-----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, Aae8Ng8GmSFbQKQT4K8cu5MYkqzLPH9JBwtcybanuma7wEWs/PhcZ/hglgJRYVUq u4/JPz6o1LFUIOiCxZvA/w== 0000950152-99-001065.txt : 19990217 0000950152-99-001065.hdr.sgml : 19990217 ACCESSION NUMBER: 0000950152-99-001065 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990216 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: SEC FILE NUMBER: 000-05734 FILM NUMBER: 99539648 BUSINESS ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 BUSINESS PHONE: 2165873600 MAIL ADDRESS: STREET 1: 4800 E 131ST ST CITY: CLEVELAND STATE: OH ZIP: 44105 10-Q 1 PIONEER-STANDARD ELECTRONICS, INC. 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (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, 1998. ------------------ 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 5, 1999: 26,354,741. (Excludes 4,780,000 Common Shares subscribed by the Pioneer Stock Benefit Trust.) 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
December 31, 1998 (Unaudited) March 31, 1998 ----------- -------------- ASSETS Current assets Cash and cash equivalents $ 18,967 $ 31,999 Accounts receivable - net 329,546 303,599 Merchandise inventory 337,629 349,100 Prepaid expenses 972 5,799 Deferred income taxes 8,631 10,113 ----------- ----------- Total current assets 695,745 700,610 Intangible assets 157,198 154,908 Other assets 21,898 14,258 Property and equipment, at cost 155,830 135,803 Accumulated depreciation 69,183 48,076 ----------- ----------- Net 86,647 87,727 ----------- ----------- $ 961,488 $ 957,503 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 241,912 $ 197,167 Accrued liabilities 45,979 38,893 Long-term debt due within one year 3,111 3,101 ----------- ----------- Total current liabilities 291,002 239,161 Long-term debt 253,221 336,234 Other long-term liabilities 11,010 12,112 Company-obligated mandatorily redeemable convertible preferred securities of trust, holding solely 6 3/4% convertible subordinated debentures of the Company 143,750 125,000 Shareholders' equity Common stock, at stated value 9,258 9,256 Capital in excess of stated value 106,759 120,465 Retained earnings 193,391 174,411 Unearned compensation (44,813) (58,555) Accumulated other comprehensive income (2,090) (581) ----------- ----------- Net 262,505 244,996 ----------- ----------- $ 961,488 $ 957,503 =========== ===========
See accompanying notes to consolidated financial statements. 2 3 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands Except Per Share Amounts)
Quarter Ended Nine Months Ended December 31, December 31, 1998 1997 1998 1997 ---- ---- ---- ---- Net sales $ 595,985 $ 424,148 $ 1,699,813 $ 1,251,696 Cost and expenses: Cost of goods sold 503,508 348,406 1,435,389 1,032,753 Warehouse, selling and administrative expenses 68,733 56,279 203,511 164,300 ----------- ----------- ----------- ----------- Operating profit 23,744 19,463 60,913 54,643 Interest expense 5,892 5,490 19,111 14,809 ----------- ----------- ----------- ----------- Income before income taxes 17,852 13,973 41,802 39,834 Provision for income taxes 6,960 5,534 16,073 16,631 Distributions on mandatorily redeemable convertible trust preferred securities, net of tax 1,459 -- 4,378 -- ----------- ----------- ----------- ----------- Net income $ 9,433 $ 8,439 $ 21,351 $ 23,203 =========== =========== =========== =========== Weighted average shares outstanding Basic 26,350,975 26,312,441 26,349,364 26,163,514 Diluted 35,757,510 26,994,629 35,711,217 26,751,827 Earnings per share: Basic $ .36 $ .32 $ .81 $ .89 Diluted $ .30 $ .31 $ .72 $ .87 Dividends per share $ .03 $ .03 $ .09 $ .09
See accompanying notes to consolidated financial statements. 3 4 PIONEER-STANDARD ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Nine months ended December 31, 1998 1997 ---- ---- Cash flows from operating activities: Net income $ 21,351 $ 23,203 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 11,631 8,661 Amortization 6,849 3,662 (Increase) decrease in operating working capital 34,897 (84,248) Increase in other assets (207) (6,452) Deferred taxes 938 (836) --------- --------- Total adjustments 54,108 (79,213) Net cash used in operating activities 75,459 (56,010) Cash flows from investing activities: Additions to property and equipment (14,040) (30,486) Investment in affiliate (7,433) -- --------- --------- Net cash used in operating (21,473) (30,486) Cash flows from financing activities: Decrease in short-term financing -- (18,000) Increase (decrease) in revolving credit borrowings (80,000) 105,000 Decrease in other long-term debt obligations (3,003) (2,878) Proceeds from sale of common shares under the Pioneer Stock Benefit Trust -- 3,308 Issuance of common shares under company stock option plan 38 637 Proceeds from issuance of mandatorily redeemable convertible trust preferred securities 18,750 -- Dividends paid (2,371) (2,352) --------- --------- Net cash provided by financing activities (66,586) 85,715 Effect of exchange rate changes on cash (432) (45) Net decrease in cash (13,032) (826) Cash and cash equivalents at beginning of period 31,999 28,116 --------- --------- Cash and cash equivalents at end of period $ 18,967 $ 27,290 ========= =========
