<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
____________________ TO ____________________
COMMISSION FILE NUMBER 001-13195
INDUSTRIAL DISTRIBUTION GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 58-2299339
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
950 East Paces Ferry Road, Suite 1575 Atlanta, Georgia 30326
(Address of principal executive offices and zip code)
(404) 949-2100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Shares outstanding of the issuer's Common Stock at March 31, 1999: 8,500,591
shares of Common Stock, $0.01 par value share.
1
<PAGE> 2
INDEX
INDUSTRIAL DISTRIBUTION GROUP, INC.
<TABLE>
<S> <C>
PART I. Financial Information
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 1999 and December 31, 1998
Consolidated Statements of Operations for the three months ended March 31,
1999 and 1998
Consolidated Statements of Cash Flows for the three months ended March 31,
1999 and 1998
Notes to the Consolidated Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. Other Information
ITEM 1. Legal Proceedings
ITEM 6. Exhibits and Reports on Form 8-K
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDUSTRIAL DISTRIBUTION GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
(Unaudited)
(Note 1)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,626 $ 1,285
Accounts Receivable, net 67,244 57,459
Inventory, net 61,432 60,949
Deferred tax assets 5,516 5,516
Prepaid and Other Current Assets 7,523 7,919
-------- --------
TOTAL CURRENT ASSETS 145,341 133,128
Property and Equipment, net 29,271 24,619
Intangible Assets, net 51,969 51,880
Other Assets 1,597 1,838
-------- --------
TOTAL ASSETS $228,178 $211,465
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short Term Debt $ 2,133 $ 4,039
Accounts Payable 41,457 40,342
Accrued Compensation 3,047 3,772
Other Accrued Liabilities 4,458 3,986
-------- --------
TOTAL CURRENT LIABILITIES 51,095 52,139
Long-Term Debt 52,879 35,660
Deferred Income Tax 883 884
Other Long-Term Liabilities 9,138 9,187
-------- --------
TOTAL LIABILITIES 113,995 97,870
STOCKHOLDERS' EQUITY:
Common Stock, par value $.01 per share, 50,000,000 shares authorized;
8,507,364 shares issued and 8,500,591 shares outstanding in 1999;
8,484,953 shares issued and 8,478,180 shares outstanding in 1998 85 85
Additional Paid-In Capital 97,250 97,182
Retained Earnings 16,848 16,328
-------- --------
Total Stockholders' Equity 114,183 113,595
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $228,178 $211,465
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
INDUSTRIAL DISTRIBUTION GROUP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
---- ----
* Restated
<S> <C> <C>
NET SALES....................................... $ 135,895 $ 89,763
COST OF SALES................................... 105,783 68,838
----------- -----------
Gross profit.................................. 30,112 20,925
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.... 28,740 18,815
----------- -----------
Income from operations........................ 1,372 2,110
INTEREST EXPENSE................................ 634 294
OTHER INCOME.................................... (136) (486)
----------- -----------
INCOME BEFORE INCOME TAXES...................... 874 2,302
PROVISION FOR INCOME TAXES...................... 354 926
----------- -----------
NET INCOME...................................... $ 520 $ 1,376
=========== ===========
BASIC EARNINGS PER SHARE........................ $ .06 $ .17
=========== ===========
DILUTED EARNINGS PER SHARE...................... $ .06 $ .17
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING (Basic)..... 8,497,418 7,944,943
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING (Diluted)... 8,497,418 8,003,104
=========== ===========
</TABLE>
*Restated for acquisitions accounted for under the pooling-of-interests method.
