UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
QUARTERLY PERIOD ENDED JULY 29, 2000.
[ ] 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: 000-24385
SCHOOL SPECIALTY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 39-0971239
(State of Other (IRS Employer
Jurisdiction of Incorporation) Identification No.)
1000 North Bluemound Drive
Appleton, Wisconsin
(Address of Principal Executive Offices)
54914
(Zip Code)
(920) 734-5712
(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 [ ]
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of the latest
practicable date.
Outstanding at
Class August 21, 2000
------ -----------------
Common Stock, $0.001 par value 17,464,505
<PAGE>
SCHOOL SPECIALTY, INC.
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JULY 29, 2000
PART I - FINANCIAL INFORMATION
Page
Number
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at July 29, 2000
(Unaudited) and April 29, 2000 1
Unaudited Consolidated Statements of Operations
for the Three Months Ended July 29, 2000 and
July 24, 1999 2
Unaudited Consolidated Statements of Cash Flows
for the Three Months Ended July 29, 2000 and
July 24, 1999 3
Notes to Unaudited Consolidated Financial
Statements 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 11
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
SCHOOL SPECIALTY, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
July 29, April 29,
2000 2000
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,378 $ 4,151
Accounts receivable, less allowance for
doubtful accounts of $1,907 and
$1,744, respectively 165,116 76,028
Inventories 86,441 86,117
Prepaid expenses and other current assets 27,132 28,664
Deferred taxes 6,964 6,964
-------- --------
Total current assets 290,031 201,924
Property and equipment, net 54,820 51,725
Intangible assets, net 217,131 192,744
Deferred taxes 1,861 1,861
Other 6,402 6,595
-------- --------
Total assets $570,245 $454,849
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities - long-term debt $ 14,863 $ 17,391
Accounts payable 85,417 48,874
Accrued compensation 4,659 8,634
Accrued restructuring - 65
Other accrued liabilities 19,067 9,942
-------- --------
Total current liabilities 124,006 84,906
Long-term debt 209,841 144,789
Other 128 161
-------- --------
Total liabilities 333,975 229,856
Stockholders' equity:
Preferred stock, $0.001 par value per
share, 1,000,000 shares authorized; - -
none outstanding
Common stock, $0.001 par value per share,
150,000,000 shares authorized and
17,464,505 shares issued and outstanding 17 17
Capital paid-in excess of par value 195,997 196,012
Accumulated other comprehensive loss (131) (30)
Retained earnings 40,387 28,994
-------- --------
Total stockholders' equity 236,270 224,993
Total liabilities and -------- --------
stockholders' equity $570,245 $454,849
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
SCHOOL SPECIALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
For the Three
Months Ended
July 29, July 24,
2000 1999
Revenues $217,067 $194,299
Cost of revenues 137,998 121,420
-------- --------
Gross profit 79,069 72,879
Selling, general and administrative expenses 54,962 48,315
-------- --------
Operating income 24,107 24,564
Other (income) expense:
Interest expense 3,691 3,168
Interest income (36) (38)
Other (263) (6)
-------- --------
Income before provision for income taxes 20,715 21,440
Provision for income taxes 9,322 10,076
-------- --------
Net income $ 11,393 $ 11,364
======== ========
Weighted average shares outstanding:
Basic 17,465 17,383
Diluted 17,620 17,468
Net income per share:
Basic $0.65 $0.65
Diluted $0.65 $0.65
See accompanying notes to consolidated financial statements.
