<PAGE>
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 June 27, 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 No. 0-27424
-------
WILMAR INDUSTRIES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2232386
-------------------------------- -----------------
(State of incorporation or (I.R.S. Employer
organization) Identification No.)
303 Harper Drive
Moorestown, New Jersey 08057
---------------------- -----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 439-1222
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
----
The number of shares of the registrant's common stock, no par value,
outstanding as of July 31, 1997 were 13,138,757.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
WILMAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 27, December 27,
1997 1996
---------------- -----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 40,281,613 $ 38,228,710
Cash - restricted 515,703 719,185
Investments 531,415 3,927,276
Accounts Receivable - trade, net of allowance for doubtful accounts
of $ 926,900 in 1997 and $ 806,300 in 1996. 21,660,981 16,140,693
Inventory 20,258,769 17,669,441
Prepaid expenses and other current assets 1,002,968 656,588
Deferred income taxes 817,000 768,000
---------------- -----------------
Total current assets 85,068,449 78,109,893
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $2,853,361 in 1997
$2,486,092 in 1996. 3,098,746 2,460,748
GOODWILL, net of accumulated amortization of $208,902 in 1997 and $ 100,755 in 1996 6,412,646 4,932,050
OTHER ASSETS 3,324,860 2,806,452
---------------- -----------------
TOTAL ASSETS $ 97,904,701 $ 88,309,143
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 100,000 $ 285,000
Accounts payable 12,539,005 8,537,019
Accrued expenses and other current liabilities 2,650,948 2,053,350
Income taxes payable 1,584,607 1,934,160
---------------- -----------------
Total current liabilities 16,874,560 12,809,529
---------------- -----------------
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY :
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued
Common stock, no par value - 50,000,000 shares authorized;
13,133,573 shares issued and outstanding in 1997
13,048,371 shares issued and outstanding in 1996 98,190,574 96,978,776
Retained Earnings (accumulated deficit) (17,160,433) (21,479,162)
---------------- -----------------
Total stockholders' equity 81,030,141 75,499,614
---------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 97,904,701 $ 88,309,143
================ =================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
WILMAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three For the Three For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
June 27, June 28, June 27, June 28,
1997 1996 1997 1996
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
SALES $ 36,409,392 $ 21,415,017 $ 69,618,567 $ 40,723,576
COST OF SALES 25,639,353 14,861,733 48,853,508 28,234,686
-------------- -------------- -------------- ---------------
Gross profit 10,770,039 6,553,284 20,765,059 12,488,890
OPERATING EXPENSES:
Operating and selling expenses 5,029,959 3,120,840 9,771,000 6,108,085
Corporate general and administrative expenses 2,588,337 1,479,815 4,920,725 2,721,860
-------------- -------------- -------------- ---------------
7,618,296 4,600,655 14,691,725 8,829,945
-------------- -------------- -------------- ---------------
Operating income 3,151,743 1,952,629 6,073,334 3,658,945
INTEREST (INCOME) EXPENSE, NET (426,325) (51,745) (808,295) 28,959
-------------- -------------- -------------- ---------------
Income before income taxes 3,578,068 2,004,374 6,881,629 3,629,986
PROVISION FOR INCOME TAXES 1,331,200 786,000 2,562,900 1,452,000
-------------- -------------- -------------- ---------------
Net income $ 2,246,868 $ 1,218,374 $ 4,318,729 $ 2,177,986
============== ============== ============== ===============
Net income per share $ 0.17 $ 0.11 $ 0.32 $ 0.21
============== ============== ============== ===============
Weighted average shares outstanding 13,363,934 10,660,956 13,339,579 10,308,783
============== ============== ============== ===============
</TABLE>
The accompanying note are an integral part of these condensed consolidated
financial statements.