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
INDUSTRIAL DISTRIBUTION GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands) (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
---- ----
*Restated
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................................ $ 520 $ 1,376
-------- --------
Adjustments to reconcile net income to net cash provided by
(used in)
Operating activities:
Depreciation and amortization................................. 1,127 600
Benefit for deferred taxes.................................... (1) 0
Loss (gain) on disposal of equipment.......................... (21) 4
Loss (gain) on sale of investments............................ 0 (6)
Changes in operating assets and liabilities:
Accounts receivable, net.................................. (9,574) (3,165)
Inventories, net.......................................... (483) (69)
Prepaid and other assets.................................. 499 (464)
Accounts payable.......................................... 736 2,146
Accrued compensation...................................... (777) 124
Deferred loan costs....................................... 52 (23)
Other accrued liabilities................................. 528 36
-------- --------
Total adjustments...................................... (7,914) (817)
-------- --------
Net cash (used in) provided by operating activities... (7,394) 559
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net........................ (6,117) (2,377)
Proceeds from the sale of property and equipment................ 498 0
Cash paid in acquisitions....................................... 0 (1,126)
Purchase of investments......................................... (30) (3)
Deposits........................................................ (101) (3)
Cash surrender value of life insurance.......................... 0 611
Cash from acquired companies................................... 0 3
Proceeds from sale of investments............................... 33 0
-------- --------
Net cash used in investing activities.................. (5,717) (2,895)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.......................... 96 86
Short term repayments........................................... (41) (2,059)
Long-term (repayments) borrowings............................... 15,403 (123)
Adjustments to conform year ends of certain pooled companies.... (6) (4)
-------- --------
Net cash provided by (used in) financing activities.... 15,452 (2,100)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS........................... 2,341 (4,436)
CASH AND CASH EQUIVALENTS, beginning of period.................... 1,285 31,534
======== ========
CASH AND CASH EQUIVALENTS, end of period.......................... $ 3,626 $ 27,098
======== ========
Supplemental Cash Flow Information:
Cash Paid for Interest.......................................... $ 296 $ 180
======== ========
Cash Paid for Income Taxes...................................... $ 534 $ 1,497
======== ========
</TABLE>
*Restated for acquisitions accounted for under the pooling-of- interests method.
The accompanying notes are an integral part of these financial statements
5
<PAGE> 6
INDUSTRIAL DISTRIBUTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1999
Industrial Distribution Group, Inc. ("IDG" or the "Company"), a Delaware
corporation, was formed on February 12, 1997 to create a nationwide supplier of
cost-effective, flexible procurement solutions for manufacturers and other users
of maintenance, repair, operating, and production (MROP) products. The Company
conducts business in 28 states and provides product expertise in the procurement
and application of MROP products to a wide range of industries.
1. BASIS OF PRESENTATION
IDG merged with three companies in 1998 which were accounted for as
poolings-of-interests. Accordingly, their results of operations are included for
all periods presented. Acquisitions made in 1998 using the purchase method of
accounting are included from their respective dates of acquisition.
The accompanying unaudited interim financial statements are prepared pursuant to
the rules and regulations for reporting on Form 10-Q. Accordingly, certain
information and footnotes required by generally accepted accounting principles
for complete financial statements are not included herein. The Company believes
all adjustments necessary for a fair presentation of these interim statements
have been included and are of a normal and recurring nature.
The interim statements should be read in conjunction with the Company's
financial statements and notes thereto, included in its annual report on form
10-K, for the fiscal year ended December 31, 1998, Commission File Number
001-13195.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
There were no significant changes in the accounting policies of the Company
during the periods presented.
3. ACQUISITIONS
There were no acquisitions during the first quarter of 1999.
4. CREDIT FACILITY
In December 1998, the Company entered into a $125,000,000 revolving credit
facility with a six-bank syndicate. The facility has a three-year term, bears
interest at either the bank's corporate base rate or a Eurodollar rate plus
applicable margins, and has a first security interest in the capital stock of
the Company's business units. The agreement provides that the facility be used
for operations and acquisitions and provides $10,000,000 each for swinglines and
letters of credit. There is an annual commitment fee on the unused portion of
the facility equal to between 20 and 30 basis points of the average daily unused
portion of the aggregate commitment, depending on the indebtedness to adjusted
EBITDA ratio. This fee amounted to $42,000 and 0 in the periods ending March 31,
1999 and 1998 respectively. This agreement amended the December 1997 agreement
for $75,000,000. The amounts outstanding under this facility at March 31, 1999
and 1998 were 49,000,000 and 0 respectively. Additionally, the Company has
outstanding a letter of credit, issued under this facility for $2,081,000 as of
March 31, 1999. The revolving credit facility contains various covenants
pertaining to maintenance of certain financial relationships. These covenants
include requirements for interest coverage, cash flow, and net worth, among
other restrictions. The covenants also prohibit the payment of dividends. The
Company was in compliance with these covenants as of March 31, 1999.
