-----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, HlyT6eOi+3Uuegm8zgsPHsCUSt+Zwvkt2ifDjedkHoXnfRVdUwZpNe/90EtZeQOi X4T0Sz9hlAHZ86fmxfdHRg== /in/edgar/work/0000899243-00-002246/0000899243-00-002246.txt : 20001026 0000899243-00-002246.hdr.sgml : 20001026 ACCESSION NUMBER: 0000899243-00-002246 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001024 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KENT ELECTRONICS CORP CENTRAL INDEX KEY: 0000793024 STANDARD INDUSTRIAL CLASSIFICATION: [5065 ] IRS NUMBER: 741763541 STATE OF INCORPORATION: TX FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09520 FILM NUMBER: 745742 BUSINESS ADDRESS: STREET 1: 1111 GILLINGHAM LN CITY: SUGAR LAND STATE: TX ZIP: 77478 BUSINESS PHONE: 2812434000 MAIL ADDRESS: STREET 1: 1111 GILLINGHAM LN CITY: SUGAR LAND STATE: TX ZIP: 77478 8-K 1 0001.txt FORM 8-K ______________________________________________________________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) OCTOBER 25, 2000 (OCTOBER 24, 2000) KENT ELECTRONICS CORPORATION Exact Name of Registrant as Specified in its Charter TEXAS 0-14643 74-1763541 State of Incorporation or Commission File Number I.R.S. Employer Organization Identification No. 1111 GILLINGHAM LANE SUGAR LAND, TEXAS 77478 Address of Principal Executive Offices (Zip Code) (281) 243-4000 Registrant's telephone number, including area code ______________________________________________________________________________ INFORMATION TO BE INCLUDED IN THE REPORT Item 5. Other Events. On October 24, 2000, Kent Electronics Corporation (the "Company") issued a press release announcing its financial results for the fiscal second quarter and six months ended September 30, 2000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable. (b) Not applicable. (c) Exhibits. The following exhibits are filed as part of this report: 99.1 Press Release issued by Kent Electronics Corporation on October 24, 2000. 2 SIGNATURE 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 hereunto duly authorized. Dated: October 25, 2000 KENT ELECTRONICS CORPORATION By: /s/ Stephen J. Chapko ----------------------------------------- Stephen J. Chapko Executive Vice President and Chief Financial Officer 3 EX-99.1 2 0002.txt PRESS RELEASE EXHIBIT 99.1 [KENT ELECTRONICS LOGO] NEWS RELEASE CONTACT: Kent Electronics Corporation Stephen J. Chapko Executive Vice President & CFO 281-243-4000 Morgen-Walke Associates Robert P. Jones/Theresa Vogt Media: Brian Maddox/Ann Marie Gaschler FOR IMMEDIATE RELEASE 212-850-5600 KENT ELECTRONICS REPORTS YEAR-OVER-YEAR AND SEQUENTIAL REVENUE AND EARNINGS GROWTH FOR THE FISCAL SECOND QUARTER . Reports Second Quarter Diluted Earnings Per Share Of $.32 . Continuing EPS Up 15% Sequentially Houston, Texas, October 24, 2000 - Kent Electronics Corporation (NYSE:KNT) today reported financial results for the fiscal second quarter and six months ended September 30, 2000. ON OCTOBER 10, 2000, KENT ELECTRONICS ANNOUNCED THE SALE OF K*TEC ELECTRONICS, ITS CONTRACT MANUFACTURING DIVISION, TO THAYER-BLUM FUNDING II, L.L.C. FOR $225 MILLION. IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, K*TEC HAS BEEN ACCOUNTED FOR AS A DISCONTINUED OPERATION IN THE SECOND QUARTER ENDED SEPTEMBER 30, 2000 AND ALL PRIOR PERIODS. FOR THE PURPOSES OF THIS RELEASE, KENT ELECTRONICS WILL ANNOUNCE SECOND QUARTER RESULTS INCLUDING AND EXCLUDING K*TEC AS NOTED. FISCAL SECOND QUARTER RESULTS (INCLUDING DISCONTINUED OPERATION) Including K*TEC, Kent Electronics reported net sales of $349.4 million for the 2001 fiscal second quarter, a 48% increase from the $236.1 million reported in the second quarter last year and a 13% sequential increase from the first quarter. Gross profit reached $56.3 million, up 42% from the year-ago period and 4% from the prior quarter. Gross margin was 16.1% compared