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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 5, 1997
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(Date of earliest event reported)
Miami Computer Supply Corporation
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(Exact name of registrant as specified in its charter)
OHIO 000-21561 31-1001529
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4750 HEMPSTEAD STATION DRIVE, DAYTON, OHIO 45429
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(Address of principal executive offices) (Zip Code)
(937) 291-8282
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed since last
report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The sole purpose of this Amendment No. 1 to the Form 8-K filed on
December 15, 1997 is to add EXHIBIT 99.
EXHIBITS:
Exhibit Number Description
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99 Safe Harbor Under the Private Securities
Litigation Reform Act of 1995.
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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.
MIAMI COMPUTER SUPPLY CORPORATION
Date: December 17, 1997 By: /s/ Michael E. Peppel
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Michael E. Peppel
Vice President and
Chief Financial Officer
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EXHIBIT 99
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
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EXHIBIT 99
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
"safe harbor" for forward-looking statements to encourage companies to
provide prospective information about their companies, so long as those
statements are identified as forward-looking and are accompanied by
meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those discussed in the
statement. The Company desires to take advantage of the "safe harbor"
provisions of the Act. Certain information, particularly information
regarding future economic performance and finances and plans and objectives
of management, contained, or incorporated by references, in the Company's
Form 8-K filed on December 15, 1997 is forward-looking. In some cases,
information regarding certain important factors that could cause actual
results to differ materially from any such forward-looking statement appear
together with such statement. Also, the following factors, in addition to
other possible factors not listed, could affect the Company's actual results
and cause such results to differ materially from those expressed in
forward-looking statements.
Highly Competitive Industry. The computer and office automation product
supply industry is highly competitive. The Company competes with major
full-service office products distributors, other national and regional
computer supply distributors, office products superstores, direct mail order
companies, and, to a lesser extent, non-specialized retailers. Certain of the
Company's competitors, such as office products superstores and major
full-service office products distributors have substantially greater
financial and other resources and purchasing power than the Company. The
Company believes that the computer supply industry will become more
consolidated in the future and consequently more competitive. Increasing
competition will result in greater price discounting which will continue to
have a negative impact on the industry's gross margins. There can be no
assurance that the Company will not encounter increased competition in the
future, which could have a material adverse effect on the Company's business.
Dependence on Certain Key Suppliers. Although the Company regularly carries
products and accessories manufactured by approximately 500 original equipment
manufacturers, 50.6% of the Company's net sales in fiscal year 1996 were
derived from products supplied by the Company's ten largest suppliers, In
addition, the Company's business is dependent upon terms provided by its key
suppliers, including pricing and related provisions, product availability and
dealer authorizations. While the Company considers its relationships with its
key suppliers, including Hewlett-Packard Company ("Hewlett-Packard"), Lexmark
International, Inc. ("Lexmark") and Imation Corp. ("Imation") to be good,
there can be no assurance that these relationships will not be terminated or
that such relationships will continue as presently in effect. In addition,
changes by one or more of such key suppliers of their policies regarding
distributors or volume discount schedules or other marketing programs
applicable to the Company may have a material adverse effect on the Company's
business. Certain distribution agreements require the Company to make minimum
annual purchases. Under its distribution agreements with Hewlett-Packard,
Lexmark and Imation, the Company is required to make minimum annual purchases
of $5.0 million, $250,000 and $50,000, respectively.
Restrictions Imposed by Debt Arrangements. The Company's outstanding
indebtedness consists primarily of borrowings under the $15.0 million secured
revolving credit facility (the "Credit Facility") provided by National City
Bank of Dayton (the "Bank"). The Credit Facility contains restrictive
covenants which may have an adverse effect on the Company's operations in the
future. These covenants include, among other restrictions: (i) the
maintenance of certain financial ratios; (ii) prior notice to the Bank with
respect to (a) the purchase or sale of assets; (b) any merger, sale or
consolidation activity; (c) the creation or acquisition of any subsidiary or
the investment in any equity securities; (d) the entering into any
partnership or joint venture; or (e) the issuance of any equity securities;
and (iii) certain limitations on the incurrence of other indebtedness. These
provisions may constrain the Company's acquisition strategy, may delay,
deter, or prevent a takeover attempt that a shareholder might consider in its
best interests and may have an adverse effect on the market price of the
Company's Common Stock. In addition, the Credit Facility restricts the
payment of dividends to no more than 50.0% of the net income of the Company
in the year that the dividend is to be paid.
Ability to Manage Growth. The Company expects to experience rapid growth that
will likely result in new and increased responsibilities for management
personnel and which will challenge the Company's management, operating and
financial systems and resources. To compete effectively and manage future
growth, if any, the Company will be required to continue to implement and
improve its operational, financial and management information systems,
procedures and internal controls on a timely basis and to expand, train,
motivate and manage its work force. There can be no assurance that the
Company's personnel, systems, procedures and controls will be adequate to
support the Company's future operations. Any failure to implement and improve
the Company's operational, financial and management systems or to expand,
train motivate or manage employees could have a material adverse effect on
the Company's operating results and financial condition.
