-----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, CeQ8Jq35MdX+ffIQFOpJ9u/RmdJ04HOb4fIzkAES6jS4ik8aHMkd0/4W+GuovgDr KKCmOR/wutxIOajZ9oSIkw== 0000950129-95-001427.txt : 19951119 0000950129-95-001427.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950129-95-001427 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KENT ELECTRONICS CORP CENTRAL INDEX KEY: 0000793024 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 741763541 STATE OF INCORPORATION: TX FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09520 FILM NUMBER: 95590699 BUSINESS ADDRESS: STREET 1: 7433 HARWIN DR CITY: HOUSTON STATE: TX ZIP: 77036-2015 BUSINESS PHONE: 7137807770 MAIL ADDRESS: STREET 1: 7433 HARWIN DRIVE CITY: HOUSTON STATE: TX ZIP: 77036-2015 10-Q 1 KENT ELECTRONICS CORPORATION - DATED 09/30/95 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 0-14643 ------------------------------------------------------ KENT ELECTRONICS CORPORATION - ------------------------------------------------------------------------------- Exact name of registrant as specified in its charter) Texas 74-1763541 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7433 Harwin Drive, Houston, Texas 77036-2015 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (713) 780-7770 - ------------------------------------------------------------------------------- Registrant's telephone number, including area code Not applicable - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. 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 stock, as of the latest practicable date. At October 31, 1995, 11,896,339 shares of common stock, no par value, are issued and outstanding. 2 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, April 1, 1995 1995 ------------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents (including temporary investments of $92,141,000 at September 30 and $6,395,000 at April 1).................. $ 88,210,000 $ 4,434,000 Trading securities, net....................... 16,936,000 16,833,000 Accounts receivable, less allowance of $1,118,000 at September 30 and $979,000 at April 1.................................. 39,288,000 33,964,000 Inventories Materials and purchased products............ 38,949,000 30,080,000 Work in process............................. 2,815,000 3,039,000 ------------ ------------ 41,764,000 33,119,000 Prepaid expenses and other.................... 2,359,000 2,778,000 ------------ ------------ Total current assets...................... 188,557,000 91,128,000 PROPERTY AND EQUIPMENT Land.......................................... 7,117,000 7,090,000 Buildings..................................... 13,766,000 6,697,000 Furniture, fixtures and equipment............. 29,200,000 26,206,000 Leasehold improvements........................ 1,602,000 1,363,000 ------------ ------------ 51,685,000 41,356,000 Less accumulated depreciation and amortization (15,331,000) (13,621,000) ------------ ------------ 36,354,000 27,735,000 DEFERRED INCOME TAXES............................ 788,000 838,000 OTHER ASSETS..................................... 1,534,000 1,022,000 COST IN EXCESS OF NET ASSETS ACQUIRED, less accumulated amortization of $1,812,000 at September 30 and $1,629,000 at April 1..... 12,984,000 13,167,000 ------------ ------------ $240,217,000 $133,890,000 ============ ============
The accompanying notes are an integral part of these statements. 2 of 13 3 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, April 1, 1995 1995 ------------- ------------- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable.............................. $ 20,983,000 $ 15,479,000 Accrued compensation.......................... 5,045,000 4,579,000 Other accrued liabilities..................... 6,619,000 3,057,000 Income taxes.................................. 1,859,000 1,694,000 ----------- ------------ Total current liabilities................. 34,506,000 24,809,000 LONG-TERM DEBT................................... -- -- LONG-TERM LIABILITIES............................ 645,000 281,000 STOCKHOLDERS' EQUITY Preferred stock, $1 par value; authorized 2,000,000 shares; none issued............... -- -- Common stock, no par value; authorized 30,000,000 shares; issued and outstanding, 11,849,892 shares at September 30 and 9,804,743 shares at April 1................. 35,918,000 34,743,000 Additional paid-in capital.................... 109,608,000 25,214,000 Retained earnings............................. 59,540,000 48,843,000 ------------ ------------ 205,066,000 108,800,000 ------------ ------------ $240,217,000 $133,890,000 ============ ============