to 16.8% in last year's second quarter and 17.6% in the first quarter 2001. Operating income was $17.4 million or 5.0% of net sales. This compares to operating income of $7.3 million, or 3.1% of net sales in last year's second quarter, and $15.8 million or 5.1% of net sales in the preceding quarter. Net earnings were $9.6 million, a substantial increase from $3.7 million in the comparable quarter last year and a 9% sequential gain over the $8.8 million earned in the preceding quarter. Earnings per diluted share were $.32, more than double the $.13 reported in the second quarter last year and up 7% from the preceding quarter. FISCAL SECOND QUARTER RESULTS (EXCLUDING DISCONTINUED OPERATION) Net sales for the second quarter, excluding K*TEC, were $231.4 million, and the combined revenues of Kent Components and Kent Datacomm increased 11% on a sequential basis. The Company's two core businesses, networking and specialty component distribution, accounted for approximately 42% and 58% of sales and posted sequential growth of 9% and 12%, respectively. Net sales, excluding K*TEC, but including the revenues from the redistribution assets which were sold on May 23, 2000, were up 4% on a sequential basis. Gross profit for the quarter was up 38% to $48.0 million from $34.8 million in the second quarter last year, and gross margin expanded to 20.7% from 20.1% in the second quarter last year. In the preceding quarter, gross profit was $46.2 million or 20.7% of sales. Operating income more than doubled to $12.8 million from $5.3 million in fiscal 1999's second quarter and increased 16% on a sequential basis. Operating margin was 5.5%, compared to 4.9% in the preceding quarter and 3.1% in the similar year-ago period. Earnings from continuing operations for the second quarter increased to $6.8 million, a 15% sequential gain over the $5.9 million earned in the preceding quarter and significantly above the $2.5 million reported in last year's second quarter. Continuing earnings per share were $.23 compared to $.20 in the preceding quarter and $.09 in the fiscal 2000 second quarter. COMMENTARY ON SECOND QUARTER RESULTS LARRY OLSON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NOTED, "WE BELIEVE THAT SECOND QUARTER RESULTS, EXCLUDING THE CONTRIBUTIONS OF OUR TWO RECENT DIVESTITURES, K*TEC AND THE REDISTRIBUTION ASSETS, ARE A STRONG DEPARTURE POINT FOR KENT. OPERATING LEVERAGE WAS SIGNIFICANT, WITH EARNINGS FROM CONTINUING OPERATIONS UP 15% SEQUENTIALLY, ON AN 11% SEQUENTIAL SALES GAIN, EXCLUDING REVENUES FROM THE REDISTRIBUTION ASSETS. ADDITIONALLY, WE HAVE STRENGTHENED AN ALREADY SOLID BALANCE SHEET. ON A CONTINUING OPERATION BASIS, SECOND QUARTER INVENTORY TURNS INCREASED TO 6.2 TIMES. ON A PRO-FORMA BASIS, REFLECTING THE SALE OF K*TEC, CASH AND CASH EQUIVALENTS APPROXIMATE $250 MILLION, PROVIDING THE COMPANY WITH SUBSTANTIAL RESOURCES TO FUND FUTURE GROWTH." WITH RESPECT TO THE OPERATING ENVIRONMENT, MR. OLSON STATED, "ORDER RATES WERE STRONG FOR OUR COMPONENTS DISTRIBUTION BUSINESS, WHICH CONTINUES TO EXPERIENCE TIGHT SUPPLY IN CERTAIN PRODUCT CATEGORIES. KENT DATACOMM SUCCEEDED IN INCREASING ITS SERVICE REVENUES IN THE SECOND QUARTER AND IN SETTING A NEW RECORD FOR INCOMING ORDERS." FIRST HALF RESULTS (INCLUDING DISCONTINUED OPERATION) Including K*TEC Electronics, Kent had total sales of $657.7 million for the first six months of fiscal 2001, a 49% increase from $441.2 million in last year's six-month period. Gross profit was $110.6 million, up 54% from the prior year, and gross margin was 16.8% compared to 16.3% in last year's first half. Operating income reached $33.2 million, an increase of 196% from the fiscal 2000 first half. Operating margin was 5.0% compared to 2.5% in the similar year-ago period. Net earnings were $18.4 million, or $.62 per diluted share, substantially