0000950152-95-001801.txt : 19950815 0000950152-95-001801.hdr.sgml : 19950815 ACCESSION NUMBER: 0000950152-95-001801 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NYSE 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: 95563298 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 10-Q 1 PIONEER-STANDARD ELECTRIC 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) X OF THE SECURITIES EXCHANGE ACT OF 1934 ----- For the quarterly period ended June 30, 1995. ------------- 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 34S0907152 ---------------------------------- ------------------------------------ (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 phone 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, 1995: 14,953,921. 2 PART I - FINANCIAL INFORMATION PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
June 30, 1995 (Unaudited) March 31, 1995 --------------- -------------- ASSETS Current assets Cash $ 16,454 $ 9,598 Accounts receivable - net 129,518 133,987 Merchandise inventory 147,172 123,008 Prepaid expenses 2,278 1,623 Deferred income taxes 5,708 5,708 -------- -------- Total current assets 301,130 273,924 Investment in 50% - owned company 17,415 16,963 Other assets 5,636 5,599 Property and equipment, at cost 57,549 55,396 Accumulated depreciation 22,712 24,467 -------- -------- Net 34,837 30,929 -------- -------- $ 359,018 $ 327,415 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Notes payable to banks $ 3,000 $ 7,000 Accounts payable 113,450 106,905 Accrued liabilities 26,771 25,625 Long-term debt due within one year 2,894 2,956 -------- -------- Total current liabilities 146,115 142,486 Long-term debt 77,316 56,318 Deferred income taxes 2,232 2,196 Shareholders' Equity Common stock, at stated value 6,646 6,630 Capital in excess of stated value 16,702 16,318 Retained earnings 109,940 103,646 Foreign currency translation adjustment 67 (179) -------- -------- Retained earnings 133,355 126,415 -------- -------- $ 359,018 $ 327,415 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, 1995 1994 ---- ---- Net sales $ 224,724 $ 183,832 Cost and expenses: Cost of goods sold 181,114 148,677 Warehouse, selling and administrative expense 31,148 25,322 ---------- ---------- Operating profit 12,462 9,833 Interest expense 1,449 701 Equity in earnings of 50% -owned company 451 673 ---------- ---------- Income before income taxes 11,464 9,805 Provision for income taxes 4,648 3,840 ---------- ---------- Net income $ 6,816 $ 5,965 ========== ========== Average shares outstanding 15,390,234 15,241,422 Shares outstanding at end of period 14,951,821 14,895,384 Earning per share $ .44 $ .39 Dividends per share $ .035 $ .023 See accompanying notes.
3 4 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Three months ended June 30, 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 6,816 $ 5,965 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 2,173 1,605 Undistributed earnings of affiliate (451) (673) Increase in operating working capital (12,491) (13,007) Increase in other assets 1 (1,590) Deferred taxes 36 54 -------- -------- Total adjustments (10,732) (13,611) -------- -------- Net cash used in operating activities (3,916) (7,646) Cash flows from investing activities: Acquisition of business --- (9,009) Additions to property and equipment (6,018) (1,751) -------- -------- Net cash used in investing activities (6,018) (10,760) Cash flows from financing activities: Increase (decrease) in short-term financing (4,000) 7,000 Increase in revolving credit borrowings 27,000 20,000 Prepayment of revolving credit borrowings (6,000) (4,000) Decrease in other long-term debt obligations (64) (102) Issuance of common shares under company stock option plan 400 314 Dividends paid (522) (347) -------- -------- Net cash provided by financing activities 16,814 22,865 Effect of exchange rate changes on cash (24) --- -------- -------- Net increase in cash 6,856 4,459 Cash at beginning of period 9,598 5,954 -------- -------- Cash at end of period $ 16,454 $ 10,413 ======== ======== 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. Common share equivalents consist of shares exercisable for stock options computed by using the treasury stock method. 2. STOCK SPLIT On July 25, 1995, the Board of Directors declared a three-for-two stock split effected in the form of a 50% share dividend of the Company's common shares payable September 6, 1995 to shareholders of record August 16, 1995. The share and per share data have not been restated for the two quarters presented to reflect the stock split. 3. 