The accompanying notes are an integral part of these statements. 3 of 13 4 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended --------------------------------- ---------------------------------- September 30, October 1, September 30, October 1, 1995 1994 1995 1994 ------------- ------------ -------------- ------------ Net sales.................................... $90,190,000 $60,335,000 $167,775,000 $116,862,000 Cost of sales................................ 66,387,000 44,895,000 123,999,000 86,898,000 ----------- ----------- ------------ ------------ Gross profit............................ 23,803,000 15,440,000 43,776,000 29,964,000 Selling, general and administrative expenses. 14,259,000 10,536,000 26,934,000 20,606,000 ----------- ----------- ------------ ------------ Operating profit............................. 9,544,000 4,904,000 16,842,000 9,358,000 Other income (expense) Interest expense........................ (5,000) (4,000) (10,000) (9,000) Other - net............................. 492,000 327,000 997,000 482,000 ----------- ----------- ------------ ------------ Earnings before income taxes................. 10,031,000 5,227,000 17,829,000 9,831,000 Income taxes................................. 4,013,000 2,012,000 7,132,000 3,785,000 ----------- ----------- ------------ ------------ NET EARNINGS............................ $ 6,018,000 $ 3,215,000 $ 10,697,000 $ 6,046,000 =========== =========== ============ ============ Earnings per share........................... $.57 $.32 $1.03 $.60 ---- ---- ----- ---- Weighted average shares...................... 10,483,300 10,090,700 10,394,800 10,052,100 ========== ========== ========== ==========
The accompanying notes are an integral part of these statements. 5 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Twenty Six Weeks Ended ------------------------------ September 30, October 1, 1995 1994 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings........................................ $10,697,000 $6,046,000 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization................... 1,940,000 1,864,000 Provision for losses on accounts receivable..... 139,000 100,000 Loss on sale of property, plant and equipment .. 3,000 -- Stock option expense............................ 568,000 397,000 Unrealized gains on trading securities.......... (103,000) -- Unrealized losses on short-term investments..... -- 120,000 Change in assets and liabilities Increase in accounts receivable............ (5,463,000) (1,211,000) Increase in inventories.................... (8,645,000) (6,520,000) Decrease in prepaid expenses and other..... 419,000 218,000 Increase in other assets................... (537,000) (445,000) Decrease in noncurrent deferred income taxes.................................. 50,000 50,000 Increase in accounts payable............... 5,504,000 491,000 Increase in accrued compensation........... 466,000 325,000 Increase in other accrued liabilities...... 3,562,000 306,000 Increase in income taxes................... 165,000 450,000 Increase in long-term liabilities.......... 364,000 -- ----------- ---------- Total adjustments....................... (1,568,000) (3,855,000) ----------- ---------- Net cash generated by operating activities......................... $ 9,129,000 $2,191,000
(Continued) 5 of 13 6 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Twenty Six Weeks Ended ------------------------------ September 30, October 1, 1995 1994 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures........................... $(10,361,000) $(3,766,000) Net sales of short-term investments............ -- 125,000 Proceeds from sale of property, plant and equipment.................................... 7,000 -- ------------ ----------- Net cash used by investing activities....................... (10,354,000) (3,641,000) CASH FLOWS FROM FINANCING ACTIVITIES Payments of long-term obligations.............. -- -- Issuance of common stock....................... 84,483,000 514,000 Tax effect of common stock issued upon exercise of employee stock options........... 518,000 -- ------------ ----------- Net cash generated by financing activities....................... 85,001,000 514,000 ------------ ----------- NET INCREASE (DECREASE) IN CASH................... 83,776,000 (936,000) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.. 4,434,000 11,382,000 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD........ $ 88,210,000 $10,446,000 ============ =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for Interest..................................... $ -- $ -- Income taxes................................. $ 6,400,000 $ 3,285,000
