<PAGE> 1
UNITED STATES
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 QUARTERLY PERIOD ENDED SEPTEMBER 28, 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 : 000-23457
ENTEX INFORMATION SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 93-133715291
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
6 INTERNATIONAL DRIVE, RYE BROOK, N.Y. 10573-1058
(914) 935-3600
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
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 AND EXCHANGE ACT
OF 1934 DURING THE PRECEDING TWELVE MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST NINETY DAYS:
YES ( ) NO ( X )
THE NUMBER OF OUTSTANDING SHARES OF THE REGISTRANT'S COMMON STOCK, PAR
VALUE $.0001 PER SHARE, WAS 32,399,060 ON SEPTEMBER 28, 1997.
As filed with the Securities and Exchange Commission on December 16, 1997
<PAGE> 2
ENTEX INFORMATION SERVICES, INC.
INDEX
Page Numbers
------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
September 28, 1997 and June 29, 1997 3
Consolidated Statements of Operations
For the Three Months Ended September 28, 1997 and
September 29, 1996 4
Condensed Consolidated Statements of Cash Flows for
the Three Months Ended September 28, 1997 and
September 29, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE> 3
ENTEX INFORMATION SERVICES, INC.
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
Unaudited
September 28, June 29,
1997 1997
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 10,330 $ 15,838
Trade receivables (net of allowance for doubtful accounts
of $4,526 and $4,746, respectively) 327,723 334,196
Vendor receivables (net of allowance of $2,000 and $2,000,
respectively) 33,481 37,789
Inventories 184,408 183,957
Other current assets 8,302 9,228
--------- ---------
Total current assets 564,244 581,008
Property, plant and equipment, net 54,894 55,049
Goodwill (net of accumulated amortization
of $9,743 and $8,903, respectively) 45,047 45,887
Other assets, net 1,459 1,646
--------- ---------
Total assets $ 665,644 $ 683,590
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 262,157 $ 269,962
Accrued liabilities 60,660 53,598
Notes payable and current installments of long-term debt 326,012 348,276
--------- ---------
Total current liabilities 648,829 671,836
--------- ---------
Long-term debt 48,653 48,215
Other long-term liabilities 1,091 1,271
--------- ---------
Total long-term liabilities 49,744 49,486
--------- ---------
Total liabilities 698,573 721,322
--------- ---------
Stockholders' equity (deficit):
Preferred stock, 2 million shares authorized;
no shares issued or outstanding -- --
Common stock, $.0001 par value; 100 million shares
authorized, 32,399,060 and 32,357,840 shares issued and
outstanding, respectively 3 3
Additional paid-in capital 19,114 19,003
Retained earnings (deficit) (52,007) (56,707)
Treasury stock, shares at cost (2) (2)
Cumulative translation adjustments (37) (29)
--------- ---------
Total stockholders' equity (deficit) (32,929) (37,732)
--------- ---------
$ 665,644 $ 683,590
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 3
<PAGE> 4
ENTEX INFORMATION SERVICES, INC.
Consolidated Statements of Operations
(Dollars in thousands except share and per share data)
<TABLE>
<CAPTION>
Unaudited
Three Months Ended
-------------------------
September 28, September 29,
1997 1996
--------- ---------
<S> <C> <C>
Net revenues:
Product revenues $ 500,938 $ 525,962
Service revenues 105,901 71,674
---------- ----------
Total net revenues 606,839 597,636
---------- ----------
Cost of revenues:
Cost of products sold 450,781 482,716
Cost of services provided 79,872 54,039
---------- ----------
Cost of revenues 530,653 536,755
---------- ----------
Product gross margin 50,157 43,246
Services gross margin 26,029 17,635
---------- ----------
Total gross margin 76,186 60,881
Selling, general and administrative expenses 61,815 58,547
---------- ----------
Income from operations 14,371 2,334
Interest expense, net 9,669 8,132
---------- ----------
Income (loss) before income taxes 4,702 (5,798)
Provision for income taxes 2 10
---------- ----------
Net income (loss) $ 4,700 $ (5,808)
========== ==========
Per share:
Net income (loss) per share $ .14 $ (.18)
========== ==========
Weighted average number of shares outstanding
and dilutive common stock equivalents 33,736,205 32,357,840
</TABLE>
See accompanying notes to consolidated financial statements.
