UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 12, 1999
PAMECO CORPORATION
(Exact name of registrant as specified in its charter)
Commission File No: 001-12837
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GEORGIA 51-0287654
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(State or other jurisdiction (I.R.S. employer
of incorporation or identification
organization) number)
1000 CENTER PLACE
NORCROSS, GA 30093
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(Address of principal executive offices)
(770)-798-0700
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On July 12, 1999, the Registrant issued a Press Release
regarding Fiscal 2000 First Quarter Results attached hereto as Exhibit 99.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PAMECO CORPORATION
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(Registrant)
By: /s/ Mark Sellers
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Mark Sellers
Chief Financial Officer
July 12, 1999 (Mr. Sellers has been duly authorized
to sign on behalf of the registrant)
PAMECO
CORP
CONTACT:
CONTACT:
Olivia Yuspa Van Negris / Philip J. Denning
Pameco Corporation Kehoe, White, Van Negris & Company, Inc.
(770) 798-0600 (212) 396-0606
FOR IMMEDIATE RELEASE
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PAMECO CORPORATION ANNOUNCES FISCAL 2000 FIRST QUARTER RESULTS
IN LINE WITH PREVIOUSLY ANNOUNCED EXPECTATIONS;
LAUNCHES NEW CUSTOMER FRIENDLY WEB SITE;
APPOINTS JACKE REYNOLDS SOUTHWEST DIVISION PRESIDENT
NORCROSS, GA - JULY 12, 1999 - Pameco Corporation (NYSE: PCN) today
announced results for the fiscal 2000 first quarter ended May 31, 1999 in
line with previously announced expectations.
Revenues for the fiscal 2000 first quarter were $159.1 million, up 9.6
percent from $145.2 million in the fiscal 1999 first quarter. Same store
sales declined 3.8 percent in the fiscal 2000 first quarter, due principally
to the unseasonably cool weather patterns that prevailed throughout the
country in May and the discontinuance of certain product promotion programs
which emphasized revenue at the expense of gross margin.
Operating earnings in the first quarter of fiscal 2000 were $93,000 compared
to $4.6 million in the prior year quarter. The decline was due, in part, to
investments made in support of the Company's objective of enhancing its key
business processes and charges related to the vesting of certain restricted
stock granted to the Company's Chief Executive Officer.
The net loss for the fiscal 2000 first quarter was $1.4 million compared to
net income of $1.9 million in the fiscal 1999 first quarter. For the fiscal
2000 first quarter, the diluted loss per share was $0.16 compared to diluted
earnings per share of $0.21 in the fiscal 1999 first quarter. Excluding the
effect of the charges related to the grant of restricted stock, operating
earnings would have been $795,000; the net loss would have been $998,000;
and the diluted loss per share would have been $0.11.
James R. Balkcom, Chairman, President and Chief Executive Officer, stated:
"Our results in the fiscal 2000 first quarter reflect the progress we are
making towards achieving our strategic objectives of investing for
profitable growth and maximizing value for both our customers and our
shareholders. As we have previously stated, our focus in fiscal 2000 is on
realizing the advantages provided from our scale and growing market share in
our present markets by concentrating on five key elements:
"(i) Redefining and enhancing the key business processes across the
Company's locations to enable the efficient and effective delivery of our
products and services and the communication of information so as to provide
enhanced customer service at the lowest total delivered cost,
"(ii) Successfully completing the initial installation of an enterprise
system technology solution to enable more timely and accurate data
communications so as to provide enhanced customer service at the lowest
total delivered cost,
"(iii) Enhancing the capabilities of Pameco's associates to those skill
sets required in an integrated supply company which uses its scale to
interface with its suppliers and to serve customers more efficiently and
effectively,
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PAMECO CORPORATION
July 12, 1999
Page Two
"(iv) Expanding the products and services available to our current
customers, and
"(v) Expanding the customer base served by Pameco's branches by better
understanding the needs of potential customers and retrofitting the branches
to respond to the needs of local markets.
"In the fiscal 2000 first quarter, we are seeing the first tangible results
from investments made in redefining and enhancing our business processes and
capabilities of our people in the area of working capital management. There
has been a qualitative improvement in the operations of our reconfigured
accounts receivable department, which has maintained a constant accounts
receivable level during a period of increased sales. Going forward, we
believe that the ongoing refinement of our processes will result in increased
customer service while simultaneously reducing operating expense."
In support of its objective of expanding products and services available to
its current customers, the Company announced that it has launched its new
customer-friendly web site www.pameco.com to provide its customers and
shareholders with up-to-date information on the Company and its products.
The site features Pameco's full line of private label ThermalZone products
as well as updated product specials and promotions. Links to suppliers,
environmental and regulatory agencies, and general industry information are
provided as a convenience to those who visit the site.
The enhanced web site www.pameco.com also features a link to Service
First which offers full-featured, affordable software solutions to
contractors in the air conditioning, refrigeration, and plumbing industries.
Service First provides complete accounting, integrated dispatching, service
agreements, vehicle maintenance, word processing functions, and powerful job
costing. The web site also offers comprehensive investor relations
information such as current stock price quotes, financial reports, SEC
filings, financial news releases and analyst coverage. Shareholders may
access Pameco's 1999 annual report on the web site.
Mr. Balkcom continued: "With Pameco's focus on establishing a national
distribution network, it is fitting that we are making ourselves accessible
on the Internet with our new web site. We realize that many of our
customers, as well as our shareholders and other members of the financial
community, rely on the Internet for fast and convenient information. We
believe that Pameco's enhanced web site will allow us to post a wide range
of critical, up-to-the-minute information so we can continue to focus on our
customers and shareholders. In the coming months, we will be adding
enhancements such as an improved inventory search, interactive online order
capability, dealer locator map, and an employment search feature."