The accompanying notes are an integral part of these statements. 6 of 13 7 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting Policies The consolidated balance sheet as of September 30, 1995, and the related consolidated statements of earnings and cash flows for the thirteen and twenty-six week periods ended September 30, 1995 and October 1, 1994, have been prepared by the Company without audit. In the opinion of management, the financial statements include all adjustments necessary for a fair presentation. All adjustments made were of a normal recurring nature. Interim results are not necessarily indications of results for a full year. For further financial information, refer to the audited financial statements of the Company and notes thereto for the fiscal year ended April 1, 1995, included in the Company's Form 10-K for that period. Public Offering The Company completed a public offering of its common stock on September 27, 1995. The offering totaled 2,000,000 shares and net proceeds to the Company from the offering were approximately $83,846,000 after deducting the associated underwriting discount and expenses. The net proceeds from the offering are expected to be used for the construction of new facilities, development and implementation of new information systems, working capital, general corporate purposes and acquisitions of complementary businesses or assets the Company may consider from time to time. These proceeds were placed in temporary investments and are readily available to meet capital requirements as they arise. Sales To Major Customers For the thirteen weeks ended September 30, 1995, sales to two customers represented 12.9% and 13.2% of net sales. Sales to the same two customers represented 12.6% and 13.0% of net sales for the twenty-six weeks ended September 30, 1995. For the thirteen and twenty-six week periods ending October 1, 1994, one customer represented 11.5% and 11.0% of net sales, respectively. 7 of 13 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the thirteen and twenty-six weeks ended September 30, 1995 increased $29,855,000, or 49.5%, and $50,913,000, or 43.6%, respectively, compared to the same periods a year ago. The sales increase reflected internal growth primarily from increased demand from existing customers and an expanded customer base. Gross profit increased $8,363,000, or 54.2%, for the thirteen weeks and $13,812,000, or 46.1%, for the twenty-six weeks when compared to the corresponding periods a year ago. Gross profit as a percentage of sales increased to 26.4% from 25.6% for the thirteen week period, and to 26.1% from 25.6% for the twenty-six week period, compared to the same periods last year. The increase in gross profit was primarily due to increased sales and an increase in the gross profit percentage resulting from substantial gains in contract manufacturing sales as a percentage of total sales. The Company believes that its profit margins from sales of manufactured products is generally greater than its profit margin on sales of distributed products. Selling, general and administrative ("SG&A") expenses increased $3,723,000, or 35.3% for the thirteen week period and $6,328,000, or 30.7%, for the twenty-six week period, compared to the same periods in the previous year. However, as a percentage of net sales, SG&A declined to 15.8% from 17.5% for the thirteen weeks and to 16.1% from 17.6% for the twenty-six weeks compared to the same prior year periods. The decline as a percentage of sales reflects the Company's continued focus on cost containment to reduce such expenses as a percentage of sales. The increase in SG&A expenses was primarily due to the expenses necessary to support the growth in the Company's existing operations. Other-net consists principally of interest and dividend income generated by cash, cash equivalents and trading securities. The increase in interest and dividend income from both prior year periods was primarily due to higher interest rates and a reduction of unrealized losses on trading securities. Also, net proceeds from the public offering generated interest income for the last three days of the thirteen and twenty-six week periods ended September 30, 1995. The Company's effective tax rate increased due to the increase in operating income subjecting the Company to a higher graduated federal income tax rate. 8 of 13 9 Net earnings increased $2,803,000, or 87.2%, and $4,651,000, or 76.9%, for the thirteen and twenty-six week periods, respectively, compared to the same periods a year ago. The improved profitability was primarily due to the incremental profit associated with the increase in sales volume, the increase in the gross profit percentage and the Company's continued focus on cost containment. Liquidity and Capital Resources Working capital at September 30, 1995 was $154,051,000, an increase of $87,732,000 from April 1, 1995. The increase was primarily the result of net proceeds from the recent public offering, as well as accounts receivable and inventories growing in response to current sales levels. Included in the Company's working capital at September 30, 1995 are investments of $109,077,000. The Company's investment strategy is low-risk and short-term, keeping the funds readily available to meet capital requirements as they arise in the normal course of business. At September 30, 1995, funds were invested primarily in a reverse