Page 4
<PAGE> 5
ENTEX INFORMATION SERVICES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Unaudited
Three Months Ended
------------------------
September 28, September 29,
1997 1996
-------- --------
<S> <C> <C>
Net cash provided by (used in) operating activities $ 21,098 $(15,121)
Cash flows from investing activities:
Capital expenditures (4,219) (6,644)
Cash paid for acquisitions -- (5,546)
Other -- (1,179)
-------- --------
Net cash used in investing activities (4,219) (13,369)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of notes payable 30,185 36,087
Change in cash overdraft 6,107 (3,636)
Proceeds from sale of common stock, net -- 121
Repayments on debt (58,679) (451)
-------- --------
Net cash provided from (used in) financing activities (22,387) 32,121
-------- --------
Increase (decrease) in cash (5,508) 3,631
Cash at beginning of period 15,838 12,603
-------- --------
Cash at end of period $ 10,330 $ 16,234
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 5
<PAGE> 6
ENTEX INFORMATION SERVICES, INC.
Notes to Consolidated Financial Statements
1. DESCRIPTION OF THE BUSINESS
ENTEX is a leading provider of personal computer ("PC") solutions to meet
the distributed information technology systems and end-user support
requirements of Fortune 1000 companies and other large enterprises. The
Company's total PC management capabilities include acquisition and
procurement services and network, professional and other outsourcing
service support for the PC-based network environment.
2. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the three months ended
September 28, 1997 and September 29, 1996 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are,
in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The
results of operations for the three months ended September 28, 1997 are
not necessarily indicative of the results for the entire fiscal year ended
June 28, 1998. These unaudited financial statements should be read in
conjunction with the financial statements included in the Company's
Registration Statement on Form 10 for the fiscal year ended June 29, 1997.
3. ACQUISITIONS
On July 12, 1996, the Company acquired all of the issued and outstanding
stock of FCP Technologies, Inc., ("FCP") for $7,216, including direct
acquisition costs. FCP was a systems integrator based in Frederick,
Maryland specializing in network integration, migration and consulting
services. The acquisition has been accounted for as a purchase, and the
results of operations of FCP have been included in the accompanying
financial statements since the date of acquisition. The excess of the
aggregate purchase price over the fair market value of the net assets
acquired was $14,077. The difference between pro forma results of
operations under the assumption that the FCP acquisition occurred as of
July 1, 1996 and actual reported results is immaterial.
4. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
Unaudited
September 28, June 29,
1997 1997
------------ -----------
<S> <C> <C>
Finished goods held for resale $ 175,428 $ 175,300
Spare parts 8,980 8,657
------------ -----------
$ 184,408 $ 183,957
============ ===========
</TABLE>
5. COMMON STOCK SPLIT
As of November 25, 1997, the Board of Directors approved an increase in
the number of authorized common stock shares from 10,000,000 to
100,000,000. In addition, the Board of Directors authorized a stock split
in the form of a four-for-one stock dividend to holders of record as of
November 25, 1997, whereby each such share will be equal to five shares of
Common Stock. All references in the consolidated financial statements
referring to shares, share prices, per share amounts and stock plans have
been adjusted retroactively for the four-for-one stock dividend.
Page 6
<PAGE> 7
ENTEX INFORMATION SERVICES, INC.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(Dollars in thousands)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information contained in this Report on Form 10-Q includes forward
looking statements. Since this information is based on current
expectations which involve risks and uncertainties, actual results could
differ materially from those expressed in the forward looking statements.
OVERVIEW
ENTEX is a leading provider of personal computer ("PC") solutions to meet
the distributed information technology systems and end-user support
requirements of Fortune 1000 companies and other large enterprises. The
Company's total PC management capabilities include acquisition and
procurement services and network, professional and other outsourcing
service support for the PC-based network environment.