See accompanying notes to consolidated financial statements. 4 5 Notes to Consolidated Financial Statements 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter and nine months ended December 31, 1998 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended March 31, 1998. 2. ACCOUNTING CHANGES The Financial Accounting Standards Board has issued Statement No. 131, "Disclosure about Segments of an Enterprise and Related Information" (FAS 131). FAS 131 requires reporting certain information about operating segments. This statement must be adopted by the Company no later than fiscal year-end 1999. Management is currently analyzing the potential effects of the adoption of this statement. Effective April 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" which requires disclosure of comprehensive income defined as the aggregate change in shareholders' equity excluding changes in ownership interests. The components of comprehensive income are as follows:
Quarter ended Nine months ended December 31, December 31, 1998 1997 1998 1997 Net income $ 9,433,000 $ 8,439,000 $ 21,351,000 $ 23,203,000 Other Comprehensive Income Foreign currency translation adjustment 10,000 (896,000) (1,509,000) (781,000) ----------- ------------ ------------ ------------ Comprehensive income $ 9,443,000 $ 7,543,000 $ 19,842,000 $ 22,422,000 =========== ============ ============ ============
5 6 In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. The Company is required to adopt SFAS No. 133 no later than fiscal 2001. Adoption of the new Standard is not expected to have a significant impact on the results of operations or financial position of the Company. 3. NET INCOME PER SHARE DATA Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted computations include dilutive common share equivalents of outstanding stock options and assumed conversion of company-obligated mandatorily redeemable convertible trust preferred securities and the elimination of related distributions, net of income taxes. The computation of basic and diluted earnings per common share for the quarters and nine months ended December 31, 1998 and 1997 are shown below:
Quarter ended Nine months ended December 31, December 31, 1998 1997 1998 1997 ---- ---- ---- ---- Basic Net income applicable to common shareholders $ 9,433,000 $ 8,439,000 $21,351,000 $23,203,000 Weighted average shares outstanding 26,350,975 26,312,441 26,349,364 26,163,514 Basic earnings per share $ .36 $ .32 $ .81 $ .89 Diluted Net income applicable to common shareholders $ 9,433,000 $ 8,439,000 $21,351,000 $23,203,000 Add back: Distributions on mandatorily redeemable convertible trust preferred securities, net of tax 1,459,000 -- 4,378,000 -- ----------- ----------- ----------- ----------- Net income applicable to common shareholders after assumed conversion $10,892,000 $ 8,439,000 $25,729,000 $23,203,000 =========== =========== =========== =========== Weighted average shares outstanding 26,350,975 26,312,441 26,349,364 26,163,514 Effect of diluted securities: Common share equivalents of outstanding stock options 279,551 682,188 247,856 588,313 Common shares issuable upon conversion of mandatorily redeemable convertible trust preferred securities 9,126,984 -- 9,113,997 -- ----------- ----------- ----------- ----------- Diluted weighted average shares outstanding 35,757,510 26,994,629 35,711,217 26,751,827 =========== =========== =========== =========== Diluted earnings per share $ .30 $ .31 $ .72 $ .87
6 7 4. COMPANY-OBLIGATED MANDORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES OF SUBSIDIARY TRUST In March 1998 and April 1998, Pioneer-Standard Financial Trust (the "trust") issued a total of $143.7 million of 6 3/4 percent Mandatorily Redeemable Convertible Trust Preferred Securities (the "Trust Preferred Securities"). Pioneer-Standard Financial Trust, a statutory business trust, is a wholly-owned consolidated subsidiary of the Company, with its sole asset being $148.2 million aggregate principal amount of 6 3/4 percent Junior Convertible Subordinated Debentures due March 31, 2028 of Pioneer-Standard Electronics, Inc. (the "Trust Debenture"). The Company has executed a guarantee with regard to the trust preferred securities. The guarantee, when taken together with the Company's obligations under the trust debenture, the indenture pursuant to which the trust debenture was issued and the applicable trust document, provides a full and unconditional guarantee of the trust's obligations under the trust preferred securities. 