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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): April 28, 1999
PENTACON, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-13931 76-0531585
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
10375 Richmond Avenue, Suite 700
Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 860-1000
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<PAGE>
ITEM 5. OTHER EVENTS
On April 28, 1999, Pentacon, Inc. issued a press release announcing
that its financial results for the quarter ended March 31, 1999. The press
release is filed as Exhibit 99.1 to this Current Report on Form 8-K, and the
contents of such Exhibit are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release, dated April 28, 1999.
<PAGE>
SIGNATURE
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.
PENTACON, INC.
By: /s/ Bruce M. Taten
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Bruce M. Taten
Senior Vice President and General Counsel
Date: May 6, 1999
Exhibit 99.1
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NEWS RELEASE
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FOR: Pentacon, Inc.
CONTACT: Brian Fontana
Senior Vice
President & CFO
(713) 860-1000
FOR IMMEDIATE RELEASE
PENTACON, INC. ANNOUNCES FIRST QUARTER EARNINGS OF $0.09
PER SHARE BEFORE NON-RECURRING CHARGE
Houston, Texas, April 28, 1999 - Pentacon, Inc. (NYSE: JIT), a leading
distributor of fasteners and other small parts and provider of related inventory
management services, today announced results for the first quarter ended March
31, 1999.
For the quarter ended March 31, 1999, Pentacon reported net income of
$1.4 million (before a non-recurring aftertax charge of $1.1 million for the
write-off of debt issuance costs) compared to pro forma net income of $2.1
million for the same period in the prior year. On a per share basis, Pentacon
reported net income of $0.09 per share in the current quarter before the
non-recurring charge of $0.07 per share compared to $0.13 per share for the same
period in the prior year.
Revenues for the quarter were $66.6 million, an increase of 61% over
revenues of $41.3 million in the prior year. EBITDA (earnings before interest,
income taxes, depreciation, amortization and write-off of debt issuance costs)
of $7.5 million (11.2% margin) in the first quarter of 1999 represents a 60%
increase over the $4.7 million (11.3% margin) reported in the corresponding
quarter of 1998.
Mark E. Baldwin, Chairman and Chief Executive Officer, commented, "Our
results for the quarter exceeded our internal forecast primarily due to better
than expected performance in both our aerospace and industrial groups. We
continue to make progress with our integration plans and expect to complete the
roll out of a common information system in our aerospace group by mid year. As a
result, cost savings are still on target for the second half of the year."
Mr. Baldwin continued, "We recently completed the sale of $100 million
of senior subordinated notes which will provide additional capital and
flexibility to support our operating strategy."
This document contains forward-looking statements that are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Key factors that could cause actual results to differ materially from
expectations include, but are not limited to: (1) estimates of costs or
projected or anticipated
<PAGE>
changes to cost estimates relating to entering new markets or expanding in
existing markets; (2) changes in economic and industry conditions; (3) changes
in regulatory requirements; (4) changes in interest rates; (5) levels of
borrowings under the Company's Credit Facility; (6) accumulation of excess
inventories by certain customers in the aerospace industry; and (7) volume or
price adjustments with respect to sales to major customers. These and other
risks and assumptions are described in the Company's reports that are available
from the United States Securities and Exchange Commission.
Headquartered in Houston, Texas, Pentacon is a leading distributor of
fasteners and other small parts and provider of related inventory management
services. Pentacon presently has 32 distribution and sales facilities in the
U.S., along with sales offices in Europe and Australia. For more information,
visit the company's web site at www.pentacon-inc.com.
(Table to follow)
<PAGE>
PENTACON, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
--------------------------------
1999 1998
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<S> <C> <C>
Revenues $ 66,550 $ 41,297
Cost of sales 44,648 27,169
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Gross profit 21,902 14,128
Operating expenses 15,012 9,790
Goodwill amortization 858 374
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Operating income 6,032 3,964
Write-off of debt issuance costs 2,308 -
Other (income) expense, net (18) (30)
Interest expense 3,192 260
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Income before taxes 550 3,734
Income taxes 291 1,684
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Net income $ 259 $ 2,050
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Net Income Per Share:
Before Write-off of Debt Issuance Costs $ 0.09 $ 0.13
Basic $ 0.02 $ 0.13
Diluted $ 0.02 $ 0.13
Shares Utilized:
Basic 16,668 15,530
Diluted 16,668 15,725
EBITDA(1) $ 7,456 $ 4,674
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF REVENUES
<S> <C> <C>
Revenues 100.0% 100.0%
Gross Profit 32.9% 34.2%
Operating Expenses 22.5% 23.7%
Goodwill Amortization 1.3% 0.9%
Operating Income 9.1% 9.6%
Net Income 0.4% 5.0%
</TABLE>
Note: The pro forma financial information for the three months ended March 31,
1998 include the results of Pentacon combined with the Founding Companies as if
the Founding Company acquisitions had occurred on January 1, 1998.
In October 1998 the Company changed its year-end from September 30 to December
31.
(1) EBITDA is earnings before interest, income taxes, depreciation,
amortization and write-off of debt issuance costs.
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