During fiscal 1996 and 1997, the Company completed several acquisitions to
improve its ability to meet customer demands for expanded service
offerings including (i) Random Access, Inc. ("Random Access"), a provider
of information technology solutions through the sale of microcomputers and
technical services to corporate and institutional clients in the western
United States, and (ii) FCP Technologies, Inc. a systems integrator based
in Maryland, specializing in network integration, migration and consulting
services. Each acquisition was accounted for as a purchase and the results
of each have been included in the consolidated financial statements since
the date of each acquisition.
The Company has two principal sources of revenue: product revenues and
service revenues. Product revenues include acquisition and procurement of
personal computer and network products, software and peripherals. Service
revenues include configuration services, network and professional
services, migration services, outsourcing services, PC and network
operation support services, on-site and centrally located help desk
services, as well as asset management services. ENTEX has expanded
rapidly; growing from $1.1 billion in net revenues for the eleven months
in fiscal 1994 to $2.5 billion in net revenues in fiscal 1997. While
product revenues have historically accounted for more than 80% of net
revenues, service revenues have grown in absolute dollar terms and as a
percentage of net revenues in each fiscal year since the Company's
inception.
Page 7
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth, for the unaudited periods indicated, the
Company's total revenue, cost of revenues, gross margin, selling,
general and administrative expenses, income (loss) from operations,
interest expense, income (loss) before income tax, provision for income
taxes and net income (loss) (dollars in thousands except per share data).
<TABLE>
<CAPTION> Three Months Ended
----------------------
Sept. 28, Sept. 29
1997 1996
----------------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA
Net revenues:
Product revenues .................. $ 500,938 $ 525,962
Service revenues .................. 105,901 71,674
----------- -----------
Total net revenues .............. 606,839 597,636
----------- -----------
Cost of revenues:
Cost of products sold ............. 450,781 482,716
Cost of services provided ......... 79,872 54,039
----------- -----------
Cost of revenues ................ 530,653 536,755
----------- -----------
Product gross margin ................. 50,157 43,246
Services gross margin ................ 26,029 17,635
----------- ----------
Total gross margin .............. 76,186 60,881
Selling, general and administrative
expenses .......................... 61,815 58,547
----------- -----------
Income (loss) from operations ... 14,371 2,334
Interest expense, net ........... 9,669 8,132
----------- -----------
Income (loss) before income
taxes ......................... 4,702 (5,798)
Provision (benefit) for income
taxes .............................. 2 10
----------- -----------
Net income (loss) ............... $ 4,700 $ (5,808)
=========== ===========
Net income (loss) per share ..... $ .14 $ (.18)
=========== ===========
Weighted average number of shares
and dilutive common stock
equivalents outstanding ........ 33,736,205 32,357,840
</TABLE>
The following table sets forth the percentage of total net revenues
represented by the items in the Company's statements of operations for the
period indicated:
<TABLE>
<CAPTION> Three months ended
------------------
Sept. 28, Sept.29,
1997 1996
<S> <C> <C>
Net revenues:
Product revenues ................................... 82.5% 88.0%
Service revenues ................................... 17.5 12.0
----- -----
Total net revenues ............................... 100.0 100.0
Cost of revenues ....................................... 87.4 89.8
----- -----
Gross margin(1) ........................................ 12.6 10.2
Selling, general and administrative expenses ........... 10.2 9.8
----- -----
Income from operations ................................. 2.4 0.4
Interest expense, net .................................. 1.6 1.4
----- -----
Income (loss) before income taxes ...................... 0.8 (1.0)
Provision (benefit) for income taxes ................... -- --
----- -----
Net income (loss) ...................................... 0.8% (1.0)%
===== =====
</TABLE>
- ----------
(1) Product gross margin as a percentage of product revenues and service
gross margin as a percentage of service revenue for each period was as
follows:
<TABLE>
<CAPTION> Three months ended
-----------------------
Sept. 28, Sept. 29,
1997 1996
-----------------------
<S> <C> <C>
Product gross margin ................................... 10.0% 8.2%
Services gross margin .................................. 24.6 24.6
</TABLE>
Page 8
<PAGE> 9
Three Months Ended September 28, 1997 Compared to Three Months Ended
September 29, 1996
The Company's net income improved in the three months ended September 28,
1997 to $4.7 million compared to a net loss of $5.8 million in the three months
ended September 29, 1996. The improvement was a result of an increase in product
gross margins attributable to improved controls over vendor programs and a
higher percentage of services in the revenue base.