<PAGE>
WILMAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Retained Total
Earnings Stockholders'
Common Stock (Accumulated Equity
Shares Amount Deficit) (Deficit)
------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 29, 1995 5,320,000 $ 124,231 $ (27,186,322) $(27,062,091)
Accretion of Mandatorily Redeemable
Preferred Stock (155,932) (155,932)
Conversion of Series B Preferred Stock 454,545 5,000,000 5,000,000
Issuance of Common Stock - Initial Public Offering 4,600,000 46,152,891 46,152,891
Issuance of Common Stock - HMA Acquisition 63,980 1,522,000 1,522,000
Issuance of Common Stock - Secondary Offering 2,565,500 43,179,654 43,179,654
Issuance of Common Stock - Aaron Acquisition 44,346 1,000,000 1,000,000
Net income 5,863,092 5,863,092
------------- -------------- --------------- --------------
BALANCE, DECEMBER 27, 1996 13,048,371 $ 96,978,776 $ (21,479,162) $ 75,499,614
Excercised Stock Options 85,202 799,798 799,798
Tax Benefit from Excercised Stock Options 412,000 412,000
Net income 4,318,729 4,318,729
------------- -------------- --------------- --------------
BALANCE, JUNE 27, 1997 13,133,573 $ 97,778,574 $ (17,160,433) $ 81,030,141
============= ============== =============== ==============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
WILMAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 27, 1997 June 28, 1996
------------------- --------------------
<S> <C> <C>
OPERATING ACTIVITIES :
Net Income $ 4,318,729 $ 2,177,986
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 585,714 235,764
Deferred income taxes (49,000) (218,000)
Tax benefit from exercise of Stock Options 412,000
Gain on disposition of property and equipment (2,036)
Changes in assets and liabilities, net of effects of acquisition:
Accounts receivable (3,995,611) (1,296,091)
Inventory (2,017,932) (705,592)
Prepaid expenses and other current assets 117,102 (194,483)
Goodwill (3,525)
Other assets (628,706) 141,493
Accounts Payable 4,001,986 (1,325,094)
Accrued expenses and other current liabilities 615,598 79,503
Accrued interest (212,823)
Income taxes payable (349,553) (161,750)
------------------- --------------------
Net cash provided by (used in) operating activities 3,006,802 (1,481,123)
------------------- --------------------
INVESTING ACTIVITIES :
Purchase of property and equipment (983,103) (306,172)
Proceeds from sale of property and equipment 3,000
Proceeds from short-term investments 3,395,861
Acquisition of business, including escrow (3,988,455) (1,570,679)
Proceeds from escrow settlement 82,000
------------------- --------------------
Net cash used in investing activities (1,493,697) (1,873,851)
------------------- --------------------
FINANCING ACTIVITIES :
Net proceeds (repayments) of demand notes payable - Bank (9,922,510)
Repayment of note payable (260,000)
Principal payments on long-term debt :
Banks (1,499,999)
Related parties (2,940,922)
Repurchase of Series A Preferred Stock, plus accrued dividends (13,870,928)
Repurchase of Series B Preferred Stock, plus accrued dividends (6,343,425)
Proceeds from the issuance (repayment) of subordinated debentures (4,000,000)
Net proceeds from exercise of stock options 799,798 46,152,891
------------------- --------------------
Net cash provided by financing activities 539,798 7,575,107
------------------- --------------------
NET (DECREASE) INCREASE IN CASH 2,052,903 4,220,133
CASH, BEGINNING OF PERIOD 38,228,710 25,043
------------------- --------------------
CASH, END OF PERIOD $ 40,281,613 $ 4,245,176
=================== ====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 19,802 $ 356,325
=================== ====================
Income taxes $ 2,669,100 $ 1,831,750
=================== ====================
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
Accretion of mandatorily redeemable Series A Senior and
Series B Junior Preferred Stock redemption values $ 155,932
Conversion of Series B Junior Preferred stock into
454,545 shares of Common stock $ 5,000,000
Issuance of Note in connection with the purchase of :
Pier-Angeli $ 75,000
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
WILMAR INDUSTRIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
- ------------------------------
The condensed consolidated financial statements include the accounts of Wilmar
Industries, Inc. ("Wilmar" or the "Company") and its subsidiaries. Material
inter-company balances and transactions have been eliminated.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, such interim statements reflect all adjustments
(consisting of normal recurring adjustments) necessary to present fairly the
financial position and the results of operations and cash flows for the interim
periods presented. The results of operations for these interim periods are not
necessarily indicative of the results to be expected for the full year ending
December 26, 1997. These financial statements should be read in conjunction
with the audited consolidated financial statements and footnotes included in the
Company's Form 10-K for the year ended December 27, 1996.
Note 2 - Accounting Policies
- ----------------------------
Earnings Per Share - In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings Per
Share". This pronouncement will be effective for financial statements for both
interim and annual periods ending December 15, 1997. The Company anticipates
that this statement will not have a material impact on its financial statements.