5. CAPITAL STOCK
During the first quarter of 1999, the Company issued 22,411 shares of its common
stock through its employee stock purchase plan.
6. COMMITMENTS AND CONTINGENCIES
On December 22, 1997, The Distribution Group ("TDG")(formally known as
Industrial Distribution Group, Inc), one of the companies acquired concurrent
with the initial public offering of IDG's common stock, brought an action in
DeKalb County Superior Court, Georgia, File No. 97-14388-4, against a former
stockholder under the Georgia dissenters' rights provisions of the Georgia
6
<PAGE> 7
Business Corporation Code (the "GBCC"). This former stockholder of TDG had
exercised his rights pursuant to the GBCC to dissent from the merger of TDG with
the Company. In accordance with the GBCC, TDG offered to pay the former
stockholder $4.2 million for his interest in TDG. The former stockholder
rejected that offer and demanded payment of $9 million. TDG brought this action
to seek a judicial determination of the value of his interest in TDG as of the
time of the merger. The proceeding is in discovery, and it is not possible to
predict the outcome at this time.
The Company is subject to various claims and legal actions which arise in the
ordinary course of business. The Company believes that the ultimate resolution
of such matters, including that identified above, will not have a material
adverse effect on the Company's financial position or results of operations.
7. NEW PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which addresses
the accounting for derivative instruments. SFAS No. 133 is effective for
financial statements for the Company's fiscal quarters beginning after July 1,
1999. The Company does not expect SFAS No. 133 will have a significant effect on
its current financial reporting.
8. PRO FORMA COMBINED FINANCIAL INFORMATION
The following pro forma combined financial information for the three months
ended March 31, 1999 and 1998, includes the results of the Company, the
companies acquired in 1998 and the three Pooled Companies as if the acquisitions
had occurred on January 1, 1998. This pro forma combined financial information
includes the effects of (a) the acquisitions, (b) amortization of goodwill
resulting from the acquisitions, (c) adjustment for interest expense for the
debt incurred related to the acquisitions, and (d) provision for income taxes at
41%.
The earnings per share amounts are based on 8,593,501 and 8,543,525 common
shares deemed to be outstanding for the periods ended March 31, 1999 and 1998,
respectively. The net income amounts include estimates of the federal and state
taxes that would have been applicable to the Company had the acquisitions
occurred at the beginning of the period. The underlying tax rates differ from
statutory federal and state rates primarily because amortization of goodwill
related to the acquisitions is not deductible for tax purposes.
The pro forma combined financial information does not purport to represent what
the Company's financial position or results of operations would actually have
been if such transactions and events in fact had occurred on those dates or to
project the Company's results of operations for any future period. (Amounts are
in thousands, except for per share amounts.)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1999 1998
---- ----
<S> <C> <C>
Net Sales $135,895 $146,559
-------- --------
Net Income $ 520 $ 1,812
======== ========
Earnings per Share $ .06 $ .21
======== ========
</TABLE>
ITEM. 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion is based upon the historical financial results of
the Company, and companies accounted for under the pooling-of-interests method
of accounting for the periods presented. Results of operations from acquisitions
made using the purchase method of accounting have also been included from their
date of acquisition.
In this discussion, most percentages and dollar amounts have been rounded to
aid presentation; as a result, all such figures are approximations. References
to such approximations have generally been omitted.
