<PAGE>
PROSPECTUS
Rule 424(b)(3)
MIAMI COMPUTER SUPPLY CORPORATION
3,760,775 SHARES OF COMMON STOCK
------------------------------------
The Selling Stockholders identified in this prospectus may offer from
time to time up to 3,760,775 shares of Common Stock, no par value, of Miami
Computer Supply Corporation. We will not receive any proceeds from this
Offering.
The shares of Common Stock may be offered by the Selling Stockholders in
one or more transactions on the Nasdaq National Market ("NNM") at prices then
prevailing, in negotiated prices or otherwise. The price at which any of the
shares of Common Stock may be sold, and the commissions, if any, paid in
connection with any sale, are unknown and may vary from transaction to
transaction. See "Plan of Distribution." We will pay certain expenses of
this Offering which are estimated to be approximately $66,000.
The Common Stock currently trades on the NNM under the symbol "MCSC."
As of October 6, 1998, we had 11,209,540 shares of Common Stock issued and
outstanding. On October 14, 1998, the last reported closing sale price of
the Common Stock on the NNM was $18.00 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 7.
------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 4, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus. . . . . . . . . . . . . . . . . .2
Where You Can Find More Information. . . . . . . . . . .2
Prospectus Summary . . . . . . . . . . . . . . . . . . .5
Risk Factors . . . . . . . . . . . . . . . . . . . . . .7
Use of Proceeds. . . . . . . . . . . . . . . . . . . . 12
Selling Stockholders . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . 15
Legal Matters. . . . . . . . . . . . . . . . . . . . . 16
Experts. . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed on
behalf of the Selling Stockholders with the Securities and Exchange
Commission ("SEC") utilizing a "shelf" registration process. Under this
shelf process, the Selling Stockholders may, from time to time, sell their
shares of Common Stock offered by this prospectus in one or more offerings.
The prices at which the shares of the Common Stock may be sold are described
under the heading "Plan of Distribution."
This prospectus omits certain information contained in the registration
statement as permitted by the SEC. Statements contained in this prospectus
as to the contents of any contract or any other document referred to are not
necessarily complete. In each instance, you are referenced to the copy of
the contract or other document filed as an exhibit to the registration
statement. You may read and copy the information in the registration
statement at the locations described under the heading "Where You Can Find
More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. For further information on the
operation of the Public Reference Room, you may call the SEC at
1-800-SEC-0330. Our SEC filings also are available to the public over the
Internet at the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by
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<PAGE>
reference is considered to be part of this prospectus, and information that
we file later with the SEC will automatically update and supersede this
information. We incorporate by reference the following documents that we
have filed with the SEC and our future filings with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the
offering of the Common Stock by the Selling Stockholders is completed:
- - Annual Report on Form 10-K for the fiscal year ended December 31, 1997;
- - Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and
June 30, 1998;
- - Current Reports on Form 8-K filed with the SEC on September 23, 1998,
September 17, 1998, April 28, 1998, January 30, 1998, January 15, 1998
as amended on February 3, 1998, and January 2, 1998;
- - Proxy Statement for our Annual Meeting of Stockholders held on April 29,
1998, filed on March 25, 1998; and
- - The description of the Common Stock contained in our Registration Statement
on Form 8-A, filed with the SEC on October 15, 1996.
You may obtain a copy of these filings, at no cost, by writing to or
calling us at the following address:
Ira H. Stanley, Vice President and Chief Financial Officer
Miami Computer Supply Corporation
4750 Hempstead Station Drive
Dayton, Ohio 45429
(937) 291-8282
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE
YOU WITH ADDITIONAL INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION
IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE COVER OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE COMMON STOCK IN ANY
STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED.
------------------------------------
3
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THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE CONTAIN
CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES. THE WORDS "BELIEVE," "ANTICIPATE," "EXPECT," "ESTIMATE,"
"INTEND" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS.
