-----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, IJK6NGyRGO7knZazbspALw5nSh6r1GbmpYI3rf7D6YppmVffRBT4r17VpnRRh4gD /yBlIhRasJWYbODnLt8UsQ== 0000950152-95-002605.txt : 19951119 0000950152-95-002605.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950152-95-002605 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95591104 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) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) / X / OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 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 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 November 1, 1995: 22,451,135. -------------------------- - ------------------------------------------ 2 PART I - FINANCIAL INFORMATION PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
September 30, 1995 (Unaudited) March 31, 1995 ----------------- ---------------- ASSETS Current assets Cash $ 18,845 $ 9,598 Accounts receivable - net 128,127 133,987 Merchandise inventory 137,352 123,008 Prepaid expenses 2,667 1,623 Deferred income taxes 5,708 5,708 ----------- --------- Total current assets 292,699 273,924 Investment in 50% - owned company 17,872 16,963 Other assets 5,684 5,599 Property and equipment, at cost 62,466 55,396 Accumulated depreciation 24,775 24,467 ----------- --------- Net 37,691 30,929 ----------- --------- $ 353,946 $ 327,415 =========== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable to banks $ 17,000 $ 7,000 Accounts payable 89,082 106,905 Accrued liabilities 22,260 25,625 Long-term debt due within one year 2,873 2,956 ----------- ---------- Total current liabilities 131,215 142,486 Long-term debt 80,313 56,318 Deferred income taxes 2,268 2,196 Shareholders' equity Common stock, at stated value 6,653 6,630 Capital in excess of stated value 16,884 16,318 Retained earnings 116,121 103,646 Foreign currency translation adjustment 492 (179) ----------- ---------- Retained earnings 140,150 126,415 ----------- ---------- $353,946 $ 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 Six months ended September 30, September 30, 1995 1994 1995 1994 ---- ---- ---- ---- Net sales $234,913 $194,423 $459,637 $378,255 Cost and expenses: Cost of goods sold 189,557 156,990 370,671 305,667 Warehouse, selling and administrative expense 32,690 27,115 63,838 52,437 -------- -------- -------- -------- Operating profit 12,666 10,318 25,128 20,151 Interest expense 1,516 944 2,965 1,645 Equity in earnings of 50% -owned company 458 183 909 856 -------- -------- -------- -------- Income before income taxes 11,608 9,557 23,072 19,362 Provision for income taxes 4,903 3,908 9,551 7,748 ------- ------- ------- ------- Net income $ 6,705 $ 5,649 $ 13,521 $ 11,614 ======== ======= ======== ========= Average shares outstanding 23,252,372 22,872,648 23,178,946 22,867,506 Shares outstanding at end of period 22,451,135 22,363,569 22,451,135 22,363,569 Earning per share $.29 $.25 $.58 $.51 Dividends per share $.023 $.02 $.047 $.035
See accompanying notes. 3 4 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Six months ended September 30, 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 13,521 $ 11,614 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 4,334 3,245 Undistributed earnings of affiliate (909) (856) Increase in operating working capital (30,269) (26,976) Increase in other assets - (1,451) Deferred taxes 72 (232) --------- --------- Total adjustments (26,772) (26,270) --------- --------- Net cash used in operating activities (13,251) (14,656) Cash flows from investing activities: Acquisition of business - (10,068) Additions to property and equipment (10,961) (4,429) --------- --------- Net cash used in investing activities (10,961) (14,497) Cash flows from financing activities: Increase in short-term financing 10,000 6,500 Increase in revolving credit borrowings 62,000 30,000 Repayment of revolving credit borrowings (38,000) (5,000) Decrease in other long-term debt obligations (88) (146) Issuance of common shares under company stock option plan 589 517 Dividends paid (1,046) (794) --------- --------- Net cash provided by financing activities 33,455 31,077 Effect of exchange rate changes on cash 4 (81) --------- --------- Net increase in cash 9,247 1,843 Cash at beginning of period 9,598 5,954 --------- -------- Cash at end of period $18,845 $ 7,797 ========= ========