This discussion may contain certain forward-looking statements concerning
the Company's operations, performance, and financial condition, including, in
particular, the likelihood of the Company's success in developing and expanding
its business. These statements are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many
7
<PAGE> 8
of which are beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ include, but are not limited
to, the availability of attractive acquisition opportunities, the successful
integration and profitable management of acquired businesses, improvement of
operating efficiencies, the availability of working capital and financing for
future acquisitions, the Company's ability to grow internally through expansion
of services and customer bases, its ability to reduce overhead, seasonality, the
continuation of key supplier relationships, the ability of the Company to
compete successfully in the highly competitive and diverse MROP market, the
Company's ability to maintain key personnel, the availability of key personnel
for employment by the Company, the effects of the Year 2000 issue, and other
factors discussed in more detail under "Item 1-Business" of the Company's Annual
Report on Form 10-K for fiscal 1998.
The timing and magnitude of acquisitions and assimilation costs may also
materially affect quarterly results. Accordingly, the operating results for any
interim period are not necessarily indicative of the results that may be
achieved for any subsequent interim period or for a full year.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
The following table sets forth certain historical financial data for IDG and
shows such data as a percentage of net sales for the periods indicated (dollars
in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
---------------------------
1999 1998
---- ----
<S> <C> <C> <C> <C>
Net Sales $135,895 100.0% $ 89,763 100.0%
Cost of Sales 105,783 77.9 68,838 76.7
-------- ----- -------- -----
Gross Profit 30,112 22.1 20,925 23.3
Selling, General and Administrative 28,740 21.1 18,815 21.0
-------- ----- -------- -----
Operating Income $ 1,372 1.0% $ 2,110 2.3%
======== ===== ======== =====
</TABLE>
Net sales increased $46.1 million or 51.4% from $89.8 million for the three
months ended March 31, 1998 to $135.9 million for the three months ended March
31, 1999. This was primarily due to the revenue contributed from acquisitions.
Cost of sales increased $37.0 million from $68.8 million for the three months
ended March 31, 1998 to $105.8 million for the three months ended March 31,
1999. As a percentage of net sales, cost of sales increased from 76.7% in 1998
to 77.9% in 1999. The increase in cost of sales as a percentage of net sales is
primarily due to a change in total company product mix as a result of
acquisitions.
Selling, general, and administrative expenses increased $9.9 million from $18.8
million for the three months ended March 31, 1998 to $28.7 million for the three
months ended March 31, 1999, primarily attributable to the effect of
acquisitions. As a percentage of net sales, selling, general, and administrative
expenses increased from 21.0% in 1998 to 21.1% in 1999. Included in selling,
general, and administrative expenses is a charge of $693,000 for expenses
associated with the departure of the former CEO, and the closure of the Chevy
Chase, Maryland office. Exclusive of this charge, SG&A would have been $28.1
million or 20.6% of net sales. Expenses for Corporate office increased $667,000
over the prior year primarily due to a new facility lease and increased staffing
levels to fill key strategic positions including procurement, information
systems, and flexible procurement solutions, among others, in order to continue
to build the infrastructure to support the now 26 operating companies. For 1998,
SG&A expenses included $187,000 of non-recurring expenses related to
acquisitions made during the first quarter of 1998. Excluding the charge for the
Pinson departure, Corporate expenses for both years and non-recurring
acquisition costs for 1998, SG&A was 19.4% of net sales for 1999 as compared to
19.6% in 1998. The decrease is due in part to the effect of the lower SG&A rates
as a percentage of net sales of the acquired companies.
Operating income decreased $738,000 from $2.1 million for the three months ended
March 31, 1998 to $1.4 million for the three months ended March 31, 1999. As a
percentage of net sales, operating income decreased from 2.3% in 1998 to 1.0% in
1999. Exclusive of the charge for the Pinson departure, operating income in 1999
was $2.1 million or 1.5% of net sales.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had $3.6 million in cash, $90.6 million of
working capital, and $74 million available under its $125 million revolving
credit facility with a six-bank syndicate.
The Company's liquidity position continues to be sufficient to enable the
Company to fund its current operations and to fund anticipated internal
expansion and acquisitions for at least the current year.