repurchase agreement and a managed fund consisting primarily of taxable, high quality corporate debt instruments. Both are compatible with the Company's stated investment strategy. The Company intends to apply its capital resources to expand its business by establishing or acquiring similar distribution and manufacturing operations in geographic areas that are attractive to the Company, by acquiring new facilities and by enlarging or improving existing facilities. In addition to the capital required to purchase existing businesses or to fund start-up operations, the expansion of the Company's operations at both new and existing locations will require greater levels of capital to finance the purchase of additional equipment, increased levels of inventory and greater accounts receivable. The Company is currently expanding its manufacturing capacity by building a new facility in Sugar Land, Texas. Facility construction and equipment will require capital expenditures of approximately $14 million, of which approximately $7 million has been spent, with the remainder of the project to be completed in this fiscal year. Management believes that current resources, along with funds generated from operations, should be sufficient to meet its current capital requirements. 9 of 13 10 PART II - OTHER INFORMATION Items 1 through 5 are not applicable and have been omitted. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 11 - Statement re computation of per share earnings. 27 - Financial Data Schedule (filed only in electronic format). (b) Reports on Form 8-K: Not applicable. 10 of 13 11 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. KENT ELECTRONICS CORPORATION -------------------------------------- (Registrant) Date: November 13, 1995 By: /s/ Morrie K. Abramson ----------------------------- -------------------------------- Morrie K. Abramson Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) Date: November 13, 1995 By: /s/ Stephen J. Chapko ----------------------------- --------------------------------- Stephen J. Chapko Vice President, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) 11 of 13 12 EXHIBIT INDEX Exhibit numbers are in accordance with the Exhibit Table in Item 601 of Regulation S-K
Exhibit No. Exhibit Description Sequential Page No. - ----------- ------------------- ------------------- 11 Statement re computation 13 of per share earnings 27 Financial Data Schedule (filed only in electronic format) --
12 of 13 EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11 KENT ELECTRONICS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (Unaudited)
Thirteen Weeks Ended ---------------------------------------------------------------- September 30, 1995 October 1, 1994 ----------------------------- ---------------------------- Fully Fully Primary Diluted Primary Diluted ----------- ----------- ----------- ----------- Net earnings ........................... $ 6,018,000 $ 6,018,000 $ 3,215,000 $ 3,215,000 =========== =========== =========== =========== Weighted average number of common shares outstanding .......................... 9,882,300 9,882,300 9,720,300 9,720,300 Excess of shares issuable upon exercise of stock options over shares deemed retired utilizing the treasury stock method ......................... 601,000 661,800 370,400 437,600 ----------- ----------- ----------- ----------- 10,483,300 10,554,100 10,090,700 10,157,900 =========== =========== =========== =========== Earnings per share ...................... $.57 $.57 $.32 $.32 ==== ==== ==== ==== Twenty-Six Weeks Ended ---------------------------------------------------------------- September 30, 1995 October 1, 1994 ----------------------------- ---------------------------- Fully Fully Primary Diluted Primary Diluted ----------- ----------- ----------- ----------- Net earnings ........................... $10,697,000 $10,697,000 $ 6,046,000 $ 6,046,000 =========== =========== =========== =========== Weighted average number of common shares outstanding .......................... 9,845,100 9,845,100 9,706,700 9,706,700 Excess of shares issuable upon exercise of stock options over shares deemed retired utilizing the treasury stock method ......................... 549,700 629,800 345,400 399,000 ----------- ----------- ----------- ----------- 10,394,800 10,474,900 10,052,100 10,105,700 =========== =========== =========== =========== Earnings per share ...................... $1.03 $1.02 $.60 $.60 ===== ===== ==== ====
EX-27 3 FINANCIAL DATA SCHEDULE
5 0000793024 KENT ELECTRONICS CORP. 6-MOS MAR-30-1996 SEP-30-1995 88,210,000 16,936,000 40,406,000 1,118,000 41,764,000 188,557,000 51,685,000 15,331,000 240,217,000 34,506,000 0 35,918,000 0 0 169,148,000 240,217,000 167,775,000 167,775,000 123,999,000 123,999,000 0 139,000 10,000 17,829,000 7,132,000 10,697,000 0 0 0 10,697,000 1.03 1.02
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