AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON JULY 21, 2000
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MANCHESTER EQUIPMENT CO., INC.
(Exact Name of Registrant as Specified in its Charter)
NEW YORK
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(State or other Jurisdiction of Incorporation or Organization)
11-2312854
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(I.R.S. Employer Identification Number)
160 Oser Avenue, Hauppauge, New York 11788
(631) 435-1199
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Barry R. Steinberg
President and Chief Executive Officer
Manchester Equipment Co, Inc.
160 Oser Avenue
Hauppauge, New York 11788
(631) 435-1199
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
David E. Paseltiner
Jaspan Schlesinger Hoffman LLP
300 Garden City Plaza
Garden City, New York 11530
<PAGE>
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Approximate date of commencement of proposed sale to the public: from time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<CAPTION>
================================================================================
Title of Securities to be Amount to Proposed Maximum Proposed Maximum Aggregate Amount of
Registered be Registered Offering Price(1) Offering Price(1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value. 105,786 $5.125 $542,153 $143
=============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee,
in accordance with Rule 457 under the Securities Act of 1933, based upon the
average of the reported high and low sales prices of the Common Stock on the
NASDAQ National Market on July 20, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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3
<PAGE>
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated July 21, 2000
PROSPECTUS
105,786 Shares
MANCHESTER EQUIPMENT CO., INC.
COMMON STOCK
On March 15, 2000, we issued an aggregate of 105,786 shares of our
common stock in connection with our acquisition of Coastal Office Products,
Inc., a Maryland corporation, which occurred on January 2, 1998. We issued these
shares to Coastal's former shareholders. This prospectus relates to the public
offering, which will not be underwritten, of these shares.
The shares of common stock being offered by the selling shareholders
may be sold from time to time in transactions on the Nasdaq National Market, in
the over-the-counter market or in negotiated transactions. The selling
shareholders directly, or through agents or dealers designated from time to
time, may sell the common stock offered by them at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of
sale or at negotiated prices. We will not receive any proceeds from the sale of
these shares.
Our common stock is listed on the Nasdaq National Market under the
symbol "MANC." On July 20, 2000, the last reported sale price of the common
stock on the Nasdaq National Market was $5.0625 per share.
--------------------------
Investing in our common stock involves risks.
See "Risk Factors" beginning on page 6.
---------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined that
this prospectus is truthful or complete. It's illegal for anyone to tell you
otherwise.
The date of this Prospectus is _______, 2000.
4
<PAGE>
TABLE OF CONTENTS
Page
Special Note Regarding Forward-Looking Statements................... 2
Where You Can Find More Information About Us ....................... 3
Incorporation of Certain Documents by Reference .................... 3
Our Company......................................................... 4
Risk Factors........................................................ 6
Use of Proceeds..................................................... 13
Selling Shareholders................................................. 13
Plan of Distribution................................................. 14
Legal Matters........................................................ 15
Experts.............................................................. 15
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In this prospectus and any prospectus supplement, the terms "Manchester,"
the "company," "we," "us," and "our" refer to Manchester Equipment Co., Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Our Company," "Risk Factors" and
elsewhere in this prospectus constitute forward-looking statements. These
statements involve known and unknown risks, uncertainties, and other factors
that may cause our or our industry's actual results, levels of activity,
performance, or achievements to be materially different from any future results,
levels of activity, performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, those listed
under "Risk Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue" or the negative
of such terms or other comparable terminology.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements.
Moreover, neither we nor any other person assumes responsibility for
the accuracy and completeness of such statements. We undertake no obligation to
update or revise any of the forward-looking statements, whether as a result of
new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
prospectus may not occur.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). You may read and copy these reports, proxy statements and other
information at the public reference facilities maintained by the SEC at its
offices at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, or at its regional offices located at Seven World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. You may also obtain copies of these
materials by mail from the Public Reference Section of the Commission, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You
may obtain further information on the operation of the public reference rooms,
by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site
containing reports, proxy statements and other information regarding registrants
that file electronically. The address of that Web site is http://www.sec.gov.
We have filed with the SEC a Registration Statement on Form S-3 under
the Securities Act of 1933 to register the Common Stock covered by this
prospectus. This prospectus, which is part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement and
its exhibits, as permitted by the rules and regulations of the SEC. For further
information about Manchester and the Common Stock, you should refer to the
Registration Statement and its exhibits, copies of which may be inspected and
copied at the public reference facilities of the SEC referred to above.