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, 1995 and 1994. The results of operations for the three-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 $27.2 million and current liabilities increased by $3.6 million during the three-month period ended June 30, 1995, resulting in an increase of $23.6 million of working capital. The current ratio was 2.1:1 at June 30, 1995, compared with 1.9:1 at year-end, March 31 1995. During the first three months of the current year, total interest-bearing debt increased by $16.9 million. The ratio of interest-bearing debt to capitalization was 38% at June 30, 1995 compared with 34% at March 31, 1995. The increase in capital requirements is attributable to the working capital needs arising from an increased level of business activity. As indicated in the following narrative, current quarter sales of $224.7 million are 22% ahead of last year's first quarter sales. Effective August 3, 1995, the Company amended its Credit Agreement with three banks to increase the credit lines available to the Company. This amendment provides for an increase in borrowings from $65.0 million to $100.0 million and allows for an increase in the maximum short-term borrowings outside of the Credit Agreement to be outstanding at any one time from $20.0 million to $30.0 million. In addition, the maturity date of the facility was extended to July 31, 1998. As of June 30, 1995, Credit Agreement borrowings were $62.0 million and short-term borrowings outside of the Credit Agreement were $3.0 million. Management estimates that capital expenditures for the current year will approximate $20.0 million ($6.0 million was expended in the first three 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. THREE MONTHS ENDED JUNE 30, 1995 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 1994 Net sales for the three-month period ended June 30, 1995 of $224.7 million increased 22% over sales of the prior year three-month period of $183.8 million. The increase in sales reflects continuing strong demand for electronic components and computer and peripheral products. Semiconductor products accounted for 34% of the Company's sales in the current quarter, compared with 38% a year ago. Computer systems products were 40% of sales in 1995 versus 36% last year. Passive and electromechanical products were 24% of the Company's business in 1995 compared with 23% a year earlier. Miscellaneous products accounted for 2% of sales in 1995 and 3% in 1994. 6 7 Cost of goods sold increased 22%, resulting in a gross margin of 19.4% in the first quarter of the current year compared with 19.1% a year ago. Warehouse, selling and administrative expenses of $31.1 million increased by 23% over the $25.3 million incurred during the prior year three-month period. This resulted in a ratio of these expenses to sales of 13.9% for the 1995 period compared with 13.8% for the 1994 quarter. The Company's share of net income of the affiliated company, Pioneer Technologies Group, Inc., was $451,000 for the 1995 three-month period compared with $673,000 for the same period last year; net sales of the affiliate for the three-month period ended June 30, 1995 of $79.8 million were 17% less than sales of the prior three-month period of $95.7 million. Lower 1995 net sales reflected a reduced volume of microprocessor sales which earn a relatively low gross profit margin. This reduction in sales impacted current year net income. Notwithstanding lower microprocessor sales volume during the current quarter, a significant portion of the affiliate's total sales involved highly concentrated sales of certain microprocessors in large quantities which might not be sustainable in future periods and the effect of which could result in a significant impact on the net income of the affiliate. The effective tax rate for the current year three-month period was 40.5% compared with 39.2% a year ago. Primarily as a result of the factors above, the Company's net income for the three-month period ending June 30, 1995 of $6.8 million was $.8 million greater than the $6.0 million earned a year ago. 7 8 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. BALANCE SHEETS (Dollars in Thousands)
June 30, 1995 (Unaudited) March 31, 1995 --------------- -------------- ASSETS Current assets Cash $ 10 $ 9 Accounts receivable - net 37,068 36,378 Merchandise inventory 62,668 46,895 Prepaid expenses 300 494 Deferred income taxes 1,075 1,246 Shareholder notes receivable 69 63 -------- ------- Total current assets 101,190 85,085 Property and equipment, at cost 11,078 10,697 Accumulated depreciation (5,660) (5,289) -------- ------- Net 5,418 5,408 Shareholder notes receivable 192 193 Other assets 208 272 -------- ------- $107,008 $ 90,958 ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 36,293 $ 34,711 Accrued liabilities 5,533 4,170 -------- ------- Total current liabilities 41,826 38,881 Long-term debt 30,352 18,148 Shareholders' Equity Common stock $.10 par value 10 10 Capital in excess of par value 90 90 Retained earnings 34,730 33,829 -------- ------- Total shareholders' equity 34,830 33,929 -------- ------- $107,008 $90,958 ======== =======