SIMILARLY, STATEMENTS THAT DESCRIBE OUR FUTURE PLANS, OBJECTIVES AND GOALS
ARE ALSO FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE
UNDER THE HEADING "RISK FACTORS," ELSEWHERE IN THIS PROSPECTUS AND THE
DOCUMENTS INCORPORATED BY REFERENCE.
------------------------------------
We have obtained Federal service mark registration of the names "Miami
Computer Supply Corporation-Registered Trademark-," "Miami Computer Supply
International-Registered Trademark-," the slogan "Computer Supplies. Right.
Now.-Registered Trademark-," "MCSI-Registered Trademark-" and the associated
Company logo. All other trademarks or registered trademarks or service marks
appearing in this prospectus or the documents incorporated by reference are
trademarks or registered trademarks or service marks of the respective
companies that utilize them.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE
READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED
FINANCIAL STATEMENTS AND RELATED NOTES CONTAINED IN THE DOCUMENTS
INCORPORATED BY REFERENCE.
REFERENCES IN THIS PROSPECTUS TO "WE," "OUR" OR "US" REFER TO MIAMI
COMPUTER SUPPLY CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES, NOT TO ANY
SELLING STOCKHOLDER.
THE COMPANY
Miami Computer Supply Corporation is a leading distributor of computer
and office automation supplies and accessories, projection presentation and
audio-visual products and video conferencing equipment throughout the United
States and in certain foreign countries. We distribute over 1,800 core
products to approximately 25,000 customers comprised primarily of small to
medium-size businesses and, to a lesser extent, governmental, educational and
institutional customers.
Our principal executive offices are located at 4750 Hempstead Station
Drive, Dayton, Ohio, 45429 and our telephone number is (937) 291-8282.
RECENT DEVELOPMENTS
We completed the sale of 2,415,000 shares of Common Stock on June 30,
1998 (2,100,000 shares) and July 23, 1998 (315,000 shares) in an underwritten
public offering. We used the proceeds of the public offering to repay
certain indebtedness outstanding under our $50.0 million credit facility.
The amounts borrowed under the credit facility were used to fund our
acquisitions in fiscal years 1997 and 1998 and for working capital.
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THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by Selling Stockholders(1). . .. 3,760,775 shares
Common Stock offered by us . . . . . . . . . . . . .. 0 shares
Common Stock to be outstanding after the Offering(2). 11,209,540 shares
Use of Proceeds. . . . . . . . . . . . . . . . . . .. The shares of Common
Stock are offered by
the Selling
Stockholders for their
own benefit. We will not
receive any proceeds
from the Offering.
Nasdaq National Market symbol. . . . . . . . . . . .. MCSC
</TABLE>
- -------------------------
(1) We issued 3,482,656 of the shares offered by this prospectus to
certain Selling Stockholders in connection with our acquisitions of Imperial
Data Supply Corporation, Data Associates, Inc., Force 4 D.P. Supplies, Inc.,
Minnesota Western/Creative Office Products, Inc., NTI Data Products, Inc.,
Britco, Inc., TBS Printware Corporation, Computer Showcase, Inc., Electronic
Image Systems, Inc. and Consolidated Media Systems, Inc. We are registering
some of these shares to fulfill "registration rights" given to certain
Selling Stockholders in connection with some of the acquisitions. The
remaining 278,119 shares may be offered for sale from time to time by the FBR
Private Equity Fund, L.P.
(2) Based on 11,209,540 shares of Common Stock outstanding as of October
6, 1998. Excludes 1,275,000 shares of Common Stock reserved for future
issuance under our stock option plans.
6
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS BEFORE PURCHASING
ANY OF THE COMMON STOCK OFFERED BY THIS PROSPECTUS, IN ADDITION TO OTHER
INFORMATION IN THIS PROSPECTUS AND INCORPORATED BY REFERENCE. THE CAUTIONARY
STATEMENTS BELOW AND IN THE DOCUMENTS INCORPORATED BY REFERENCE SHOULD BE
READ AS ACCOMPANYING FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
AND IN THE DOCUMENTS INCORPORATED BY REFERENCE. THE RISKS DESCRIBED IN THE
STATEMENTS BELOW COULD CAUSE OUR RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN OR INDICATED BY THE FORWARD-LOOKING STATEMENTS.
