-----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, IsAbpoYIigK9XcnGSIGViXeMNbmS6vIqMy0565I98uYDAQ7495mpz1UBy3dMV6ZB p/NOWGL5VYv3ZaemkSKxyg== 0000790703-96-000017.txt : 19961216 0000790703-96-000017.hdr.sgml : 19961216 ACCESSION NUMBER: 0000790703-96-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961213 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: 96680471 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 10-Q FOR THE PERIOD ENDED 10/31/96 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, 1996 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 29, 1996 - ---------------------------------------- ------------------ Common stock, par value $.0015 per share 43,238,422 TECH DATA CORPORATION AND SUBSIDIARIES -------------------------------------- Form 10-Q For The Quarter Ended October 31, 1996 ------------------------------------------------ INDEX ----- PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Balance Sheet as of October 31, 1996 (unaudited) and January 31, 1996 3 Consolidated Statement of Income (unaudited) for the three and nine months ended October 31, 1996 and 1995 4 Consolidated Statement of Cash Flows (unaudited) for the nine months ended October 31, 1996 and 1995 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, 1996. SIGNATURES 10 2 TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands, except share amounts)
October 31, January 31, 1996 1996 ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,826 $ 1,154 Accounts receivable, less allowance for doubtful accounts of $24,580 and $22,669 590,152 445,202 Inventories 641,203 465,422 Prepaid and other assets 56,112 39,010 ------------ ----------- Total current assets 1,291,293 950,788 Property and equipment, net 62,997 61,610 Excess of cost over acquired net assets, net 6,119 6,376 Other assets, net 24,016 25,105 ------------ ----------- $1,384,425 $1,043,879 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Revolving credit loans $ 339,585 $ 283,100 Current portion of long-term debt 231 519 Accounts payable 579,484 433,374 Accrued expenses 37,230 32,091 ------------ ----------- Total current liabilities 956,530 749,084 Long-term debt 8,947 9,097 ------------ ----------- 965,477 758,181 ------------ ----------- 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; 43,200,360 and 37,930,655 issued and outstanding 65 57 Additional paid-in capital 224,798 130,045 Retained earnings 192,502 153,310 Cumulative translation adjustment 1,578 2,281 ------------ ----------- Total shareholders' equity 418,948 285,698 ------------ ----------- $1,384,425 $1,043,879 ============ ===========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements 3 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, ------------------------------- ------------------------------ 1996 1995 1996 1995 ------------ ------------ ------------ ------------ Net sales $1,236,650 $843,286 $3,285,452 $2,185,582 ------------ ------------ ------------ ------------ Cost and expenses: Cost of products sold 1,150,695 784,601 3,056,183 2,030,568 Selling, general and administrative expenses 54,023 42,179 149,632 119,697 ------------ ------------ ------------ ------------ 1,204,718 826,780 3,205,815 2,150,265 ------------ ------------ ------------ ------------ Operating profit 31,932 16,506 79,637 35,317 Interest expense 4,409 4,825 15,211 14,829 ------------ ------------ ------------ ------------ Income before income taxes 27,523 11,681 64,426 20,488 Provision for income taxes 10,775 4,639 25,234 8,149 ------------ ----------- Net income $ 16,748 $ 7,042 $ 39,192 $ 12,339 ============ ============ ============ ============ Net income per common share $ .38 $ .18 $ .95 $ .32 ============ ============ ============ ============ Weighted average common shares outstanding 44,641 38,171 41,046 38,068 ============ ============ ============ =============
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements 4 TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In thousands)
Nine months ended October 31, ------------------------------- 1996 1995 ------------ ------------ Cash flows from operating activities: Cash received from customers $3,125,968 $2,066,067 Cash paid to suppliers and employees (3,215,839) (1,989,032) Interest paid (15,197) (14,957) Income taxes paid (29,521) (4,080) ------------ ----------- Net cash (used in) provided by operating activities (134,589) 57,998 ------------ ----------- Cash flows from investing activities: Capital expenditures (13,547) (21,047) ------------ ----------- Cash flows from financing activities: Proceeds from issuance of common stock 94,761 1,304 Net borrowings (repayments) under revolving credit loan 56,485 (37,413) Principal payments on long-term debt (438) (464) ------------ ----------- Net cash provided by (used in) financing activities 150,808 (36,573) ------------ ----------- Net increase in cash and cash equivalents 2,672 378 Cash and cash equivalents at beginning of period 1,154 496 ------------ ----------- Cash and cash equivalents at end of period $ 3,826 $ 874 ============ =========== Reconciliation of net income to net cash provided by (used in) operating activities: Net income $ 39,192 $ 12,339 ------------ ----------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 14,451 12,467 Provision for losses on accounts receivable 14,534 12,979 (Increase) decrease in assets: Accounts receivable (159,484) (119,515) Inventories (175,781) (14,438) Prepaid and other assets (18,750) (2,558) Increase (decrease) in liabilities: Accounts payable 146,110 150,533 Accrued expenses 5,139 6,191 ------------ ----------- Total adjustments (173,781) 45,659 ------------ ----------- Net cash (used in) provided by operating activities $ (134,589) $ 57,998 ============ ===========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 5 TECH DATA CORPORATION AND SUBSIDIARIES -------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ 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, 1996, and the results of their operations and cash flows for the three and nine months ended October 31, 1996 and 1995. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the nine months ended October 31, 1996 are not necessarily indicative of the results that can be expected for the entire fiscal year ending January 31, 1997. 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. 