Net cash (used in) provided by operating activities for the three months
ended March 31, 1999 and 1998 was ($7.4 million) and $559,000 respectively. The
change was principally due to increased needs for working capital.
Net cash used in investing activities for the three months ended March 31,
1999 and 1998 was $5.7 million and $2.9 million, respectively. The change was
primarily attributable to cash used for property additions.
Net cash provided by (used in) financing activities for the three months
ended March 31, 1999 and 1998 was $15.5 million and ($2.1 million),
respectively. These changes were principally due to repayment of lines of credit
of certain acquired companies and the borrowing of funds for operations and
property additions.
YEAR 2000
Impact of the Year 2000 Issue
Generally, the year 2000 risk involves computer software and hardware
that are not able to perform without interruption into the year 2000. The
arrival of the year 2000 poses a unique worldwide challenge to the ability of
all systems to correctly recognize the date change from December 31, 1999 to
January 1, 2000. If the Company's systems did not correctly recognize such a
date change, computer applications that rely on the date field could fail or
create erroneous results. Such erroneous results could result in the temporary
inability to process transactions, send invoices or engage in similar normal
business activities. If not adequately addressed by the Company or its
suppliers, customers or other companies with which it does business, the year
2000 issue could result in a material adverse impact on the Company's financial
condition and results of operations.
The Company's State of Readiness
The Company's 13 business unit presidents and their IT staff are
responsible for the respective business units' identification and remediation of
date recognition problems in both information technology ("IT") and non-systems
IT functions and processes that include microcontrollers and other embedded
computer technology. The Company hired a chief information officer in August
1998 whose responsibilities include coordinating the consolidation of the
business units' IT systems. He has assumed oversight responsibility for the
business units' year 2000 initiatives.
The Company's business units have developed plans to address issues
related to the year 2000 risk. Their plans consist of four phases: (1) assessing
both IT systems and non-systems IT functions and processes; (2) remediating year
2000 problems; (3) testing the remediated systems; and (4) implementing the
remediated systems. The chart below shows the number of the Company's 13
business units that have completed each phase of the year 2000 plans:
<TABLE>
<CAPTION>
STAGES OF THE COMPANY'S
YEAR 2000 PLAN
- --------------------------------------------------------------------------------------------------------------
PHASE IT SYSTEMS NON-SYSTEMS IT FUNCTIONS
- ----- ---------- ------------------------
<S> <C> <C> <C>
(1) Assessment 13 13
(2) Remediation 13 10
(3) Testing 11 10
(4) Implementation 9 9
</TABLE>
The Company expects the remediation, testing and implementation of its
year 2000 plan to be completed at all of its business units by the end of the
second quarter of 1999, except for one business unit. The several companies that
comprise that business unit are currently consolidating their systems. Once
consolidated, the business unit will remediate and test the system. Year 2000
compliance of that system is expected in August 1999.
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<PAGE> 10
For operational reasons, the Company is purchasing and implementing an
enterprise-wide IT system. The system will be implemented in stages beginning in
early 2000, with a targeted completion date of early 2001. The enterprise-wide
IT system, which the Company believes will be year 2000 compliant when
installed, will replace the current systems being remediated at the business
units. The Company's purchase of the enterprise-wide IT system is a part of its
continuing effort to implement systemwide efficiencies.
Costs to Address Year 2000 Issues
The Company does not anticipate that the year 2000 related costs
(excluding the $15.5 million expenditure for the enterprise-wide IT system
mentioned above that is being installed for operational reasons unrelated to
year 2000 issues) will be material to its financial condition or results of
operations. Excluding that expenditure, the Company estimates that its total
costs for the evaluation, remediation, testing and implementation of its IT and
non-IT systems in connection with the year 2000 issue will range from $500,000
to $600,000. Approximately $420,000 of such costs have been incurred to date.