We also furnish our stockholders with annual reports containing audited
financial statements, quarterly reports containing unaudited financial
statements for the first three quarters of each fiscal year and proxy material
for our annual meetings.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" certain information we
file with them, which means that we can disclose important information to you by
referring you to those documents. Under the SEC's regulations, any statement
contained in a document incorporated by reference in this prospectus is
automatically updated and superseded by any information contained in this
prospectus, or in any subsequently filed document of the types described below.
We incorporate into this prospectus by reference the following documents filed
by us with the SEC, each of which should be considered an important part of this
prospectus:
o Our Annual Report on Form l0-K for the fiscal year ended July 31, 1999,
o Our Annual Report on Form l0-K/A for the fiscal year ended July 31, 1999,
o our Quarterly Reports on Form 10-Q for the fiscal quarters ended October
31, 1999, January 31, 2000, and April 30, 2000,
<PAGE>
o the description of our common stock contained in our Registration Statement
on Form S-1 dated October 3, 1996, and
o any future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until the selling shareholders
sell all of the common stock offered by them pursuant to this prospectus.
You may obtain a copy of these filings, at no cost, by writing or calling
us at the following address: Manchester Equipment Co., Inc., 160 Oser Avenue,
Hauppauge, New York 11788, (631) 435-1199, Attention: Veronica Laskowski,
Investor Relations. Exhibits to a document will not be provided unless they are
specifically incorporated by reference in that document.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone to provide you with different information. We are not making an offer to
sell these securities in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information in this prospectus or the
prospectus supplement is accurate as of any date other than the date on the
front of those documents. Our business, financial condition, results of
operations and prospects may have changed since that date.
The information in this prospectus or any supplement may not contain
all of the information that may be important to you. You should read the entire
prospectus or any supplement, as well as the documents incorporated by reference
in the prospectus or any supplement, before making an investment decision.
OUR COMPANY
Manchester is an integrator and reseller of computer hardware, software
and networking products, primarily for commercial customers. We offer our
customers single-source solutions customized to their information systems needs
by integrating its analysis, design and implementation services, which are
"value-added" services, with hardware, software, networking products and
peripherals from leading vendors. Over the past 26 years, the Company has forged
long-standing relationships with both customers and suppliers and capitalized on
the rapid developments in the computer industry, including the shift toward
client/server-based platforms. To date, most of our revenue has been derived
from product sales.
Our marketing focus is on mid- to large-sized companies, which have
become increasingly dependent upon complex information systems in an effort to
gain competitive advantages. While many of these companies have the financial
resources to make the required capital investments in information systems, often
they do not have the necessary information technology personnel to design,
install or maintain complex systems or to incorporate the continuously evolving
technologies. As a result, these companies are turning to independent third
parties to procure, design, install, maintain and upgrade their information
systems.
<PAGE>
We offer our customers a variety of value-added services, such as
consulting, integration and support services, together with a broad range of
computer and networking products from leading vendors. Consulting services
include systems design, performance analysis, and migration planning.
Integration services include product procurement, configuration, testing and
systems installation and implementation. Support services include network
management, "help-desk" support, and enhancement, maintenance and repair of
computer systems. Most of the Company's revenues are derived from sales to
customers located in the New York Metropolitan area, with approximately 60% of
the Company's revenue generated from our Long Island and New York City offices.
On February 16, 2000, we launched our enhanced website and electronic
commerce system. This new site, located at www.e-manchester.com, allows both
existing customers, corporate shoppers and others to find product
specifications, compare products, check price and availability and place and
track orders quickly and easily, 24 hours a day, 7 days a week. In addition, on
June 25, 1999, we announced the launch of a new consumer products on-line super
store, Marketplace4U.com. This site offers products in categories such as
consumer electronics, automotive accessories, and outdoor and camping equipment
from its main and outlet stores. The main store offers top brand products at
competitive prices; the outlet store offers top name brand factory refurbished,
warranteed products at even greater savings.
