-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, gtBjSBcfJNNRequMf13UQvc617KKs8dKGfpw+68OXiS7VSlSFjACLuVLKQ5jo/Td P9jooCmjOMfXSSo7GRkezA== 0000950152-94-000108.txt : 19940215 0000950152-94-000108.hdr.sgml : 19940215 ACCESSION NUMBER: 0000950152-94-000108 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER STANDARD ELECTRONICS INC CENTRAL INDEX KEY: 0000078749 STANDARD INDUSTRIAL CLASSIFICATION: 5065 IRS NUMBER: 340907152 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-05734 FILM NUMBER: 94507027 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 10-Q 1 PIONEER STANDARD 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1993. 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 05734 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 February 4, 1994: 9,814,824. 2 PART I - FINANCIAL INFORMATION PIONEER-STANDARD ELECTRONICS, INC. BALANCE SHEETS (Dollars in Thousands)
December 31, 1993 March 31, 1993 ASSETS (Unaudited) Current assets Cash $ 1,863 $ 1,864 Accounts receivable - net 76,240 62,347 Merchandise inventory 84,437 67,101 Prepaid expenses 1,048 773 Deferred income taxes 4,234 3,471 -------- -------- Total current assets 167,822 135,556 Investment in 50% - owned company 13,813 11,462 Other assets 1,711 1,683 Property and equipment, at cost 42,927 40,794 Accumulated depreciation (19,158) (17,635) -------- -------- Net 23,769 23,159 -------- -------- $207,115 $171,860 ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable to banks $ 5,000 $ 2,500 Accounts payable 54,623 46,019 Accrued liabilities 16,676 15,994 Long-term debt due within one year 195 262 -------- -------- Total current liabilities 76,494 64,775 Long-term debt 31,135 21,328 Deferred income taxes 1,977 1,640 Shareholders' equity Common stock, at stated value 6,543 6,529 Capital in excess of stated value 15,827 15,665 Retained earnings 75,139 61,923 -------- -------- Total shareholders' equity 97,509 84,117 -------- -------- $207,115 $171,860 ======== ========
2 3 PIONEER-STANDARD ELECTRONICS, INC. STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Quarter ended Nine months ended December 31, December 31, 1993 1992 1993 1992 ---- ---- ---- ---- Net sales $149,814 $109,706 $421,601 $311,933 Costs and expenses: Cost of goods sold 120,807 86,141 337,159 244,250 Warehouse, selling and administrative expense 20,627 18,502 62,067 52,560 ------- ------- -------- ------- Operating profit 8,380 5,063 22,375 15,123 Interest expense 662 628 2,013 2,947 Equity in earnings of 50%-owned company 404 658 2,350 2,016 ------- ------- -------- ------- Income before income taxes 8,122 5,093 22,712 14,192 Provision for income taxes 3,235 1,794 8,566 4,930 ------- ------- -------- ------- Net income $ 4,887 $ 3,299 $ 14,146 $ 9,262 ======= ======= ======== ======= Average shares outstanding Primary 10,100,355 9,944,115 10,056,548 8,928,148 Fully diluted --- --- --- 9,970,363 Shares outstanding at end of period 9,814,449 9,773,317 9,814,449 9,773,317 Earnings per share Primary $.48 $.33 $1.41 $1.04 Fully diluted --- --- --- $.97 Dividends per share $.035 $.027 $.095 $.08
3 4 PIONEER-STANDARD ELECTRONICS, INC. STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Nine months ended December 31, 1993 1992 ---- ---- Cash flows from operating activities: Net income $ 14,146 $ 9,262 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,164 3,392 Undistributed earnings of affiliate (2,350) (2,016) Decrease (increase) in operating working capital (22,218) 1,219 Decrease (increase) in other assets (67) 256 Deferred taxes (426) --- -------- ------- Total adjustments (20,897) 2,851 -------- ------- Net cash (used in) provided by operating activities (6,751) 12,113 Cash flows from investing activities: Additions to property and equipment (4,736) (2,508) ------- ------ Net cash used in investing activities (4,736) (2,508) Cash flows from financing activities: Increase in short-term financing 2,500 500 Increase in revolving credit borrowings 25,000 8,000 Decrease of revolving credit borrowings (15,000) (17,000) Decrease in other long-term debt obligations (260) (1,490) Debenture retirement --- (916) Issuance of common shares under company stock option plan 176 242 Dividends paid (930) (697) -------- ------ Net provided by (used in) financing activities 11,486 (11,361) -------- ------- Net decrease in cash (1) (1,756) Cash at beginning of period 1,864 1,887 -------- ------ Cash at end of period $ 1,863 $ 131 ======== ======