Note 3 - Acquisition
- --------------------
In January 1997, the Company acquired certain assets of Pier-Angeli Group, Inc.
("Pier-Angeli"), a distributor of plumbing and electrical supplies primarily to
the multi-family industry or apartment housing market. The total purchase price
of the acquisition was approximately $4 million, including costs of acquisition.
Goodwill and other intangibles recorded in connection with this acquisition
totaled approximately $2 million, and are being amortized on a straight-line
basis over 3 to 30 years.
Note 4 - Income Taxes
- ---------------------
The Company provides for income taxes based upon Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", which
requires an asset and liability approach to financial accounting and reporting
for income taxes.
Note 5 - Computation of Net Income Per Share
- ---------------------------------------------
Net income per share represents net income divided by the weighted average
number of shares of Common Stock and Common Stock equivalents outstanding during
the period plus the number of shares of Common Stock required to be sold at the
assumed initial public offering price to raise sufficient proceeds to redeem the
mandatorily redeemable Preferred Stock (including accrued but unpaid dividends
thereon). Net income is not reduced by the provision for accretion of Preferred
Stock redemption values of $155,932 for the six months ended June 28, 1996
because the calculation assumes the related Common Stock was outstanding in lieu
of the Preferred Stock.
<PAGE>
WILMAR INDUSTRIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
Common Stock equivalents include shares from the exercise of stock options
(using the treasury stock method). Pursuant to the rules of the Securities and
Exchange Commission, common stock issued and stock options granted at prices
lower than the assumed initial public offering price within a one year period
prior to an initial public offering are included in the calculation (using the
treasury stock method and the assumed initial public offering price) as if they
were outstanding for all periods presented.
Note 6 - Contingencies
- ----------------------
The Company is involved in various legal proceedings in the ordinary course of
its business, which are not anticipated to have a material adverse effect on the
Company's results of operations, financial position or cash flows.
<PAGE>
WILMAR INDUSTRIES, INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
This document contains certain forward-looking statements that are subject to
risks and uncertainties. Forward-looking statements include certain information
relating to future growth plans, the anticipated costs associated with those
plans, the Company's liability and capital resources, as well as information
contained elsewhere in this report where statements are preceded by, followed by
or include the words "believes," "expects," "anticipates" or similar
expressions. For such statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including without limitation, general market conditions, increased
competition, and factors discussed elsewhere in this report and in the documents
incorporated herein by reference. The following discussion should be read in
conjunction with the interim financial statements and the notes thereto
contained elsewhere in this report on Form 10-Q.
Results of Operations
Six Months Ended June 27, 1997 Compared to Six Months Ended June 28, 1996.
Net Sales. Net sales increased by $28.9 million, or 71.0%, to $69.6 million for
the six months ended June 27, 1997 from $40.7 million for the corresponding
period in 1996. This increase was primarily attributable to the acquisitions of
Mile High Maintenance Supply, Inc. ("Mile High"), HMA Enterprises, Inc. ("HMA")
and certain assets of Sun Valley Maintenance Supply , Inc. ("Sun Valley"), Aaron
Distributing, Inc. ("Aaron"), and Pier-Angeli Group, Inc. ("Pier-Angeli") which
occurred in May 1996, July 1996, May 1996, November 1996 and January 1997
respectively. In addition, the maturation of the existing sales force, the
Company's telesales effort, increased sales to national accounts and a
substantial investment in "line-hauling" (the use of third party trucks to ship
multiple orders from a distribution center to other markets overnight followed
by next day local delivery), also contributed significantly to the Company's
growth. The Company's sales force at the end of the second quarter of 1997 was
149 an increase of 60 when compared with the corresponding quarter of 1996.
Sales attributable to the existing sales force (salesmen employed for all of
both periods) increased 21.0%. Price increases during both periods were modest
and made only on selected items. During the six months ended June 27, 1997,
Wilmar generated approximately $2.1 million in net sales to new end markets as a
result of the Company's decision to target customers outside its core apartment
housing market beginning in the first quarter of 1995.
Gross Profit. Cost of sales includes merchandise, freight, distribution center
occupancy and delivery costs. As a percentage of net sales, gross profit was
29.8% for the six months ended June 27, 1997 compared to 30.7% for the
corresponding period in 1996. This expected decrease in the gross margin
resulted from the acquisition of HMA, whose historic gross margins have been
lower due to increased competition in the Texas market as well as a higher
volume of less profitable HVAC equipment and major appliance sales. Increased
delivery expenses associated with "line-hauling" to new markets, as well as
higher relative occupancy costs relating to the operation of the Company's new
distribution centers in Chicago, Dallas, Phoenix and Charlotte also contributed
to the decrease in gross margin when compared with the first six months of 1996.