7 8 PIONEER-STANDARD ELECTRONICS, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 1998 COMPARED WITH THE THREE MONTHS ENDED DECEMBER 31, 1997 Net sales for the three-month period ended December 31, 1998 of $596.0 million increased 41% over the prior year three-month period of $424.1 million. The increase was primarily attributable to higher sales volume of computer systems products resulting from the acquisition of Dickens Data Systems, Inc. ("Dickens") on March 31, 1998. Semiconductor products also contributed to the increase in sales. Including sales of Dickens with the comparable prior year quarter on a pro forma basis, sales increased 9% over the prior year quarter. Semiconductor products accounted for 30% of the Company's sales in the current quarter, compared with 36% a year ago. Computer systems products represented 56% of sales in 1998 versus 43% last year. Interconnect, passive and electromechanical products were 13% of the Company's sales in 1998 versus 19% in 1997. Miscellaneous products accounted for 1% of sales in 1998 and 2% a year earlier. Cost of goods sold increased 45% compared to the prior year quarter, resulting in a gross margin of 15.5% in the current quarter compared with 17.9% a year ago. The primary factors contributing to the decrease in the gross margin percent were the industry excess semiconductor supply versus demand conditions adversely impacting average selling prices and the increased percentage of computer systems sales with lower gross margins. Warehouse, selling and administrative expenses were $68.7 million compared to $56.3 million incurred during the prior year three-month period. This resulted in a ratio of these expenses to sales of 11.5% for the current quarter compared with 13.3% a year ago. The reduction in the ratio of these expenses is primarily due to the shift in product mix with computer system sales constituting a larger percentage of total sales which are accompanied with a lower ratio of selling expenses, and ongoing cost containment programs. The operating profit resulting from the activity described above of $23.7 million, or 4.0% of sales in the current period, was up 22% compared with $19.5 million, or 4.6% of sales a year ago. Interest expense was $5.9 million in the current quarter compared with $5.5 million a year ago. The increased interest expense is primarily attributable to the additional debt to fund working capital and capital expenditure requirements necessary to support the ongoing growth needs of the business as well as the effect of the acquisition of Dickens. 8 9 The effective tax rate for the current year three-month period was 39.0% compared with 39.6% for the same period a year ago. The tax rate decrease was primarily due to lower effective state tax rates. Distributions on mandatorily redeemable convertible trust preferred securities (the "Preferred Securities"), net of tax, were $1.5 million for the current year three-month period. Primarily as a result of the factors noted above, the Company's net income for the three-month period ending December 31, 1998 increased 12% to $9.4 million from $8.4 million earned in the prior year. NINE MONTHS ENDED DECEMBER 31, 1998 COMPARED WITH THE NINE MONTHS ENDED DECEMBER 31, 1997 Net sales for the nine-month period ended December 31, 1998 of $1,699.8 million were 36% greater than sales of the prior year nine-month period of $1,251.7 million. The increase was primarily attributable to higher sales volume of computer systems products resulting from the acquisition of Dickens. Semiconductor products and interconnect, passive and electromechanical products also contributed to the increase in sales. Including sales of Dickens with the comparable prior year nine-month results on a pro forma basis, sales increased 11% over the prior nine-month period. During the first nine months of 1998, semiconductor products accounted for 31% of the Company's sales compared with 35% in the prior year. Computer systems products accounted for 54% of the Company's sales in 1998 and 45% in 1997. Passive and electromechanical products accounted for 14% of the Company's sales in 1998 and 18% in 1997. Miscellaneous products accounted for 1% of sales in 1998 and 2% a year earlier. The percentage increase in cost of goods sold of 39% resulted in a gross margin of 15.6% in the first nine months of the current year compared with 17.5% a year ago. The primary factors contributing to the decrease in the gross margin percent were the industry excess semiconductor supply versus demand conditions adversely impacting average selling prices and the increased percentage of computer systems sales with lower gross margins. Warehouse, selling and administrative expenses of $203.5 million increased by 24% as compared with the $164.3 million incurred during the prior year nine-month period. This resulted in a ratio of these expenses to sales of 12.0% for the current nine months compared with 13.1% a year ago. The reduction in the ratios reflects primarily the lower ratio of selling expenses associated with computer system sales and the Company's efforts to reduce operating costs as a percentage of sales. The operating profit resulting from the activity described above of $60.9 million in 1998 or 3.6% of sales increased 11% compared with $54.6 million or 4.4% of sales a year ago. Interest expense was $19.1 million in the current nine-month period compared with $14.8 million a year ago. The increased interest expense is primarily attributable to the additional debt to fund working capital and capital expenditure requirements necessary to support the ongoing growth needs of the business as well as the effect of the acquisition of Dickens. 