-----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, TvBUXXq19cN+n5FaRRyT3PkMJ1wm3DH/6a/D+IItU2lHrASJmrQ+ngaRWqzRh1l8 BdY4J2bjQRm2MTI+t2k/yw== 0000950152-98-002118.txt : 19980323 0000950152-98-002118.hdr.sgml : 19980323 ACCESSION NUMBER: 0000950152-98-002118 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980319 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/A SEC ACT: SEC FILE NUMBER: 000-05734 FILM NUMBER: 98568782 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 10-Q/A 1 PIONEER-STANDARD ELECTRONICS, INC. FORM 10-Q/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A (AMENDMENT NO. 1) (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, 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 FEBRUARY 3, 1998: 26,327,179. (Excludes 4,780,000 Common Shares subscribed by the Pioneer Stock Benefit Trust.) 2 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Number Description ------ ----------- 4.1 First Amendment to Credit Agreement, dated as of June 30, 1997, by and among Pioneer-Standard Electronics, Inc., National City Bank, the Banks identified on the signature pages thereto and National City Bank as Agent (filed herewith). 4.2 Second Amendment to Credit Agreement and Extension of Facility Termination Date, dated as of November 10, 1997, by and among Pioneer-Standard Electronics, Inc., National City Bank, the Banks identified on the signature pages thereto, and National City Bank as Agent (filed herewith). 27 Financial Data Schedule 3 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: March 17, 1998 James L. Bayman ---------------------------------------- Chairman and CEO Date: March 17, 1998 John V. Goodger ------------------------------------- Vice President & Treasurer EX-4.1 2 EXHIBIT 4.1 1 Exhibit 4.1 FIRST AMENDMENT TO CREDIT AGREEMENT This First Amendment to Credit Agreement (this "First Amendment"), dated as of June 30, 1997, is by and among Pioneer-Standard Electronics, Inc., an Ohio corporation, and its successors and assigns (the "Borrower"), National City Bank, a national banking association, and the several banks, financial institutions and other entities from time to time parties to the Agreement (sometimes collectively, "Lenders" and sometimes individually, a "Lender"), and National City Bank, not individually, but as "Agent". Capitalized terms used herein, and not otherwise defined herein, shall have the meaning ascribed to those terms in the Credit Agreement (as defined herein). RECITALS A. Borrower, Lenders and Agent entered into a Credit Agreement dated as of August 12, 1996 (the "Original Credit Agreement"), whereby Lenders agreed to make revolving loans available to Borrower in an aggregate principal amount not to exceed $125,000,000, pursuant to the terms of the Original Credit Agreement. B. Borrower, Lenders and Agent desire to amend certain terms and conditions of the Original Credit Agreement. C. The Original Credit Agreement as modified by this First Amendment shall hereafter be the "Credit Agreement." NOW THEREFORE, for mutual consideration, the receipt and sufficiency of which is acknowledged by Borrower, Lenders and Agent, the parties hereby agree as follows: 1. The definitions of Consolidated Fixed Charge Coverage Ratio and Loan Documents in the Original Credit Agreement are hereby deleted and the following shall be substituted in lieu thereof: "Consolidated Fixed Charge Coverage Ratio" means, as of any date of determination, the ratio of (a) the sum of Consolidated Pre-Tax Income plus Consolidated Interest Expense, to (b) Consolidated Debt Service, all for the four fiscal quarters then ended. "Loan Documents" means this Agreement, the Notes, the Non-Borrowing and Non-Pledge Agreements, the Subordination Agreement, and any other document from time to time evidencing or securing indebtedness incurred by Borrower under this Agreement, as any of the foregoing may be amended or modified from time to time. 2 2. The following definitions shall be included in the Credit Agreement: "Additional Receivables Transfer" or "Additional Receivables Transfers" means one or more transfers of receivables of Borrower to the Limited Partnership in a maximum aggregate amount