8 9 PIONEER TECHNOLOGIES GROUP, INC. STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Three months ended June 30, 1995 1994 ---- ---- Net Sales $ 79,809 $ 95,742 Costs and expenses: Cost of goods sold 66,206 81,352 Selling and administrative expense 11,295 11,658 --------- --------- Operating profit 2,308 2,732 Interest expense 568 452 --------- --------- Income before income taxes 1,740 2,280 Provision for income taxes 838 935 --------- --------- Net income $ 902 $ 1,345 ========= ========= Average shares outstanding 100,000 100,000 Earnings per share $ 9.02 $13.45 Dividends per share -- --
9 10 PIONEER TECHNOLOGIES GROUP, INC. STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Three months ended June 30, 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 902 $ 1,345 Adjustments to reconcile net income to net cash used in operating activities: Items not affecting cash 406 253 Increase in operating working capital (13,330) (10,464) Decrease (increase) in other assets 235 (33) --------- --------- Total adjustments (12,689) (10,244) --------- --------- Net cash used in operating activities (11,787) (8,899) Cash flows from investing activities: Additions to property and equipment (416) (261) --------- --------- Net cash used in investing activities (416) (261) Cash flows from financing activities: Increase in long-term debt 12,204 9,160 --------- --------- Net cash provided by financing activities 12,204 9,160 Net change in cash 1 -- Cash at beginning of period 9 8 --------- --------- Cash at end of period $ 10 $ 8 ========= =========
10 11 PART II - OTHER INFORMATION ITEM 1. OTHER INFORMATION Effective August 3, 1995, the Company amended its Credit Agreement providing for an increase in borrowings from $65.0 million to $100.0 million and permitting for an increase in the maximum short-term borrowings outside of the Credit Agreement to be outstanding at any one time from $20.0 million to $30.0 million. See Management's Discussion - Financial Condition for addition details. ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS
Number Description ------ ----------- 10 Consolidated Amendment No. 3 to the Credit Agreement, dated as of August 3, 1995. 11 Calculation of Primary Earnings Per Share 27 Financial Data Schedule
(b) FORM 8-K There were no reports on Form 8-k filed during the three-month period ended June 30, 1995. 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: August 11, 1995 James L. Bayman --------------- ---------------------------------- President and CEO Date: August 11, 1995 John V. Goodger --------------- ---------------------------------- Vice President & Treasurer 11 EX-10 2 EXHIBIT 10 1 Exhibit 10 CONSOLIDATED AMENDMENT NO. 3 TO CREDIT AGREEMENT This Consolidated Amendment No. 3 to Credit Agreement (this "Amendment"), dated as of August 3, 1995, is entered into by and among Pioneer Standard Electronics, Inc. (Borrower), National City Bank, Society National Bank (successor in interest to Ameritrust Company National Association) and Star Bank, N.A. (together "banks") and National City Bank in its capacity as agent of the banks "NCB-Agent") for the purposes of the Credit Agreement referred to below and the related writings. WITNESSETH: WHEREAS, the parties have entered into a Credit Agreement dated January 23, 1992, as amended by Amendment Agreement dated as of June 30, 1993 (the "First Amendment"), Second Amendment Agreement dated as of May 27, 1994 (the "Second Amendment"), Consolidated Amendment No. 1 dated as of October 28, 1994 and Consolidated Amendment No. 2 dated as of February 28, 1995 (as amended, the "Credit Agreement"; all terms used in the Credit Agreement being used herein with the same meaning), which sets forth the terms and conditions upon which Borrower may obtain (a) "subject loans" on a revolving basis until the "conversion date" (originally January 1, 1995 but previously extended until January 1, 1998), as that term is defined in the Credit Agreement, and on an amortizing basis thereafter and (b) "subject BAs"; and WHEREAS, the parties desire to amend certain provisions of the Credit Agreement to (a) increase the aggregate amount of the subject commitments from sixty-five million dollars ($65,000,000) to one hundred million dollars ($100,000,000), (b) extend the term of the subject commitments from January 1, 1998 until July 31, 1998, (c) delete the bankers acceptance financing option and (d) amend certain covenants; and WHEREAS, in light of the fact that certain previous amendments set forth in the First Amendment, the Second Amendment, Consolidated Amendment No. 1 and/or Consolidated Amendment No. 2 have been affected by later amendments and/or will be affected by this Amendment and for ease of reference, the parties also desire to restate and consolidate in this Amendment all amendments to the Credit Agreement that are effective on and as of the date hereof; NOW, THEREFORE, in consideration of the premises above and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 12 2 SECTION I - AMENDMENTS TO CREDIT AGREEMENT ------------------------------ A. Subsections 2A.01 and 2A.02 of the Credit Agreement are hereby amended in their entirety to read as follows: 2A.01 AMOUNTS -- The aggregate amount of the subject commitments shall be one hundred million dollars ($100,000,000), but that amount may be reduced from time to time pursuant to subsection 2A.03 or 2A.04 and the subject commitments may be terminated pursuant to section 5B. The amount of each bank's subject commitment (subject to such reduction or termination), and the proportion (expressed as a percentage) that it bears to all of the subject commitments, is set forth opposite the bank's name below, to-wit: $ 53,500,000 53.5% National City Bank 33,500,000 33.5% Society National Bank 13,000,000 13.0% Star Bank, N.A. -------------- ------- ------------------------- $100,000,000 100.0% Total