FINANCING FOR ACQUISITIONS; ADDITIONAL DILUTION
We intend to pursue aggressively the acquisition of computer and office
automation supply, projection presentation and audio-visual products
companies. If acquisitions are funded by the issuance of additional Common
Stock, the issuance may be without stockholder approval, and will dilute
current stockholders and stockholders who purchase shares of Common Stock
offered by this prospectus. Stockholders have no preemptive rights and,
therefore, no stockholder has the right to acquire additional Common Stock to
prevent dilution. Moreover, the issuance of additional shares of Common
Stock may have a negative impact on earnings per share and may impact
negatively the market price of the Common Stock.
FINANCING FOR ACQUISITIONS; LEVERAGE
If the purchase price of an acquisition includes cash, we will likely
borrow the necessary funds. We may become highly leveraged as a result of
borrowing these funds. High leverage could make us more vulnerable to
extended economic downturns and reduce our ability to respond to changing
economic and industry conditions. High leverage also could impair our
ability to obtain additional financing needed for working capital, capital
expenditures, acquisitions or general corporate purposes.
NEED FOR ADDITIONAL FINANCING TO IMPLEMENT ACQUISITION STRATEGY
We will require additional funds to implement our acquisition strategy.
Borrowings under our $50.0 million credit facility ("Credit Facility") may be
utilized to finance acquisitions, however, these borrowings are subject to
the satisfaction of terms and conditions contained in the Credit Facility,
including financial covenants and certain restrictions on "permitted
acquisitions." Under the Credit Facility, at least 40.0% of the
consideration for an acquisition must be Common Stock and certain pro forma
indebtedness to earnings ratios must be satisfied in order for an acquisition
to be a "permitted acquisition." In addition, our ability to obtain debt
financing other than in accordance with the Credit Facility is limited by
covenants in the Credit Facility.
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Accordingly, there can be no assurance that we will have the borrowing
capacity or the ability to raise equity capital sufficient to implement our
acquisition strategy.
RESTRICTIONS IMPOSED BY CREDIT FACILITY
Our outstanding indebtedness consists primarily of borrowings under the
Credit Facility. The Credit Facility contains covenants that may restrict
our operations in the future. The Credit Facility provides, among other
things, that we will not, in certain circumstances: (i) change the nature of
our business; (ii) acquire the property or assets of any person, other than
permitted acquisitions that comply with the financial covenants of the Credit
Facility; (iii) incur other indebtedness, except for certain capital leases
up to $3.0 million, certain guaranties and certain existing indebtedness;
(iv) pay cash dividends or repurchase our capital stock; or (v) violate
certain financial covenants.
FAILURE TO IMPLEMENT ACQUISITION STRATEGY
We expect competition for acquisitions in major metropolitan markets to
increase. No assurance can be given that we will identify attractive
acquisition candidates or complete acquisitions at reasonable prices, in a
timely manner or at all. A failure to identify and complete acquisitions
could have a material adverse effect on our future growth and the market
price of our Common Stock.
INTEGRATION OF ACQUISITIONS
Between May 1, 1993 and June 30, 1998, we acquired nine computer and
office automation supply companies and three projection presentation products
businesses, nine of which occurred between April 1997 and June 1998. We
intend to continue to actively pursue additional acquisitions. No assurance
can be given that we will be able to successfully integrate acquisitions with
our existing systems and operations without substantial costs, delays or
other problems. The integration of acquired businesses may also lead to the
resignation of key employees of the acquired companies and diversion of
management attention from our other ongoing business concerns. Any or all of
these factors could have a material adverse effect on our operating results
and financial condition.
