-----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, BsURFUUH47UhW8UvKJwfus1Vnw3ovUkR3oej4hOm01kA209kBNxzxwGBKPibuHxa C1gkSLhdVkWeF2zL/fZ3WQ== 0000950152-98-005435.txt : 19980622 0000950152-98-005435.hdr.sgml : 19980622 ACCESSION NUMBER: 0000950152-98-005435 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980619 ITEM INFORMATION: FILED AS OF DATE: 19980619 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: 8-K SEC ACT: SEC FILE NUMBER: 000-05734 FILM NUMBER: 98651263 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 MAIL ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 8-K 1 PIONEER-STANDARD ELECTRONICS, INC. 1 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 19, 1998 -------------------- PIONEER-STANDARD ELECTRONICS, INC. -------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 0-5734 34-0907152 - ----------------- ----------- ------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) 4800 EAST 131ST STREET, CLEVELAND, OHIO 44108 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (440) 587-3600 ------------------------- 2 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. Dickens Data Systems, Inc. Unaudited Condensed Consolidated Financial Statements for the Three Months Ended March 31, 1998 and March 31, 1997 Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1998 and March 31, 1997 Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1998 and March 31, 1997 Notes to Condensed Consolidated Financial Statements (b) UNAUDITED PRO FORMA FINANCIAL INFORMATION Unaudited Pro Forma Condensed Combined Statement of Operations for the Fiscal Year Ended March 31, 1998, including notes thereto 3 DICKENS DATA SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS)
THREE MONTHS ENDED ----------------------------------- 3/31/98 3/31/97 Net Sales $ 91,402 $ 69,369 Cost of Goods Sold 77,576 59,435 ---------- --------- Gross Margin 13,826 9,934 Selling, General, and Administrative Expenses 9,906 7,984 ---------- --------- Operating Income 3,920 1,950 Interest Expense, Net 205 266 Other Income (1) 4 ---------- -------------- Net Income $ 3,714 $ 1,688 ========== ==========
The accompanying notes are an integral part of these unaudited condensed consolidated statements. 4 DICKENS DATA SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
THREE MONTHS ENDED --------------------------------------- 3/31/98 3/31/97 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 3,714 $ 1,688 Adjustments to reconcile net income to net cash (used in) provided by operations: Depreciation and amortization 442 346 Changes in operating assets and liabilities: Accounts receivable, net 6,632 (3,870) Inventories 4,031 (4,480) Prepaid expenses and other assets (1,120) (365) Accounts payable, accrued and other liabilities (25,403) 8,174 ----------- ---------- Total adjustments (15,418) (195) ----------- ----------- Net cash (used in) provided by operating activities (11,704) 1,493 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,028) (500) ---------- ----------- Net cash used in investing activities (1,028) (500) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debt --- (7) Long-term debt proceeds 420 --- Net borrowings from revolving lines of credit 15,642 (3,719) Distribution to shareholders (4,300) (241) ---------- ---------- Net cash used in financing activities 11,762 (3,967) NET DECREASE IN CASH AND CASH EQUIVALENTS (970) (2,974) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,114 3,077 --------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 144 $ 103 ========== ==========
The accompanying notes are an integral part of these unaudited condensed consolidated statements. 5 DICKENS DATA SYSTEMS, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated statements of operations and cash flows of Dickens Data Systems, Inc. and subsidiaries ("Dickens Data") have been prepared in accordance with generally accepted accounting principles for interim financial information. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 1998 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information refer to Dickens Data's consolidated financial statements and footnotes thereto for the year ended December 31, 1997 appearing in Pioneer-Standard Electronics, Inc. ("Pioneer") Form 8-K filed with the Securities and Exchange Commission on February 27, 1998. On March 31, 1998, 100 percent of the outstanding stock of Dickens Data was acquired by Pioneer for $121.0 million in cash. The acquisition was accounted for using the purchase method of accounting. Accordingly the assets and liabilities of Dickens Data were included in Pioneer's consolidated balance sheet at their estimated fair value as of March 31, 1998. 2. NATURE OF BUSINESS The accompanying consolidated financial statements include the accounts of Dickens Data and its subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. Dickens Data is a value-added system integrator and services provider that markets, distributes, and integrates information technology products and services directly and indirectly (through authorized resellers) to business institutions and governments primarily within the United States and Canada. The technology products and services marketed and sold by Dickens Data include midrange computer hardware and software, workstations, networking equipment, storage devices, systems solutions, and various technological services, including operating system support, installation, integration, and education. The majority of the technology products marketed by Dickens Data are manufactured by International Business Machines Corporation, and essentially all of Dickens Data's revenues are associated with the distribution of these products. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition - ------------------- Distribution of products is recorded as revenue upon shipment. Revenues from custom programming, training, and other services are recognized as provided. Market Development Funds - ------------------------ Primary vendors provide Dickens Data with market development funds ("MDF") in the amount that is generally based on purchases of the vendors' products and services. These funds typically range from 1% to 3% of such purchases and are required to be used to market and promote the vendors' products and services. Dickens Data accrues these funds based on its purchases and offsets them against direct costs of selling, general, and administrative expenses. Income Taxes - ------------ Dickens Data's shareholders had elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Accordingly, no provision for federal income taxes was recorded in Dickens Data's financial statements, and the shareholders are personally liable for individual income taxes on their respective portions of Dickens Data's taxable income. 6 PIONEER-STANDARD ELECTRONICS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS The accompanying unaudited pro forma condensed combined statement of operations of Pioneer-Standard Electronics, Inc. ("Pioneer") for the year ended March 31, 1998 gives effect to the purchase by Pioneer of all of the stock of Dickens Data System, Inc. ("Dickens Data"), the spin-off of certain operations to the former shareholders of Dickens Data, and the acquisition of a 51% interest in a portion of the operations spun-off. The statement of operations was prepared as if all the transactions had occurred on April 1, 1997. This information is not necessarily indicative of future combined operations and it should be read in conjunction with the separate historical statements and related notes of the respective entities incorporated by reference in Pioneer-Standard Electronics, Inc. Form 10-K for the year ended March 31, 1998 and appearing in the Form 8-K dated February 27, 1998 filed with the Securities and Exchange Commission. 7 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED MARCH 31, 1998 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PIONEER DICKENS DATA PRO FORMA MARCH 31, MARCH 31, PRO FORMA AS 1998 (1) 1998 (1) SPIN-OFF(7) ADJUSTMENTS ADJUSTED -------- -------- -------- ----------- -------- Net sales $ 1,685,265 $ 369,692 $ (2,552) $ 2,052,405 Cost and expenses: Cost of goods sold 1,386,666 318,278 (725) 1,704,219 Warehouse, selling and admin- $ 2,919 (2) istrative expenses (1,187) (5) 225,649 36,240 (1,505) (448) (6) 261,668 ------------ ---------- ---------- ------------ ----------- Operating profit 72,950 15,174 (322) (1,284) 86,518 Interest expense 20,717 1,130 (117) 8,849 (3) 30,579 ------------ ----------- --------- ------------ ----------- Income before taxes 52,233 14,044 (205) (10,133) 55,939 Provision for income taxes 21,624 1,538 (4) 23,162 Distributions on mandatorily redeemable convertible trust preferred securities - net of tax 112 112 ------------ ----------- --------- ------------ ----------- Net Income $ 30,497 $ 14,044 $ (205) $ (11,671) $ 32,665 ========== ========== ========= ============ ========== Earnings per share: Basic 1.16 1.25 Diluted 1.14 1.22 Weighted average common shares outstanding: Basic 26,205 26,205 Diluted 26,949 26,949
[FN] - --------------------- NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (1) The Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended March 31, 1998, gives effect to the acquisition of Dickens Data as if it occurred at the beginning of the period by combining the twelve-month period ended March 31, 1998 of Pioneer with the unaudited twelve-month period ended March 31, 1998 of Dickens Data. (2) Represents amortization of goodwill resulting from the application of purchase accounting over a 40-year period using the straight-line method. The amortization of goodwill is tax deductible. (3) Reflects additional interest expense which would have been incurred by Pioneer assuming the acquisition of Dickens Data had occurred at the beginning of the period. (4) Dickens Data was taxed under Subchapter S of the Internal Revenue Code of 1986, as amended, and did not pay taxes on behalf of itself. The income tax recorded reflects the amounts that would have been incurred had the acquisition occurred at the beginning of the period. (5) Reflects net compensation of certain former shareholders of Dickens Data who did not continue as employees and will not be replaced. (6) To record the 49% minority interest in the loss of the newly-formed partnership which operates the professional source business of Dickens Data. (7) To record the spin-off of the software business and OEM business to Dickens Data's current shareholders. 8 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. PIONEER-STANDARD ELECTRONICS, INC. Date: June 19, 1998 By /s/ John V. Goodger ------------------------------- John V. Goodger Vice President and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----