above the $5.6 million or $.20 per diluted share earned in the comparable period last year. FIRST HALF RESULTS (EXCLUDING DISCONTINUED OPERATION) Net sales for the first half of fiscal 2001, excluding K*TEC, were $454.7 million, a 40% increase from $323.7 million in the comparable period last year. The combined sales of Kent Components and Kent Datacomm grew by approximately 57%. Gross profit for the six-month period grew 43% to $94.2 million from $65.7 million in the same period last year. Gross margin expanded to 20.7% from 20.3% in the first six months of fiscal 2001. Operating income for the period was $23.7 million, more than twice the $10.8 million reported for last year's first half. Earnings from continuing operations for the first six months of fiscal 2001 increased to $12.7 million, or $.43 per diluted share, compared to $5.2 million, or $.18 per diluted share, in the same period in fiscal 2000. 2 OUTLOOK LOOKING AHEAD, MR. OLSON STATED, "KENT'S LEADING MARKET POSITION IN SPECIALTY COMPONENT DISTRIBUTION CONTINUES TO STRENGTHEN AS PRODUCT SHORTAGES PENALIZE SMALLER COMPETITORS. INDUSTRY ANALYSTS EXPECT THE SUPPLY/DEMAND IMBALANCE IN PASSIVE COMPONENTS SUCH AS CAPACITORS, RESISTORS AND OSCILLATORS TO LAST AT LEAST THROUGH THE MIDDLE OF CALENDAR YEAR 2001. OUR NETWORK INTEGRATION BUSINESS IS BENEFITING FROM THE TREMENDOUS DEMAND FOR INCREASED BANDWIDTH AND THE RAPID CONVERGENCE OF VOICE, DATA AND VIDEO APPLICATIONS." "THE DIVESTITURE OF K*TEC SHOULD ENABLE KENT TO LEVERAGE THE FUNDAMENTAL STRENGTHS OF ITS POSITION IN BOTH OF THESE DYNAMIC BUSINESSES, WHILE AT THE SAME TIME CREATE IMPORTANT OPERATING EFFICIENCIES IN A LESS CYCLICAL AND MORE PREDICTABLE ENVIRONMENT," MR. OLSON SAID. "GOING FORWARD," HE ADDED, "WE EXPECT TO UTILIZE THE RESOURCES FROM THE K*TEC SALE TO FUND THE ORGANIC AND ACQUISITION-RELATED GROWTH OF BOTH OPERATIONS. THIS SHOULD INVOLVE CREATING A BROADER GEOGRAPHIC FOOTPRINT AS WELL AS ADDING RELATED SERVICES." The Company noted that even without the benefit of acquisitions, it expects full fiscal year 2001 earnings to exceed $1.30 per diluted share. The forward-looking statements in this press release involve risks and uncertainties which could cause actual results, performance or trends, including the above-mentioned estimated earnings per diluted share, to differ materially from those expressed in the forward-looking statements. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management's expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this press release, include, but are not limited to, the risks relating to forward-looking statements discussed in the Company's Annual Report on Form 10-K for the fiscal year ended April 1, 2000, including, but not limited to, the risks discussed under the captions "Cycles in the Electronics Industry; General Economic Conditions," "Management of Growth," "Competition," "Risks Associated with Acquisitions" and "Dependence on Significant Suppliers." Kent Electronics is among the largest publicly traded specialty electronics distributors and network integrators. Kent Components provides distribution and value-added services with a focus on interconnect, passive and electromechanical components. Kent Datacomm provides complete end-to-end networking solutions, including design, consulting, source selection, product configuration and installation, and warranty and technical support. (TABLES TO FOLLOW) 3 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES PRO FORMA SUPPLEMENTAL INFORMATION* (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) The following pro forma supplemental information excludes the effect of reporting the divestiture of K*TEC Electronics as a discontinued operation. This pro forma information is not prepared in accordance with U.S. generally accepted accounting principles.