4 5 NOTES - Pioneer-Standard Electronics, Inc. 1. PER SHARE DATA Net income per common share is computed using the weighted average common shares outstanding during the quarters and nine-month periods ended December 31, 1993 and 1992. Fully diluted net income per common share was computed on the same basis as above with the assumption that all of the 9% Subordinated Convertible Debentures were converted into common shares and that the related interest expense, net of income taxes, was added to net income. See Note 2. 2. CONVERSION OF 9% SUBORDINATED CONVERTIBLE DEBENTURES During the second quarter of 1992, the Company's 9% Subordinated Convertible Debentures due in 1998 were retired. As a result of a combination of a call to satisfy the sinking fund installment balance due August 1, 1992, voluntary conversions of Debentures during the quarter and redemption of the Debentures effective September 23, 1992, the Debentures were retired for issuance of 1,538,451 Common Shares, plus cash of $916,000. 3. STOCK SPLIT All share and per share data have been restated to reflect the three-for-two stock split effective March 15, 1993. 4. MANAGEMENT OPINION The information furnished herein reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations for the quarters and nine months ended December 31, 1993 and 1992. The results of operations for the three and nine month periods are not necessarily indicative of results which may be expected for a full year. 5 6 PIONEER-STANDARD ELECTRONICS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION Current assets increased by $32.2 million and current liabilities increased by $11.7 million during the nine-month period ended December 31, 1993, resulting in an increase of $20.5 million of working capital. The current ratio was 2.2:1 at December 31, 1993, compared with 2.1:1 at year-end, March 31, 1993. During the first nine months of the current year, total interest-bearing debt increased by $12.2 million. The ratio of interest-bearing debt to capitalization (interest-bearing debt plus equity) was 27% at December 31, 1993 compared with 22% at March 31, 1993. The increase in capital requirements is attributable to expenditures for property and equipment and working capital needs arising from increased sales volume in the first nine months of the current year with sales of $421.6 million compared with the trailing fiscal nine months sales of $327.7 million. During the second fiscal quarter, pursuant to the provisions of the Company's $30.0 million revolving credit agreement and upon consent of the parties thereto, the maturity date of the facility was extended for one additional year to January 1, 1997, to be followed by a four-year term loan amortized in equal quarterly installments. Management estimates that capital spending plans for the current year will approximate $6.0 million ($4,736,000 was expended in the first nine months of the current year). Under present business conditions, it is anticipated that funds from current operations and available debt facilities will be sufficient to finance both capital spending and working capital needs for the balance of the current fiscal year. RESULTS OF OPERATIONS NINE MONTHS ENDED DECEMBER 31, 1993 COMPARED WITH THE NINE MONTHS ENDED DECEMBER 31, 1992 Net sales for the nine-month period ended December 31, 1993 of $421.6 million were 35% greater than sales of the prior year nine-month period of $311.9 million. The increase in sales reflects continuing strong demand for electronic components and computer systems. During the first nine months of 1993, semiconductor products accounted for 41% of the Company's sales compared with 37% in the prior year. Computer systems products comprised 34% of 1993 sales compared with 40% a year earlier. Passive and electromechanical products were 23% of the Company's 1993 sales, up from 20% the prior year. Miscellaneous products accounted for 2% and 3% of sales in 1993 and 1992, respectively. The percentage increase in cost of goods sold of 38% resulted in a gross margin of 20.0% in the first nine months of the current year compared with 21.7% a year ago. Regarding the Company's three major product categories; computer systems products have the highest average line item value and lowest gross margin percent, whereas passive and electromechanical products have the lowest average line item value and higher gross margin percent. 