RISKS RELATING TO INTERNATIONAL ACQUISITIONS
We have in the past, and may in the future, seek to acquire the stock or
assets of computer supply, projection presentation or audio-visual product
distributors which are located outside the United States. Expansion into
international markets may involve additional risks relating to things such as
(i) currency exchange rates, (ii) new and different legal and regulatory
requirements, (iii) political and economic risks relating to the stability of
foreign governments and their trading relationship with the United States,
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(iv) difficulties in staffing and managing foreign operations, (v)
differences in financial reporting, (vi) differences in the manner in which
different cultures do business, (vii) operating difficulties and (viii) other
factors. Although our operations currently are not subject to material
international risks, we intend to expand our international operations and, as
a result, the above risks may be present in the future.
ABILITY TO MANAGE GROWTH
We expect to experience continued rapid growth resulting in new and
increased responsibilities for management personnel and increased demands on
our operating and financial systems and resources. To effectively manage
future growth, we must continue to expand our operational, financial and
management information systems and to train, motivate and manage our work
force. There can be no assurance that our operational, financial and
management information systems will be adequate to support our future
operations. Failure to expand our operational, financial and management
information systems or to train, motivate or manage employees could have a
material adverse effect on our operating results and financial condition.
DEPENDENCE ON CERTAIN KEY SUPPLIERS
Although we regularly carry products and accessories manufactured by
approximately 500 original equipment manufacturers, products supplied by our
ten largest suppliers represented 51.9% of our net sales for the year ended
December 31, 1997 and 50.2% of our net sales for the six months ended June
30, 1998. In addition, products of the following manufacturers accounted for
a significant portion of our total net sales for the year ended December 31,
1997: Hewlett-Packard Company, 14.6%; Canon Corporation, 12.4%; and Lexmark
International, Inc., 7.8%.
Our business is dependent upon terms provided by our key suppliers,
including pricing and related provisions, product availability and dealer
authorizations. While we consider our relationships with our key suppliers,
including Hewlett- Packard Company, Canon Corporation and Lexmark
International, Inc., to be good, there can be no assurance that these
relationships will continue. In addition, a material change by a key
supplier relating to distributors, volume discount schedules or marketing
programs applicable to us, could have a material adverse effect on our
operating results and financial condition.
DEPENDENCE ON KEY PERSONNEL
We rely on certain key executives, including our President and other
senior management, and have entered into employment agreements that contain
non-competition provisions with these key executives. There can be no
assurance that we can retain our executive officers and key personnel or
attract additional qualified management in the future. In addition, the
success of certain of our acquisitions may depend, in part, on our
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ability to retain management personnel of the acquired companies. The loss
of services of one or more of our key executives could disrupt and have a
material adverse effect on our operating results and financial condition.
DEPENDENCE ON COMPUTER SYSTEMS
Our operations depend, to a large extent, on our management information
systems. Modifications to our computer systems and application software will
be necessary as we grow and respond to customer needs, technological
developments, electronic commerce requirements and other factors. We
currently are in the process of upgrading our internal accounting and
inventory control and distribution software programs. The upgrade is
expected to cost approximately $2.5 million. The modifications may (i) cause
disruptions in our operations, (ii) delay the schedule for integrating newly
acquired companies, or (iii) cost more to design, implement or operate than
currently budgeted. Any of these disruptions, delays or costs could have a
material adverse effect on our operating results and financial condition.
We do not currently have redundant computer systems or redundant
dedicated communication lines linking our computers to our warehouses. We
have safeguards against certain events that could interrupt our operations,
including (i) back-up power supplies that allow our computer system to
function in the event of a power outage, (ii) redundant storage of data,
(iii) off-site storage of back-up data, (iv) physical security systems and an
(v) early warning detection and fire extinguishing system. The failure of
our computer or communication systems could have a material adverse effect on
our operating results and financial condition.