Manchester was incorporated in New York in 1973 and has seven active
wholly-owned subsidiaries:
* Manchester International, Ltd., a New York corporation, which sells
computer hardware, software and networking products to resellers domestically
and internationally;
* ManTech Computer Services, Inc., a New York corporation, which identifies
and provides temporary information technology positions and solutions for
commercial customers;
* Electrograph Systems, Inc., a New York corporation, which distributes
microcomputer peripherals throughout the United States;
* Coastal Office Products, Inc., a Maryland corporation, which is an
integrator and reseller of computer products in the Baltimore, Maryland area;
* Marketplace4U.com, Inc., a New York corporation, which is an online
superstore that offers a wide range of brand name products to consumers; and
* Texport Technology Group, Inc., a New York corporation, and Learning
Technology Group, LLC, a New York limited liability company, both of which are
value-added resellers of computer services and peripherals to companies and
educational institutions in the Rochester, New York area.
<PAGE>
Our principal executive office is located at 160 Oser Avenue,
Hauppauge, New York 11788, our telephone number is (631) 435-1199, and the
address of our Web site is www.e-manchester.com. We do not intend the
information found on our Web site to be a part of this prospectus.
RISK FACTORS
You should carefully consider the risks described below and all other
information contained in this prospectus before making an investment decision.
The risks described below are not the only ones facing our company. Additional
risks not presently known to us or that we currently deem immaterial may also
impair our business operations.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks and you may lose all or
part of your investment.
This prospectus also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described below and elsewhere in this
prospectus.
We may be adversely affected by changing industry conditions and decreasing
operating margins in sales of products.
The computer industry is characterized by a number of potentially
adverse business conditions, including pricing pressures, evolving distribution
channels, market consolidation and a potential decline in the rate of growth in
sales of personal computers. Heightened price competition among various hardware
manufacturers has resulted in reduced per unit revenue and declining gross
profit margins. As a result of the intense price competition within our
industry, we have experienced increasing pressure on our gross profit and
operating margins with respect to our sale of products. Our inability to compete
successfully on the pricing of products sold, or a resumption of the decline in
our gross margins of products sold due to adverse industry conditions or
competition, may have a material adverse effect on our business, financial
condition and results of operations.
Our growth strategy involves risks related to increasing our service revenue,
expanding our operations, managing our growth and hiring and retaining skilled
personnel. Our failure with respect to one or more of these risks could
materially adversely affect our growth rate, prospects, and business.
An integral part of our strategy is to increase the revenue generated
by selling value-added services, such as analysis, design and implementation
services. These services generally provide higher operating margins than those
associated with the sale of products. We can't predict whether we will be
successful in increasing our focus on providing value-added services, and the
failure to do so may have a material adverse effect on our results of operations
and financial condition.
<PAGE>
Our strategy also includes expanding our presence in the New York
metropolitan area by increasing our sales and service capabilities in our New
York City office and enlarging its sales, service and training capabilities at
our Long Island headquarters as well as expanding geographically into growing
business centers in the eastern half of the United States. We can't assure you
that the expansion of our New York metropolitan area operations will increase
profits generated by such operations, that the opening of new offices will prove
profitable, or that these expansion plans will not substantially increase future
capital expenditures or other expenditures. The failure of this component of our
strategy may materially adversely affect our results of operations and financial
condition.
To date, our success has been based primarily upon sales in the New
York Metropolitan area. Our strategy, encompassing the expansion of service
offerings, the expansion of existing offices and the establishment of new
regional offices, has challenged and will continue to challenge our senior
management and infrastructure. We can't predict our ability to respond to these
challenges. If we fail to effectively manage our planned growth, there may be a
material adverse effect on our growth rate, prospects, results of operations and
financial condition.
In addition, the success of our strategy depends in large part upon
our ability to identify, attract, hire, develop, motivate and retain highly
skilled technical personnel and sales representatives, including independent
sales representatives, in a very competitive labor market. Our ability to grow
our service offerings has been somewhat limited by a shortage of qualified
personnel, and we can't assure you that we will be able to hire and retain such
skilled personnel and representatives. The loss of a significant number of our
existing technical personnel or sales representatives, difficulty in hiring or
retaining additional technical personnel or sales representatives, or
reclassification of our sales representatives as employees, may have a material
adverse effect on our business, growth rate and financial condition.
If we are unable to successfully compete in the computer industry, our business
could be materially adversely affected.