Operating and Selling Expenses. Operating and selling expenses consist of labor
and other costs associated with operating a distribution center as well as
selling expenses and commissions. Operating and selling expenses increased by
$3.7 million, or 60.0%, to $9.8 million for the six months ended June 27, 1997
from $6.1 million for the corresponding period in 1996. As a percentage of net
sales, these expenses represented 14.0% for the six months ended June 27, 1997
compared to 15.0% for the corresponding period in 1996. The decrease resulted
primarily from the acquisition of HMA, which operates three mature distribution
centers and employs a mature sales force. Historically, the Company's operating
and selling expenses as a percentage of sales have been higher than HMA's due to
the Company's investment in new distribution centers as well as the rapid
expansion of the sales force.
<PAGE>
WILMAR INDUSTRIES, INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Results of Operations
Six Months Ended June 27, 1997 Compared to Six Months Ended June 28, 1996
Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased by $2.2 million or 80.8%, to $4.9 million for
the six months ended June 27, 1997 from $2.7 million for the corresponding
period in 1996. This increase is primarily the result of the enhanced staffing
required to manage a larger volume of business and an increase in amortization
expense attributable to the acquisitions completed since the first quarter of
1996. As a percentage of net sales, these expenses represented 7.1% for the six
months ended June 27, 1997 compared to 6.7% for the corresponding period in
1996. During the first six months of 1997, the Company incurred approximately
$201,000 in expenses related to the assimilation of HMA, Aaron and Pier-Angeli
and pre-opening expenses for its new Phoenix and Charlotte distribution centers,
(the "assimilation and pre-opening expenses"). The Company expenses all
distribution center pre-opening and acquisition assimilation costs when
incurred. Excluding the expenses, corporate general and administrative expenses
as a percentage of net sales would have been 6.8% for the six months ended June
27, 1997 compared to 6.6% for the corresponding period in 1996.
Operating Income. Operating income increased by $2.4 million, or 66.0%, to
$6.1 million for the six months ended June 27, 1997 from $3.7 million for the
corresponding period in 1996. As a percentage of net sales, operating income
was 8.7% for the six months ended June 27, 1997 compared to 9.0% for the
corresponding period in 1996. Excluding assimilation and pre-opening expenses,
operating income would have increased by $2.6 million, or 69% for the six
months of 1997 As a percentage of net sales, operating income (excluding the
assimilation and pre-opening expenses) would have been 9.0% for the six months
in 1997 compared to 9.1% for the first six months of 1996.
Interest (Income) Expense Net. Net interest expense decreased by $837,000 to
$808,000 of net interest income for the six months ended June 27, 1997 from
$29,000 of net interest expense for the corresponding period in 1996 as a result
of the reduction in debt made from the proceeds of the initial public offering
and the investment income from the proceeds of the secondary public offering
completion in July, 1996.
Three Months Ended June 27, 1997 Compared to Three Months Ended June 28, 1996
Net Sales. Net sales increased by $15.0 million, or 70.0%, to $36.4 million for
the three months ended June 27, 1997 from $21.4 million for the corresponding
period in 1996. This increase was primarily attributable to the acquisitions of
Mile High, HMA and certain assets of Sun Valley, Aaron and Pier-Angeli which
occurred in May 1996, July 1996, May 1996, November 1996 and January 1997,
respectively. In addition, the maturation of the existing sales force, the
Company's telesales effort, increased sales to national accounts and a
substantial investment in "line-hauling", also contributed significantly to the
Company's growth. Price increases during both periods were modest and made only
on selected items. During the three months ended June 27, 1997, Wilmar generated
approximately $1.1 million in net sales to new end markets as a result of the
Company's decision to target customers outside its core apartment housing market
beginning in the first quarter of 1995.