YEAR 2000 COMPLIANCE
We are aware of the issues associated with the hardware, software and
operating systems in existing computer and telecommunication systems as the
millennium approaches. The "year 2000" problem is pervasive and complex as
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
and other computer operated 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 cause a system to
fail.
We are utilizing internal and external resources to identify and
correct, or reprogram, all of our systems for year 2000 compliance. Our
AS/400 hardware and operating system are already compliant. We are in the
process of implementing a corporate wide financial and distribution software
package from J. D. Edward Company in response to our expansion and
acquisition program. This software package is already year 2000 compliant,
and installation is expected to be complete January 1, 1999.
All other equipment is currently undergoing compliance testing. In
cases of non-compliance, equipment will be replaced by January 1, 1999. This
equipment includes
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personal computers, networking equipment and telecommunication equipment.
Because most of our computer and telecommunications equipment is relatively
new, the cost to bring it into compliance is currently estimated to be less
than $250,000.
No one knows the extent of the potential impact of the year 2000 problem
generally and we cannot predict the likelihood that year 2000 problems will
cause a significant disruption in the economy as a whole. We will continue
to examine the year 2000 issue as it potentially impacts us and will develop
a contingency plan if we believe one is necessary.
HIGHLY COMPETITIVE INDUSTRY
The industry in which we operate is highly competitive. We compete 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
our competitors, such as office products superstores and major full-service
office products distributors, are larger and have substantially greater
financial and other resources and purchasing power than we do. We believe
that the computer supply industry will further consolidate in the future and
consequently become more competitive. Increased competition may result in
greater price discounting which will continue to have a negative impact on
the industry's gross margins.
POTENTIAL VOLATILITY OF STOCK PRICE
Stock prices of growth companies such as ours may fluctuate widely,
often for reasons that are unrelated to the actual operating performance of
the particular company. In addition, the market price of the Common Stock is
subject to significant fluctuation due to (i) variations in stock market
conditions, (ii) changes in financial estimates by securities analysts or by
our failure to meet estimates, (iii) variations in quarterly operating
results, (iv) general conditions affecting all participants in the computer
supply industry, (v) announcements by us or our competition, (vi) regulatory
developments, and (vii) economic or other external factors.
NO DIVIDENDS
We have not paid a cash dividend on our Common Stock since our initial
public offering and currently expect to retain our future earnings, if any,
for use in the operation and expansion of our business. We do not anticipate
paying any cash dividends in the foreseeable future. In addition, the Credit
Facility prohibits the payment of cash dividends.
AVAILABILITY OF COMMON STOCK AND PREFERRED STOCK FOR ISSUANCE
Our Board of Directors has the authority to issue up to 5,000,000 shares
of our Preferred Stock, no par value per share, and to determine the terms,
including voting
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rights, of those shares without any further vote or action by our
stockholders. The voting and other rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. Similarly,
our Board may issue additional shares of Common Stock without any further
vote or action by stockholders under certain circumstances. An issuance
could occur in the context of another public or private offering of shares of
Common Stock or Preferred Stock or in a situation where the Common Stock or
Preferred Stock is used to acquire the assets or stock of another company.
The issuance of Common Stock or Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of delaying, deferring or preventing a change
in control.
CONTROL OF EXISTING MANAGEMENT AND CERTAIN STOCKHOLDERS
Our directors and executive officers and officers of our subsidiaries
currently beneficially own 5,493,067 shares of Common Stock representing
approximately 49.0% of the outstanding shares of Common Stock (including
vested stock options but not including shares owned beneficially by
Pittsburgh Investment Group LLC, an investor group that includes four of our
directors). Consequently, management is in a position to exert significant
influence over material matters relating to our business, including decisions
regarding (i) the election of our Board of Directors, (ii) the acquisition or
disposition of assets (in the ordinary course of our business or otherwise),
(iii) future issuances of Common Stock or other securities, and (iv) the
declaration and payment of dividends on the Common Stock. Management also
may be able to delay, make more difficult or prevent us from engaging in any
business combination.