The computer industry is characterized by intense competition. We
directly compete with local, regional and national systems integrators,
value-added resellers and distributors as well as with certain computer
manufacturers that market through direct sales forces and/or the Internet. The
computer industry has recently experienced a significant amount of consolidation
through mergers and acquisitions, and manufacturers of personal computers may
increase competition by offering a range of services in addition to their
current product and service offerings. In the future, we may face further
competition from new market entrants and possible alliances between existing
competitors. In addition, certain suppliers and manufacturers may choose to
market products directly to end users through a direct sales force and/or the
Internet rather than or in addition to channel distribution, and may also choose
<PAGE>
to market services, such as repair and configuration services, directly to end
users. Some of our competitors have, or may have, greater financial, marketing
and other resources, and may offer a broader range of products and services,
than us. As a result, they may be able to respond more quickly to new or
emerging technologies or changes in customer requirements, benefit from greater
purchasing economies, offer more aggressive hardware and service pricing or
devote greater resources to the promotion of their products and services. We may
not be able to compete successfully in the future with these or other current or
potential competitors. Competition may result in reduced revenues, and may cause
the Company to reduce its prices, which, in turn, could reduce profits. As a
result, our results of operations and financial condition may be materially
adversely affected.
The loss of senior management could materially adversely affect our business.
We are highly dependent upon the services of the members of our senior
management team, particularly Barry R. Steinberg, the Company's founder,
Chairman of the Board, President and Chief Executive Officer, and Joel G.
Stemple, Ph.D., the Company's Executive Vice President. We have an employment
agreement with Dr. Stemple, but do not have an employment agreement with Mr.
Steinberg. The loss of either member of our senior management team may have a
material adverse effect on our business. While we are the beneficiary under
insurance policies on the lives of Mr. Steinberg and Dr. Stemple in the amounts
of $1.3 million and $700,000, respectively, we cannot assure you that the
proceeds of these insurance policies will be adequate to compensate us for the
loss of services of either of these key executives.
Our business is geographically concentrated and is therefore subject to regional
economic downturns, which could adversely affect our results of operations.
Our operations and customers are principally located in the eastern
United States. Therefore, our business, financial condition and results of
operations are susceptible to regional economic downturns and other regional
factors, including state regulations and severe weather conditions. In addition,
as we expand in our existing markets, opportunities for growth within these
regions will become more limited. We cannot assure you that we will grow enough
in other markets to lessen our regional geographic concentration.
We are dependent on our sales to computer resellers and value added resellers, a
reduction in which could adversely affect our ability to obtain volume
discounts, resulting in an adverse affect on our results of operations.
Our profitability has been positively affected by our ability to obtain
volume discounts from certain manufacturers, which has been dependent, in part,
upon our ability to sell large quantities of products to computer resellers,
including value added resellers. Our sales to resellers have been made at profit
margins generally less favorable than our sales directly to commercial
customers. Our inability to sell products to computer resellers and thereby
obtain the desired volume discounts from manufacturers or to expand our sales to
<PAGE>
commercial customers sufficiently to offset our need to rely on sales to
computer resellers may have a material adverse effect on our financial condition
and results of operations.
We are dependent on our relationships with major manufacturers, the loss of
which could limit our ability to source sufficient quantities of merchandise or
increase the price we have to pay for merchandise, which, in either case, could
adversely affect our revenue and profits.
Our business is dependent upon our relationships with major
manufacturers in the computer industry. Our top four vendors accounted for
approximately 21%, 10%, 6% and 6%, respectively, of our total product purchases
for the year ended July 31, 1999. Our top three vendors accounted for
approximately 24%, 13% and 11%, respectively, of our total product purchases for
the year ended July 31, 1998. Our top two vendors accounted for approximately
17% and 15%, respectively, of total product purchases for the year ended July
31, 1997. Many aspects of our business are affected by our relationships with
major manufacturers, including product availability, pricing and related terms,
and reseller authorizations.
The increasing demand for personal computers and ancillary equipment
has resulted in significant product shortages from time to time, because
manufacturers have been unable to produce sufficient quantities of certain
products to meet demand. We can't predict that manufacturers will maintain an
adequate supply of these products to satisfy all the orders of our customers or
that, during periods of increased demand, manufacturers will provide products to
us, even if available, or at discounts previously offered to us. In addition, we
can't assure you that the pricing and related terms offered by major
manufacturers will not adversely change in the future. Our failure to obtain an
adequate supply of products, the loss of a major manufacturer, the deterioration
of our relationship with a major manufacturer or our inability in the future to
develop new relationships with other manufacturers may have a material adverse
effect on our revenues and results of operations.