6 7 Warehouse, selling and administrative expenses of $62.1 million increased by 18% as compared with the $52.6 million incurred during the prior year nine-month period. This resulted in a ratio of these expenses to sales of 14.7% for the 1993 period compared with 16.8% for the 1992 first nine months. The resulting operating profit of $22.4 million in 1993 was 5.3% of sales compared with $15.1 million in 1992 which was 4.8% of sales. The Company's share of net income of the affiliated company, Pioneer Technologies Group, Inc., was $2,350,000 for the 1993 nine-month period compared with $2,016,000 for the same period last year; net sales of the affiliate for the current year period of $329.4 million were 60% greater than the sales of the prior year period of $206.3 million. The affiliate's increase in sales was attributable to highly concentrated sales of certain microprocessors in large quantities, the sales of which might not be sustainable in future periods which could result in a significant impact on net income of the affiliate. Current year results reflect the increase in sales, effective cost containment and earnings contribution of the affiliate. The Company adopted the Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", in the quarter ended June 30, 1993. Pursuant to these provisions, the Company is required to accrue taxes on its portion of the unremitted earnings of its affiliate; the increase in the effective tax rate, from 40.5% a year ago to 42.1% for the current period, is primarily attributable to this factor. The effect of the adoption of this standard on the Company's financial position and results of operations was not material. Adoption of this standard had no effect on the Company's cash position. Primarily as a result of the factors noted above, the Company's net income for the nine-month period ending December 31, 1993 of $14.1 million was $4.8 million higher than the $9.3 million earned a year ago. THREE MONTHS ENDED DECEMBER 31, 1993 COMPARED WITH THE THREE MONTHS ENDED DECEMBER 31, 1992 Net sales for the three-month period ended December 31, 1993 of $149.8 million increased 37% over sales of the prior year three-month period of $109.7 million. The increase in sales reflects a strong demand for electronic components and computer systems. During the third fiscal quarter of 1993, semiconductor products accounted for 44% of the Company's sales compared with 37% in the prior year. Computer systems products comprised 33% of 1993 sales compared with 42% a year earlier. Passive and electromechanical products were 21% of the Company's 1993 sales, up from 18% the prior year. Miscellaneous products accounted for 2% and 3% of sales in 1993 and 1992, respectively. The percentage increase in cost of goods sold of 40% resulted in a gross margin of 19.4% in the third quarter of the current year compared with 21.5% a year ago. Regarding the Company's three major product categories; computer systems products have the highest average line item value and lowest gross margin percent, whereas passive and electromechanical products have the lowest average line item value and higher gross margin percent. 7 8 Warehouse, selling and administrative expenses of $20.6 million increased by 11% over the $18.5 million incurred during the prior year three- month period. This resulted in a ratio of these expenses to sales of 13.8% for the 1993 period compared with 16.9% for the 1992 quarter. The Company's share of net income of the affiliate Company, Pioneer Technologies Group, Inc., was $404,000 for the 1993 three-month period compared with $658,000 for the same period last year. The decline in the current year quarter is attributable to the affiliate's product mix. Net sales of the affiliate for the three-month period ended December 31, 1993 of $103.4 million were 52% greater than the sales of the prior year three-month period of $68.1 million. The affiliate's increase in sales was attributable to highly concentrated sales of certain microprocessors in large quantities, the sales of which might not be sustainable in future periods which could result in a significant impact on net income of the affiliate. Current year results reflect the increase in sales, effective cost containment and the earnings contribution of the affiliate. The Company adopted the Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", in the quarter ended June 30, 1993. Pursuant to these provisions, the Company is required to accrue taxes on its portion of the unremitted earnings of its affiliate; the increase in the effective tax rate, from 40.5% in last year's quarter to 41.9% for the current quarter, is primarily attributable to this factor. Primarily as a result of the factors above, the Company's net income for the three-month period ending December 31, 1993 of $4.9 million was $1.6 million greater than the $3.3 million earned a year ago. 8 9 Pioneer-Standard Electronics, Inc. owns 50% of the outstanding common stock of Pioneer Technologies Group, Inc. The investment is accounted for by the equity method in the Company's financial statements via the balance sheet caption of "Investment in 50%-owned company" and via the statements of income caption of "Equity in earnings of 50%-owned company". Pioneer Technologies Group, Inc. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