Product revenues. Product revenues were $500.9 million for the three
months ended September 28, 1997 as compared to $526.0 million for the three
months ended September 29, 1996, a decrease of $25.1 million or 4.8%. While the
Company experienced overall unit growth in sales of desktops, laptops and server
units during the three months ended September 28, 1997, the revenue decline
reflects the price reductions in average sales price driven by lower
manufacturer prices and intense competition.
Service revenues. Service revenues were $105.9 million for the three
months ended September 28, 1997 as compared to $71.7 million for the three
months ended September 29, 1996, an increase of $34.2 million or 47.8%. Service
revenues as a percentage of total net revenues increased to 17.5% for the
three months ended September 28, 1997 as compared to 12.0% in the three months
ended September 29, 1996. These increases reflect increase in demand from
existing customers and the addition of new large accounts. The Company is
focused on continuing to increase service revenue as a percentage of total net
revenues.*
Gross margins. Total gross margins increased to 12.6% for the three months
ended September 28, 1997 as compared to 10.2% for the three months ended
September 29, 1996. This increase was due primarily to the revenue growth in the
higher margin service business. Product gross margin increased to 10.0% or
$50.2 million for the three months ended September 28, 1997 as compared to
8.2% or $43.2 million for the three months ended September 29, 1996. These
increases reflect the Company's efforts to improve product margins through
improved controls over price protection arrangements and vendor allowances and
to a lesser extent, the Company's involvement in certain manufacturer's
programs designed to increase sales of specific products. Future product
margins may be adversely influenced by manufacturers' pricing strategies and
increased competition.* Service margins remained constant over the periods at
24.6%, reflecting an improved mix of services, partially offset by pricing
pressures.
Selling, general and administrative expenses. Selling, general and
administrative expenses were $61.8 million for the three months ended
September 28, 1997 as compared to $58.5 million for the three months ended
September 29, 1996, an increase of $3.3 million or 5.6%. The increase resulted
from expenditures in support of the Company's growth in services including
investments in the enterprise-wide technology infrastructure to support
operations.
Income from operations. Income from operations was $14.4 million for the
three months ended September 28, 1997 as compared to $2.3 million in the three
months ended September 29, 1996, an increase of $12.1 million. The increase
reflects significant improvements in gross margins partially offset by increases
in selling, general and administrative expenses to support business expansion.
Interest expense, net. Net interest expense increased to $9.6 million for
the three months ended September 28, 1997 as compared to $8.1 million for the
three months ended September 29, 1996, an increase of $1.5 million or 18.9%. The
increase was driven by an increase in borrowing rates under the Company's
credit agreements and the prime rate, in addition to increased working capital
needs.
Provisions for income taxes. The Company utilized net operating loss
carryforwards to offset federal income tax requirements for the three months
ended September 28, 1997 and September 29, 1996.
Net income. As a result of the factors mentioned above, net income for the
three months ended September 28, 1997 was $4.7 million as compared to a net loss
of $5.8 million for the three months ended September 29, 1996.
- ---------------
* This statement is a forward-looking statement reflecting current
expectations. There can be no assurances that the Company's actual future
performance will meet the Company's current expectations. The reader is
cautioned that other sections and sentences not so identified may also contain
forward looking information.
Page 9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically financed its operations with borrowings under
various credit lines. Cash provided by operating activities was $21.1 million
for the three months ended September 28, 1997. The cash provided by operations
during the three months ended September 28, 1997 resulted primarily from net
income of $4.7 million, depreciation and other non-cash charges to income, and
from changes in operating assets and liabilities.
Cash (used in) investing activities was $(4.2) million during the three months
ended September 28, 1997 and was used primarily for capital expenditures.
Cash (used in) financing activities was $(22.4) million during the three months
ended September 28, 1997. The fluctuations in cash from financing activities
during this period resulted primarily from changes in the Company's borrowings
to support the business growth.