Certain manufacturers offer market development funds, cooperative
advertising and other promotional programs to systems integrators, distributors
and computer resellers. We rely on these funds for many of our advertising and
promotional campaigns. The dollar amounts of these funds that we received for
the fiscal years ended July 31, 1997, 1998 and 1999 were $521,000, $623,000 and
$380,000, respectively. In recent years, manufacturers have generally reduced
their level of support with respect to these programs, which has required us to
increasing spending of our own funds to obtain the same level of advertising and
promotion. If manufacturers continue to reduce their level of support for these
programs, or discontinue them altogether, we would have to further increase our
advertising and promotion spending, which may have a material adverse effect on
our results of operations.
We may be adversely affected if we are unable to successfully manage our
inventory.
<PAGE>
The computer industry is characterized by rapid product improvement and
technological change. This results in relatively short product life cycles and
rapid product obsolescence, which can place inventory at considerable valuation
risk. Certain of our suppliers provide price protection to us, which is intended
to reduce the risk of inventory devaluation due to price reductions on current
products. Price protection means that if a supplier lowers its prices on goods
that we recently purchased from the supplier, we will receive a credit from the
supplier reflecting the difference between the price we paid and the reduced
price. Generally, price protection is available only with respect to products
that we have in our inventory, and not to products that we sold prior to the
price reduction. Certain of our suppliers also provide stock balancing to us,
which means that we are able to return unsold inventory to a supplier as a
partial credit against payment for new products. There are often restrictions on
the dollar amount of inventory that we can return at any one time. Price
protection and stock balancing may not be available to us in the future, and,
even if available, these measures may not provide complete protection against
the risk of excess or obsolete inventories. Although we maintain a sophisticated
proprietary inventory management system, we can't assure you that we will
continue to successfully manage our existing and future inventory. Our failure
to successfully manage our current or future inventory may result in our being
unable to satisfy our customers' demands for various products, or our having to
carry inventory that we are unable to sell at a profit, either of which could
have a material adverse effect on our financial condition and results of
operations.
If we do not adapt to rapid technological change, we will not be competitive in
the marketplace.
The markets for our products and services are characterized by rapidly
changing technology and frequent introduction of new hardware and software
products and services. This may render many existing products and services
noncompetitive, less profitable or obsolete. Our continued success will depend
on our ability to keep pace with the technological developments of new products
and services and to address increasingly sophisticated customer requirements.
Our success will also depend upon our abilities to address the technical
requirements of our customers arising from new generations of computer
technologies, to obtain these new products from present or future suppliers and
vendors at reasonable costs, to educate and train our employees as well as our
customers with respect to these new products or services and to integrate
effectively and efficiently these new products into both our internal systems
and systems developed for our customers. We may not be successful in
identifying, developing and marketing product and service developments or
enhancements in response to these technological changes. Our failure to respond
effectively to these technological changes may have a material adverse effect on
our growth rate, prospects, financial condition and results of operations.
We may not be successful in making acquisitions, which could adversely affect
our future growth.
Our strategy envisions that part of our future growth will come from
making acquisitions consistent with our strategy. There can be no assurance that
<PAGE>
we will be able to identify suitable acquisition candidates and, once
identified, to negotiate successfully their acquisition at a price or on terms
and conditions favorable to us, or to integrate the operations of such acquired
businesses with our operations. Certain of these acquisitions may be of
significant size and may include assets that are outside our geographic
territories or are ancillary to our core business strategy.
The price of our stock is subject to volatility and the market price could fall
below the price you paid for your shares. As a result, you may lose all or part
of your investment.
The market price of our common stock has been volatile and subject to
wide fluctuations, and could decline below the price paid to the selling
shareholders. Specific factors relating to our business or broad market
fluctuations may materially adversely affect the market price of our common
stock. The trading price of our common stock could be subject to wide
fluctuations in response to numerous factors, such as:
* actual or anticipated variations in quarterly operating results,
* announcements of technological innovations, new products or services
by us or our competitors,
* changes in financial estimates and forecasts by securities analysts;
* changes in the market valuations of other computer integrators and
resellers,
* announcements that we will make significant acquisitions or form
strategic partnerships,
* general conditions in the computer industry,
* changes in earnings
estimates by securities analysts, and
* other events or factors, many of which are beyond our control.
