FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
Commission file number: 1-5731
REXEL, INC.
(Exact name of registrant as
specified in its charter)
New York 13-1474527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Alhambra Circle, Coral Gables, Florida 33134
(Address of principal executive offices) (Zip Code)
(305) 446-8000
(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 number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
DATE CLASS SHARES OUTSTANDING
---- ----- ------------------
<S> <C> <C>
NOVEMBER 3, 1997 COMMON STOCK 26,060,490
---------------- ------------ ----------
</TABLE>
<PAGE>
REXEL, INC.
INDEX
-----
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C> <C>
Part I - Financial Information
Condensed Consolidated Balance Sheets (Unaudited)
at September 30, 1997 and December 31, 1996........................... 1
Condensed Consolidated Statements of Income
(Unaudited) for the Nine and Three Months Ended September 30,
1997 and 1996......................................................... 2
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Nine Months Ended September 30, 1997
and 1996.............................................................. 3
Notes to Unaudited Condensed Consolidated
Financial Statements.................................................. 4
Independent Accountants' Review Report................................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................... 8-11
Part II - Other Information........................................................ 12
</TABLE>
<PAGE>
REXEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's omitted, except for share amounts)
<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
1997 1996
---------- ---------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash $ 24,190 $ 14,396
Accounts and Notes Receivable - Net 197,650 156,450
Inventories 126,888 117,657
Prepaid Expenses and Other Current Assets 9,657 10,423
Income taxes receivable 1,547 0
Deferred Income Taxes 3,870 3,747
--------- ---------
Total Current Assets 363,802 302,673
Investments and Noncurrent Receivables 173 814
Fixed Assets - Net 46,564 48,218
Other Assets 3,938 3,286
Goodwill - Net 91,023 73,947
--------- ---------
$ 505,500 $ 428,938
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Debt $ 43,500 $ 25,500
Current Portion of Long-Term Debt 7,770 7,737
Accounts Payable - Trade and Other Liabilities 200,904 161,377
Income Taxes Payable 0 2,186
--------- ---------
Total Current Liabilities 252,174 196,800
Long-Term Debt 21,986 29,582
Other Long-Term Liabilities 3,458 3,476
Deferred Income Taxes 2,774 2,973
Stockholders' Equity
Preferred Stock (Authorized 2,000,000 Shares, None Issued) 0 0
Common Stock (26,675,933 and 26,313,633 Shares Issued) 26,675 26,314
Capital Surplus 98,408 94,706
Retained Earnings 104,914 79,976
Treasury Stock, at Cost (621,243 Shares) (4,889) (4,889)
--------- ---------
225,108 196,107
--------- ---------
$ 505,500 $ 428,938
========= =========
See accompanying independent accountants' review report and notes
to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
REXEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except for per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------
1997 1996 1997 1996
------ ------ ------ ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Sales $1,028,577 $854,023 $361,743 $297,375
Cost Of Goods Sold 817,210 675,829 288,248 236,506
---------- -------- -------- --------
Gross Profit 211,367 178,194 73,495 60,869
Selling and Administrative Expenses 163,814 138,251 56,544 46,757
---------- -------- -------- --------
Operating Profit 47,553 39,943 16,951 14,112
Interest Expense 4,690 3,679 1,549 1,136
Other Income - Net 506 259 253 17
Income From Operations Before Income Taxes 43,369 36,523 15,655 12,993
Provision For Income Taxes 18,432 15,824 6,653 5,471
---------- -------- -------- --------
Net Income $ 24,937 $ 20,699 $ 9,002 $ 7,522
========== ======== ======== ========
Net Income Per Common Share $ .95 $ .80 $ .34 $ .29
========== ======== ======== ========
Weighted Average Number of Common and Common
Equivalent Shares 26,194 25,986 26,280 25,958
========== ======== ======== ========
See accompanying independent accountants' review report and notes
to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
REXEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1997 1996
-------- --------
(UNAUDITED)
<S> <C> <C>
Net Cash Provided By Operating Activities $ 28,953 $ 15,926
-------- --------
Cash Flows From Investing Activities:
Capital Expenditures (3,653) (3,418)
Cash paid for Acquisitions (25,146) (5,218)
Other Investing Activities 1,169 123
-------- --------
Net Cash Used In Investing Activities (27,630) (8,513)
-------- --------
Cash Flows From Financing Activities:
Net Borrowings under Line of Credit Arrangement 18,000 2,900
Acquisition of Treasury Shares 0 (18)
Proceeds From Exercise of Stock Options 2,650 187
Other Debt Payments and Financing Activities (12,179) (8,641)
-------- --------
Net Cash Provided By (Used In) Financing Activities 8,471 (5,572)
-------- --------
Net Increase In Cash 9,794 1,841
Cash at Beginning of Period 14,396 10,013
-------- --------
Cash at End of Period $ 24,190 $ 11,854
======== ========
Supplemental information of business acquired:
Fair value of assets acquired, other than cash $ 40,572 $ 10,290
Liabilities assumed (10,197) (4,572)
Liabilities issued to sellers (5,229) (500)
-------- --------
Cash paid for acquisitions $ 25,146 $ 5,218
======== ========
</TABLE>
See accompanying independent accountants' review report and notes
to unaudited condensed consolidated financial statements.