Second Quarter Six Months (Thirteen Weeks) (Twenty-Six Weeks) September 30, October 2, September 30, October 2, 2000 1999 2000 1999 -------- -------- -------- -------- Net sales $349,390 $236,073 $657,658 $441,249 Cost of sales 293,061 196,363 547,099 369,509 -------- -------- -------- -------- Gross profit 56,329 39,710 110,559 71,740 Selling, general and administrative expenses 38,942 32,423 77,377 60,514 -------- -------- -------- -------- Operating profit 17,387 7,287 33,182 11,226 Other income (expense) Interest expense (2,676) (2,575) (5,385) (5,153) Other - net 1,230 1,354 2,841 3,136 -------- -------- -------- -------- Earnings before income taxes 15,941 6,066 30,638 9,209 Income taxes 6,376 2,382 12,254 3,616 -------- -------- -------- -------- Net earnings $ 9,565 $ 3,684 $ 18,384 $ 5,593 ======== ======== ======== ======== Earnings per common share: Basic $.34 $.13 $.65 $.20 ======== ======== ======== ======== Diluted $.32 $.13 $.62 $.20 ======== ======== ======== ======== Weighted average shares: Basic 28,508 27,993 28,446 27,984 ======== ======== ======== ======== Diluted 29,675 28,740 29,636 28,534 ======== ======== ======== ========
- ------------- * Amounts prior to the second quarter of fiscal 2001 include the operating results of the Company's wire and cable redistribution assets, which were sold on May 23, 2000. The sale of the redistribution assets, in accordance with U.S. generally accepted accounting principles, was not accounted for as a discontinued operation. -MORE- 4 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES SCHEDULE OF NET SALES (UNAUDITED - IN THOUSANDS)
FISCAL YEAR 2000 FISCAL YEAR 2001 --------------------------------------------------------------- ------------------------------- Quarter Ending Quarter Ending Quarter Ending ------------------- 6 Mos. ------------------- 12 Mos. -------------------- 6 Mos. 7/3/99 10/2/99 Total 1/1/00 4/1/00 Total 7/1/00 9/30/00 Total -------- -------- -------- -------- -------- -------- -------- -------- -------- Kent Components $ 70,270 $ 91,369 $161,639 $101,671 $110,469 $373,779 $119,176 $133,871 $253,047 Kent Datacomm 57,368 60,579 117,947 74,222 83,683 275,852 89,493 97,533 187,026 K*TEC Electronics 54,976 62,600 117,576 60,707 72,818 251,101 84,955 118,026 202,981 Wire & Cable Redistribution 22,562 21,525 44,087 22,435 26,684 93,206 14,644 (40) 14,604 -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales $205,176 $236,073 $441,249 $259,035 $293,654 $993,938 $308,268 $349,390 $657,658 ======== ======== ======== ======== ======== ======== ======== ======== ========
-MORE- 5 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS* (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
Second Quarter Six Months (Thirteen Weeks) (Twenty-Six Weeks) September 30, October 2, September 30, October 2, 2000 1999 2000 1999 -------- -------- -------- -------- Net sales $231,364 $173,473 $454,677 $323,673 Cost of sales 183,404 138,630 360,473 257,990 -------- -------- -------- -------- Gross profit 47,960 34,843 94,204 65,683 Selling, general and administrative expenses 35,193 29,530 70,476 54,901 -------- -------- -------- -------- Operating profit 12,767 5,313 23,728 10,782 Other income (expense) Interest expense (2,676) (2,575) (5,385) (5,153) Other - net 1,230 1,354 2,841 3,136 -------- -------- -------- -------- Earnings from continuing operations before income taxes 11,321 4,092 21,184 8,765 Income taxes 4,527 1,643 8,472 3,520 -------- -------- -------- -------- Earnings