In addition, the stock market in general and the Nasdaq National Market in
particular have experienced extreme price and volume fluctuations, which have
particularly affected the market prices of many technology companies and which
have often been unrelated or disproportionate to the operating performance of
such companies. Our revenue or operating results in future quarters may be below
the expectations of securities analysts and investors. In such an event, the
price of our common stock would likely decline, perhaps substantially. As a
result, you could lose part or all of your investment. During the twelve-month
period ended June 30, 2000, the closing price of our common stock ranged from a
high of $9.125 per share to a low of $2.25 per share and ended that period at
$4.875 per share.
Our revenues and operating results are subject to quarterly fluctuations, which
may adversely affect our financial results and stock price.
<PAGE>
Our quarterly revenues and operating results have varied significantly
in the past and we expect that they will continue to do so in the future.
Quarterly revenues and operating results generally fluctuate as a result of the
demand for our products and services, the introduction of new hardware and
software technologies with improved features, the introduction of new services
by us and our competitors, changes in the level of our operating expenses,
competitive conditions and economic conditions. In particular, we have increased
our fixed operating expenses, including a significant increase in personnel, as
part of our strategy to increase our focus on providing systems integration and
other higher margin and value-added services. As a result, we believe that
period-to-period comparisons of our operating results should not be relied upon
as an indication of future performance, and the results of any quarterly period
are not indicative of results to be expected for a full fiscal year. If we do
not accurately predict our sales and revenues, we may not appropriately adjust
our spending which could have a negative impact on our financial results and
stock price. In addition, if our business results do not meet analysts'
predictions or the market's expectations, then our stock price may decline. As a
result, you could lose part or all of your investment.
We may not be successful in increasing our Internet presence, which could
adversely affect our growth rate and prospects.
We have made, and expect to continue to make, significant investments
and improvements in our e-commerce capabilities. However, sales on the Internet
are subject to intense competition. Some of our competitors have, or may have,
greater financial, marketing and other resources, and may offer a broader range
of products and services, than we do. In addition, because use of the Internet
for the purpose of selling goods and services is still in a relatively early
stage of development, there is no guarantee that use of the Internet for such
purchases will become widespread. Customer concerns about privacy and security
may hinder the growth of such Internet sales.
Moreover, to date revenue from Marketplace4U.com has been immaterial.
While we have entered into a number of strategic alliances in an effort to
increase consumer traffic to this site, these alliances may not result in
increased revenues or profits. In addition, we may be unable to develop new
alliances and may be unsuccessful in renewing existing alliances or, if they are
renewed, it may be at a higher cost.
Accordingly, we cannot assure you that we will be successful in
enhancing and increasing our business though our expanded Internet presence. Our
inability to do so may have a material adverse affect on our growth rate and
prospects.
The outcome of the Microsoft anti-trust case may delay or otherwise affect the
introduction and distribution of Microsoft products, which may have a material
adverse affect on our results of operations.
Most of the personal computers we sell utilize operating systems
developed by Microsoft Corporation. The United States Department of Justice has
brought an antitrust action against Microsoft, which could delay the
<PAGE>
introduction and distribution of Microsoft products. The potential
unavailability of Microsoft products may have a material adverse effect on our
business, results of operations and financial condition.
Our ownership is concentrated, which may adversely affect the market price of
our stock.
Barry R. Steinberg, our Chairman of the Board, President and Chief
Executive Officer, owns approximately 57% of the outstanding shares of Common
Stock. As a result, he has sufficient voting power to control all matters
submitted to our stockholders for approval (including the election and removal
of directors and any merger, consolidation or sale of all or substantially all
of our assets). Such concentration of ownership may delay, defer or prevent a
change in control, impede a merger, consolidation, takeover or other business
combination involving us or discourage a potential acquirer from making a tender
offer or otherwise attempting to take control of us. This could, in turn,
adversely affect the market price of the Common Stock.
USE OF PROCEEDS
All of the shares of common stock offered pursuant to this prospectus
are being offered by the selling shareholders listed under "Selling
Shareholders." We will not receive any proceeds from sales of common stock by
the selling shareholders.