6 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, 1996 and 1995 - -------------------------------------------- Net sales increased 46.6% to $1.24 billion in the third quarter of fiscal 1997 compared to $843.3 million in the third quarter last year. This 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 domestic market share. Adjusting for the effect of sales attributable to the launch of Microsoft Windows 95 in the third quarter of last year, year-over-year sales growth was 52.3%. The Company's domestic sales increased 50% while international business advanced 25% in the third quarter of fiscal 1997 compared to the prior year third quarter and adjusting for the effect of the Windows 95 sales, these growth rates were 54% and 36%, respectively. The cost of products sold as a percentage of net sales was 93.0% in the third quarter of fiscal 1997, consistent with the prior year. This stability is the result of moderation in competitive market conditions combined with the Company's efforts to control other product costs such as freight. Selling, general and administrative expenses increased 28.1% to $54.0 million in the third quarter of fiscal 1997 compared to $42.2 million last year and as a percentage of net sales declined to 4.37%, 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 operating expenses needed to support the increased volume of business. As a result of the factors described above, operating profit increased 93.5% to $31.9 million, or 2.6% of net sales, in the third quarter of fiscal 1997, compared to $16.5 million, or 2.0% of net sales for the third quarter last year. Interest expense decreased in the third quarter of fiscal 1997 due to a decrease in the average interest rate charged on the Company's floating interest rate indebtedness, partially offset by an increase in the average outstanding amount of such indebtedness. As a result of the factors described above, net income increased 137.8% to $16.7 million, or $.38 per share, in the third quarter of fiscal 1997 compared to $7.0 million, or $.18 per share, in the prior year comparable quarter. 7 Nine Months Ended October 31, 1996 and 1995 - ------------------------------------------- Net sales increased 50.3% to $3.29 billion in the first nine months of fiscal 1997 compared to $2.19 billion in the same period last year. Net income for the nine month period this year was $39.2 million, or $.95 per share, up 218% from the $12.3 million, or $.32 per share, in the same period last year. (The underlying reasons for the fluctuations in the results of operations for the nine months ended October 31, 1997 are substantially the same as in the comparative quarterly discussion above and, therefore, will not be repeated here). Liquidity and Capital Resources - ------------------------------- Net cash used in operating activities of $134.6 million during the first nine months of fiscal 1997 was primarily attributable growth in sales and the resulting increase in accounts receivable. Net cash used in investing activities of $13.5 million during the first nine months of fiscal 1997 was a result of the Company making capital expenditures to expand its management information systems, office facilities and distribution centers. The Company expects to make capital expenditures of approximately $25 million during fiscal 1997 for computer systems development and to further expand its office facilities and distribution centers. Net cash provided by financing activities of $150.8 million during the first nine months of fiscal 1997 reflects the net proceeds of $83.4 million from the Company's July 1996 offering of 4.6 million shares of common stock combined with additional borrowings under the Company's revolving loans of $56.5 million and proceeds from stock option exercises of $11.4 million. 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 1998. Asset Management - ---------------- The Company manages its inventories by maintaining sufficient quantities to achieve high order fill rates while attempting to stock only those products in high demand with a rapid turnover rate. Inventory balances fluctuate as the Company adds new product lines and when appropriate, makes large purchases, including cash purchases from manufacturers and publishers when the terms of such purchases are considered advantageous. The Company's contracts with most of its vendors provide price protection and stock rotation privileges to reduce the risk of loss due to manufacturer price reductions and slow moving or obsolete inventory. In the event of a vendor price reduction, the Company generally receives a credit for the impact on products in inventory. In addition, the Company has the right to rotate a certain percentage of purchases, subject to certain limitations. Historically, price protection and stock rotation privileges, as well as the Company's inventory management procedures have helped to reduce the risk of loss of carrying inventory. 8 The Company attempts to control losses on credit sales by closely monitoring customers' creditworthiness through its computer system which contains detailed information on each customer's payment history and other relevant information. In addition, the Company participates in a national credit association which exchanges credit information on mutual customers. The Company also maintains credit insurance which insures a percentage of the credit extended by the Company to certain of its larger domestic and international customers against possible loss. 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. Comments on Forward-Looking Information - --------------------------------------- In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company filed a Form 8-K with the Securities Exchange Commission on March 26, 1996 outlining cautionary statements and identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. Such forward-looking statements, as made within Items 1 and 7 of this Form 10-Q, should be considered in conjunction with the information included within the Form 8-K. 9 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, 1996 - --------------------- Directors and Chief Steven A. Raymund Executive Officer /s/ Jeffery P. Howells Senior Vice President of Finance December 12, 1996 - ---------------------- and Chief Financial Officer Jeffery P. Howells (principal financial officer) /s/ Joseph B. Trepani Vice President and Worldwide December 12, 1996 - --------------------- Controller (principal accounting Joseph B. Trepani officer) 10 INDEX TO EXHIBITS ----------------- EXHIBIT NO. DESCRIPTION - ------- ----------------- 27 Financial Data Schedule for the Period Ended 10/31/96 (for SEC Use Only) EX-27 2 TECH DATA CORP FDS FOR THE PERIOD ENDED 10/31/96
5 This schedule contains summary financial information extracted from the financial statements of Tech Data Corporation for the period ended October 31, 1996 and is qualified in its entirety by reference to such financial statements 1,000 9-mos JAN-31-1997 FEB-01-1996 OCT-31-1996 3,826 0 614,732 24,580 641,203 1,291,293 62,997 0 1,384,425 956,530 0 0 5 65 418,878 1,384,425 3,285,452 3,285,452 3,056,183 3,205,815 0 0 15,211 64,426 25,234 39,192 0 0 0 39,192 .95 .95
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