-----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, MjPUWR/CYpujMde8W7S7qqp4EF0yZ/FDK9Fhu/I2uHp3t/WZQ5a+b9wzlLo0hs+P /1jChCMyO/59lC2HDkjz4g== 0000790703-97-000007.txt : 19970613 0000790703-97-000007.hdr.sgml : 19970613 ACCESSION NUMBER: 0000790703-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970612 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: 97622947 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 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 April 30, 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 0-14625 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 May 31, 1997 - --------------------------------------- ------------------ Common stock, par value $.0015 per share 43,451,924 TECH DATA CORPORATION AND SUBSIDIARIES Form 10-Q For The Quarter Ended April 30, 1997 INDEX PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Balance Sheet as of April 30, 1997 (unaudited) and January 31, 1997 3 Consolidated Statement of Income (unaudited) for the three months ended April 30, 1997 and 1996 4 Consolidated Statement of Cash Flows (unaudited) for the three months ended April 30, 1997 and 1996 5 Notes to Consolidated Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 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 April 30, 1997. SIGNATURES 9 2
TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands, except share amounts) April 30, January 31, 1997 1997 ---------- ----------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 1,381 $ 661 Accounts receivable, less allowance of $25,969 and $23,922 626,524 633,579 Inventories 671,083 759,974 Prepaid and other assets 44,982 55,796 ---------- ---------- Total current assets 1,343,970 1,450,010 Property and equipment, net 66,327 65,597 Excess of cost over acquired net assets, net 5,808 5,922 Other assets, net 23,120 23,765 ---------- ---------- $1,439,225 $1,545,294 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Revolving credit loans $ 325,657 $ 396,391 Current portion of long-term debt 204 201 Accounts payable 595,243 658,732 Accrued expenses 51,512 42,693 ---------- ---------- Total current liabilities 972,616 1,098,017 Long-term debt 8,844 8,896 ---------- ---------- 981,460 1,106,913 ---------- ---------- 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; 43,414,118 and 43,291,423 issued and outstanding 65 65 Additional paid-in capital 229,403 226,577 Retained earnings 228,505 210,283 Cumulative translation adjustment (213) 1,451 ---------- ---------- Total shareholders' equity 457,765 438,381 ---------- ---------- $1,439,225 $1,545,294 ========== ==========
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 April 30, ------------------------- 1997 1996 ---------- -------- Net sales $1,370,146 $985,574 ---------- -------- Cost and expenses: Cost of products sold 1,274,969 916,562 Selling, general and administrative expenses 59,484 46,285 ---------- -------- 1,334,453 962,847 ---------- -------- Operating profit 35,693 22,727 Interest expense 6,526 5,523 ---------- -------- Income before income taxes 29,167 17,204 Provision for income taxes 10,945 6,776 ---------- -------- Net income $ 18,222 $ 10,428 ========== ======== Net income per common share $ .41 $ .27 ========== ======== Weighted average common shares outstanding 44,663 38,589 ========== ========
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) Three months ended April 30, ------------------------- 1997 1996 ---------- -------- Cash flows from operating activities: Cash received from customers $1,372,286 $939,927 Cash paid to suppliers and employees (1,288,899) (947,485) Interest paid (6,889) (5,358) Income taxes paid (2,352) (6,550) ---------- -------- Net cash provided by (used in) operating activities 74,146 (19,466) ---------- -------- Cash flows from investing activities: Capital expenditures (5,469) (2,213) ---------- -------- Cash flows from financing activities: Proceeds from issuance of common stock 2,826 4,362 Net (repayments) borrowings under revolving credit loans (70,734) 17,227 Principal payments on long-term debt (49) (145) ---------- --------- Net cash (used in) provided by financing activities (67,957) 21,444 ---------- --------- Net increase (decrease) in cash and cash equivalents 720 (235) Cash and cash equivalents at beginning of period 661 1,154 ---------- --------- Cash and cash equivalents at end of period $ 1,381 $ 919 ========== ========= Reconciliation of net income to net cash provided by (used in) operating activities: Net income $ 18,222 $ 10,428 ---------- --------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 5,607 4,696 Provision for losses on accounts receivable 4,915 4,552 (Increase) decrease in assets Accounts receivable 2,140 (45,647) Inventories 88,891 34,727 Prepaid and other assets 9,041 3,857 Increase (decrease) in liabilities: Accounts payable (63,489) (33,147) Accrued expenses 8,819 1,068 ---------- --------- Total adjustments 55,924 (29,894) ---------- --------- Net cash provided by (used in) operating activities $ 74,146 $ (19,466) ========== =========