December 31, 1993 March 31, 1993 (Unaudited) ASSETS Current assets Cash $ 8 $ 7 Accounts receivable - net 33,594 31,052 Merchandise inventory 52,064 42,450 Prepaid expenses 592 110 Deferred income taxes 1,713 1,443 Shareholder notes receivable 10 49 -------- ------- Total current assets 87,981 75,111 Property and equipment, at cost 9,052 7,326 Accumulated depreciation (4,580) (3,748) -------- ------- Net 4,472 3,578 Other assets 539 499 -------- ------- $ 92,992 $79,188 ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $40,248 $20,361 Accrued liabilities 3,792 4,028 ------- ------- Total current liabilities 44,040 24,389 Long-term debt 21,325 31,873 Shareholders' equity Common stock $.10 par value 10 10 Capital in excess of par value 90 90 Retained earnings 27,527 22,826 ------- ------- Total shareholders' equity 27,627 22,926 ------- ------- $ 92,992 $79,188 ======== =======
9 10 PIONEER TECHOLOGIES GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Quarter ended Nine months ended December 31, December 31, 1993 1992 1993 1992 ---- ---- ---- ---- Net sales $103,437 $68,057 $329,408 $206,250 Costs and expenses: Cost of goods sold 91,944 56,165 290,767 172,154 Selling and administrative expense 9,819 9,376 29,961 26,205 -------- -------- -------- -------- Operating profit 1,674 2,516 8,680 7,891 Interest expense 307 252 825 941 -------- -------- -------- -------- Income before income taxes 1,367 2,264 7,855 6,950 Provision for income taxes 559 949 3,154 2,918 -------- -------- -------- -------- Net income $ 808 $ 1,315 $ 4,701 $ 4,032 ======== ======== ======== ======== Average shares outstanding 100,000 100,000 100,000 100,000 Earnings per share $8.08 $13.15 $47.01 $40.32 Dividends per share --- --- --- ---
10 11 PIONEER TECHNOLOGIES GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Nine months ended December 31, 1993 1992 ---- ---- Cash flows from operating activities: Net income $ 4,701 $ 4,032 Adjustments to reconcile net income to net cash provided by operating activities: Items not affecting cash 834 677 Decrease (increase) in operating working capital 6,782 (1,599) Decrease (increase) in other assets (40) 36 ------- ------- Total adjustments 7,576 (886) ------- ------- Net cash provided by operating activities 12,277 3,146 Cash flows from investing activities: Additions to property and equipment (1,728) (566) ------- ------- Net cash used in investing activities (1,728) (566) Cash flows from financing activities: Decrease in long-term debt (10,548) (5,063) ------- ------- Net cash used in financing activities (10,548) (5,063) ------- ------- Net increase (decrease) in cash 1 (2,483) Cash at beginning of period 7 2,490 ------- ------- Cash at end of period $ 8 $ 7 ====== =======
11 12 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Exhibit 11, statement regarding computation of per share earnings is included herein. (b) FORM 8-K There were no reports on Form 8-K filed during the three-month period ended December 31, 1993. SIGNATURES Pursuant to the requirements of the Securities and 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: February 10, 1994 Preston Heller, Jr. ----------------- ------------------------------------------------------------- Chairman of the Board and Chief Executive Officer Date: February 10, 1994 John V. Goodger ----------------- ---------------------------------------------------------- Vice President, Treasurer and Assistant Secretary
12 EX-11 2 EXHIBIT 11 1 Exhibit 11 PIONEER-STANDARD ELECTRONICS, INC. COMPUTATION OF PER SHARE EARNINGS
Three months ended Nine months ended December 31, December 31, 1993 1992 1993 1992 ---- ---- ---- ---- PRIMARY Weighted average Common Shares and Common Share equivalents outstanding 10,100,355 9,944,115 10,056,548 8,928,148 Net income $4,887,000 $3,299,000 $14,146,000 $9,262,000 ========== ========== =========== ========== Earnings per share $.48 $.33 $1.41 $1.04 FULLY DILUTED Weighted average Common Shares and Common Share equivalents outstanding 8,965,623 Assumed conversion of 9% convertible debentures 1,004,740 ---------- Total 9,970,363 ========== Net income $9,262,000 Add 9% convertible debenture interest, net of federal income tax effect 399,000 ---------- Total net income as adjusted $9,661,000 ========== Earnings per share $.97
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