2A.02 TERM -- Each subject commitment shall commence as of the date of this Agreement and shall remain in effect on a revolving basis until July 31, 1998 (the "expiration date") EXCEPT that a later expiration date may be established from time to time pursuant to subsection 2A.06 and EXCEPT that the subject commitments shall end in any event upon any earlier reduction thereof to zero pursuant to subsection 2A.03 or any earlier termination pursuant to section 5B. B. Subsection 2A.04 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: 2A.04 [RESERVED] C. Subsection 2B.04 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: 2B.04 [RESERVED] D. The introductory language and clause (c) of subsection 2B.05 of the Credit Agreement are hereby amended in their entirety to read as follows: 2B.05 CONTRACT PERIODS -- Each series of fixed-rate loans shall have applicable thereto a contract period to be duly elected by Borrower in the credit request therefor. Each contract period shall begin on the date of borrowing and shall end on such date, not later than the expiration date, as Borrower may select subject, however, to the following: (c) Borrower shall never elect a contract period for any series of fixed-rate loans the term of which extends beyond the expiration date. 13 3 E. Subsection 2B.06 of the Credit Agreement is hereby amended in its entirety to read as follows: 2B.06 MATURITIES -- The stated maturity of each RR loan shall be the expiration date. The stated maturity of each fixed-rate loan shall be the last day of the contract period applicable thereto. In no event, however, shall the stated maturity of any fixed-rate loan be later than the expiration date. F. Clause (b) of subsection 2B.09 of the Credit Agreement is hereby amended in its entirety to read as follows: (b) Prior to maturity each LIBOR loan shall bear interest during each contract period applicable to it at a rate equal to the LIBOR pre-margin rate in effect at the start of the contract period plus six hundred twenty-five/one-thousandths of one percent (.625%) per annum. G. Clause (d) of subsection 2B.10 of the Credit Agreement is hereby amended in its entirety to read as follows: (d) No prepayment shall of itself reduce any subject commitment. H. Subsection 2C.02 of the Credit Agreement is hereby deleted in its entirety and all other references in the Credit Agreement to "subject BA" shall be of no further force or effect. I. Subsections 3B.01, 3B.02, 3B.03, 3B.04 and 3B.05 of the Credit Agreement are hereby amended in their entirety to read as follows: 3B.01 NET WORTH -- Borrower will not suffer or permit the consolidated net worth of the companies at any time to be less than the then required minimum amount. The required minimum amount shall be one hundred five million dollars ($105,000,000) EXCEPT that the required minimum amount shall be permanently increased (a) on June 30, 1995 and on each quarterly date thereafter by an amount equal to the sum of fifty percent (50%) of the consolidated net income of the companies, if any, for the quarter-annual period then ending plus (b) upon each issuance or other sale by Borrower of any of its equity securities by an amount equal to the net proceeds (after costs and expenses) thereof. 3B.02 LEVERAGE -- Borrower will not suffer or permit the total liabilities of the companies at any time to exceed an amount equal to two hundred twenty-five percent (225%) of the sum of the net worth of the companies, all as determined on a consolidated basis. 3B.03 WORKING CAPITAL -- Borrower will not suffer or permit the companies' consolidated working capital at any time to fall below one hundred million dollars ($100,000,000). 14 4 3B.04 CURRENT RATIO -- Borrower will not suffer or permit the current assets of the companies at any time to fall below an amount equal to one and seven-tenths (1.7) times the amount of their current liabilities, all as determined on a consolidated basis. 