<PAGE>
SCHOOL SPECIALTY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Three
Months Ended
July 29, July 24,
2000 1999
Cash flows from operating activities:
Net income $ 11,393 $ 11,364
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization expense 3,307 3,049
Amortization of loan fees and other 236 140
Gain on disposal of fixed assets (184) -
Change in current assets and liabilities
(net of assets acquired and
liabilities assumed in business
combinations accounted for under
the purchase method):
Accounts receivable (84,685) (64,218)
Inventory 1,317 (6,209)
Prepaid expenses and other current assets 1,349 (947)
Accounts payable 35,738 25,831
Accrued liabilities 4,062 8,610
-------- --------
Net cash used in operating activities (27,467) (22,380)
-------- --------
Cash flows from investing activities:
Cash paid in acquisitions, net of cash aquired (31,316) (1,085)
Additions to property and equipment (3,900) (1,277)
Proceeds from the sale of property and equipment 2,485 -
Other (316) (1,052)
-------- --------
Net cash used in investing activities (33,047) (3,414)
-------- --------
Cash flows from financing activities:
Proceeds from bank borrowings 101,150 38,700
Repayment of bank debt and capital leases (40,409) (24,918)
Proceeds from issuance of common stock - 2,233
-------- --------
Net cash provided by financing activities 60,741 16,015
-------- --------
Net income (decrease) in cash and cash equivalents 227 (9,779)
Cash and cash equivalents, beginning of period 4,151 9,779
-------- --------
Cash and cash equivalents, end of period $ 4,378 $ -
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
SCHOOL SPECIALTY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(Unaudited)
(In thousands)
The Company entered into certain business combinations
accounted for under the purchase method in the three
months ended July 29, 2000, and July 24, 1999. The
transaction that occurred in the three months ending
July 29, 2000 was paid for using cash, and the
transaction during the three months ended July 24, 1999
was paid for using cash and common stock. The fair
values of the assets and liabilities of the acquired
companies at the dates of the acquisitions are
presented as follows:
For the Three
Months Ended
July 29, July 24,
2000 1999
Accounts receivable $ 4,403 $ 2,015
Inventories 1,641 632
Prepaid expenses and other current assets 2,174 46
Property and equipment 897 85
Intangible assets 25,813 1,672
Other assets - 13
Short-term debt and capital lease obligations (1,217) -
Accounts payable (806) (837)
Accrued liabilities (1,023) (568)
Long-term capital lease obligations (566) (885)
-------- --------
Net assets acquired $ 31,316 $ 2,173
Acquisitions were funded as follows:
Cash paid, net of cash acquired $ 31,316 $ 1,085
Common stock - 1,088
-------- --------
Total $ 31,316 $ 2,173
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
SCHOOL SPECIALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except per share amounts)
NOTE 1-BASIS OF PRESENTATION
The accompanying unaudited consolidated financial
statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. In the
opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a
fair presentation have been included. The Balance
Sheet at April 29, 2000, has been derived from the
Company's audited financial statements for the fiscal
year ended April 29, 2000. For further information,
refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report
on Form 10-K for the year ended April 29, 2000.
NOTE 2-STOCKHOLDERS' EQUITY
Changes in stockholders' equity during the three months
ended July 29, 2000, were as follows:
Stockholders' equity balance at April 29, 2000 $224,993
Net income 11,393
Other (116)
--------
Stockholders' equity balance at July 29, 2000 $236,270
========
NOTE 3-EARNINGS PER SHARE
The following information presents the Company's
computations of basic earnings per share ("basic EPS")
and diluted earnings per share ("diluted EPS") for the
periods presented in the consolidated statements of
operations:
Income Share Per Share
(Numerator) (Denominator) Amount
Three months ended July 29, 2000:
Basic EPS $11,393 17,465 $ 0.65
Effect of dilutive employee stock =======
options - 155
------- ------
Diluted EPS $11,393 17,620 $ 0.65
======= ====== =======
Three months ended July 24, 1999:
Basic EPS $11,364 17,383 $ 0.65
Effect of dilutive employee stock =======
options - 85
------- ------ -------
Diluted EPS $11,364 17,468 $ 0.65
======= ====== =======
The Company had additional employee stock options
outstanding during the periods presented that were not
included in the computation of diluted EPS because they
were anti-dilutive.
NOTE 4-ACCOUNTING PRONOUNCEMENT
The SEC issued Staff Accounting Bulletin No. 101,
"Revenue Recognition" ("SAB No. 101"), in December
1999, which provides guidance on the recognition,
presentation, and disclosure of revenue in financial
statements. On June 26, 2000, the SEC issued SAB No.