ANTITAKEOVER PROVISIONS
Our Amended and Restated Articles of Incorporation and Amended and
Restated Code of Regulations contain certain provisions which, among other
things, (i) permit the establishment of a "staggered" Board of Directors,
(ii) limit the personal liability of and provide indemnification for our
directors, (iii) require that stockholders comply with certain requirements
to nominate a director or submit a proposal before a meeting of stockholders,
(iv) limit the ability of stockholders to act by written consent and (v)
require a supermajority vote of stockholders if a "related person" (as
defined) attempts to engage in a business combination with us. The Ohio
General Corporation Law, which applies to us, has certain other provisions
which may be deemed to have antitakeover effects, including statutes which
deal with (i) control share acquisitions, (ii) control bids and (iii) the
disgorgement of trading profits.
USE OF PROCEEDS
We will not receive any proceeds from the Offering. All proceeds will
be received and retained solely by the Selling Stockholders.
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SELLING STOCKHOLDERS
Of the 3,760,775 shares of Common Stock offered by this prospectus,
3,482,656 represent shares issued to certain of the Selling Stockholders by
us in connection with our acquisitions of Imperial Data Supply Corporation,
Spokane, Washington; Data Associates, Inc., Roswell, Georgia; Force 4 D.P.
Supplies, Inc., Portland, Oregon; Minnesota Western/Creative Office Products,
Inc., Berkley, California; NTI Data Products, Inc., Goffstown, New Hampshire;
Britco, Inc., Houston, Texas; TBS Printware Corporation, Fremont, California;
Computer Showcase, Inc., Norcross, Georgia; Electronic Image Systems, Inc.,
Seattle, Washington; and Consolidated Media Systems, Inc., Nashville,
Tennessee. We are registering some of these shares on behalf of the Selling
Stockholders to fulfill "registration rights" given to them in connection
with certain of the acquisitions. The remaining 278,119 shares may be
offered for sale from time to time by the FBR Private Equity Fund, L.P., an
affiliate of Friedman, Billings, Ramsey & Co., Inc., one of the underwriters
of the public offering we completed on June 30, 1998 and July 23, 1998.
Except as indicated, none of the Selling Stockholders has held any position
or office or had a material relationship with us or any of our affiliates
within the past three years other than as a result of the ownership of Common
Stock. The following table sets forth the aggregate number of shares of
Common Stock beneficially owned and to be offered by each Selling
Stockholder. See "Plan of Distribution."
<TABLE>
<CAPTION>
Number of
Shares Beneficially
Shares Beneficially Shares Owned
Name of Selling Stockholder Owned Prior to Offering(1) Being Offered After Offering(1)
--------------------------- -------------------------- ------------- -------------------
Number Percent Number Percent
-------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Michael A. Clark(2). . . . . 66,068 * 66,068 + +
J. Phillip Crone(3). . . . . 90,080 * 90,080 + +
H. Clark Gilson Trust(4)(5). 440,851 3.9% 440,851 + +
Larry R. Goodman Trust(4)(6) 440,851 3.9 440,851 + +
Gerald G. Gould(3) . . . . . 96,918 * 96,918 + +
Charles and Gretchen
Ferguson(7). . . . . . . . 274,999 2.5 274,999 + +
Thomas R. James(8) . . . . . 83,250 * 83,250 + +
John Keegan and
Valerie Keegan(3). . . . . 76,515 * 76,515 + +
John D. Lentz. . . . . . . . 15,464 * 15,464 + +
John McCoubrie(9). . . . . . 78,750 * 78,750 + +
John W. Miles(10). . . . . . 308,561 2.8 308,561 + +
Stephen M. Mulloy(8) . . . . 55,750 * 55,750 + +
Ruy J. Pereira(4). . . . . . 440,851 3.9 440,851 + +
Melva Potter . . . . . . . . 1,825 * 1,825 + +
William H. Potter
Testamentary Trust(11) . . 32,484 * 32,484 + +
Michael C. Richardson(2) . . 66,068 * 66,068 + +
Lothar Rowe. . . . . . . . . 157,500 1.4 157,500 + +
Robert Salomon(9). . . . . . 78,750 * 78,750 + +
Donald W. Sandlin(10). . . . 308,561 2.8 308,561 + +
Deborah Smith(12). . . . . . 55,750 * 55,750 + +
Jerrold H. Smith(12) . . . . 90,135 * 90,135 + +
Daniel W. Wisdom(13) . . . . 188,292 1.7 188,292 + +
FBR Private Equity Fund, L.P. 278,119 2.5 278,119 + +
Total. . . . . . 3,760,775 33.5 3,760,775 + +
</TABLE>
(NOTES ON FOLLOWING PAGE)
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- ---------------------
(*) Less than 1% of the 11,209,540 shares of Common Stock issued and
outstanding as of October 6, 1998.
