<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
- ---- 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 1-5374
WYLE ELECTRONICS
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-1779998
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15370 BARRANCA PARKWAY
IRVINE, CALIFORNIA 92718
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 753-9953
----------------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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
----------- -----------
At April 30, 1995 registrant had 12,299,328 shares of common stock outstanding.
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PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
WYLE ELECTRONICS
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------------------
1995 1994
--------- ---------
<S> <C> <C>
Net sales $250,036 $175,579
-------- --------
Costs and expenses
Cost of sales 209,699 146,716
Selling & administrative expenses 29,155 25,495
Interest expense, net 294 142
Miscellaneous, net (235) (124)
-------- --------
238,913 172,229
-------- --------
Income from continuing operations before income taxes 11,123 3,350
Income taxes 4,393 1,233
-------- --------
Income from continuing operations 6,730 2,117
Income from discontinued operations, net of taxes - 692
-------- --------
Net income $ 6,730 $ 2,809
======== ========
Income per share:
Income from continuing operations $ .54 $ .17
======== ========
Income from discontinued operations, net of taxes $ - $ .06
======== ========
Net income $ .54 $ .23
======== ========
Average common and common equivalent shares 12,457 12,454
======== ========
Dividends per share $ .07 $ .07
======== ========
</TABLE>
See accompanying notes.
1
<PAGE>
WYLE ELECTRONICS
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
(Unaudited)
ASSETS 3/31/95 12/31/94
- ------ -------- ---------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 12,094 $ 9,319
Receivables (less allowances of $5,839 at
3/31/95 and $5,333 at 12/31/94) 131,528 115,082
Inventories 143,857 140,332
Prepaid expenses 10,389 9,301
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Total current assets 297,868 274,034
-------- ---------
Property, plant and equipment 37,978 32,666
Less accumulated depreciation 17,340 17,169
-------- ---------
20,638 15,497
-------- ---------
Other assets 15,992 16,382
-------- ---------
Total Assets $334,498 $ 305,913
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Current maturities of long-term debt $ 3,000 $ 3,000
Accounts payable 88,141 70,444
Accrued expenses 33,605 29,817
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Total current liabilities 124,746 103,261
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Long-term debt, less current maturities 18,500 17,802
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Other liabilities 24,483 25,104
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Commitments and contingencies - -
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Shareholders' equity
Common stock 88,471 86,647
Retained earnings 78,298 73,099
-------- ---------
166,769 159,746
-------- ---------
Total Liabilities and Shareholders' Equity $334,498 $ 305,913
======== =========
</TABLE>
See accompanying notes.
2
<PAGE>
WYLE ELECTRONICS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands)
Three Months
Ended March 31,
---------------------
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 6,730 $ 2,809
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 1,071 1,598
Provision for losses on receivables 981 338
Provision for deferred income taxes (1,322) (700)
(Increase) in receivables (17,427) (14,830)
(Increase) in inventories (3,525) (1,077)
Decrease in prepaid expenses 1,012 2,731
Increase in accounts payable 17,697 4,354
Increase in accrued expenses 3,788 3,445
Other, net 49 (227)
-------- --------
Net cash provided by (used for) operating activities 9,054 (1,559)
-------- --------
FINANCING ACTIVITIES
Additions to long-term debt 698 -
Payments of long-term debt - (1,120)
Exercise of stock options 1,955 350
Dividends on common stock (863) (857)
Purchase of common stock (848) -
-------- --------
Net cash provided by (used for) financing activities 942 (1,627)
-------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment (6,161) (1,957)
Additions to other non-current assets and liabilities, net (1,060) (551)
-------- --------
Net cash (used for) investing activities (7,221) (2,508)
-------- --------
Increase (decrease) in cash and cash equivalents 2,775 (5,694)
Cash and cash equivalents at beginning of period 9,319 23,748
-------- --------
Cash and cash equivalents at end of period $ 12,094 $ 18,054
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 395 $ 260
Income taxes 114 17
</TABLE>
See accompanying notes.
3
<PAGE>
WYLE ELECTRONICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 -- Basis of Presentation
The consolidated financial statements included herein have been prepared by the
company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
The accompanying consolidated financial statements have been prepared on the
same basis as the consolidated financial statements for the year ended December
31, 1994. These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the company's Annual
Report to Shareholders for the year ended December 31, 1994.
The consolidated financial statements include the accounts of the company and
all of its subsidiaries after eliminating all significant intercompany
transactions and reflect all normal recurring adjustments which are, in the
opinion of management, necessary to present a fair statement of the results for
the interim periods reported. The results of operations for the three months
ended March 31, 1995 are not necessarily indicative of the results to be
expected for the full year.
The company's fiscal quarters are on a 13-week basis. The first quarter of 1995
ended on April 2, 1995 (the Sunday nearest March 31, 1995). Last year's first
quarter ended on April 3, 1994. For clarity of presentation, the company uses
calendar month-end dates for financial reporting purposes.
Note 2 -- Discontinued Operations
On December 23, 1994, the company completed the sale of its Scientific Services
& Systems (SS&S) business. Accordingly, operating results of SS&S are
classified as discontinued operations on the company's statement of income for
1994. Sales applicable to discontinued operations for the three months ended
March 31, 1994 totaled $21,616,000. Income from discontinued operations for the
first quarter of 1994 is net of an income tax provision of $490,000.