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 and six-month periods ended September 30, 1995 and 1994. Common share equivalents consist of shares exercisable of 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 been restated for the periods 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 and six months ended September 30, 1995 and 1994. The results of operations for the three and six 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 $18.8 million and current liabilities decreased by $11.3 million during the six-month period ended September 30, 1995, resulting in an increase of $30.1 million of working capital. The decrease in current liabilities is attributable to timing variations of accounts payable payments. The current ratio was 2.2:1 at September 30, 1995, compared with 1.9:1 at year-end, March 31, 1995. During the first six months of the current year, total interest-bearing debt increased by $33.9 million. The ratio of interest-bearing debt to capitalization was 42% at September 30, 1995 compared with 34% at March 31, 1995. Management estimates that capital expenditures for the current year will approximate $20.0 million ($11.0 million was expended in the first six 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 SEPTEMBER 30, 1995 COMPARED WITH THE THREE MONTHS ENDED SEPTEMBER 30, 1994 Net sales for the three-month period ended September 30, 1995 of $234.9 million increased 21% over sales of the prior year three-month period of $194.4 million. The increase in sales reflects continuing strong demand for electronic components and computer and peripheral products. Semiconductor products accounted for 36% of the Company's sales in the current quarter, compared with 38% a year ago. Computer systems products were 39% of sales in 1995 versus 36% last year. Passive and electromechanical products were 22% of the Company's business in 1995 compared with 23% a year earlier. Miscellaneous products accounted for 3% of sales in both 1995 and 1994. Cost of goods sold increased 21% compared with the prior year quarter, resulting in a gross margin of 19.3% in the second quarters of both years. Warehouse, selling and administrative expenses of $32.7 million increased by 21% over the $27.1 million incurred during the prior year three-month period. This resulted in a ratio of these expenses to sales of 13.9% for both quarters. The Company's share of net income of the affiliated company, Pioneer Technologies Group, Inc., was $458,000 for the 1995 three-month period compared with $183,000 for the same period last year; net sales of the affiliate for the three-month period ended September 30, 1995 of $80.6 million were 11% less than sales of the prior three-month period of $90.1 million. Lower 1995 net sales reflect a reduced volume of 6 7 microprocessor sales which earn a relatively low gross profit margin. 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 42.2% compared with 40.8% a year ago. Primarily as a result of the factors above, the Company's net income for the three-month period ending September 30, 1995 of $6.7 million was $1.1 million greater than the $5.6 million earned a year ago. SIX MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH THE SIX MONTHS ENDED SEPTEMBER 30, 1994 Net sales for the six-month period ended September 30, 1995 of $459.6 million were 22% greater than sales of the prior year six-month period of $378.3 million. The increase in sales reflects continuing strong demand for electronic components and computer systems. During the first six months of 1995, semiconductor products accounted for 35% of the Company's sales compared with 38% in the prior year. Computer systems products accounted for 39% of the Company's sales in 1995 and 36% in 1994. Passive and electromechanical products accounted for 23% of sales in both 1995 and in 1994. Miscellaneous products accounted for 3% of sales in both 1995 and 1994. The percentage increase in cost of goods sold of 21% resulted in a gross margin of 19.4% in the first six months of the current year compared with 19.2% a year ago. Warehouse, selling and administrative expenses of $63.8 million increased by 22% as compared with the $52.4 million incurred during the prior year six-month period. This resulted in a ratio of these expenses to sales of 13.9% for both the 1995 and 1994 periods. The resulting operating profit of $25.1 million in 1995 was 5.5% of sales compared with $20.2 million in 1994, which was 5.3% of sales. Current year results reflect the increase in sales and effective cost containment. The Company's share of net income of the affiliated company, Pioneer Technologies Group, Inc., was $909,000 for the 1995 six-month period compared with $856,000 for the same period last year; net sales of the affiliate for the current year period of $160.4 million were 14% less than the sales of the prior year period of $185.9 million. This reduction is attributable to a lower volume of microprocessor sales. 7 8 Notwithstanding this reduction, a significant portion of the affiliate's sales during the six-month period was still attributable to highly concentrated sales of certain microprocessors in large quantities, the sales volume of which might not be sustainable in future periods and the effect of which could result in a significant impact on net income of the affiliate. The effective tax rate for the current six-month period was 41.4% compared with 40.0% a year ago. Primarily as a result of the factors noted above, the Company's net income for the six-month period ending September 30, 1995 of $13.5 million was $1.9 million higher than the $11.6 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. BALANCE SHEETS (Dollars in Thousands)