(+) The Selling Stockholder may sell some, all or none of his or her shares
offered by this prospectus.
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under Rule 13d-3, beneficial ownership includes any shares
which the Selling Stockholder has sole or shared voting power or investment
power and also any shares which the Selling Stockholder has the right to
acquire within 60 days of the date of this prospectus through the exercise
of any stock option or other right. The number and percentage of shares
beneficially owned does not include 1,275,000 shares of Common Stock
reserved for issuance under our employee stock option and non-employee
director stock option plans, none of which are beneficially owned by any
of the Selling Stockholders.
(2) Michael A. Clark and Michael C. Richardson are the President and the Chief
Executive Officer, respectively, of Electronic Image Systems, Inc., one of
our wholly-owned subsidiaries.
(3) Messrs. Crone and Keegan are employees of ours. Mr. Gould resigned as an
employee effective July 31, 1998, and now serves as a consultant to us.
(4) H. Clark Gilson, Ruy J. Pereira and Larry R. Goodman are the President,
Vice-President, and Vice-President and Assistant Secretary, respectively,
of Minnesota Western/Creative Office Products, Inc., one of our
wholly-owned subsidiaries.
(5) H. Clark Gilson and Kay Ann Gilson are the sole beneficiaries of the H.
Clark Gilson Trust.
(6) Larry R. Goodman and Linda D. Goodman are the sole beneficiaries of the
Larry R. Goodman Trust.
(7) Gretchen Ferguson and Charles Ferguson are President and Vice-President,
respectively, of Britco, Inc., one of our wholly-owned subsidiaries.
(8) Thomas R. James is the President and Stephen M. Mulloy is the Vice
President of NTI Data Products, Inc., one of our wholly-owned subsidiaries.
(9) John McCoubrie is the Chief Executive Officer and Secretary and Robert
Salomon is the President of TBS Printware Corporation, one of our
wholly-owned subsidiaries.
(10) Donald W. Sandlin and John W. Miles are the President and the Secretary and
Treasurer, respectively, of Consolidated Media Systems, Inc., one of our
wholly-owned subsidiaries.
(11) Melva Potter is the trustee of the William H. Potter Testamentary Trust.
(12) Deborah Smith and Jerrold H. Smith are the Vice-President and President,
respectively, of Computer Showcase, Inc., one of our wholly-owned
subsidiaries.
(13) Mr. Wisdom resigned as President of Force 4 D. P. Supplies, Inc., one of
our wholly-owned subsidiaries, effective July 15, 1998.