The Company announced it has appointed Jacke Reynolds to Southwest Division
President, responsible for the Texas, New Mexico, Louisiana, Kansas,
Missouri, Oklahoma and Arkansas markets. Mr. Reynolds, 38, is a seasoned
HVAC/R professional who most recently served as divisional vice president at
Pameco. He has served in various positions within the Company over the past
21 years, starting his career in the warehouse and has moved up through
sales and management positions to regional manager. Mr. Reynolds, who
resides in Vidor, Texas with his wife, Karen and their children Timothy,
Taylor and Tyler, attended Lamar University and has completed various
industry-related courses.
Jerry Bowman, Pameco's Chief Operating Officer, stated: "Jacke, whose HVAC/R
roots go back to his father who spent 45 years in the industry, has
demonstrated excellence in leadership and industry expertise during his 21
years with Pameco. His move to Division President will strengthen Pameco's
customer service focus in the critical southwest regions. I'm looking
forward to Jacke's continued success in his new role."
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PAMECO CORPORATION
July 12, 1999
Page Three
Mr. Balkcom added: "Jacke Reynolds' appointment to Southwest Division
President further strengthens Pameco's management structure as we continue
to develop our nationwide distribution network."
Pameco Corporation is one of the largest distributors of HVAC systems and
equipment and refrigeration products in the United States, with predecessor
corporations dating back to 1931, and has established a leading position in
the consolidating distribution segment of the climate control industry,
building a centralized national distribution network. Pameco's products
include a complete range of heating, air conditioning and refrigeration
("HVAC/R") equipment, parts and supplies for the light commercial and
residential HVAC markets and commercial refrigeration market. The products
sold by Pameco are used principally for the repair and replacement of
existing HVAC/R and for new construction. The Company had 353 branches in
47 states and Guam which are located in 95 of the top 100 population centers
in the country as of May 31, 1999.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: Certain statements contained in this press release are "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including without limitation, the Company's plans for
future business development activities, product mix, margin enhancements,
the timely review of the Company's management information system ("MIS") and
the successful implementation of the MIS and any additional enterprise wide
software required to enhance the functionality thereof, eventual
improvements to the Company's logistics and delivery system through the MIS,
and the Company's ability to operate acquired companies in a profitable
manner. Such forward-looking statements are subject to risks, uncertainties
and other factors which could cause actual results to differ materially from
future results expressed or implied by such forward-looking statements.
Investors are cautioned that any forward-looking statements are not
guarantees of future performance and involve risks and uncertainties and
that actual results may differ materially from those contemplated by such
forward-looking statements. Such risks include, without limitation, risks
associated with the Company's information technology, including its MIS, the
risk that the Company will not be able to successfully implement its new
strategies, the risk that new acquisitions will not be successfully
integrated into the Company, the seasonality and cyclicality of the
Company's sales, the Company's competition, the Company's dependence on
supplier relationships, the increased presence of buying groups and risks
related to the Company's borrowings.
Note: Additional information about Pameco Corporation is available on
Pameco's World Wide Web site on the Internet located at
http://www.pameco.com.
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Pameco Corporation
July 12, 1999
Page Four
PAMECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MAY 31,
1999 1998
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<S> <C> <C>
Net sales $ 159,117 $ 145,194
Costs and expenses:
Cost of products sold 121,915 111,146
Warehousing, selling, and administrative expenses 37,126 29,519
Amortization of excess of cost over acquired net assets 292 204
Amortization of excess of acquired net assets over cost (309) (306)
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159,024 140,563
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Operating earnings 93 4,631
Other expenses:
Interest expense, net (1,779) (1,022)
Discount on sales of accounts receivable and other expenses (814) (760)
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(Loss) income before income taxes (2,500) 2,849
(Benefit) provision for income taxes (1,067) 965
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Net (loss) income $ (1,433) $ 1,884
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Basic (loss) earnings per share $ (0.16) $ 0.22
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Basic weighted average shares outstanding 9,092 8,740
Diluted (loss) earnings per share $ (0.16) $ 0.21
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Diluted weighted average shares outstanding 9,092 9,120
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PAMECO CORPORATION
July 12, 1999
Page Five
PAMECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
MAY 31, FEBRUARY 28,
1999 1999
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ASSETS
Current assets:
Cash and cash equivalents $ 147 $ 148
Accounts receivable, less allowance of $6,120
at February 28, 1999 and $6,210 at February 28, 1998 35,583 35,507
Inventories 150,230 157,621
Prepaid expenses and other current assets 2,252 4,149
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Total current assets 188,212 197,425
Property and equipment, net 16,100 15,694
Excess of cost over acquired net assets, net 44,569 44,948
Deferred income tax assets and other assets 15,689 15,821
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Total assets $ 264,570 $ 273,888
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 71,423 $ 68,521
Accrued compensation and withholdings 3,383 4,661
Other accrued liabilities and expenses 22,952 26,723
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Total current liabilities 97,758 99,905
Long-term liabilities:
Debt 90,076 95,608
Capital lease obligations, warranty reserves, and other 4,145 3,675
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Total long-term liabilities 94,221 99,283
Excess of acquired net assets over cost, net 3,851 4,160
Total shareholders' equity 68,740 70,540
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Total liabilities and shareholders' equity $ 264,570 $ 273,888
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