101B which delayed implementation of SAB No. 101. The
Company will implement SAB No. 101 in the fourth
quarter of fiscal year 2001 as required by SAB No.
101B. The Company is reviewing the requirements of SAB
No. 101 and has not yet determined the impact of this
standard on its consolidated financial statements. It
is not expected, however, that SAB No. 101 will have a
material effect on the Company's financial position or
results of operations.
<PAGE>
SCHOOL SPECIALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except per share amounts)
NOTE 5-BUSINESS COMBINATIONS
On June 30, 2000, the Company acquired 100% of a
company, which was accounted for under the purchase
method of accounting, for a cash purchase price of
$32,000, resulting in goodwill of $25,813, which will
be amortized over 40 years. The results of this
acquisition have been included in the Company's results
from the date of acquisition.
During fiscal 2000, the Company purchased 100% of a
company, and certain assets of another company. The
results of these acquisitions have been included in the
Company's results from their respective dates of
acquisition. The pro-forma results of the later
transaction are not included in the table below due to
immateriality.
The following information presents the unaudited pro
forma results of operations of the Company for the
three months ended July 29, 2000 and July 24, 1999, and
includes the Company's consolidated results of
operations and the results of the companies acquired
during fiscal 2001 and fiscal 2000 acquisitions as if
all such purchase acquisitions had been made at the
beginning of fiscal 2000. The results presented below
include certain pro forma adjustments to reflect the
amortization of intangible assets, adjustments to
interest expense, and the inclusion of an income tax
provision on all earnings:
Three Months Ended
July 29, July 24,
2000 1999
Revenues $222,571 $198,985
Net income 11,595 11,718
Net income per share:
Basic $0.66 $0.67
Diluted $0.66 $0.67
The unaudited pro forma results of operations are
prepared for comparative purposes only and do not
necessarily reflect the results that would have
occurred had the acquisitions occurred at the beginning
of fiscal 2000 or the results that may occur in the
future.
NOTE 6-SEGMENT INFORMATION
The Company's business activities are organized around
three principal business segments, Traditional,
Specialty and Internet. Both internal and external
reporting conform to this organizational structure,
with no significant differences in accounting policies
applied. The Company evaluates the performance of its
segments and allocates resources to them based on
revenue growth and profitability. While the three
segments serve a similar customer base, notable
differences exist in products, gross margin and revenue
growth rate. Products supplied within the Traditional
segment include consumables (consisting of classroom
supplies, instructional materials, educational games,
art supplies and school forms), school furniture and
indoor and outdoor equipment. Products supplied within
the Specialty segment target specific educational
disciplines, such as art, industrial arts, physical
education, sciences, library and early childhood. The
Internet segment supplies products from both the
Traditional and Specialty segments through the
Internet. In addition, the Internet segment includes
products supplied for customer use with the Internet
(i.e., filtering software for the Internet).