4
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of Operations
- ---------------------
Consolidated sales for the first quarter ended March 31, 1995 totaled
$250,036,000, up 42% compared to the three months ended March 31, 1994. Income
from continuing operations aggregated $6,730,000 for the first quarter, an
increase of 218% versus the corresponding period last year. After giving effect
to the company's former Scientific Services & Systems business, which was
accounted for as a discontinued operation in the previous year, net income for
the prior year totaled $2,809,000.
The first quarter gain in sales, in comparison to the prior year, resulted
mainly from a rise in demand for semiconductor products, particularly those
offered through the company's value-added activities such as kitting, turnkey
manufacturing, autoreplenishment, design of application specific integrated
circuits (ASICs) and other design/programming services. The company also
registered higher shipments of computer products versus last year, primarily
computer systems and mass storage devices.
The improvement in income from continuing operations for the first quarter,
compared to the previous year, primarily reflects increased sales levels.
Earnings also benefited from lower selling and administrative expense as a
percentage of sales due, in part, to incurring substantial expansion-related
costs during last year's first quarter. An interest rate swap agreement
previously entered into by the company had an immaterial effect on overall
interest expense for the periods presented.
The electronics distribution industry is highly sensitive to fluctuating market
conditions primarily caused by changes in the supply and demand for
semiconductors and computer products. The company's financial results have in
the past reflected variations from period-to-period due to these factors.
Financial Condition
- -------------------
Working capital as of March 31, 1995 totaled $173,122,000, up $2,349,000 from
December 31, 1994. The growth in working capital can be attributed primarily to
increased trade receivables due to higher sales levels, offset partially by a
rise in accounts payable. The current ratio at March 31, 1995 and December 31,
1994 was 2.4 and 2.7, respectively. The ratio of long-term debt to total capital
(long-term debt plus equity) was 10% at March 31, 1995 and December 31, 1994.
Capital expenditures for the three months ended March 31, 1995 aggregated
$6,161,000, which are up from the corresponding period of the prior year due
mainly to the construction of a new warehouse/value-added distribution center.
Capital outlays in 1995 for this new facility, which is planned to be completed
during the second half of the year, are currently expected to aggregate
approximately $16-18 million.
The company's cash requirements for 1995 are expected to be higher than normal
due primarily to funds required to finance capital outlays for the construction
of the new value-added distribution center. Also, during the fourth quarter of
1994, the company reactivated a plan to purchase from time to time up to
1,500,000 shares of the corporation's common stock in the open market, or
through negotiated purchases. The company's near-term cash requirements are
expected to be financed through a combination of internally generated cash flow
and bank borrowings.
5
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
11. Calculation of Income Per Share
27. Financial Data Schedule
(b) Reports on Form 8-K:
None.
No responses are given to any other items of Part II because the answers are
either negative or not applicable.
6
<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.
WYLE ELECTRONICS
Date: May 15, 1995 By: R. VAN NESS HOLLAND, JR.
--------------------------
R. Van Ness Holland, Jr.
Executive Vice President-
Finance and Treasurer,
Chief Financial Officer
7
<PAGE>
WYLE ELECTRONICS
INDEX TO EXHIBITS FILED WITH FORM 10-Q
For the Quarter Ended March 31, 1995
Exhibits:
- --------
11. Calculation of Income Per Share
27. Financial Data Schedule
8
<PAGE>
EXHIBIT 11
----------
WYLE ELECTRONICS
CALCULATION OF INCOME PER SHARE
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------
1995 1994
------- -------
<S> <C> <C>
Income applicable to common shares
Income from continuing operations................... $ 6,730 $ 2,117
Income from discontinued operations, net of taxes... - 692
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Net income.......................................... $ 6,730 $ 2,809
======= =======
Common and common equivalent shares
Weighted average number of common
shares outstanding................................ 12,239 12,233
Stock options included under the
treasury stock method............................. 218 221
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12,457 12,454
======= =======
Income per share
Income from continuing operations................... $ .54 $ .17
======= =======
Income from discontinued operations, net of taxes... $ - $ .06
======= =======
Net income.......................................... $ .54 $ .23
======= =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 12,094
<SECURITIES> 0
<RECEIVABLES> 137,367
<ALLOWANCES> 5,839
<INVENTORY> 143,857
<CURRENT-ASSETS> 297,868
<PP&E> 37,978
<DEPRECIATION> 17,340
<TOTAL-ASSETS> 334,498
<CURRENT-LIABILITIES> 124,746
<BONDS> 18,500
<COMMON> 88,471
0
0
<OTHER-SE> 78,298
<TOTAL-LIABILITY-AND-EQUITY> 334,498
<SALES> 250,036
<TOTAL-REVENUES> 250,036
<CGS> 209,699
<TOTAL-COSTS> 209,699
<OTHER-EXPENSES> 27,939
<LOSS-PROVISION> 981
<INTEREST-EXPENSE> 294
<INCOME-PRETAX> 11,123
<INCOME-TAX> 4,393
<INCOME-CONTINUING> 6,730
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,730
<EPS-PRIMARY> .54
<EPS-DILUTED> 0
</TABLE>
