-----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, L9pstlSyNe2rcpB57HDw/+Vwe8f0SdJP4ujrZK7pbc+vMoE0p59oRuXmt+83JHML 3bQPD4YHHBlSY05kTvjxqQ== 0000790703-95-000009.txt : 19951213 0000790703-95-000009.hdr.sgml : 19951213 ACCESSION NUMBER: 0000790703-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECH DATA CORP CENTRAL INDEX KEY: 0000790703 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 591578329 STATE OF INCORPORATION: FL FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14625 FILM NUMBER: 95601023 BUSINESS ADDRESS: STREET 1: 5350 TECH DATA DR CITY: CLEARWATER STATE: FL ZIP: 34620 BUSINESS PHONE: 8135397429 MAIL ADDRESS: STREET 1: 5350 TECH DATA DRIVE CITY: CLEARWATER STATE: FL ZIP: 34620 10-Q 1 TECH DATA CORP FORM 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended October 31, 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 0-14625 ------- TECH DATA CORPORATION ------------------------------------------- (Exact name of registrant as specified in its charter) Florida No. 59-1578329 --------------------------- ---------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 5350 Tech Data Drive, Clearwater, Florida 34620 - ------------------------------------------ --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(813) 539-7429 -------------- 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 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 stock, as of the latest practicable date. Outstanding at CLASS November 30, 1995 - -------------------------------- ----------------- Common stock, par value $.0015 per share 37,901,495 2 TECH DATA CORPORATION AND SUBSIDIARIES Form 10-Q For The Quarter Ended October 31, 1995 ------------------------------------------------ INDEX ----- PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Balance Sheet as of October 31, 1995 (unaudited) and January 31, 1995 3 Consolidated Statement of Income (unaudited) for the three and nine months ended October 31, 1995 and 1994 4 Consolidated Statement of Cash Flows (unaudited) for the nine months ended October 31, 1995 and 1994 5 Notes to Consolidated Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II. OTHER INFORMATION All items required in Part II have been previously filed, have been included in Part I of this report or are not applicable for the quarter ended October 31, 1995. SIGNATURES 10 3 TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands, except share amounts)
October 31, January 31, 1995 1995 ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 874 $ 496 Accounts receivable, less allowance for doubtful accounts of $23,201 and $16,580 416,382 309,846 Inventories 378,969 364,531 Prepaid and other assets 26,030 21,850 -------- -------- Total current assets 822,255 696,723 Property and equipment, net 63,143 51,042 Excess of cost over acquired net assets, net 9,549 10,061 Other assets, net 23,242 26,603 -------- -------- $918,189 $784,429 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Revolving credit loans $267,371 $304,784 Current portion of long-term debt 549 542 Accounts payable 344,746 194,213 Accrued expenses 20,573 14,382 -------- -------- Total current liabilities 633,239 513,921 Long-term debt 9,211 9,682 -------- -------- 642,450 523,603 -------- -------- Commitments and contingencies Shareholders' equity: Preferred stock, par value $.02; 226,500 shares authorized and issued; liquidation preference $.20 per share 5 5 Common stock, par value $.0015; 100,000,000 shares authorized; 37,866,489 and 37,807,794 issued and outstanding 57 57 Additional paid-in capital 129,251 127,947 Retained earnings 144,108 131,769 Cumulative translation adjustment 2,318 1,048 -------- -------- Total shareholders' equity 275,739 260,826 -------- -------- $918,189 $784,429 ======== ========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 4 TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In thousands, except per share amounts)
Three months ended Nine months ended October 31, October 31, ------------------ ---------------------- 1995 1994 1995 1994 -------- -------- ---------- ---------- Net sales $843,286 $658,341 $2,185,582 $1,758,465 -------- -------- ---------- ---------- Cost and expenses: Cost of products sold 784,601 604,526 2,030,568 1,611,715 Selling, general and administrative expenses 42,179 33,068 119,697 89,764 -------- -------- ---------- ---------- 826,780 637,594 2,150,265 1,701,479 -------- -------- ---------- ---------- Operating profit 16,506 20,747 35,317 56,986 Interest expense 4,825 3,600 14,829 8,799 -------- -------- ---------- ---------- Income before income taxes 11,681 17,147 20,488 48,187 Provision for income taxes 4,639 6,852 8,149 19,064 -------- -------- ---------- ---------- Net income $ 7,042 $ 10,295 $ 12,339 $ 29,123 ======== ======== ========== ========== Net income per common share $ .18 $ .27 $ .32 $ .76 ======== ======== ========== ========== Weighted average common shares outstanding 38,171 38,300 38,068 38,273 ======== ======== ========== ==========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 5 TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In thousands)