<PAGE>
WILMAR INDUSTRIES, INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Results of Operations
Three Months Ended June 27, 1997 Compared to Three Months Ended June 28, 1996
Gross Profit. Cost of sales includes merchandise, freight, distribution center
occupancy and delivery costs. As a percentage of net sales, gross profit was
29.6 % for the three months ended June 27, 1997 compared to 30.6 % for the
corresponding period in 1996. This expected decrease in the gross margin
resulted from the acquisition of HMA, whose historic gross margins have been
lower due to increased competition in the Texas market as well as a higher
volume of less profitable HVAC equipment and major appliance sales. Increased
delivery expenses associated with "line-hauling" to new markets, as well as
higher relative occupancy costs relating to the operation of the Company's new
distribution centers in Chicago, Dallas and Charlotte also contributed to the
decrease in gross margin when compared with the three months ended June 28,
1996.
Operating and Selling Expenses. Operating and selling expenses consist of labor
and other costs associated with operating a distribution center as well as
selling expenses and commissions. Operating and selling expenses increased by
$1.9 million, or 61.2% , to $5.0 million for the three months ended June 27,
1997 from $3.1 million for the corresponding period in 1996. As a percentage
of net sales, these expenses represented 13.8% for the three months ended June
27, 1997 compared to 14.6% for the corresponding period in 1996. The decrease
resulted primarily from the acquisition of HMA, which operates three mature
distribution centers and employs a mature sales force. Historically, the
Company's operating and selling expenses as a percentage of sales have been
higher than HMA's due to the Company's investment in new distribution centers as
well as the rapid expansion of the sales force.
Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased by $1.1 million, or 74.9%, to $2.6 million for
the three months ended June 27, 1997 from $1.5 million for the corresponding
period in 1996. This increase is primarily the result of the enhanced staffing
required to manage a larger volume of business and an increase in amortization
expense attributable to the acquisitions completed since the first quarter of
1996. As a percentage of net sales, these expenses represented 7.1% for the
three months ended June 27, 1997 compared to 6.9% for the corresponding period
in 1996. During the three months ended June 27, 1997, the Company incurred
approximately $73,000 in expenses related to the assimilation of HMA
and pre-opening expenses for its new Phoenix distribution center. The Company
expenses all distribution center pre-opening and acquisition assimilation costs
when incurred. Excluding these expenses, corporate general and administrative
expenses, as a percentage of net sales, would have been 6.9% for the three
months ended June 27, 1997.
Operating Income. Operating income increased by $1.2 million, or 61.4%, to $3.2
million for the three months ended June 27, 1997 from $2.0 million for the
corresponding period in 1996. As a percentage of net sales, operating income
was 8.7% for the three months ended June 27, 1997 compared to 9.1% for the
corresponding period in 1996. Excluding the assimilation and pre-opening
expenses, operating income would have increased by $1.3 million, or 64.1% for
the three months ended June 27, 1997. As a percentage of net sales, operating
income (excluding the assimilation and pre-opening expenses) would have been
9.2% for the three months ended June 27, 1997.
Interest (Income) Expense, Net. Net interest income increased by $374,000 to
$426,000 of net interest income for the three months ended June 27, 1997 from
$52,000 of net interest income for the corresponding period in 1996. As a
result of the reduction in debt made from the proceeds of the initial public
offering and the investment income from the proceeds of the secondary public
offering completed in July 1996.
<PAGE>
WILMAR INDUSTRIES, INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Liquidity and Capital Resources
Cash provided by operating activities was $3.0 million during the six months
ended June 27, 1997 compared to $1.5 million of cash used in operating
activities during the corresponding period in 1996. Cash provided by operating
activities during the six months ended June 27, 1997 consisted of $4.3 million
of net income before adding back depreciation and amortization and other non-
cash charges, decreased $1.7 million by changes in operating assets and
liabilities primarily resulting from a $4.5 million increase in accounts payable
and accrued expenses offset by an increase in the accounts receivable and
inventory of $6.0 million, consistent with its higher volume of business.
Cash used in investing activities during the six months ended June 27, 1997 was
$1.5 million, consisting of $4.0 million related to the acquisition of Pier-
Angeli, $3.4 million in proceeds from the sale of short-term investments, and
$983,000 for the purchase of property and equipment.
Cash provided by financing activities during the six months ended June 27, 1997
was $540,000, consisting of $800,000 of net proceeds from exercise of stock
options, reduced by $260,000 for the repayment of a note payable.
Capital expenditures were $983,000 for the six months ended June 27, 1997
compared to $308,000 for the corresponding period in 1996. The Company spent
approximately $464,000 on capital expenditures during the six months ended June
27, 1997 primarily for office, computer and distribution center equipment.