<PAGE>
REXEL, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. The accompanying financial information should be read in conjunction with
the consolidated financial statements, including the notes thereto, for the
year ended December 31, 1996. The condensed consolidated balance sheet as
of December 31, 1996 has been summarized from the Company's audited
consolidated balance sheet as of that date but does not include all
disclosures required by generally accepted accounting principles.
2. Results for interim periods are not necessarily indicative of the results
to be expected for the year. The accompanying financial information
reflects all adjustments which are, in the opinion of Management, of a
normal, recurring nature and necessary for a fair presentation of the
results for the periods.
3. Inventories are stated at the lower of LIFO cost or market.
4. Net income per common share is computed by dividing net income by the
weighted average number of common and common equivalent shares outstanding
during the periods.
5. On August 7, 1996, the Company acquired the common stock of Utility
Products Supply Co. of Denver, Colorado ("UPS"), a distributor of
electrical products to the utility industries with locations in Colorado,
Arizona, California and Kansas, for cash and deferred payments totaling
$5.6 million.
On November 12, 1996, the Company acquired the common stock of Cable &
Connector Warehouse, Inc. of Dallas, Texas ("CCW"), a distributor of
electronic wire, cable, connectors and related apparatus to manufacturers
of data and telecommunications products with locations in Louisiana, Texas,
Colorado, California, Oregon and Kansas, for cash consideration of $20.2
million (including $0.2 million of acquisition costs), plus contingent
consideration of up to $4.0 million based upon achieving certain operating
results in 1997. Any contingent consideration will be recorded as
additional purchase price.
On January 17, 1997, the Company acquired the assets of Southland
Electrical Supply Company ("Southland"), a distributor of electrical parts
and supplies with eight locations in Kentucky for a cash purchase price
(including $0.2 million of acquisition costs) of approximately $20.1
million and a future obligation of $4.7 million.
On April 29, 1997, the Company acquired the common stock of Chemco Electric
Supply, Inc. ("Chemco"), a distributor of electrical parts and supplies
with three distribution centers located in Tampa, Bartow and Pinellas Park,
Florida for a total consideration (including $0.2 million of acquisition
<PAGE>
costs) of approximately $5.5 million consisting of cash of $5.0 million and
a future obligation of $0.5 million. Concurrent with the Chemco
acquisition, the Company paid approximately $2.1 million of Chemco bank
debt and received approximately $1.1 million from the seller as payment for
the selling shareholder's debt to Chemco and the purchase of a life
insurance policy.
Each of these acquisitions has been recorded as a purchase, and the excess
of the total purchase price over the fair value of the net assets acquired
($3.0 million for UPS, $13.7 million for CCW, $14.6 million for Southland
and $4.3 million for Chemco) is being amortized over 40 years. Results of
operations of the companies are included in the Company's financial
statements from the respective dates of acquisition. The following table
summarizes the effect on consolidated sales and income of the Company for
the nine months ended September 30, 1997 and 1996 and the three months
ended September 30, 1996 on an unaudited pro forma basis, assuming the
acquisitions had been consummated on January 1, 1996. These acquisitions
are reflected in the Company's results of operations for the three months
ended September 30, 1997.
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- -----------------
1997 1996 1996
------ ------ ------
Net sales $1,035,228 $964,355 $332,856
========== ======== ========
Net income $ 25,012 $ 21,897 $ 7,940
========== ======== ========
Net income per share $ .95 $ .84 $ .31
========== ======== ========
The pro forma results are not necessarily indicative of what actually would
have occurred if the acquisitions had been consummated on January 1, 1996
or are they necessarily indicative of future operating results.
On October 20, 1997, the Company announced that, pursuant to a recently
executed merger agreement, its majority stockholder, Rexel, S.A. of Paris,
France, was launching a tender offer to purchase all of the outstanding
stock of the Company not beneficially owned by Rexel, S.A. at a price of
$22.50 per share in cash. The agreement was recommended by a special
committee of the Company's Board of Directors and approved by the Company's
directors. If the transactions contemplated by the merger agreement are
completed, the Company's common stock will cease to be publicly traded and
the Company will cease to be a reporting company under the Securities
Exchange Act of 1934.