Nine months ended October 31, ---------------------------- 1995 1994 ----------- ----------- Cash flows from operating activities: Cash received from customers $2,066,067 $1,675,280 Cash paid to suppliers and employees (1,989,032) (1,701,307) Interest paid (14,957) (8,721) Income taxes paid (4,080) (22,714) ---------- ---------- Net cash provided by (used in) operating activities 57,998 (57,462) ---------- ---------- Cash flows from investing activities: Capital expenditures (21,047) (29,975) ---------- ---------- Cash flows from financing activities: Proceeds from issuance of common stock 1,304 1,837 Net (repayments) borrowings under revolving credit loan (37,413) 86,836 Principal payments on long-term debt (464) (982) ---------- ---------- Net cash (used in) provided by financing activities (36,573) 87,691 ---------- ---------- Net increase in cash and cash equivalents 378 254 Cash and cash equivalents at beginning of period 496 678 ---------- ---------- Cash and cash equivalents at end of period $ 874 $ 932 ========== ========== Reconciliation of net income to net cash provided by (used in) operating activities: Net income $ 12,339 $ 29,123 ---------- ---------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 12,467 6,203 Provision for losses on accounts receivable 12,979 13,242 (Increase) decrease in assets: Accounts receivable (119,515) (81,988) Inventories (14,438) (82,102) Prepaid and other assets (2,558) 583 Increase (decrease) in liabilities: Accounts payable 150,533 59,445 Accrued expenses 6,191 (1,968) ---------- ---------- Total adjustments 45,659 (86,585) ---------- ---------- Net cash provided by (used in) operating activities $ 57,998 $ (57,462) ========== ==========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 6 TECH DATA CORPORATION AND SUBSIDIARIES -------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (UNAUDITED) ----------- Basis of presentation - --------------------- The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position of Tech Data Corporation and subsidiaries (the "Company") as of October 31, 1995, and the results of their operations and cash flows for the three and nine months ended October 31, 1995 and 1994. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the nine months ended October 31, 1995 are not necessarily indicative of the results that can be expected for the entire fiscal year ending January 31, 1996. Revolving credit loans - ---------------------- In October 1995, the Company renewed and extended its Receivables Securitization Program to December 31, 1996, and increased the amount that may be borrowed under this facility from $200 million to $250 million. With the increase in this facility, combined with the Company's other revolving credit loans, the Company may borrow up to $450 million, of which $267 million was outstanding at October 31, 1995. Net income per common share - --------------------------- Net income per share of common stock is based on the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Primary earnings and fully diluted earnings per share are the same amounts for each of the periods presented. 7 TECH DATA CORPORATION AND SUBSIDIARIES -------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS -------------------------------------- OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ Results of Operations - --------------------- Three Months Ended October 31, 1995 and 1994 - -------------------------------------------- Net sales increased 28.1% to $843.3 million in the third quarter of fiscal 1996 compared to $658.3 million in the third quarter a year ago. Approximately $31 million of this increase is attributable to the sales of Microsofts Windows 95 product which was launched in August. The launch of Windows 95 is a one-time event and is not expected to reoccur in the fourth quarter. The remainder of the increase is attributable to the addition of new product lines and the expansion of existing product lines combined with an increase in the Company's customer base. The rate of growth in third quarter fiscal 1996 sales is lower than the rate of growth in the prior year, although an improvement over first and second quarter fiscal 1996 sales growth of 19.4% and 24.4%, respectively, as the Company continues to recover from the effects of the business interruptions caused by the conversion to a new computer system in December 1994. The Company's international sales grew 56% in the third quarter of fiscal 1996 compared to the prior year third quarter and were approximately 12% of fiscal 1996 third quarter consolidated net sales. The cost of products sold as a percentage of net sales increased to 93.0% in the third quarter of fiscal 1996 from 91.8% in the prior year. This increase is the result of competitive market conditions and to a lesser extent the Company's strategy of lowering selling prices in order to gain market share. Selling, general and administrative expenses increased 27.6% to $42.2 million in the third quarter of fiscal 1996 compared to $33.1 million last year and as a percentage of net sales were 5.0% in the third quarter this year, compared to 5.0% in the third quarter last year. The dollar value increase is primarily the result of expanded employment and increases in other administrative expenses, including expenses associated with the new computer system. As a result of the factors described above, operating profit decreased 20.4% to $16.5 million, or 2.0% of net sales, in the third quarter of fiscal 1996, compared to $20.7 million, or 3.2% of net sales for the third quarter last year. Interest expense increased in the third quarter of fiscal 1996 due to an increase in the Company's average outstanding indebtedness over the prior year comparable period and, to a lesser extent, a higher average interest rate charged on such indebtedness. As a result of the factors described above, net income decreased 31.6% to $7.0 million, or $.18 per share, in the third quarter of fiscal 1996 compared to $10.3 million, or $.27 per share, in the prior year comparable quarter. 