SELLING SHAREHOLDERS
The shares of common stock being offered by the selling shareholders
were issued to the selling shareholders by Manchester in a transaction exempt
from registration under the Securities Act. The following table sets forth the
number of shares owned by each of the selling shareholders. The selling
shareholders have been officers and employees of our wholly-owned subsidiary,
Coastal Office Products, Inc., since prior to our acquiring it on January 2,
1998. The information set forth below is based on information provided by or on
behalf of the selling shareholders. The shares offered by this prospectus may be
offered from time to time by the selling shareholders named below.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Name of Selling Shareholder Number of Shares Shares Shares Owned Upon
Beneficially Owned Being Offered Completion of the
Prior to the Offering(1) Offering(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bruce Clasing 62,893 52,893 10,000
Harold Clasing 62,893(3) 52,893 10,000(3)
</TABLE>
-----------
(1) This registration statement also covers any additional shares of common
stock which become issuable in connection with the shares being registered by
reason of any stock dividend, stock split, recapitalization or other similar
transaction made without the receipt of consideration and which results in an
increase in the number of Manchester's outstanding shares of common stock.
(2) Assuming all of the shares being registered are sold in the offering and no
additional shares of Common Stock are bought or sold by any selling shareholder.
We make this assumption due to the fact that the actual amount of shares that
will be held by the selling shareholders after completion of this offering is
not known at this time. The selling shareholders may offer all, some or none of
the shares, and there currently are no agreements, arrangements or
understandings with respect to the sale of any of the shares.
(3) Does not include 100 shares of common stock issued in the name of Harold
Clasing as Custodian for Nicholas H. Clasing, Mr. Clasing's son. Mr. Clasing
disclaims beneficial ownership of these shares.
<PAGE>
PLAN OF DISTRIBUTION
We are registering 105,786 shares (the "Shares") on behalf of certain
selling shareholders. All of the Shares were originally issued by us in
connection with our acquisition of Coastal. The selling shareholders named in
the table above and pledgees, donees, transferees or other
successors-in-interest selling Shares received from a named selling shareholder
as a gift or other non-sale-related transfer after the date of this prospectus
(collectively, the "Selling Shareholders") may sell the Shares from time to
time. The Selling Shareholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. The Selling
Shareholders may sell the Shares directly to other purchasers, or to or through
dealers or agents. To the extent required, a prospectus supplement with respect
to the Shares will set forth the terms of the offering of the Shares, including
the name(s) of any dealer or agents, the number of Shares to be sold, the price
of the Shares, any underwriting discount or other items constituting
underwriters' compensation.
The Shares may be sold from time to time directly by the Selling
Shareholders or, alternatively, through broker-dealers or agents. Such common
stock may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of
sale or at negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (1) on any national securities
exchange for quotation services on which the common stock may be listed or
quoted at the time of sale, (2) in the over-the-counter market, (3) in
transactions other than on such exchanges or services or in the over-the-counter
market, or (4) through the writing of options. In connection with sales of the
Shares, the Selling Shareholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of such common stock in
the course of hedging the positions they assume. The Selling Shareholders may
also sell the Shares short and deliver such Shares to close out such short
positions, or loan or pledge such Shares to broker-dealers that in turn may sell
Shares. In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 or Regulation S of the Securities Act may be sold
under Rule 144 or Regulation S rather than pursuant to this prospectus.
The Selling Shareholders and any underwriters, broker-dealers, or
agents that participate in the sale of the Shares may be deemed "underwriters"
as defined by the Securities Act.
If a dealer is used in the sale of any common stock where this
prospectus is delivered, the Selling Shareholders may sell the Shares to the
public at varying prices to be determined by such dealer and at the time of
resale. To the extent required, the name of the dealer and the terms of the
transaction will be set forth in the related prospectus supplement.
<PAGE>
In connection with the sale of the Shares, dealers or agents may
receive compensation from the Selling Shareholders or from purchasers of such
Shares for whom they may act as agents in the form of discounts, concessions, or
commissions. Agents and dealers participating in the distribution of the Shares
may be deemed to be underwriters, and any compensation received by them and any
profit on the resale of Shares by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
Manchester will bear all costs, expenses and fees in connection with
the registration of the Shares. The Selling Shareholders will bear all
commissions and discounts, if any, attributable to the sales of the Shares. The
Selling Shareholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the Shares against certain
liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the issuance of shares of common stock being offered
will be passed upon for us by Jaspan Schlesinger Hoffman LLP, Garden City, New
York.