<PAGE>
SCHOOL SPECIALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except per share amounts)
During the third quarter of fiscal 2000, the Company
modified its segment reporting by identifying
information for a third business segment, the Internet
business segment. This segment includes business
generated by products supplied through the Internet and
products supplied for use with the Internet. Effective
October 24, 1999 (the beginning of fiscal 2000's third
quarter), the Company began to separately track
financial information for this segment, and assign
certain management personnel the responsibility for
monitoring this information and focusing on the
expansion of the Company's Internet business. The
Company is unable to segregate information for the
Internet business segment for the first two quarters of
fiscal 2000; therefore, results for this segment for
those periods are included in both the Traditional and
Specialty business segments. The following table
presents segment information:
Three Months Ended
July 29, July 24,
2000 1999
Revenues:
Traditional $130,966 $121,239
Specialty 86,101 73,060
Internet 9,158 -
Inter-company revenue elimination (9,158) -
-------- --------
Total $217,067 $194,299
======== ========
Operating profit (loss) and income before taxes:
Traditional $ 15,320 $ 16,220
Specialty 12,591 11,479
Internet (1,048) -
-------- --------
Total 26,863 27,699
General corporate expense 2,756 3,135
Interest expense and other 3,392 3,124
-------- --------
Income before taxes $ 20,715 $ 21,440
======== ========
Identifiable assets (at quarter end):
Traditional $303,263 $309,229
Specialty 229,209 179,407
Internet 9,349 -
-------- --------
Total 541,821 488,636
Corporate assets 28,424 14,311
-------- --------
Total $570,245 $502,947
======== ========
Depreciation and amortization:
Traditional $ 1,334 $ 1,712
Specialty 1,240 1,180
Internet 482 -
-------- --------
Total 3,056 2,892
Corporate 251 157
-------- --------
Total $ 3,307 $ 3,049
======== ========
Expenditures for property and equipment:
Traditional $ 581 $ 66
Specialty 1,509 1,087
Internet 1,273 -
-------- --------
Total 3,363 1,153
Corporate 537 124
-------- --------
Total $ 3,900 $ 1,277
======== ========
<PAGE>
SCHOOL SPECIALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except per share amounts)
NOTE 7-RESTRUCTURING COSTS
During the second quarter of fiscal 1999, the Company
recorded a $4,200 restructuring charge, which is
discussed in the fiscal 2000 Form 10-K. This charge was
for the Company's plan to consolidate existing
warehousing, customer service and sales operations.
Under this restructuring plan, which was completed
during the first quarter of fiscal 2001, the Company
eliminated approximately 240 jobs. No employees were
terminated under the plan for the three months ended
July 29, 2000 and July 24, 1999.
Selected information related to the restructuring
reserve follows:
Employee Facility Other Asset
Restructuring charge Termination Closure and Write-downs
(in thousands) Benefits Consolidation and Costs Total
April 24, 1999 liability balance $ 1,285 $ 1,101 $ 366 $ 2,752
Utilizations:
First quarter, fiscal 2000 (351) (47) - (398)
Second quarter, fiscal 2000 (236) (122) (54) (412)
Third quarter, fiscal 2000 (396) (531) - (927)
Fourth quarter, fiscal 2000 (262) (384) (304) (950)
-------- -------- -------- --------
April 29, 2000 liability balance $ 40 $ 17 $ 8 $ 65
Utilizations:
First quarter, fiscal 2001 (40) (17) (8) (65)
-------- -------- -------- -------
July 29, 2000 liability balance $ - $ - $ - $ -
<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table sets forth various items as a
percentage of revenues on a historical basis.
Three Months Ended
July 29, July 24,
2000 1999
Revenues 100.0% 100.0%
Cost of revenues 63.6 62.5
------ ------
Gross profit 36.4 37.5
Selling, general and administrative expenses 25.3 24.9
------ ------
Operating income 11.1 12.6
Interest expense and other 1.6 1.6
------ ------
Income before provision for income taxes 9.5 11.0
Provision for income taxes 4.3 5.2
------ ------
Net income 5.2% 5.8%
====== ======
Three Months Ended July 29, 2000 Compared to Three
Months Ended July 24, 1999
Revenues
Revenues increased 11.7% from $194.3 million for the
three months ended July 24, 1999, to $217.1 million for
the three months ended July 29, 2000. This increase
was primarily due to strong growth in all segments of
the business. The specialty segment grew 17.8%,
traditional 8.0% and the Internet segment delivered
$9.2 million in revenue. Growth in the traditional and
specialty segments is primarily due to increased market
penetration and an increase in proprietary product
offering and revenue.