The Company is funding such expenditures from available sources of capital. The
Company will spend approximately 35% of the anticipated year 2000 costs for the
remediation of software. The remainder of the expenditures relate to the
replacement of systems and equipment. All of the expected expenditures are
present in the Company's 1999 internal budgets. In accordance with generally
accepted accounting principles, certain year 2000 expenditures will be charged
to income for the year when the expense is incurred.
Risks of Third-Party Year 2000 Issues
The impact of year 2000 non-compliance by outside parties with whom the
Company transacts business cannot be accurately gauged. The Company has
contacted (1) key customers that aggregate approximately 80% of each business
unit's sales during 1998; (2) key trade vendors that supply approximately 80% of
products sold by each business unit in 1998; and (3) key utility vendors. The
Company intends to follow-up with parties that fail to respond to its inquiries.
The Company's Contingency Plans
The Company is developing contingency plans to address reasonably
likely worst case year 2000 scenarios. These scenarios include: (1) an
interruption in the supply of goods and services from the Company's vendors; (2)
the inability of a business unit's IT system to interface with the IT systems of
other business units or the Company's corporate office; and (3) the inability of
the Company's e-commerce systems to integrate with its customer's systems.
The Company has not yet completed its contingency planning with respect
to these and other scenarios. It is contacting key vendors regarding year 2000
compliance and attempting to gain assurance of the vendors' compliance programs.
Should the Company believe that a key vendor will not be ready for the year 2000
date change, the Company may purchase critical inventory from alternate
acceptable vendors or stock-pile important product lines.
The Company believes that should the worst case scenarios described in
subparagraphs (2) or (3) above occur, the Company could utilize telephone or
facsimile communications for a short period of time.
See "Item 1. Business - Certain factors affecting forward looking statements -
year 2000 compliance" in the Company's 1998 Annual Report on Form 10K for a
discussion of risks.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No changes have occurred since the filing of the Company's Annual Report on Form
10K.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, Commission File No. 001-13195, previously filed with the
Commission, regarding certain legal proceedings in which the Company is
involved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits
Exhibit 11 -- Computation of Earnings Per Share
Exhibit 27 -- Financial Data Schedule (for SEC use only)
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INDUSTRIAL DISTRIBUTION GROUP, INC.
(Registrant)
Date: May 12, 1999 By: /s/ Jack P. Healey
-----------------------------------------
Jack P. Healey
Senior Vice President and
Chief Financial Officer
Date: May 12, 1999 /s/ Jack P. Healey
-----------------------------------------
Jack P. Healey
Senior Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
12
<PAGE> 1
EXHIBIT 11
INDUSTRIAL DISTRIBUTION GROUP, INC.
COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS PERIODS ENDED MARCH 31, 1999 AND 1998
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Net income $ 520 $1,376
====== ======
Weighted average common 8,497 7,945
shares outstanding
Add - Dilutive effect of outstanding options
(as determined by the application of the
treasury stock method) -- 58
------ ------
Weighted average common and
common equivalent
shares outstanding 8,497 8,003
====== ======
Primary earnings per share: $ .06 $ .17
====== ======
Diluted earnings per share: $ .06 $ .17
====== ======
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INDUSTRIAL DISTRIBUTION GROUP, INC. FOR THE THREE MONTHS
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 3,626
<SECURITIES> 0
<RECEIVABLES> 68,878
<ALLOWANCES> (1,634)
<INVENTORY> 61,432
<CURRENT-ASSETS> 145,341
<PP&E> 35,548
<DEPRECIATION> (6,277)
<TOTAL-ASSETS> 228,178
<CURRENT-LIABILITIES> 51,095
<BONDS> 0
0
0
<COMMON> 85
<OTHER-SE> 114,098
<TOTAL-LIABILITY-AND-EQUITY> 228,178
<SALES> 135,895
<TOTAL-REVENUES> 135,895
<CGS> 105,783
<TOTAL-COSTS> 134,523
<OTHER-EXPENSES> (136)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 634
<INCOME-PRETAX> 874
<INCOME-TAX> 354
<INCOME-CONTINUING> 520
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