September 30, 1995 (Unaudited) March 31, 1995 --------------- -------------- ASSETS Current assets Cash $ 10 $ 9 Accounts receivable - net 42,829 36,378 Merchandise inventory 58,685 46,895 Prepaid expenses 630 494 Deferred income taxes 1,075 1,246 Shareholder notes receivable 14 63 ---------- ---------- Total current assets 103,243 85,085 Property and equipment, at cost 11,360 10,697 Accumulated depreciation (6,046) (5,289) ---------- --------- Net 5,314 5,408 Shareholder notes receivable 192 193 Other assets 186 272 ---------- ---------- $108,935 $ 90,958 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 26,779 $ 34,711 Accrued liabilities 2,693 4,170 ---------- ---------- Total current liabilities 29,472 38,881 Long-term debt 43,717 18,148 Shareholders' equity Common stock $.10 par value 10 10 Capital in excess of par value 90 90 Retained earnings 35,646 33,829 ---------- ---------- Total shareholders' equity 35,746 33,929 ---------- ---------- $108,935 $90,958 ========== ==========
9 10 PIONEER TECHNOLOGIES GROUP, INC. STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Quarter ended Six months ended September 30, September 30, 1995 1994 1995 1994 ---- ---- ---- ---- Net sales $ 80,587 $ 90,133 $ 160,396 $ 185,875 Costs and expenses: Cost of goods sold 67,326 78,331 133,532 159,683 Selling and administrative expense 10,985 10,626 22,280 22,284 ------- ------ ------- ------- Operating profit 2,276 1,176 4,584 3,908 Interest expense 745 554 1,313 1,006 -------- -------- -------- -------- Income before income taxes 1,531 622 3,271 2,902 Provision for income taxes 616 255 1,454 1,190 -------- -------- ------- -------- Net income $ 915 $ 367 $ 1,817 $ 1,712 ========= ========= ======== ========= Average shares outstanding 100,000 100,000 100,000 100,000 Earnings per share $9.15 $ 3.67 $18.17 $17.12 Dividends per share -- -- -- --
10 11 PIONEER TECHNOLOGIES GROUP, INC. STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Six months ended September 30, 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 1,817 $ 1,712 Adjustments to reconcile net income to net cash used in operating activities: Items not affecting cash 833 670 Increase in operating working capital (27,737) (5,084) Decrease (increase) in other assets 258 (182) ---------- ---------- Total adjustments (26,646) (4,596) Net cash used in operating activities (24,829) (2,884) Cash flows from investing activities: Additions to property and equipment (739) (612) ---------- ---------- Net cash used in investing activities (739) ( 612) Cash flows from financing activities: Increase in long-term debt 25,569 3,497 ---------- ---------- Net cash provided by financing activities 25,569 3,497 Net change in cash 1 1 Cash at beginning of period 9 8 ---------- ---------- Cash at end of period $ 10 $ 9 ========== ==========
11 12 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Annual Meeting of Shareholders held on July 25, 1995 (the "Annual Meeting"), the shareholders voted to elect Frederick A. Downey, Victor Gelb and Edwin Z. Singer to additional three-year terms as Directors of the Company. Following is a summary of the voting:
Frederick A. Victor Edwin Z. Votes Downey Gelb Singer ----- ------ ---- ------ For 12,964,416 12,966,179 12,961,224 Withheld 52,388 50,625 55,580
The term of office of the following Directors of the Company continued after the Annual Meeting of Shareholders: James L. Bayman; Gordon E. Heffern; Preston B. Heller, Jr.; Arthur Rhein; Thomas C. Sullivan and Karl E. Ware. In addition, at the Annual Meeting of Shareholders, the 1995 Stock Option Plan for Outside Directors was approved by the Shareholders; 11,834,446 votes were cast in favor of the Plan, 943,372 votes were cast against the Plan, 235,236 votes abstained from voting on the Plan, and there were 3,749 broker non-votes concerning the Plan. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Number Description ------ ------------ 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 September 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: November 10, 1995 James L. Bayman ------------------- ----------------------------------- President and CEO Date: November 10, 1995 John V. Goodger ------------------- ----------------------------------- Vice President & Treasurer 12 EX-11 2 EXHIBIT 11 1 Exhibit 11 CALCULATION OF PRIMARY EARNINGS PER SHARE (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three months ended Six months ended September 30, September 30, 1995 1994 1995 1994 ---- ---- ---- ---- Weighted average common shares and common share equivalents outstanding 23,252,372 22,872,648 23,178,946 22,867,506 Net income $6,705 $5,649 $13,521 $11,614 Earnings per share $.29 $.25 $.58 $.51
13 EX-27 3 EXHIBIT 27
5 1,000 6-MOS MAR-31-1996 SEP-30-1995 18,845 0 132,903 4,776 137,352 292,699 62,466 24,775 353,946 131,215 80,313 6,653 0 0 133,497 353,946 459,637 459,637 370,671 370,671 63,838 0 2,965 23,072 9,551 13,521 0 0 0 13,521 .58 0
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