3B.05 FIXED CHARGE COVERAGE -- Borrower will not suffer or permit the aggregate of (a) the consolidated net income of the companies (EXCEPT Borrower's equity in any income or loss of PTGI) plus (b) the consolidated interest expense of the companies plus (c) the consolidated federal, state and local income taxes of the companies plus (d) the consolidated operating lease expense of the companies for any four-quarter period to be less than amount equal to one hundred seventy-five percent (175%) of the sum of (a) the consolidated interest expense of the companies plus (b) the consolidated operating lease expenses of the companies plus (c) the consolidated principal payments of funded indebtedness of the companies which are payable within twelve (12) months after the date as of which this ratio is determined for that four-quarter period, all as determined on a fully consolidated basis. J. Subsection 3D.01 of the Credit Agreement is hereby amended by replacing the period at the end thereof with the word "or" and by adding to the end thereof the following new clauses (iii) and (iv): (iii) Borrower's investment in Pioneer-Standard Canada Inc. (exclusive of retained earnings of Pioneer-Standard Canada Inc.) so long as the aggregate amount of such investments does not exceed ten million eight hundred thousand ($10,800,000) or (iv) any acquisition of the assets or stocks of any corporation if the aggregate of the consideration paid by Borrower for such acquisition does not exceed twelve million dollars ($12,000,000). K. Subsection 3D.02 of the Credit Agreement is hereby amended by replacing the period at the end thereof with the word "or" and by adding to the end thereof the following new clause (v): (v) any advance or loan to, or guaranty of the obligations of, Pioneer-Standard Canada Inc., so long as the aggregate amount of all such advances, loans and guaranties does not exceed twenty million dollars ($20,000,000) at any one time. L. Subsection 3D.03(ii)(A) of the Credit Agreement is hereby amended by deleting the reference to "twenty million dollars ($20,000,000)" and substituting in lieu thereof a reference to "thirty million dollars ($30,000,000)". M. Subsection 3D.05 of the Credit Agreement is hereby amended in its entirety to read as follows: 15 5 3D.05 FIXED ASSETS -- Borrower will not invest (net after trade-ins, if any) in fixed assets and leasehold improvements during any fiscal year (commencing with the present year) more than the following amounts for the following periods: For the fiscal year ending March 31, 1996 $25,000,000 For the fiscal year ending March 31, 1997 $15,000,000 For the fiscal year ending March 31, 1998 $15,000,000
N. The definitions of "amortization date," "amortization payment" and "conversion date" are hereby deleted from the Credit Agreement and the following new definitions are hereby added to section 9 of the Credit Agreement: COMPANY refers to Borrower or to a subsidiary of Borrower, as the case may be; EXPIRATION DATE means the date referred to as such in subsection 2A.02, except that in the event of any extension pursuant to subsection 2A.06, "expiration date" shall mean the latest date to which the subject commitments shall have been so extended; O. All references in the Credit Agreement to "conversion date" shall be deemed to be references to the "expiration date." SECTION II - CONDITIONS PRECEDENT -------------------- It is a condition precedent to the effectiveness of this Amendment that, prior to or on the date hereof, the following items shall have been delivered to NCB-Agent (in form and substance acceptable to NCB-Agent): (A) an Amended and Restated Promissory Note ("Amended Note") in favor of each bank, in the form of EXHIBIT A to this Amendment, with all blanks appropriately completed, duly executed by Borrower; (B) an Acknowledgment of Receipt of a copy of, and Consent and Agreement to the terms of, this Amendment and the Amended Notes by Pioneer-Standard Canada Inc. with respect to a certain Continuing Guaranty of Payment executed and delivered to NCB-Agent by such entity and dated May 27, 1994; (C) a Certificate, dated as of the date hereof, of the secretary of Borrower certifying (1) that Borrower's Articles of Incorporation and Code of Regulations have not been amended since the execution of the Credit Agreement (or certifying that true, correct and complete copies of any amendments are attached), (2) that copies of resolutions of the Board of Directors of Borrower are attached with respect to the approval of this Amendment and of the matters contemplated hereby and authorizing the execution, delivery and performance by Borrower of this Amendment and each other document to be delivered pursuant hereto and (3) as to the incumbency and signatures of the 16 6 officers of Borrower signing this Amendment and each other document to be delivered pursuant hereto; (D) a separate agreement from Borrower in which Borrower has agreed to pay NCB-Agent, for its own account, certain fees; and (E) Such other documents as NCB-Agent may request to implement this Amendment and the transactions contemplated hereby. If NCB-Agent or banks shall consummate the transactions contemplated hereby prior to the fulfillment of any of the conditions precedent set forth above, the consummation of such transactions shall constitute only an extension of time