On October 15, 1997, the Company completed its previously announced
agreement to sell its Utility Products Division based in Forth Worth, Texas
to Cummins Holdings, Inc. for cash of approximately $30 million. The
Utility Products Division had sales of $36.3 million and $99.6 million,
<PAGE>
respectively, for the quarter and nine months ended September 30, 1997 and
sales of $26.0 million and $72.1 million, respectively, for the quarter and
nine months ended September 30, 1996.
Previously, the Company announced that it had reached agreements to
acquire, in separate transactions, Pacific Electrical Supply, Inc. based in
San Leandro, California (which acquisition was completed on November 3,
1997) and Taylor Electric Supply, Inc. based in Portland, Oregon (which
acquisition is scheduled to be completed on November 14, 1997) for total
consideration of approximately $40 million in cash.
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders of
Rexel, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of Rexel,
Inc. and subsidiaries (the "Company") as of September 30, 1997, and the related
condensed consolidated statements of income and cash flows for the three-month
and nine-month periods then ended. These financial statements are the
responsibility of the Company's management. The financial statements of the
Company for the three-month and nine-month periods ended September 30, 1996 were
reviewed by other accountants whose report, dated October 16, 1996, stated that
they were not aware of any material modifications that should be made to those
financial statements for them to be in conformity with generally accepted
accounting principles. The financial statements of the Company as of and for the
year ended December 31, 1996 were audited by other auditors whose report, dated
February 14, 1997, expressed an unqualified opinion on those statements.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements as of and for the
three-month and nine-month periods ended September 30, 1997 for them to be in
conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
Miami, Florida
November 12, 1997
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Earnings per share for the third quarter of 1997 increased to $.34 per share
from $.29 per share in the third quarter of 1996 on a 19.7% increase in net
income from $7.5 million to $9.0 million. Earnings per share for the nine months
ended September 30, 1997 increased to $.95 per share from $.80 per share for the
first nine months of 1996 on a 20.5% increase in net income from $20.7 million
to $24.9 million.
Sales for the third quarter ended September 30, 1997 were up 21.6% (9.7% on same
branch sales) to $361.7 million compared to third quarter 1996 sales of $297.4
million. For the nine months ended September 30, 1997, sales were up 20.4% (7.8%
on same branch sales) to $1,028.6 million from $854.0 million for the first nine
months of 1996.
The following table sets forth the percentage which certain income and expense
items bear to net sales:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
Gross Profit 20.3% 20.5% 20.5% 20.9%
Selling and Administrative
Expenses 15.6 15.7 15.9 16.2
----- ----- ----- -----
Operating Profits 4.7 4.8 4.6 4.7
Interest Expense 0.4 0.4 0.5 0.4
Other Income - - 0.1 -
----- ----- ----- ----
Income Before Taxes 4.3% 4.4% 4.2% 4.3%
===== ===== ===== =====
</TABLE>
Sales for 1997 include $43.3 million and $115.5 million for the quarter and nine
months ended September 30, 1997, respectively, for Utility Products Supply,
Cable Connector Warehouse, Southland Electrical Supply and Chemco Electric
Supply, acquired, respectively, on August 7, 1996, November 12, 1996, January
17, 1997 and April 29, 1997. These acquisitions accounted for 14.6% of the 21.6%
sales increase for the quarter and 12.9% of the 20.4% sales increase for the
nine months. The increase in same branch sales for both the quarter and nine
months is primarily attributable to growth in commercial construction in the
California, Arizona, North Texas and Florida markets. Backlogs in commercial
construction operations remain strong while industrial operations backlogs are
flat to slightly up. Excluding acquisitions, two branches were opened and none
were closed during the third quarter of 1997. The Company opened one new branch
and closed two branches in the prior two quarters of 1997.