9 10 The effective tax rate for the current nine-month period was 38.5% compared with 41.8% a year ago. The tax rate decrease was primarily due to the utilization of the operating loss carryforward of the Canadian subsidiary and lower effective state tax rates. Distributions on the Preferred Securities, net of tax, were $4.4 million for the current nine-month period. Primarily as a result of the factors noted above, the Company's net income for the nine-month period ending December 31, 1998 of $21.4 million was $1.8 million less than the $23.2 million earned a year ago. FINANCIAL CONDITION Current assets including cash decreased by $4.9 million and current liabilities increased by $51.8 million during the nine-month period ended December 31, 1998, resulting in a decrease of $56.7 million in working capital. Despite increased sales over the second fiscal quarter, improvement in both inventory turnover and customer collections on account resulted in reduced working capital needs. In addition, the increase in current liabilities is primarily attributable to payment timing differences in accounts payable. The current ratio was 2.4:1 at December 31, 1998 and 2.9:1 at year-end March 31, 1998. In April 1998, the Company purchased a minority equity interest in Eurodis Electron PLC ("Eurodis"), a pan-European distributor of electronic components. This purchase furthers the Company's growth strategy by offering it access to what management believes is a very broad industrial electronic components market, as well as one of the world's largest telecommunication markets. Headquartered near London, Eurodis employs 1,100 people in 13 countries and has operating centers in the United Kingdom, Austria, the Netherlands, Belgium, France, Germany, Italy, Switzerland and Eastern Europe. In April 1998, the Company issued an additional $18.7 million of Preferred Securities upon exercise of an overallotment option in connection with an offering by the Company in March 1998 of $125 million of Preferred Securities. Effective December 1, 1998, the Company entered into two interest rate swap agreements for notional amounts aggregating $50 million for purposes of reducing the impact of increases in interest rates on its outstanding floating rate bank credit borrowings. A two-year swap for a notional amount of $25 million provides for the Company to pay interest at a fixed rate of 5.155% and a three-year swap for a notional amount of $25 million provides for payment of interest at a fixed rate of 5.34%. Under the swap agreements, the Company receives interest payments on the notional amounts at a floating rate based on three-month LIBOR (London Interbank Offered Rate). These swaps have the effect of converting the floating rate of interest being paid on bank credit borrowings into fixed rates of interest. These swap agreements, coupled with a similar five-year swap for a notional amount of $20 million entered into in June 1995 providing for payment of a fixed rate of interest of 6.05%, brings the total amount of floating rate debt protected for interest rate fluctuations to $70 million. As of December 31, 1998, the Company has $100 million aggregate amount of floating rate bank credit borrowings outstanding. 10 11 During the first nine months of the current year, total interest-bearing debt decreased by $83.0 million. The decrease in debt is primarily attributable to the decrease in working capital for the reasons noted above and application of proceeds of the April 1998 sale of Preferred Securities. The ratio of interest-bearing debt to capitalization was 39% at December 31, 1998 compared with 48% at March 31, 1998. Management estimates that capital expenditures for the fiscal year 1999 will be approximately $20 million. Capital expenditures in the first nine months of the current year were $14.0 million. Under present business conditions, it is anticipated that funds from current operations and available credit facilities will be sufficient to finance both capital spending and working capital needs for the balance of the current fiscal year. YEAR 2000 READINESS DISCLOSURE The Year 2000 Problem - software, hardware or an embedded chip that does not correctly process date information for years after 1999 - results from the practice of storing date information with only the last two digits of the year. The Company began to address Year 2000 issues in 1996. Since 1997, the Company has employed internal and external resources to assist it in identifying, remediating and testing Year 2000 problems. The Company has also assembled a multi-departmental Year 2000 task force to coordinate and facilitate its Year 2000 efforts and provide regular updates to the board of directors. The scope of the Year 2000 readiness effort includes the Company's internal information technology ("IT") systems, such as hardware and software; non-IT systems with date-sensitive characteristics; the status of key third parties, including suppliers, service providers, and customers. The Company's major IT applications are currently