not to exceed $30,000,000, on terms and conditions in accordance with those set forth in SCHEDULE 2 hereto. "Initial Receivables Transfer" means the receivables transfer of Borrower to the Limited Partnership in a maximum amount not to exceed $90,000,000, as described on SCHEDULE 3 hereto. "Consolidated Pre-Tax Income" means, for any period, Consolidated Net Income plus the sum of all income and franchise tax expense incurred by Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Pre-Tax Income" means, for any period, Net Income plus the sum of all income taxes paid by Borrower for such period. "Pre-Tax Interest Coverage Ratio" means, as of any date of determination, the ratio of (a) the sum of Pre-Tax Income plus Interest Expense, to (b) Interest Expense. "Subordination Agreement" means a Subordination Agreement, executed by Borrower and Limited Partnership in favor of Lenders, substantially in the form of EXHIBIT A attached hereto, as the same may be amended, supplemented or otherwise modified from time to time. 3. The definition of the terms Fixed Charge Coverage Ratio and Debt Service shall be deleted from the Credit Agreement in their entirety. 4. Upon execution and delivery of this First Amendment, a written opinion of Borrower's and Limited Partnership's counsel shall be delivered to Lenders in substantially the form of EXHIBIT B and EXHIBIT C hereto. 5. Upon execution and delivery of this First Amendment, Borrower and Limited Partnership shall deliver to Lenders a Subordination Agreement in substantially the form of EXHIBIT A hereto. 6. As of the date hereof, Borrower hereby affirms each of the representations and warranties set forth in SECTION 4 of the Original Credit Agreement. -2- 3 7. Schedule 1 (Subsidiaries of Borrower) of the Original Credit Agreement is deleted in its entirety and Schedule 1 attached hereto is substituted therefor. 8. Section 5.11 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.11 MERGER; SALE OF ASSETS. Other than (a) the Transfer of Assets in connection with the Corporate Reorganization, (b) the Initial Receivables Transfer described on Schedule 3 attached hereto and (c) any Additional Receivables Transfer described on Schedule 2 attached hereto, Borrower will not, nor will it permit any of its Subsidiaries to, enter into any merger, consolidation, reorganization or liquidation or transfer or otherwise dispose of a Substantial Portion of its Property or business, unless approved in advance by Lenders. The foregoing notwithstanding, at least thirty (30) days prior to the effectiveness of any Additional Receivables Transfer as described on Schedule 2 attached hereto, Borrower shall submit to Lenders the following: (a) a Financial Compliance Certificate in accordance with Section 5.1(v) of this Agreement, (b) pro forma consolidated financial statements projecting the results after the Additional Receivables Transfer for the following fiscal year, and (c) an affirmation by Borrower and the Limited Partnership that any debt incurred by Borrower in favor of the Limited Partnership in connection with the Additional Receivables Transfer is subject to the Subordination Agreement. 9. Section 5.17 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.17 ADDITIONAL INDEBTEDNESS AND FINANCIAL UNDERTAKINGS. Borrower will not enter into or remain liable upon, any Financial Undertaking, nor will Borrower incur Indebtedness for Borrowed Money (other than Indebtedness for Borrowed Money which is incurred under this Agreement, the Additional Facilities, the Debt Offering, the Initial Receivables Transfer, or any Additional Receivables Transfers or that consists of interest rate exchange agreements or interest rate option agreements. that in the aggregate, at any time, do not create an Aggregate Measured Credit Risk in excess of $7,500,000). Borrower will not permit any of its Subsidiaries to enter into or remain liable upon, any Financial Undertaking, nor will Borrower permit any of its Subsidiaries to incur Indebtedness for Borrowed Money (other than loans made by Borrower and permitted by Section 5.26, and current Indebtedness for Borrowed Money as described on Schedule 6 hereto); -3- 4 10. Section 5.24 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.24 LEVERAGE RATIO. The Leverage Ratio shall not exceed 4.75 to 1.00 at any time during the period commencing on the Closing Date, and ending on March 31, 1997, 3.75 to 1.00 at any time during the period commencing April 1, 1997, and ending on March 31, 1998, and 3.00 to 1.00 at any time during the period commencing on April 1, 1998, and thereafter. 