Additionally, the Company spent approximately $519,000 during the six months
ended June 27,1997 to equip its new Philadelphia, Dallas, Phoenix and Charlotte
distribution centers. A typical distribution center requires a capital
investment of approximately $150,000 to $200,000 for equipment and leasehold
improvements and an initial commitment of approximately $250,000 for working
capital (net of accounts payable attributable to new inventory). The Company
typically incurs expenses of approximately $60,000 before a new distribution
center becomes operational. The Company intends to finance its future capital
expenditures with cash flow from operations and possibly with a portion of the
previous public offerings, term debt or capital leases.
Wilmar's credit facility consists of a $10.0 million unsecured bank line of
credit. This line of credit had a zero balance as of June 27, 1997. In April
1997, the Company renewed its existing $10.0 million unsecured bank line of
credit, which bears interest at three quarter percent below the bank's prime
rate. The renewed credit facility will expire in June 1998. The Company believes
It could increase the amount of this credit facility if needed, although there
can be no assurance that it could do so on equally or more favorable terms.
The Company believes that its existing cash balances, supplemented by borrowings
under the revolving line of credit, are adequate to meet planned operating and
capital expenditure needs at least through 1997. However, if the Company were
to make any significant acquisitions for cash, it may be necessary for the
Company to obtain additional debt or equity financing.
<PAGE>
WILMAR INDUSTRIES, INC.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
11* Computation of Earnings Per Share
27* Financial Data Schedule
- ----------------------
* Filed herewith
(b) Reports on Form 8-K
-------------------
The Company did not file a Form 8-K during the quarter ended June 27, 1997.
<PAGE>
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 thereunto duly authorized.
WILMAR INDUSTRIES, INC.
By: /s/ Michael T. Toomey
-----------------------------------------
Michael T. Toomey
Chief Financial Officer and Treasurer
(Duly authorized officer and
Principal financial officer)
Date: August 11, 1997
<PAGE>
Exhibit 11
WILMAR INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 27, 1997 June 28, 1996 June 27, 1997 June 28, 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income Before Income Taxes $ 3,578,068 $ 2,004,374 $ 6,881,629 $ 3,629,986
Provision for Income Taxes 1,331,200 786,000 2,562,900 1,452,000
------------- ------------ ------------ ------------
Net Income $ 2,246,868 $ 1,218,374 $ 4,318,729 $ 2,177,986
============= ============ ============ ============
Weighted Average Shares Outstanding 13,078,743 10,374,545 13,063,481 9,672,526
Common Stock Equivalents :
Preferred Stock 390,486
Items issued within one year of IPO: (1)
Common Stock
Stock Options 285,191 286,411 276,098 245,771
------------- ------------ ------------ ------------
Total Weighted Average Shares Outstanding 13,363,934 10,660,956 13,339,579 10,308,783
============= ============ ============ ============
Net Income Per Share $ 0.17 $ 0.11 $ 0.32 $ 0.21
============= ============ ============ ============
</TABLE>
(1) Common stock issued and stock options granted at prices lower then the
assumed initial public offering price within a one year period prior to an
initial public offering are included in the calculation (using the treasury
stock method and the assumed initial public offering price) as if they were
outstanding for all periods presented.
FULLY DILUTED EARNINGS PER SHARE
Fully diluted earnings per share differs from primary earnings per share by less
than 3%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-26-1997
<PERIOD-END> JUN-27-1997
<CASH> 40,797,316
<SECURITIES> 531,415
<RECEIVABLES> 20,734,081
<ALLOWANCES> (926,900)
<INVENTORY> 20,258,769
<CURRENT-ASSETS> 85,058,449
<PP&E> 5,952,107
<DEPRECIATION> (2,853,361)
<TOTAL-ASSETS> 97,894,701
<CURRENT-LIABILITIES> 16,864,560
<BONDS> 0
0
0
<COMMON> 98,190,574
<OTHER-SE> (17,160,433)
<TOTAL-LIABILITY-AND-EQUITY> 97,894,701
<SALES> 69,618,567
<TOTAL-REVENUES> 69,618,567
<CGS> 48,853,508
<TOTAL-COSTS> 48,853,508
<OTHER-EXPENSES> 14,691,725
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (808,295)
<INCOME-PRETAX> 6,881,629
<INCOME-TAX> 2,562,900
<INCOME-CONTINUING> 4,318,739
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,318,729
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