As of September 28, 1997, the Company's primary source of liquidity consisted of
various financing provided under the Fourth Amended and Restated Agreement
for Wholesale Financing as amended ("IBMCC Financing Agreement") with IBM Credit
Corporation ("IBMCC") and an inventory financing facility with FINOVA Capital
Corporation ("FINOVA"). The IBMCC Financing Agreement provides for borrowings
under a working capital line of credit of up to $525 million (the "IMBCC Working
Capital Line of Credit"). At September 28, 1997, the amount outstanding under
the IBMCC Working Capital Line of Credit was $448.0 million of which $333.3
million was interest bearing. The amount of available borrowings under the
IBMCC Financing Agreement may be increased for higher seasonal purchasing
requirements, and may be reduced or terminated by IBMCC upon 60 days prior
written notice. Amounts outstanding under the IBMCC Working Capital Line of
Credit bear interest at the prime rate plus .50% (9.0% at September 28,
1997). Borrowings under the IBMCC Financing Agreement are secured by the
Company's assets, including certain accounts receivable, certain inventories
and other assets. The agreement is subject to annual renewal and expires
September 15, 1998.
In connection with the Company's acquisitions of Random Access in September
1995, the IBMCC Financing Agreement was amended to provide for a term loan in
the original principal amount of $20 million (the "IBMCC Long-Term Loan"). The
IBMCC Long-Term Loan is required to remain outstanding unless there are no
outstanding interest bearing advances under the IBMCC Financing Agreement. The
IBMCC Financing Agreement was further amended in December 1996 and July 1997 to
provide a short term loan in the original principal amount of $55 million (the
"Short-Term-Loan") and a special working capital advance in the original
principal amount of $20 million (the "Special Working Capital Advance"). The
Short-Term Loan was repaid in full subsequent to September 28, 1997. Amounts
outstanding under the IBMCC Long-Term Loan and the Special Working Capital
Advance bear interest at the prime rate plus 2.50% (11.0% at September 28,
1997). At September 28, 1997, $17.3 million of principal was outstanding under
the IBMCC Long-Term Loan, $27.5 million of principal was outstanding under the
Short-Term Loan and $20.0 million of principal was outstanding under the Special
Working Capital Advance.
As of September 28, 1997, the Company had $110 million available for borrowing
under its inventory line of credit with FINOVA. The line of credit is secured by
the Company's inventory financed by FINOVA. At September 28, 1997, the principal
amount outstanding under this line of credit was $70 million. Under the terms of
the agreement with FINOVA, the Company paid no interest on this borrowing.
The IBMCC Financing Agreement provides that if Dort A. Cameron III ceases to
own and/or control at least 35% of the issued and outstanding capital stock of
the Company, the Company will be deemed to be in default under the IBMCC
Financing Agreement. In addition, the IBMCC Financing Agreement contains
restrictive covenants with respect to maintenance of minimum tangible net
worth, current ratio, fixed asset additions, fixed charges and certain
additional indebtedness and prohibits the Company from paying cash dividends
on Common Stock.
The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium (year 2000) approaches. The "year
2000" problem is complex since virtually every computer operation will be
affected in some way by the rollover of the two digit year value to 00. The
issue is whether computer systems will properly recognize date sensitive
information when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or fail. The Company
is utilizing both internal and external resources to identify, correct or
reprogram, and test the systems for the year 2000 compliance. It is
anticipated that all reprogramming efforts will be complete by December 31,
1999, allowing adequate time for testing.* Management has not yet assessed the
amount required for the year 2000 compliance expense and related potential
effect on the Company's earnings.
The Company believes its current cash balances and its available credit
facilities will be sufficient to meet its anticipated cash needs for capital
expenditures for the next 12 months.* The Company intends to continue to finance
a significant portion of its working capital needs through credit facilities.
The Company believes that it may seek to raise additional funds through public
or private equity or debt financing or from other sources to support the future
growth of the business. However, there can be no assurance that the Company will
be able to raise such additional funding.
- ---------------
* This statement is a forward-looking statement reflecting current expectations.
There can be no assurances that the Company's actual future performance will
meet the Company's current expectations. The reader is cautioned that other
sections and sentences not so identified may also contain forward looking
information.