8 Nine Months Ended October 31, 1995 and 1994 - -------------------------------------------- Net sales increased 24.3% to $2.19 billion in the first nine months of fiscal 1996 compared to $1.76 billion in the same period last year. Net income decreased 57.6% to $12.3 million, or $.32 per share, in the first nine months of fiscal 1996 compared to $29.1 million, or $.76 per share, in the comparable prior year period. (The underlying reasons for the fluctuations in the results of operations for the nine months ended October 31, 1995 are substantially the same as in the comparative quarterly discussion above and, therefore, will not be repeated here). Liquidity and Capital Resources - ------------------------------- Net cash provided by operating activities of $58.0 million during the first nine months of fiscal 1996 was primarily attributable to the Company's efforts to reduce inventory levels consistent with the lower rate of sales growth. Net cash used in investing activities of $21.0 million during the first nine months of fiscal 1996 was a result of the Company making capital expenditures for computer systems development, expansion of the Company's headquarters facilities and the acquisition of equipment for distribution centers. The Company expects to make capital expenditures of approximately $25 million during fiscal 1996 for computer systems development and to further expand its office facilities and distribution centers. Net cash used in financing activities of $36.6 million during the first nine months of fiscal 1996 reflects the use of cash generated from operating activities (net of capital expenditures) to reduce borrowings under the Company's revolving credit loans. In October 1995, the Company increased the amount that may be borrowed under its Receivables Securitization Program from $200 million to $250 million and extended the maturity date to December 31, 1996. The aforementioned loan modification increased the aggregate amount the Company may borrow to $450 million, of which $267 million was outstanding at October 31, 1995. The Company believes that cash from operations, available and obtainable bank credit lines, and trade credit from its vendors will be sufficient to satisfy its working capital and capital expenditure needs through fiscal 1997. Asset Management - ---------------- The Company manages its inventories by maintaining sufficient quantities to achieve high order fill rates while at the same time attempting to stock only those products in high demand with a rapid turnover rate. Inventory balances will fluctuate as the Company adds new product lines and when appropriate, makes large purchases and cash purchases from manufacturers when the terms of such purchases are considered advantageous. The Company's contracts with most of its vendors provide price protection and stock return privileges to reduce the risk of loss to the Company due to manufacturer price reductions and slow moving or obsolete inventory. In the event of a vendor price reduction, the Company 9 generally receives a credit for products in inventory. In addition, the Company has the right to return a certain percentage of purchases, subject to certain limitations. Historically, price protection and stock return privileges, as well as the Company's inventory management procedures, have helped to reduce the risk of loss of carrying inventory. The Company attempts to control losses on credit sales by closely monitoring customers' creditworthiness through its on-line computer system which contains detailed information on the customer's payment history and other relevant information. In addition, the Company participates in a national credit association which exchanges credit rating information on mutual customers. Customers who qualify for credit terms are typically granted net 30 day payment terms. The Company also sells product on a prepay, credit card or cash on delivery basis. 10 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. TECH DATA CORPORATION --------------------- (Registrant) Signature Title Date - --------- ----- ---- /s/ Steven A. Raymund Chairman of the Board of December 12, 1995 - --------------------- Directors and Chief Steven A. Raymund Executive Officer /s/ Jeffery P. Howells Senior Vice President of December 12, 1995 - ---------------------- Finance and Chief Financial Jeffery P. Howells Officer (principal financial officer) /s/ Joseph B. Trepani Vice President and Worldwide December 12, 1995 - --------------------- Controller (principal Joseph B. Trepani accounting officer) 11 INDEX TO EXHIBITS ----------------- EXHIBIT NO. DESCRIPTION - ------- ----------- 27 Financial Data Schedule (for SEC use only) EX-27 2 TECH DATA CORP FDS
5 This schedule contains summary financial information extracted from the financial statements of Tech Data Corporation for the period ended October 31, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JAN-31-1996 FEB-01-1995 OCT-31-1995 874 0 439,583 23,201 378,969 822,255 63,143 0 918,189 633,239 0 57 0 5 275,677 918,189 2,185,582 2,185,582 2,030,568 2,150,265 0 0 14,829 20,488 8,149 12,339 0 0 0 12,339 .32 .32
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