Dependence on Computer Systems. The Company's operations are generally
dependent on its proprietary software applications. Modifications to the
Company's computer systems and applications software will be necessary as the
Company executes its expansion
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plans and responds to customer needs, technological developments, electronic
commerce requirements and other factors. Such modifications may cause
disruptions in the operations of the Company, delay the schedule for
implementing the integration of newly acquired companies, or cost more to
design, implement or operate than currently budgeted. Such disruptions,
delays or costs could have a material adverse effect on the Company's
operations and financial performance.
The Company does not currently have redundant computer systems or redundant
dedicated communication lines linking its computers to its warehouses,
although all data is stored on two separate hard drives on a continual basis.
The Company has taken precautions to protect itself from events that could
interrupt its operations, including back-up power supplies that allow the
Company's computer system to function in the event of a power outage,
off-site storage of back-up data, fire protection, physical security systems
and an early warning detection and fire extinguishing system. The occurrence
of any of these events could have a material adverse effect on the Company's
operations and financial performance.
Failure to Implement Acquisition Strategy. The Company's business strategy
includes the acquisition of other computer and office automation supply
companies in the U.S. and overseas. Competition for desirable new
acquisitions in attractive major metropolitan markets is expected to
increase. No assurance can be given that the Company will be able to find
attractive acquisition candidates or that such acquisitions can be effected
at reasonable prices or in a timely manner, or that once acquired, the
Company will be able to profitably manage such companies. The failure to
complete acquisitions and continue the Company's expansion could have a
material adverse effect on its financial performance.
Integration of Acquisitions. The Company has acquired six computer and office
automation supply businesses in the past five years and intends to actively
pursue additional acquisitions. No assurance can be given that the Company
will be able to successfully integrate its future acquisitions with the
Company's existing systems and operations. The integration of acquired
businesses may also lead to the resignation of key employees of the acquired
companies and diversion of management attention from other ongoing business
concerns. The costs of integration could have an adverse effect on short-term
operating results. Any or all of these factors could have a material adverse
effect on the Company's operations in the future.
Financing for Acquisitions; Leverage. If acquisitions are consummated for
cash, it is likely that the Company will borrow the necessary funds and,
accordingly, the Company may become highly leveraged as a result thereof. If
it becomes highly leveraged, the Company may be more vulnerable to extended
economic downturns and its flexibility in responding to changing economic and
industry conditions may be limited. The degree to which the Company is
leveraged could have important consequences to purchasers of the Common
Stock, including the impairment of the Company's ability to obtain additional
financing for working capital, capital expenditures, acquisitions and general
corporate purposes. The Company's ability to make principal and interest
payments on its current and future indebtedness and to repay its current and
future indebtedness at maturity will be dependent on the Company's future
operating performance, which is itself dependent on a number of factors, many
of which are beyond the Company's control, and may be dependent on the
availability of borrowings under the Credit Facility or other financings. A
substantial portion of the Company's current borrowing capacity under the
Credit Facility could be consumed by increased working capital needs,
including future acquisitions.
Possible Need for Additional Financing to Implement Acquisition Strategy. No
portion of the Company's working capital has been set aside for the specific
purpose of funding future acquisitions and, therefore, the Company may
require additional funds to implement its acquisition strategy. While the
Company's Credit Facility may be utilized to finance acquisitions, the amount
which may be drawn upon by the Company may be limited. Accordingly, the
Company may require additional debt or equity financing for future
acquisitions. There can be no assurance that the Company will be able to
obtain additional debt or equity financing on terms favorable to the Company,
or at all, or if obtained, there can be no assurance that such debt or equity
financing will be sufficient for the financing needs of the Company.
Risks Relating to International Acquisitions. Expansion into international
markets may involve additional risks relating to such things as currency
exchange rates, new and different legal and regulatory requirements,
political and economic risks relating to the stability of foreign governments
and their trading relationship with the United States, difficulties in
staffing and managing foreign operations, differences in financial reporting,
differences in the manner in which different cultures do business, operating
difficulties and other factors.
Exchange Rate Fluctuations. Although the Company's operations are not
currently subject to material operational risks associated with fluctuations
in exchange rates, because the Company intends to expand the size and scope
of its international operations, its exposure to fluctuations in exchange
rates will be increased. Accordingly, no assurance can be given that the
Company's results of operations will not be adversely affected in the future
by fluctuations in foreign currency exchange rates. The Company has, at
times, entered into forward foreign currency exchange contracts in order to
hedge the Company's accounts receivable and accounts payable. In the future,
the Company may, from time to time, consider entering into other forward
foreign currency exchange contracts, although no assurances can be given that
the Company will do so, or will be able to do so, or that such arrangements
will adequately protect the Company from fluctuations in foreign currency
exchange rates.
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