Gross Profit
Gross profit increased 8.5% from $72.9 million or 37.5%
of revenues for the three months ended July 24, 1999 to
$79.1 million or 36.4% of revenues for the three months
ended July 29, 2000. Increase in gross profit is
primarily due to an increase in revenue. Gross margin
as a percent of revenue was 36.4% as compared to 37.5%
in fiscal 2000's first quarter. The change in gross
margin as a percent of revenue is due primarily to 1)
product mix in the traditional segment, driven by
revenue growth in the lighter-margin furniture lines;
2) growth in Internet revenue, which is typically lower-
gross margin business than the traditional and
specialty segments; and 3) a slight margin decline in
the specialty segment, driven by modest pricing
adjustments to facilitate revenue growth through
enhanced geographic market penetration.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include
selling expenses (the most significant component of
which is sales wages and commissions), operations
expenses (which includes customer service, warehouse
and outbound transportation costs), catalog costs and
general administrative overhead (which includes
information systems, accounting, legal, human resources
and purchasing expense).
Selling, general and administrative expenses increased
13.8% from $48.3 million or 24.9% of revenues for the
three months ended July 24, 1999, to $55.0 million or
25.3% of revenues for the three months ended July 29,
2000. Increase in selling, general and administrative
expenses is primarily due to an increase in variable
costs related to increased revenue and investments in
infrastructure to develop the Internet segment.
Increase in selling, general and administrative
expenses as a percent of revenues is primarily due to
growth in the specialty segment, which typically has
higher selling, general and administrative expenses as
a percentage of revenue than our other business
segments, and expenses incurred in developing the
Internet segment. These incremental expenses were
partially offset by a reduction in general corporate
expense.
<PAGE>
Interest Expense
Interest expense, net of interest income, increased
$0.5 million from $3.1 million or 1.6% of revenues for
the three months ended July 24, 1999 to $3.7 million or
1.6% of revenues for the three months ended July 29,
2000. Increase in interest expense is primarily due to
a slight increase in our effective borrowing rate and
an increase in debt due to debt assumed and cash paid
to acquire a company during the first quarter of fiscal
2001.
Provision for Income Taxes
Provision for income taxes for the three months ended
July 29, 2000 decreased 7.5% or $0.8 million over the
three months ended July 24, 1999, reflecting income tax
rates of 45.0% and 47.0% for the three months ended
July 29, 2000 and July 24, 1999, respectively. The
effective tax rate of 45.0% in the first quarter of
fiscal 2001 as compared to 47.0% in the first quarter
of fiscal 2000 is due to reduced state taxes and a
smaller percentage impact of non-deductible goodwill
amortization. The higher effective tax rate, compared
to the federal statutory rate of 35.0%, is primarily
due to state income taxes and non-deductible goodwill
amortization.
Liquidity and Capital Resources
At July 29, 2000, we had working capital of $166.0
million. Our capitalization at July 29, 2000 was
$460.0 million and consisted of bank debt of $223.7
million and stockholders' equity of $236.3 million.
We have a five-year secured $350 million revolving
credit facility with Bank of America, N.A. The credit
facility has a $100 million term loan payable quarterly
over five years commencing in January 1999 and
revolving loans which mature on September 30, 2003.
The amount outstanding as of July 29, 2000 under the
credit facility was approximately $223.7 million,
consisting of $143.8 million outstanding under the
revolving loan portion of the facility and $79.9
million outstanding under the term loan portion of the
facility. Borrowings under the credit facility are
usually significantly higher during our first and
second quarters to meet the working capital needs of
our peak selling season. To accommodate our business
growth, we intend, as necessary, to make immaterial
changes to certain financial and other covenants under
the credit facility.
On October 28, 1998, we entered into an interest rate
swap agreement with the Bank of New York covering $50
million of the outstanding credit facility. The
agreement fixes the 30 day LIBOR interest rate at 4.37%
per annum on the $50 million notional amount and has a
three year term that may be canceled by the Bank of New
York on the second anniversary. As of July 29, 2000,
our effective interest rate on borrowings under our
credit facility was approximately 8.4% excluding the
effect of the swap agreement and 7.8% including the
effect of the swap agreement. During the quarter, we
had net borrowings under our credit facility of $61.8
million, which were used primarily to meet our seasonal
working capital requirements, and to fund an
acquisition and capital expenditures.