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 April 30, 1997 and the results of their operations and cash flows for the three months ended April 30, 1997 and 1996. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three months ended April 30, 1997 are not necessarily indicative of the results that can be expected for the entire fiscal year ending January 31, 1998. Proposed acquisition - -------------------- In April 1997, the Company entered into an agreement to acquire 75% of the outstanding voting common stock of Macrotron AG, a publicly-held German distributor of personal computer products based in Munich, Germany. The closing of the transaction is subject to completion of due diligence and is expected to be completed by July 31, 1997. In Macrotron's most recent fiscal year ended September 30, 1996, the company reported sales and net income of DM1.3 billion ($905 million) and DM7.8 million ($5.3 million), respectively. 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. Fully diluted and primary earnings per share are the same amounts for each of the periods presented. 6 TECH DATA CORPORATION AND SUBSIDIARIES -------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ Results of Operations - --------------------- Three Months Ended April 30, 1997 and 1996 - ------------------------------------------ Net sales increased 39.0% to $1.37 billion in the first quarter of fiscal 1998 compared to $986 million in the first 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 market share. The Company's U.S. and international sales grew 41% and 30%, respectively, in the first quarter of fiscal 1998 compared to the prior year first quarter. International sales were approximately 13% of fiscal 1998 first quarter net sales compared to 14% for the first quarter last year. The cost of products sold as a percentage of net sales increased to 93.1% in the first quarter of fiscal 1998 from 93.0% in the prior year. This increase is a result of competitive market prices and the Company's strategy of lowering selling prices in order to gain market share and to pass on the benefit of operating efficiencies to its customers. Selling, general and administrative expenses increased by 28.5% to $59.5 million in the first quarter of fiscal 1998 compared to $46.3 million in the prior year and decreased as a percentage of net sales to 4.34% in the first quarter of fiscal 1998 compared to 4.70% in the first quarter last year. This decline in selling, general and administrative expenses as a percentage of net sales in the first quarter of fiscal 1998 is attributable to greater economies of scale the Company realized in addition to improved operating efficiencies. The dollar value increase in selling, general and administrative expenses is primarily a result of expanded employment and increases in other administrative expenses needed to support the increased volume of business. As a result of the factors discussed above, operating profit increased 57.1% to $35.7 million, or 2.6% of net sales, in the first quarter of fiscal 1998 compared to $22.7 million, or 2.3% of net sales for the first quarter last year. Interest expense increased in the first quarter of fiscal 1998 due to an increase in the Company's average outstanding indebtedness, partially offset by decreases in short-term interest rates on the Company's floating rate indebtedness. As a result of the factors discussed above, net income increased 74.7% to $18.2 million, or $.41 per share, in the first quarter of fiscal 1998 compared to $10.4 million, or $.27 per share, in the prior year comparable quarter. Liquidity and Capital Resources - ------------------------------- Net cash provided by operating activities of $74.1 million during the first quarter of fiscal 1998 was primarily attributable to reductions in accounts receivable and inventories. 7 Net cash used in investing activities of $5.5 million during the first quarter of fiscal 1998 was a result of the Company making capital expenditures to expand its management information system capability, office facilities and distribution centers. The Company expects to make capital expenditures of approximately $50 million during fiscal 1998 to further expand its management information system capability, office facilities and distribution centers. Net cash used in financing activities of $68.0 million during the first quarter of fiscal 1998 was primarily used to reduce borrowings under the Company's revolving credit loans. As of April 30, 1997, the Company had total available credit loans of approximately $625 million (including the $325 million Receivables Securitization Program), of which approximately $325 million was outstanding. 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 during 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. 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 has recently obtained domestic credit insurance which insures a percentage of the credit extended by the Company to certain of its larger customers against possible loss. Customers who qualify for credit terms are typically granted net 30-day payment terms. The Company also sells products on a prepay, credit card, cash on delivery and floorplan 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 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 this Form 10-Q, should be considered in conjunction with the information included within the Form 8-K. 8 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 June 10, 1997 - --------------------- Directors; Chief Executive Officer Steven A. Raymund (principal executive officer) /s/ Jeffery P. Howells Executive Vice President of Finance June 10, 1997 - ---------------------- and Chief Financial Officer; Jeffery P. Howells (principal financial officer) /s/ Joseph B. Trepani Vice President and Worldwide June 10, 1997 - --------------------- Controller; (principal accounting officer) Joseph B. Trepani 9 EX-27 2 FDS FOR THE QUARTER ENDED APRIL 30, 1997
5 This schedule contains summary financial information extracted from the financial statements of Tech Data Corporation for the period ended April 30, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS JAN-31-1998 FEB-01-1997 APR-30-1997 1,381 0 652,493 25,969 671,083 1,343,970 66,327 0 1,439,225 972,616 8,844 0 5 65 457,695 1,439,225 1,370,146 1,370,146 1,274,969 1,334,453 59,484 0 6,526 29,167 10,945 18,222 0 0 0 18,222 .41 .41
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