EXPERTS
The consolidated financial statements and schedule of Manchester Equipment
Co., Inc. and subsidiaries as of July 31, 1999 and 1998, and for each of the
years in the three-year period ended July 31, 1999, have been incorporated by
reference herein and in the Registration Statement in reliance upon the report
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
**************
We have not authorized any person to make a statement that differs from
what is in this prospectus. If any person does make a statement that differs
from what is in this prospectus, you should not rely on it. This prospectus is
not an offer to sell, nor is it seeking an offer to buy, these securities in any
state in which the offer or sale is not permitted. The information in this
prospectus is complete and accurate as of its date, but the information may
change after that date.
18
<PAGE>
105,786 Shares
Manchester Equipment Co., Inc.
Common Stock
----------------------
Prospectus
----------------------
_________, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The following table sets forth the Registrant's estimates (other than
the SEC Registration Fee) of the expenses in connection with the distribution of
the securities being registered, all of which are to be paid by the Registrant.
SEC Registration Fee .........................................$143
Legal Fees and Expenses.....................................$7,500
Accounting Fees and Expenses................................$7,500
Printing Fees...............................................$1,000
Miscellaneous Expenses .....................................$1,000
Total .....................................................$17,143
ITEM 15. Indemnification of Directors and Officers
Section 722 of the New York Business Corporation Law grants
corporations the power to indemnify their directors, officers, employees and
agents in accordance with the provisions thereof. Article Ninth of the
Registrant's Amended and Restated Certificate of Incorporation provides for
indemnification, to the full extent permissible under Section 722 of the New
York Business Corporation Law, of all persons the Registrant has the power to
indemnify under such Section.
Registrant maintains directors' and officers' liability insurance
coverage with an aggregate policy limit of $5,000,000 of each policy year.
ITEM 16. Exhibits
Exhibit No. Description
----------- -----------
2.1 Definitive Purchase Agreement among Manchester Equipment Co.,
Inc., Bruce C. Clasing, Harold B. Clasing, and Coastal Office
Products, Inc., dated January 2, 1998 (1)
5.1 Opinion of Jaspan Schlesinger Hoffman LLP
23.1 Consent of KPMG LLP
23.2 Consent of Jaspan Schlesinger Hoffman LLP (included in the
opinion of Jaspan Schlesinger Hoffman LLP filed in Exhibit 5.1
hereto)
24.1 Power of Attorney (included on Page II-4 of this registration
statement)
----------
(1) Filed as Exhibit 10.12 to the Registrant's Quarterly Report on Form
10-Q filed with the SEC on March 13, 1998.
<PAGE>
ITEM 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement, or the most recent
post-effective amendment thereof, which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and therefore is unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by the registrant of expenses incurred or paid by a director,
<PAGE>
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act, that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Hauppauge, New York, on July 21, 2000.
MANCHESTER EQUIPMENT CO., INC.
(Registrant)
By:/s/ Barry R. Steinberg
----------------------------------
Barry R. Steinberg
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Barry R. Steinberg, as his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue thereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on the dates indicated.
Name Title Date
---- ----- ----
/s/ Barry R. Steinberg President, Chief Executive July 21, 2000
----------------------------- Officer, Chairman of the Board
Barry R. Steinberg and Director (Principal
Executive Officer)
/s/ Joel G. Stemple Executive Vice President, July 21, 2000
----------------------------- Secretary and Director
Joel G. Stemple
/s/ Joseph Looney Vice President-Finance July 21, 2000
----------------------------- and Chief Financial Officer
Joseph Looney (Principal Accounting and
Financial Officer)
/s/ Joel Rothlein Director July 21, 2000
-----------------------------
Joel Rothlein
/s/ Julian Sandler Director July 21, 2000
-----------------------------
Julian Sandler
/s/ Bert Rudofsky Director July 21, 2000
-----------------------------
Bert Rudofsky
/s/ Michael Russell Director July 21, 2000
-----------------------------
Michael Russell
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
5.1 Opinion of Jaspan Schlesinger Hoffman LLP
23.1 Consent of KPMG LLP
23.2 Consent of Jaspan Schlesinger Hoffman LLP (included in
the opinion of Jaspan Schlesinger Hoffman LLP filed in
Exhibit 5.1 hereto)
24.1 Power of Attorney (included on Page II-3 of this
registration statement)