Page 10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- NONE
ITEM 2. CHANGES IN SECURITIES
From June 29, 1997 to September 28, 1997, the Company sold the
following securities (as adjusted, in the case of equity securities, to reflect
the four-for-one stock dividend of Common Stock effected by the Company on
November 25, 1997):
(a) From June 29, 1997 to September 28, 1997, the Company issued an
aggregate of 1,055,500 options, net of forfeitures, to purchase
shares of Common Stock to officers, employees and consultants
pursuant to the Company's 1996 Performance Incentive Plan.
(b) On June 30, 1997 the Company issued 41,220 shares to Non-employee
Directors pursuant to the Company's Non-employee Director Share
Plan.
(c) In July 1997, the Company issued warrants for purchase of 167,235
shares of Common Stock to IBMCC which are currently exercisable at
$7.55 Rev share.
The issuances of the securities described in Items 2(a) and (b) were
deemed to be exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act") in reliance on Rule 701 promulgated thereunder.
The issuance of securities described in Item 2(c) were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2). The
recipients of the securities in each such transaction represented their
interests to acquire the securities by investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates issued in such transactions. All
recipients had access, through their relationships with the Company, to
information about the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- NONE
ITEM 5. OTHER INFORMATION
On November 25, 1997, the Company increased the number of shares of
authorized Common Stock from 10,000,000 to 100,000,000. In addition, the
Company effectuated a stock split in the form of a four-for-one stock dividend
to holders of record as of November 25, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1(a) Certificate of Incorporation, as amended.
4.1(a) Form of the Company's Common Stock Certificate.
10.1(a) Warrant Agreement between IBM Credit Corporation and the
Company dated July 15, 1997.
11.1 Statement of computation of earnings per share.
27.1 Financial Data Schedule.
---------
(a) Incorporated by reference from the Company's Registration
Statement on Form 10 filed with the Securities and Exchange
Commission on December 3, 1997. Exhibits 3.1, 4.1 and 10.1 listed
are incorporated by reference to Exhibits 3.1, 4.1 and 10.22,
respectively, of the Company's Registration Statement on Form 10.
(b) REPORTS ON FORM 8-K - NONE
Page 11
<PAGE> 12
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 hereunto duly authorized.
ENTEX Information Services, Inc.
December __, 1997
/s/ Kenneth A. Ghazey
----------------------------------
Kenneth A. Ghazey
Executive Vice President
and Chief Financial Officer
<PAGE> 1
Exhibit 11.1
ENTEX INFORMATION SERVICES, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Unaudited
Three months ended Three months ended
------------------ ------------------
September 28, September 29,
1997 1996
---- ----
Weighted average number of
common shares outstanding 31,014,425 32,357,840
Common equivalent shares from stock
options and warrants using the
treasury stock method 2,721,780 -
------------------ ------------------
Shares used in computing
earnings per share 33,736,205 32,357,840
------------------ ------------------
------------------ ------------------
Net income (loss) $ 4,700 $ (5,808)
------------------ ------------------
------------------ ------------------
Primary and fully diluted
earnings per share $ 0.14 $ (0.18)
------------------ ------------------
------------------ ------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 28, 1997, AND THE CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 28, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> JUN-30-1997
<PERIOD-END> SEP-28-1997
<CASH> 10,330
<SECURITIES> 0
<RECEIVABLES> 332,249
<ALLOWANCES> 4,526
<INVENTORY> 184,408
<CURRENT-ASSETS> 0
<PP&E> 92,271
<DEPRECIATION> 37,377
<TOTAL-ASSETS> 665,644
<CURRENT-LIABILITIES> 648,829
<BONDS> 48,653
0
0
<COMMON> 3
<OTHER-SE> (32,932)
<TOTAL-LIABILITY-AND-EQUITY> 665,644
<SALES> 500,938
<TOTAL-REVENUES> 606,839
<CGS> 450,781
<TOTAL-COSTS> 530,653
<OTHER-EXPENSES> 61,815
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,669
<INCOME-PRETAX> 4,702
<INCOME-TAX> 2
<INCOME-CONTINUING> 4,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,700
<EPS-PRIMARY> .14
<EPS-DILUTED> 0
</TABLE>