11. Section 5.25 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.25 CONSOLIDATED FIXED CHARGE COVERAGE RATIO; PRE-TAX INTEREST COVERAGE RATIO. Borrower and its Subsidiaries shall maintain a Consolidated Fixed Charge Coverage Ratio of no less than 2.0 to 1.0 on the Closing Date, and on the last calendar day of each fiscal quarter thereafter until June 30, 1997, and no less than 2.3 to 1.0 on the last calendar day of each fiscal quarter thereafter, until the Facility Termination Date. Borrower shall maintain a Pre-Tax Interest Coverage Ratio of 1.10 to 1 on July 1, 1997, and on the last calendar day of each fiscal quarter thereafter, until the Facility Termination Date. 12. Section 5.26 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.26 INVESTMENT AND LOAN LIMIT. Neither Borrower, nor any of its Subsidiaries, together or individually, directly or indirectly, in any instance or in the aggregate over time may: (a) invest in any manner more than $10,800,000 in Canada, or (b) loan more than an aggregate principal amount of: (i) $25,000,000 to Canada; (ii) $85,000,000 to Limited Partnership; (iii) $15,000,000 to Minnesota; (iv) $10,000,000 to Illinois; (v) $55,000,000 to Maryland; and (vi) $1,000,000 to FSC. 13. Section 5.27 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.27 ACQUISITION LIMIT. Neither Borrower nor any of its Subsidiaries shall fund the Acquisitions of Persons, or offer for, any Capital Stock of Persons, to the extent the aggregate consideration (including contingent consideration) of all such Acquisitions made after the Closing Date and until the Facility Termination Date would exceed $5,000,000. -4- 5 14. SECTION 5.30 of the Original Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 5.30 TANGIBLE ASSETS; ASSETS. As of the Closing Date, and at all times thereafter until April 30, 1997, Borrower's Tangible Assets shall be equal to or greater than forty-six (46%) percent of Borrower's Assets, based on equity method of accounting. As of May 1, 1997, and at all times thereafter until the Facility Termination Date, Borrower's Tangible Assets shall be equal to or greater than forty (40%) percent of the Borrower's Assets, based on equity method of accounting. 15. Borrower represents and warrants that as of the date hereof Borrower is not in Default under any of the terms and conditions of the Credit Agreement. 16. All other terms and conditions of the Credit Agreement shall remain in full force and effect and unmodified hereby. -5- 6 17. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which taken together shall constitute one instrument. PIONEER-STANDARD ELECTRONICS, INC. By: /s/ John V. Goodger Print Name: John V. Goodger Title: Vice President 4800 East 131st Street Garfield Heights, Ohio 44105 Phone: (216) 587-3600 Facsimile: (216) 587-3563 Attention: John V. Goodger NATIONAL CITY BANK, Individually and as Agent By: /s/ Anthony J. DiMare Print Name: Anthony J. DiMare Title Senior Vice President Via Hand Delivery National City Bank National City Center, 10th Floor 1900 East Ninth Street Cleveland, Ohio 44114 Via U.S. Mail National City Bank P.O. Box 5756 Cleveland, Ohio 44101-0756 Attention: Anthony J. DiMare Vice President -6- 7 KEYBANK NATIONAL ASSOCIATION By: /s/ Matthew Tuohey Print Name: Matthew Tuohey Title: Assistant Vice President Via Hand Delivery KeyBank National Association Large Corporate Group Mail Code OH-01-27-0606 127 Public Square Cleveland, Ohio 44114-1306 Via U.S. Mail KeyBank National Association Large Corporate Group Mail Code OH-01-27-0606 127 Public Square Cleveland, Ohio 44114-1306 Attention: Matthew P. Tuohey -7- 8 MELLON BANK, N.A. By: /s/ Mark F. Johnston Print Name: Mark F. Johnston Title: AVP Via Hand Delivery Mellon Bank, N.A. Three Mellon Bank Center Suite 