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER STANDARD ELECTRONICS INC CENTRAL INDEX KEY: 0000078749 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 340907152 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05734 FILM NUMBER: 97660829 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 10-Q 1 PIONEER-STANDARD ELECTRONICS, INC. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997. OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _________________. Commission file number 0-5734 ------- Pioneer-Standard Electronics, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 34-0907152 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4800 East 131st Street, Cleveland, OH 44105 - ------------------------------------- ----- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (216) 587-3600 ---------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of Common Shares, as of the latest practical date: COMMON SHARES, WITHOUT PAR VALUE, AS OF AUGUST 1, 1997: 26,058,469 . (Excludes 5,000,000 Common Shares subscribed by the Share Subscription Agreement and Trust.) 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
June 30, 1997 (Unaudited) March 31, 1997 ----------- -------------- ASSETS Current assets Cash $ 16,813 $ 28,116 Accounts receivable - net 220,258 209,086 Merchandise inventory 269,613 243,940 Prepaid expenses 8,413 6,633 Deferred income taxes 10,285 10,282 --------- --------- Total current assets 525,382 498,057 Intangible assets 39,011 39,260 Other assets 2,572 2,602 Property and equipment, at cost 89,962 91,681 Accumulated depreciation 38,195 39,087 --------- --------- Net 51,767 52,594 --------- --------- $ 618,732 $ 592,513 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable to banks $ 17,500 $ 20,500 Accounts payable 128,639 144,277 Accrued liabilities 39,433 31,867 Long-term debt due within one year 2,880 2,878 --------- --------- Total current liabilities 188,452 199,522 Long-term debt 203,577 173,587 Deferred income taxes 5,788 5,425 Shareholders' equity Common stock, at stated value 9,235 9,228 Capital in excess of stated value 125,570 121,489 Retained earnings 153,578 147,055 Unearned compensation (67,500) (63,750) Foreign currency translation adjustment 32 (43) --------- --------- Net 220,915 213,979 --------- --------- $ 618,732 $ 592,513 ========= =========
See accompanying notes. 2 3 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Quarter ended June 30, 1997 1996 ----------- ----------- Net sales $ 396,264 $ 375,156 Cost and expenses: Cost of goods sold 327,553 308,990 Warehouse, selling and administrative expense 51,423 51,348 ----------- ----------- Operating profit 17,288 14,818 Interest expense 4,324 3,904 ----------- ----------- Income before income taxes 12,964 10,914 Provision for income taxes 5,659 4,763 ----------- ----------- Net income $ 7,305 $ 6,151 =========== =========== Weighted average shares outstanding 26,432,555 23,138,433 Earnings per share - primary and fully diluted $ .28 $ .27 Dividends per share $ .03 $ .03
See accompanying notes. 3 4 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Three months ended June 30, 1997 1996 ---- ---- Cash flows from operating activities: Net income $ 7,305 $ 6,151 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 4,446 3,554 Increase in operating working capital (46,885) (56,132) Decrease in other assets 30 15 Deferred taxes 360 -- -------- -------- Total adjustments (42,049) (52,563) -------- -------- Net cash used in operating activities (34,744) (46,412) Cash flows from investing activities: Additions to property and equipment (3,115) (2,554) -------- -------- Net cash used in investing activities (3,115) (2,254) Cash flows from financing activities: Increase (decrease) in short-term financing (3,000) 8,500 Increase in revolving credit borrowings 30,000 48,000 Increase (decrease) in other long-term debt obligation (8) 51 Issuance of common shares under company stock option plan 380 304 Dividends paid (781) (675) -------- -------- Net cash provided by financing activities 26,591 56,180 Effect of exchange rate changes on cash (35) 59 -------- -------- Net increase in cash (11,303) 7,273 Cash at beginning of period 28,116 24,440 -------- -------- Cash at end of period $ 16,813 $ 31,713 ======== ========
See accompanying notes. 4 5 NOTES - Pioneer-Standard Electronics, Inc. 1. PER SHARE DATA Net income per common share is computed using the weighted average common shares and common share equivalents outstanding during the quarters June 30, 1997 and 1996. Common share equivalents consist of shares issuable upon exercise of stock options computed by using the treasury stock method. 2. MANAGEMENT OPINION The information furnished herein reflects all normal and recurring adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations for the quarters ended June 30, 1997 and 1996. The results of operations for the three month period are not necessarily indicative of results which may be expected for a full year. 5 6 PIONEER-STANDARD ELECTRONICS, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Current assets increased by $27.3 million and current liabilities decreased by $11.1 during the three-month period ended June 30, 1997, resulting in an increase of $38.4 million in working capital. The current ratio was 2.8:1 at June 30, 1997 compared with 2.5:1 at year-end, March 31, 1997. During the first three months of the current year, total interest-bearing debt increased by $27.0 million. The increase in debt is attributable to funding working capital and capital expenditure needs. The ratio of interest-bearing debt to capitalization was 50% at June 30, 1997 compared with 48% at March 31, 1997. Management estimates that capital expenditures for the fiscal year 1998 will approximate $28 million. Capital expenditures in the first three months of the current year were $3.1 million. Under present business conditions, it is anticipated that funds from current operations and available credit facilities will be sufficient to finance both capital spending and working capital needs for the balance of the current fiscal year. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 1996 Net sales for the three-month period ended June 30, 1997 of $396.3 million increased 6% over sales of the prior year three-month period of $375.2 million. The increase in net sales reflect strong demand for computer products which more than offset the weaker sales comparisons experienced by the Company's two other product lines, semiconductors and interconnect, passive, and electromechanical products. Semiconductor products accounted for 34% of the Company's sales in the current quarter, compared with 41% a year ago. Computer systems products represented 46% of sales in 1997 versus 38% last year. Interconnect, passive and electromechanical products were 18% of the Company's sales in 1997 and 1996. Miscellaneous products accounted for 2% and 3% of sales in 1997 and 1996, respectively. Cost of goods sold increased 6% compared with the prior year quarter, resulting in a gross margin of 17.3% in the current quarter compared with 17.6% a year ago. The shift in product mix described above was the principal factor impacting current year margins. Warehouse, selling and administrative expenses were $51.4 million, compared to the $51.3 million incurred during the prior year three-month period. This resulted in a ratio of these expenses to sales of 13.0% for the current quarter compared with 13.7% a year ago. The operating profit resulting from the activity described above of $17.3 million, or 4.4% of sales in the current period was up 17% compared with $14.8 million, or 3.9% of sales a year ago. Interest expense was $4.3 million in the current quarter compared with $3.9 million a year ago. The effective tax rate for the current year three-month period was 43.7% compared with 43.6% for the same period a year ago. Primarily as a result of the factors above, the Company's net income for the three-month period ending June 30, 1997 of $7.3 million was $1.1 million greater than the $6.2 million earned in the prior year. 6 7 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Number Description ------ ----------- 4 Amendment No. 1 to Rights Agreement, dated as of May 16, 1997, by and between Pioneer-Standard Electronics, Inc. and National City Bank 11 Calculation of Primary Earnings Per Share 27 Financial Data Schedule 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 thereunto duly authorized. PIONEER-STANDARD ELECTRONICS, INC. Date: August 14, 1997 James L. Bayman ----------------- ------------------------------ Chairman and CEO Date: August 14, 1997 John V. Goodger ----------------- ------------------------------ Vice President & Treasurer 7 EX-4 2 EXHIBIT 4 1 EXHIBIT 4 AMENDMENT NO. 1 TO RIGHTS AGREEMENT This Amendment No. 1 to the Rights Agreement (the "Rights Agreement") dated as of April 25, 1989 between AmeriTrust Company, National Association ("AmeriTrust") and Pioneer-Standard Electronics, Inc. (the "Company") is dated as of May 16, 1997 between National City Bank ("National City") and the Company. W I T N E S S E T H: - - - - - - - - - - WHEREAS, Key Bank National Association ("Key Bank"), successor in interest to AmeriTrust under the Rights Agreement, has indicated to the Company its intention to resign as Rights Agent under the Rights Agreement effective as of May 19, 1997; and WHEREAS, the Company has appointed National City, and National City has agreed to serve as, the successor Rights Agent under the Rights Agreement effective immediately upon the termination of Key Bank's services as Right Agent; and WHEREAS, the parties wish to evidence the appointment of National City as the successor Rights Agent under the Rights Agreement. NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and promises herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto agree as follows: 1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Rights Agreement. 2. APPOINTMENT OF SUCCESSOR RIGHTS AGENT. The Company hereby appoints National City the successor Rights Agent to Key Bank, to act as agent for the Company and the holders of the Rights in accordance with the terms and conditions of the Rights Agreement, and the Rights Agent hereby accepts such appointment. 3. EFFECTIVENESS OF APPOINTMENT. The appointment of National City as the Rights Agent shall become effective immediately upon the termination of Key Bank's services as Rights Agent, but in any event no later than May 19, 1997. 4. AMENDMENT OF RIGHTS AGREEMENT AND RIGHT CERTIFICATES. The Rights Agreement and the Right Certificates are hereby amended as appropriate to reflect the appointment of National City as the Rights Agent under the Rights Agreement. 5. COUNTERPARTS. This Amendment No. 1 may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 2 6. GOVERNING LAW. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of Ohio. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and attested, all as of the day and year first above written. PIONEER-STANDARD ELECTRONICS, INC. Attest: By /s/ Colleen M. Simon By /s/ John V. Goodger -------------------------------- -------------------------------- Title: Executive Assistant Title: Vice President - Treasurer NATIONAL CITY BANK Attest: By By -------------------------------- -------------------------------- Title: Title: Acknowledged by: KEY BANK NATIONAL ASSOCIATION By -------------------------------- Title: 3 6. GOVERNING LAW. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of Ohio. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and attested, all as of the day and year first above written. PIONEER-STANDARD ELECTRONICS, INC. Attest: By By -------------------------------- -------------------------------- Title: Title: NATIONAL CITY BANK Attest: By /s/ H. E. Cockrell By /s/ J. Dean Presson -------------------------------- -------------------------------- Title: Senior Vice President Title: Vice President Acknowledged by: KEY BANK NATIONAL ASSOCIATION By -------------------------------- Title: 4 6. GOVERNING LAW. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of Ohio. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and attested, all as of the day and year first above written. PIONEER-STANDARD ELECTRONICS, INC. Attest: By By -------------------------------- -------------------------------- Title: Title: NATIONAL CITY BANK Attest: By By -------------------------------- -------------------------------- Title: Title: Acknowledged by: KEY BANK NATIONAL ASSOCIATION By /s/ B. William Bedy -------------------------------- Title: EX-11 3 EXHIBIT 11 1 Exhibit 11 CALCULATION OF PRIMARY EARNINGS PER SHARE (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Three months ended June 30, 1997 1996 ---- ---- Weighted average common shares and common share equivalents outstanding 26,452,555 23,138,433 Net income $ 7,305 $ 6,151 Earnings per share - primary and fully diluted $ .28 $ .27
EX-27 4 EXHIBIT 27
5 3-MOS MAR-31-1998 JUN-30-1997 16,813 0 227,838 7,580 269,613 525,382 89,962 38,195 618,732 188,452 203,577 9,235 0 0 211,680 618,732 396,264 369,264 327,553 327,553 51,423 0 4,324 12,964 5,659 7,305 0 0 0 7,305 .28 .28
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