for the fulfillment of such conditions and not a waiver thereof. Upon receipt of the properly completed and executed Amended Notes, banks agree to return to Borrower the previously executed notes respecting the subject loans and the same shall be marked "Replaced" or "Substituted" or with words of like import. SECTION III - AGREEMENTS CONCERNING PIONEER-STANDARD CANADA INC. -------------------------------------------------- Borrower agrees to cause its subsidiary, Pioneer-Standard Canada Inc., to comply with all the provisions of sections 3A, 3B, 3C and 3D of the Credit Agreement and agrees that all references to financial information in section 3A shall be deemed to be references to financial information of Borrower and its subsidiaries on a consolidating and consolidated basis; PROVIDED, that Pioneer-Standard Canada Inc. shall not be required to comply with the provisions of subsection 3D.06 (captioned "DIVIDENDS"). SECTION IV - REPRESENTATIONS AND WARRANTIES ------------------------------ Borrower hereby represents and warrants to each of the other parties to this Amendment that (A) none of the representations and warranties made in subsections 4B.01 through 4B.08 of the Credit Agreement has ceased to be true and complete in any material respect as of the date hereof; and (B) as of the date hereof no "default under this Agreement" has occurred that is continuing. SECTION V - ACKNOWLEDGMENTS CONCERNING OUTSTANDING LOANS -------------------------------------------- Borrower acknowledges and agrees that, as of the date hereof, all of Borrower's outstanding loan obligations to banks are owed without any offset, deduction, defense or counterclaim of any nature whatsoever. SECTION VI - REFERENCES ---------- On and after the effective date of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", or words of like import referring to the Credit Agreement, and in the subject notes or other related writings to the "Credit Agreement", "thereof", or words of like import 17 7 referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended hereby. The Credit Agreement, as amended by this Amendment, is and shall continue to be in full force and effect and is hereby ratified and confirmed in all respects. To the extent any amendment set forth in the First Amendment, the Second Amendment, Consolidated Amendment No. 1 or Consolidated Amendment No. 2 is omitted from this Amendment, the same shall be deemed eliminated as between Borrower and the other parties hereto as of the date hereof. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of NCB-Agent or banks under the Credit Agreement or constitute a waiver of any provision of the Credit Agreement except as specifically set forth herein. From and after the date of this Amendment references in the Credit Agreement to EXHIBIT B shall be deemed to be references to the form of the Amended Note attached hereto as EXHIBIT A. SECTION VII - COUNTERPARTS AND GOVERNING LAW ------------------------------ This Amendment may be executed in any number of counterparts, each counterpart to be executed by one or more of the parties but, when taken together, all counterparts shall constitute one agreement. This Amendment, and the respective rights and obligations of the parties hereto shall be construed in accordance with and governed by Ohio law. IN WITNESS WHEREOF, the Borrower, NCB-Agent and the banks have caused this Amendment to be executed by their authorized officers as the date and year first above written. National City Bank, Agent Pioneer-Standard Electronics, Inc. By: Janice E. Focke By: John V. Goodger --------------------------------- -------------------------------- Printed Name: Janice E. Focke Printed Name: John V. Goodger ----------------------- ---------------------- Title: Vice President Title: Vice President & Treasurer ------------------------------ ----------------------------- National City Bank Star Bank, N.A. By: Janice E. Focke By: John D. Barrett --------------------------------- -------------------------------- Printed Name: Janice E. Focke Printed Name: John D. Barrett ----------------------- ---------------------- Title: Vice President Title: Vice President ------------------------------ ----------------------------- Society National Bank By: Lawrence A. Mack --------------------------------- Printed Name: Lawrence A. Mack ----------------------- Title: Vice President ------------------------------ 18 EX-11 3 EXHIBIT 11 1 Exhibit 11 CALCULATION OF PRIMARY EARNINGS PER SHARE (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Three months ended June 30, 1995 1994 ---- ---- Weighted average common shares and common share equivalents outstanding 15,390,234 15,241,422 Net income 6,816 5,965 Earnings per share $.44 $.39
19 EX-27 4 EXHIBIT 27
5 1,000 3-MOS MAR-31-1996 JUN-30-1995 16,454 0 134,542 5,024 147,172 301,130 57,549 22,712 359,018 146,115 77,316 6,646 0 0 126,709 359,018 224,724 224,724 181,114 181,114 31,148 0 1,449 11,464 4,648 6,816 0 0 0 6,816 .44 0