We anticipate that our cash flow from operations and
borrowings available from our existing bank credit
facility will be sufficient to meet our liquidity
requirements for our operations (including anticipated
capital expenditures) and our debt service obligations
for the remainder of the fiscal year.
During the three months ended July 29, 2000, net cash
used in operating activities was $27.5 million. This
net use of cash by operating activities during the
period is indicative of the high seasonal nature of our
business, with sales occurring in the first and second
quarter of the fiscal year and cash receipts in the
second and third quarters. Net cash used in investing
activities was $33.0 million, including $31.3 million
for an acquisition and $3.9 million for additions to
property and equipment, offset by $2.5 million in
proceeds from the sale of a closed warehouse facility.
Net cash provided by financing activities was $60.7
million, which consisted primarily of borrowings under
our credit facility.
During the three months ended July 24, 1999, net cash
used in operating activities was $22.4 million. This
net use of cash by operating activities during the
period is indicative of the high seasonal nature of our
business, with sales occurring in the first and second
quarter of the fiscal year and cash receipts in the
second and third quarters. Net cash used in investing
activities was $3.4 million, including $1.1 million for
an acquisition and $1.3 million for additions to
property and equipment. Net cash provided by financing
activities was $16.0 million, which consisted primarily
of borrowings under our credit facility.
<PAGE>
Fluctuations in Quarterly Results of Operations
Our business is subject to seasonal influences. Our
historical revenues and profitability have been
dramatically higher in the first two quarters of our
fiscal year (May-October) primarily due to increased
shipments to customers coinciding with the start of
each school year.
Quarterly results also may be materially affected by
the timing of acquisitions, the timing and magnitude of
costs related to such acquisitions, variations in our
costs for the products we sell, the mix of products
sold and general economic conditions. Moreover, the
operating margins of companies acquired by us may
differ substantially from our own margins, which could
contribute to further fluctuation in our quarterly
operating results. Therefore, results for any quarter
are not indicative of the results that we may achieve
for any subsequent fiscal quarter or for a full fiscal
year.
Inflation
Inflation has and is expected to have only a minor
affect on our results of operations and our internal
and external sources of liquidity.
Forward-Looking Statements
Statements in this report which are not strictly
historical are "forward looking." In accordance with
the Private Securities Litigation Reform Act of 1995,
we can obtain a "safe-harbor" for forward-looking
statements by identifying those statements and by
accompanying those statements with cautionary
statements which identify factors that could cause
actual results to differ materially from those in the
forward-looking statements. Accordingly, the foregoing
"Management's Discussions and Analysis of Financial
Condition and Results of Operations" contains certain
forward-looking statements relating to growth plans and
projected revenues, earnings and costs. Our actual
results may differ materially from those contained in
the forward-looking statements herein. Factors which
may cause such a difference to occur include those
factors identified in Item 1, "Business - Forward
Looking Statements," contained in the Company's Form
10-K for the year ended April 29, 2000, which factors
are incorporated herein by reference to such Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information as to our Quantitative and Qualitative
Disclosures about Market Risk, please see our Annual
Report on Form 10-K for the fiscal year ending April
29, 2000. There have been no material changes in our
quantitative or qualitative exposure to market risk
since the end of fiscal 2000.
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit No. Description
10.1 Amendment No. 1 to Amended and Restated
Credit Agreement dated as of May 12, 2000
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
We did not file any reports on Form 8-K during the
quarter.
<PAGE>
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.
SCHOOL SPECIALTY, INC.
(Registrant)
08/28/00 /s/ Daniel P. Spalding
--------- ----------------------------------------------
Date Daniel P. Spalding
Chairman of the Board, Chief Executive Officer
(Principal Executive Officer)
08/28/00 /s/ Mary M. Kabacinski
-------- ----------------------------------------------
Date Mary M. Kabacinski
Executive Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
10.1 Amendment No. 1 to Amended and
Restated Credit Agreement dated as
of May 12, 2000
27.1 Financial Data Schedule