from continuing operations 6,794 2,449 12,712 5,245 Earnings from discontinued operations, net of income taxes 2,771 1,235 5,672 348 -------- -------- -------- -------- Net earnings $ 9,565 $ 3,684 $ 18,384 $ 5,593 ======== ======== ======== ======== Basic earnings per common share: Earnings from continuing operations $ .24 $ .09 $ .45 $ .19 ======== ======== ======== ======== Net earnings $ .34 $ .13 $ .65 $ .20 ======== ======== ======== ======== Diluted earnings per common share: Earnings from continuing operations $ .23 $ .09 $ .43 $ .18 ======== ======== ======== ======== Net earnings $ .32 $ .13 $ .62 $ .20 ======== ======== ======== ======== Weighted average shares: Basic 28,508 27,993 28,446 27,984 ======== ======== ======== ======== Diluted 29,675 28,740 29,636 28,534 ======== ======== ======== ========
- ------------- * Amounts prior to the second quarter of fiscal 2001 include the operating results of the Company's wire and cable redistribution assets, which were sold on May 23, 2000. The sale of the redistribution assets, in accordance with U.S. generally accepted accounting principles, was not accounted for as a discontinued operation. -MORE- 6 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
September 30, 2000 April 1, (Unaudited) 2000 ------------- ---------- ASSETS CURRENT ASSETS Cash and cash equivalents (including temporary investments of $80,237 at September 30 and $105,164 at April 1) $ 74,162 $101,052 Accounts receivable, net 180,909 149,161 Inventories Materials and purchased products 117,222 124,939 Work in process 826 1,002 -------- -------- 118,048 125,941 Net assets of discontinued operations 195,164 143,795 Other 8,792 12,594 -------- -------- Total current assets 577,075 532,543 PROPERTY AND EQUIPMENT Land 4,990 4,990 Buildings 18,424 19,627 Equipment, furniture and fixtures 57,050 58,808 Leasehold improvements 855 1,541 -------- -------- 81,319 84,966 Less accumulated depreciation and amortization (28,222) (29,209) -------- -------- 53,097 55,757 OTHER ASSETS 16,344 10,429 COST IN EXCESS OF NET ASSETS ACQUIRED, Less accumulated amortization of $6,568 at September 30 and $5,176 at April 1 101,772 103,164 -------- -------- Total assets $748,288 $701,893 ======== ========
-MORE- 7 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued (IN THOUSANDS, EXCEPT SHARE DATA)
September 30, 2000 April 1, (Unaudited) 2000 ------------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 98,842 $ 82,782 Accrued compensation 20,460 23,877 Other accrued liabilities 21,045 16,202 Income taxes 4,323 589 Current maturities of long-term debt 4,000 4,000 -------- -------- Total current liabilities 148,670 127,450 LONG-TERM DEBT, less current maturities 212,000 212,000 DEFERRED INCOME TAXES 11,874 11,824 LONG-TERM LIABILITIES 7,061 5,887 STOCKHOLDERS' EQUITY Preferred stock, $1 par value per share; authorized 2,000,000 shares; none issued --- --- Common stock, no par value; authorized 60,000,000 shares; 28,592,853 shares issued and 28,542,853 shares outstanding at September 30 and 28,375,032 shares issued and 28,325,032 shares outstanding at April 1 74,035 68,579 Additional paid-in capital 117,908 117,797 Retained earnings 177,717 159,333 -------- -------- 369,660 345,709 Less common stock in treasury - at cost, 50,000 shares (977) (977) -------- -------- 368,683 344,732 -------- -------- Total liabilities and stockholders' equity $748,288 $701,893 ======== ========
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