Year 2000 ready. Remediation and testing of the balance of the IT systems are expected to be completed by July 1999. The Company is in the early stages of analyzing the readiness of non-IT systems and anticipates that remediation and testing of any non-compliant systems will be completed by October 1999. The Company also has taken initial steps to determine the compliance of key third parties and expects that it will have received and reviewed responses from the majority of such parties by October 1999. Although the Company expects to meet the target dates for completion of remediation and testing and for determining the status of key third parties, the task force is simultaneously developing contingency plans should the programs not be completed when anticipated or should the third parties not be ready on a timely basis. Currently, the Year 2000 readiness program is on schedule. The Company has not become aware of any third party non-compliance not in the process of remediation that might result in a major disruption. Costs of the initiative to date approximate $1.6 million. It is anticipated that an additional $2.2 million will be incurred to complete the program. Substantially all of these outlays are expected to result from remediation of existing systems as opposed to replacing existing systems. Costs of 11 12 the initiative are being funded from operating cash flows. The actual costs of the Company's Year 2000 efforts may vary from current estimates, which are based on information available at that time. At the present time the Company believes that the greatest threat posed to it by the Year 2000 Problem is potential litigation arising out of any failure of products sold or services performed by the Company due to Year 2000 non-compliance. Based on currently available information, the Company is unable to quantify losses, if any, it may incur as a result of any Year 2000 non-compliant products or services sold by it, and cannot provide any assurance that such losses may not be material. The Company believes that its exposure to liability resulting from the malfunction of Year 2000 non-compliant products is mitigated in substantial part by manufacturers' warranties that are passed through to the customer. Regardless of whether the Company is ultimately held liable for any customer's losses, the costs of defending customer lawsuits could have a material adverse effect on the Company's business, results of operations and financial condition, depending on the number and nature of such actions. Due to the uncertain number and nature of such lawsuits, the Company is unable to estimate its potential litigation expenses resulting from any Year 2000 non-compliance of products or services sold by it. Although the Company believes that it is taking appropriate precautions against disruption of its systems due to the Year 2000 issue, there can be no assurance that the Company will identify all Year 2000 problems in advance of their occurrence, or that the Company will be able to successfully remedy all problems that are discovered. Furthermore, there can be no assurance that the Company's third party relationships will not be adversely affected by Year 2000 issues. The Company is in the process of developing contingency plans to address the potential effects of problems arising from Year 2000 non-compliance. While the Company does not anticipate that costs of Year 2000 disruptions will have a material adverse effect, Year 2000 disruptions, arising either from within the Company or through third party relationships, could have a material adverse effect on the Company's business, operating results and financial condition. Portions of this report contain current management expectations which may constitute forward-looking information. The Company's performance may differ materially from that contemplated by such statements for a variety of reasons, including, but not limited to: competition, dependence on the computer market, cyclical nature of semiconductor market, inventory obsolescence and technology changes, dependence on key suppliers, effects of industry consolidation, risks and uncertainties involving acquisitions, instability in world financial markets, downward pressure on gross margins and management of growth of the business. 12 13 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Number Description ------ ----------- 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed. 13 14 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: February 12, 1999 /s/ James L. Bayman --------------------------- --------------------------- James L. Bayman Chairman and CEO Date: February 12, 1999 /s/ John V. Goodger ---------------------------- ----------------------------- John V. Goodger Vice President & Treasurer 14 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS MAR-31-1998 DEC-31-1998 18,967 0 340,739 11,193 337,629 695,745 155,830 69,183 961,488 291,002 396,971 0 0 9,258 253,247 961,488 1,699,813 1,699,813 1,435,389 1,435,389 203,511 0 19,111 41,802 16,073 21,351 0 0 0 21,351 .81 .72
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