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PLAN OF DISTRIBUTION
We have been advised by the Selling Stockholders that they intend to
sell all or a portion of the shares offered by this prospectus from time to
time on the Nasdaq National Market, or otherwise, and that sales will be made
at prices and terms then prevailing or prices related to the then current
market price or at negotiated prices. The Selling Stockholders also may make
private sales directly or through a broker or brokers, who may act as agent
or as principal. As used in this section, "Selling Shareholders" includes
donees and pledgees selling shares of the Common Stock offered by this
prospectus received from a named Selling Shareholder after the date of this
Prospectus. We will not receive any proceeds from any sales of shares by the
Selling Stockholders. The shares of Common Stock offered by this prospectus
may be sold by one or more of the following means of distribution:
- - a block trade in which the broker-dealer so engaged will attempt to sell
shares of Common Stock as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
- - purchases by a broker-dealer as principal and resale by the broker-dealer
for its own account pursuant to this prospectus;
- - an over-the-counter distribution in accordance with the rules of the Nasdaq
National Market;
- - ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- - in privately negotiated transactions.
Upon our notification by the Selling Stockholders that any material
arrangement has been entered into with a broker or dealer for the sale of
shares through a secondary distribution, or a purchase by a broker or dealer,
a supplemented prospectus will be filed, if required, pursuant to Rule 424(c)
under the Securities Act of 1933, disclosing (i) the name of each
broker-dealer(s), (ii) the number of shares involved, (iii) the price at
which the shares were sold, (iv) the commissions paid or discounts or
concessions allowed to the broker-dealer(s), where applicable, (v) that the
broker-dealer(s) did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus, as supplemented, and
(vi) other facts material to the transaction.
We have (i) advised the Selling Stockholders that Regulation M under the
Securities Exchange Act of 1934 may apply to their sales and their
affiliates' sales in the market, (ii) furnished the Selling Stockholders with
a copy of this regulation and (iii) informed them of the need for delivery of
copies of this prospectus at or prior to the time
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of any sale of shares of Common Stock offered by this prospectus. The
Selling Stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act of 1933. Any
commissions paid or any discounts or concessions allowed to any such
broker-dealers, and any profits received on the resale of such shares, may be
deemed to be underwriting discounts and commissions under the Securities Act
of 1933 if the broker-dealers purchase shares as principal.
Any securities covered by this prospectus that qualify for sale pursuant
to Rule 144 or Rule 145 under the Securities Act of 1933 may be sold under
such rule rather than pursuant to this Prospectus.
There is no assurance that the Selling Stockholders will sell any or all
of the shares of Common Stock offered by this prospectus.
LEGAL MATTERS
The validity of the Common Stock offered by this prospectus will be
passed upon for us by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.
As of the date of this prospectus, a general partnership composed of certain
members of Elias, Matz, Tiernan & Herrick L.L.P. beneficially owned 20.4% of
Pittsburgh Investment Group LLC, which owns 388,519 shares of Common Stock.
In addition, certain members of Elias, Matz, Tiernan & Herrick L.L.P. owned
approximately 247,680 shares of Common Stock.
EXPERTS
The consolidated financial statements of Miami Computer Supply
Corporation as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997, incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Miami Computer Supply
Corporation for the year ended December 31, 1997, have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Consolidated Media Systems, Inc. as of
December 31, 1997 and for the year then ended, incorporated in this
Prospectus by reference to Miami Computer Supply Corporation's Form 8-K dated
September 11, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The financial statements of Consolidated Media Systems, Inc. as of
December 31, 1996 and the related statements of income, stockholder's equity
and cash flows for the years ended December 31, 1996 and 1995, incorporated
in this Prospectus by reference to
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Miami Computer Supply Corporation's Form 8-K dated September 11, 1998, have
been so incorporated in reliance on the report of Frasier, Dean & Howard,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Minnesota Western/Creative Office Products,
Inc. as of October 31, 1996 and September 30, 1997 and for each of the two
years in the period ended October 31, 1996 and for the eleven month period
ended September 30, 1997, incorporated in this Prospectus by reference to
Miami Computer Supply Corporation's Form 8-K dated January 30, 1998, have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of TBS Printware Corporation as of January 3,
1997 and September 30, 1997 and for the year ended January 3, 1997 and for
the nine months ended September 30, 1997, incorporated in this Prospectus by
reference to Miami Computer Supply Corporation's Form 8-K dated January 15,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
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