<PAGE>
For the third quarter of 1997, gross margins increased $12.6 million to $73.5
million, or 20.7% over the same period in 1996. For the nine months ended
September 30, 1997, gross margin increased $33.2 million, or 18.6% over the same
period in 1996. Acquisitions accounted for 12.6% of the increase for the quarter
and 12.7% of the increase for the nine months. As a percentage of sales, gross
profit was 20.3% in the third quarter of 1997 compared to 20.5% in the third
quarter of 1996. For the nine months ended September 30, 1997, the percentage
was 20.5% compared to 20.9% a year ago. The decline in gross profit percentage
points can be analyzed as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1997
------------------ ------------------
<S> <C> <C>
Sales Mix 0.1% - %
Utility Markets (0.3) (0.1)
LIFO (0.1) (0.1)
Trading Margins 0.1 (0.2)
----- -----
(0.2)% (0.4)%
===== =====
</TABLE>
For the quarter ended September 30, 1997, stock sales (sales from inventory)
represented a greater percentage of total sales than direct sales (sales shipped
directly to the customer from the vendor). Stock sales have historically had a
gross margin percentage roughly twice the gross margin percentage attributable
to direct sales. Utility margins continue to be negatively impacted by the trend
of utility companies to consolidate their purchasing, thereby reducing the
number of their electrical suppliers and increasing their ability to demand
lower pricing. LIFO reserves were increased by $0.3 million in the third quarter
of 1997 for a total increase of $0.7 million for the nine months ended September
30, 1997 compared to a decrease of $0.2 million for both the quarter and nine
months ended September 30, 1996 resulting from inflation in copper prices in
1997 compared to deflation in 1996. The year to date deterioration in trading
margin is the result of competitive pressures and efforts to improve same store
sales.
For the quarter ended September 30, 1997, selling and administrative expenses
increased $9.8 million to $56.5 million or 20.9% compared to the same period of
the prior year. For the nine months ended September 30, 1997, selling and
administrative expenses increased $25.6 million to $163.8 million or 18.5%
compared to the nine months ended September 30, 1996. As a percentage of sales,
selling and administrative expenses were 15.6% and 15.9%, respectively, for the
quarter and nine months ended September 30, 1997 as compared to 15.7% and 16.2%,
respectively, for the quarter and nine months ended September 30, 1996. For the
quarters ended March 31, 1997 and June 30, 1997, respectively, these expenses
were 16.6% and 15.6% of sales.
Excluding acquisitions and new and closed branches, selling and administrative
expenses in the third quarter of 1997 were up $3.8 million or 8.3% compared to
the same period of the prior year. For the nine months, this increase was $8.4
million or 6.2%. As a percentage of gross profit, selling and administrative
expenses were 76.9% and 77.5%, respectively, for the quarter and nine months
ended September 30, 1997 compared to 76.8% and 77.6%, respectively, for the same
periods of the prior year.
<PAGE>
The increase in interest expense for the quarter and nine months reflects an
increased level of debt related primarily to acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Total assets at September 30, 1997 increased $76.6 million or 17.8% compared to
year-end 1996, of which $41.3 million was attributable to 1997 acquisitions.
Cash increased $9.8 million to $24.2 million from $14.4 million at December 31,
1996. Cash provided by operating activities ($29.0 million), together with
borrowings under the line of credit arrangement ($18.0 million) and funds from
the exercise of stock options ($2.7 million) were used for acquisitions ($25.1
million), payment of debt ($12.2 million, including $2.1 million in connection
with the Chemco acquisition) and capital expenditures ($3.7 million). The
increase in cash provided by operating activities for the first nine months of
1997 compared to the same period of the prior year is driven by operations and a
more favorable variance in operating assets.
Accounts and notes receivable, excluding acquisitions, increased by $30.6
million at September 30, 1997 compared to December 31, 1996. The number of days
sales represented by total accounts receivable was 49 days at September 30, 1997
compared to 46 days at December 31, 1996. Inventory, excluding acquisitions,
increased $2.1 million. Total inventory days improved to 67 days at September
30, 1997 from 74 days at December 31, 1996.
Excluding acquisitions, capital expenditures were $3.7 million in the first nine
months of 1997 mainly for the upgrade of computer systems.
Total liabilities increased $47.6 million. Short-term debt increased $18.0
million, primarily as a result of acquisitions. Trade accounts payable and other
liabilities, excluding acquisitions, increased $28.7 million. Total trade
accounts payable days improved from 42 days at December 31, 1996 to 49 days at
September 30, 1997. The reduction in long-term debt of $7.6 million includes the
March 1997 installment of $7.1 million on the 9.78% Senior Notes.
Equity increased $29.0 million as a result of 1997 earnings of $24.9 million,
proceeds from the exercise of non-qualified stock options of $2.7 million and a
tax benefit of approximately $1.4 million associated with the exercise of the
options.
The Company's debt to equity ratio (defined as the ratio of debt including
capital lease obligations to total stockholders' equity) was 0.3 to 1 at both
September 30, 1997 and December 31, 1996. The current ratio was 1.4 at September
30, 1997 compared to 1.5 at December 31, 1996.