2300 Pittsburgh, PA 15259 Attention: Loan Administration Theresa Heukeshoven Via U.S. Mail Mellon Bank, N.A. Three Mellon Bank Center Suite 2300 Pittsburgh, PA 15259 Attention: Loan Administration Theresa Heukeshoven With a Copy To: Via Hand Delivery Mellon Bank, N.A. One Mellon Bank Center Grant Street, Room 4530 Pittsburgh, PA 15258-0001 Via U.S. Mail Mellon Bank, N.A. One Mellon Bank Center Grant Street, Room 4530 Pittsburgh, PA 15258-0001 Attention: Mark F. Johnston -8- 9 STAR BANK, N.A. By: /s/ John D. Barrett Print Name: John D. Barrett Title: Sr. Vice President Via Hand Delivery Star Bank, N.A. 1350 Euclid Avenue, Suite 220 Cleveland, Ohio 44115 Via U.S. Mail Star Bank, N.A. 1350 Euclid Avenue, Suite 220 Mail Location 4432 Cleveland, Ohio 44115 Attention: John D. Barrett -9- 10 SCHEDULE 2 TERMS AND CONDITIONS OF ADDITIONAL RECEIVABLES TRANSFERS 1. The aggregate amount all Additional Receivable Transfers shall not exceed $30,000,000. 2. The transferee of all such Additional Receivable Transfers shall be Limited Partnership. 3. The Limited Partnership shall be required to promptly transfer the funds collected from the collection of such accounts receivable to Borrower. In accordance with the Initial Receivables Transfer, Limited Partnership may transfer such funds pursuant to a loan to Borrower, provided, the repayment of such debt by Borrower is subordinate to the debt of Borrower arising under the Credit Agreement. 11 SCHEDULE 3 DESCRIPTION OF INITIAL RECEIVABLES TRANSFER Pursuant to the restructuring of Pioneer-Standard Electronics, Inc. (the (Company"), the Company will transfer directly and indirectly through its wholly-owned subsidiary Pioneer-Standard Illinois, Inc. ("Pioneer Illinois"), up to $90,000,000 in accounts receivable (the "Receivables") to Pioneer-Standard Electronics, Ltd. ("Pioneer LP") (the "Initial Receivables Transfer"). The Initial Receivables Transfer is scheduled to occur on or about August 1, 1997, and will be reflected on the financial statements of the Company as a capital contribution to Pioneer Illinois and the to Pioneer LP. Upon the completion of the Initial Receivables Transfer, Pioneer LP will own the Receivables and the proceeds to be collected from the Receivables. Subsequent to the Initial Receivables Transfer, Pioneer LP will pay the Company a servicing fee to collect the Receivables on behalf of Pioneer LP. Pioneer LP will then loan the Company, on a daily basis, as the cash is collected from customers, the proceeds of the Receivables. It is anticipated that the Receivables transferred as part of the Initial Receivables Transfer will be collected and loaned back to the Company within the fifty-day period commencing with the Initial Receivables Transfer. After such fifty-day period has elapsed, a loan of up to $90,000,000 from Pioneer LP to the Company will be outstanding and will be evidenced by a demand note of the Company payable to Pioneer LP. EX-4.2 3 EXHIBIT 4.2 1 Exhibit 4.2 SECOND AMENDMENT TO CREDIT AGREEMENT AND EXTENSION OF FACILITY TERMINATION DATE This Second Amendment to Credit Agreement and Extension of Facility Termination Date (this "Second Amendment"), dated as of November 10, 1997, is by and among Pioneer-Standard Electronics, Inc., an Ohio corporation, and its successors and assigns (the "Borrower"), National City Bank, a national banking association, and the several banks, financial institutions and other entities from time to time parties to the Agreement (sometimes collectively, "Lenders" and sometimes individually, a "Lender"), and National City Bank, not individually, but as "Agent". Capitalized terms used herein, and not otherwise defined herein, shall have the meaning ascribed to those terms in the Credit Agreement (as defined herein). RECITALS A. Borrower, Lenders and Agent entered into a Credit Agreement dated as of August 12, 1996 (the "Original Credit Agreement"), whereby Lenders agreed to make revolving loans available to Borrower in an aggregate principal amount not to exceed $125,000,000, pursuant to the terms of the Original Credit Agreement. B. Borrower, Lenders and Agent entered into a First Amendment to Credit Agreement as of June 30, 1997 (the "First Amendment"), amending certain terms and conditions of the Original Credit Agreement (the Original Credit Agreement as amended by the First Amendment, the "Amended Credit Agreement"); C. Borrower, Lenders and Agent desire to amend certain terms and conditions of the Amended Credit Agreement. D. The Amended Credit Agreement as modified by this Second Amendment shall hereafter be the "Credit Agreement." NOW THEREFORE, for mutual consideration, the receipt and sufficiency of which is acknowledged by Borrower, Lenders and Agent, the parties hereby agree as follows: 1. As provided for in the definition of Facility Termination Date in the Amended Credit Agreement, the Facility Termination Date is hereby extended one (1) year (August 12, 2000). 2. As of the date hereof, Borrower hereby affirms each of the representations and warranties set forth in SECTION 4 of the Amended Credit Agreement. 3. SECTION 5.14 of the Amended Credit Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 2 5. 14 ACQUISITIONS AND INVESTMENTS. Borrower will not, nor will it permit any Subsidiary to, make or suffer to exist any Investments, or commitments therefor, or create any Subsidiary (other than Illinois, Minnesota and the Limited Partnership) or become or remain a partner in any partnership or joint venture, or make any Acquisition of any Person, except: (i) Cash Equivalents; (ii) up to $10,800,000 investment in Canada, other existing Investments in Subsidiaries and joint ventures, and other Investments in existence on the date hereof and described in Schedule "1" hereto; (iii) acquisitions permitted pursuant to SECTION 5.27; (iv) investments and loans permitted under SECTION 5.26; and (v) up to $7,000,000 investment in World Peace Industrial Co. Ltd. ("WPI"), to acquire approximately 5% of the stock of WPI. 4. Borrower represents and warrants that as of the date hereof Borrower is not in Default under any of the terms and conditions of the Credit Agreement. 5. All other terms and conditions of the Credit Agreement shall remain in full force and effect and unmodified hereby. 6. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which taken together shall constitute one instrument. PIONEER-STANDARD ELECTRONICS, INC. By: Print Name: John V. Goodger Title: Vice President 4800 East 131st Street Garfield Heights, Ohio 44105 Phone: (216) 587-3600 Facsimile: (216) 587-3563 Attention: John V. Goodger -2- 3 NATIONAL CITY BANK, Individually and as Agent By /s/ Anthony J. DiMare Print Name: Anthony J. DiMare Title: Senior Vice President Via Hand Delivery National City Bank National City Center, 10th Floor 1900 East Ninth Street Cleveland, Ohio 44114 Via U.S. Mail National City Bank P.O. Box 5756 Cleveland, Ohio 44101-0756 Attention: Anthony J. DiMare Senior Vice President -3- 4 KEYBANK NATIONAL ASSOCIATION By: /s/ Richard A. Pohle Print Name: Richard A. Pohle Title: Vice President Via Hand Delivery KeyBank National Association Large Corporate Group Mail Code OH-01-27-0606 127 Public Square Cleveland, Ohio 44114-1306 Via U.S. Mail KeyBank National Association Large Corporate Group Mail Code OH-01-27-0606 127 Public Square Cleveland, Ohio 44114-1306 Attention: Michael J. Jackson -4- 5 MELLON BANK, N.A. By: Mark F. Johnston Print Name: /s/ Mark F. Johnston Title: AVP Via Hand Delivery Mellon Bank, N.A. Three Mellon Bank Center Suite 2300 Pittsburgh, PA 15259 Attention: Loan Administration Theresa Heukeshoven Via U.S. Mail Mellon Bank, N.A. Three Mellon Bank Center Suite 2300 Pittsburgh, PA 15259 Attention: Loan Administration Theresa Heukeshoven With a Copy To: Via Hand Delivery Mellon Bank, N.A. One Mellon Bank Center Grant Street, Room 4530 Pittsburgh, PA 15258-0001 Via U.S. Mail Mellon Bank, N.A. One Mellon Bank Center Grant Street, Room 4530 Pittsburgh, PA 15258-0001 Attention: Mark F. Johnston -5- 6 STAR BANK, N.A. By: /s/ John D. Barrett Print Name: John D. Barrett Title: Senior Vice President Via Hand Delivery Star Bank, N.A. 1350 Euclid Avenue, Suite 220 Cleveland, Ohio 44115 Via U.S. Mail Star Bank, N.A. 1350 Euclid Avenue, Suite 220 Mail Location 4432 Cleveland, Ohio 44115 Attention: John D. Barrett -6- -----END PRIVACY-ENHANCED MESSAGE-----