On October 20, 1997, the Company announced that, pursuant to a recently executed
merger agreement, its majority stockholder, Rexel, S.A. of Paris, France, was
launching a tender offer to purchase all of the outstanding stock of the Company
not beneficially owned by Rexel, S.A. at a price of $22.50 per share in cash.
The agreement was recommended by a special committee of the Company's Board of
Directors and approved by the Company's directors. If the transactions
contemplated by the merger agreement are completed, the Company's common stock
<PAGE>
will cease to be publicly traded and the Company will cease to be a reporting
company under the Securities Exchange Act of 1934.
On October 15, 1997, the Company completed its previously announced agreement to
sell its Utility Products Division based in Forth Worth, Texas to Cummins
Holdings, Inc. for cash of approximately $30 million. The Utility Products
Division had sales of $36.3 million and $99.6 million, respectively, for the
quarter and nine months ended September 30, 1997 and sales of $26.0 million and
$72.1 million, respectively, for the quarter and nine months ended September 30,
1996.
Previously, the Company announced that it had reached agreements to acquire, in
separate transactions, Pacific Electrical Supply, Inc. based in San Leandro,
California (which acquisition was completed on November 3, 1997) and Taylor
Electric Supply, Inc. based in Portland, Oregon (which acquisition is scheduled
to be completed on November 14, 1997) for total consideration of approximately
$40 million in cash.
The Company's working capital requirements are generally met by internally
generated funds and short-term borrowings under the Company's credit agreement.
Management believes that sufficient cash resources will be available to support
its long-term growth strategies through internally generated funds, credit
arrangements and the ability of the Company to obtain additional financing.
However, no assurance can be given that financing will continue to be available
on terms attractive to the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
<TABLE>
<CAPTION>
(a) EXHIBITS
--------
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
11.1 Computation of net income per common and common
equivalent shares.
15.1 Awareness letter of independent accountants.
27.1 Financial Data Schedule (Filed with EDGAR
filing only)
(b) REPORTS ON FORM 8-K
-------------------
During the quarter ended September 30, 1997 the Company did not
file any Current Reports on Form 8-K.
</TABLE>
<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
undersigned thereunto duly authorized.
REXEL, INC.
Date: November 14, 1997 By: /S/ ALLAN GONOPOLSKY
------------------------------
Allan Gonopolsky
Vice President and
Chief Accounting Officer
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
11.1 Computation of net income per common and common
equivalent shares.
15.1 Awareness letter of independent accountants.
27.1 Financial Data Schedule (Filed with EDGAR
filing only)
</TABLE>
EXHIBIT 11.1
------------
REXEL, INC.
COMPUTATION OF NET INCOME PER
COMMON AND COMMON EQUIVALENT SHARE
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS
NINE MONTHS ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ---------------
1997 1996 1997 1996
----- ----- ------ ----
<S> <C> <C> <C> <C>
Income applicable to primary common and
common equivalent shares $24,937 $20,699 $ 9,002 $ 7,522
======= ======= ======= =======
Weighted average number of common shares and
common share equivalents outstanding during
the year
Common (net of treasury stock) 25,946 25,657 26,046 25,666
Options 248 329 234 292
------- ------- ------- -------
26,194 25,986 26,280 25,958
======= ======= ======= =======
</TABLE>
EXHIBIT 15.1
November 12, 1997
Rexel, Inc.
Coral Gables, Florida
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Rexel, Inc. and subsidiaries as of and for the three-month and
nine-month periods ended September 30, 1997, as indicated in our report dated
November 12, 1997; because we did not perform an audit, we expressed no opinion
on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, is
incorporated by reference in Registration Statement No. 33-32648 on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ DELOITTE & TOUCHE LLP
Miami, Florida
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REXEL, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 24,190
<SECURITIES> 0
<RECEIVABLES> 201,450
<ALLOWANCES> 3,800
<INVENTORY> 126,888
<CURRENT-ASSETS> 363,802
<PP&E> 85,863
<DEPRECIATION> 39,299
<TOTAL-ASSETS> 505,500
<CURRENT-LIABILITIES> 252,174
<BONDS> 21,986
0
0
<COMMON> 26,675
<OTHER-SE> 198,433
<TOTAL-LIABILITY-AND-EQUITY> 505,500
<SALES> 1,028,577
<TOTAL-REVENUES> 1,028,577
<CGS> 817,210
<TOTAL-COSTS> 817,210
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 782
<INTEREST-EXPENSE> 4,690
<INCOME-PRETAX> 43,369
<INCOME-TAX> 18,432
<INCOME-CONTINUING> 24,937
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,937
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
</TABLE>
