FORM 10-Q
UNITED STATES
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 December 31, 1998
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 0-5896
JACO ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-1978958
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
145 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (516) 273-5500
Indicated 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 report), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO __
Number of Shares of Registrant's Common Stock Outstanding as of February 12,
1999 - 3,653,521 (Excluding 412,200 Shares of Treasury Stock).
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FORM 10-Q December 31, 1998
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, June 30,
1998 1998
------------ -----------
ASSETS
Current Assets
<S> <C> <C>
Cash $ 390,024 $ 562,556
Marketable securities 813,275 764,810
Accounts receivable, net 22,881,322 21,887,618
Inventories 33,966,202 35,737,288
Prepaid expenses and other 992,457 1,203,198
Prepaid income taxes 769,074 610,132
Deferred income taxes 817,000 772,500
----------- -----------
Total current assets 60,629,354 61,538,102
Property, plant and equipment, net 7,226,221 6,102,445
Deferred income taxes 353,000 333,000
Excess of cost over net assets acquired, net 3,682,680 3,776,912
Other assets 1,686,671 1,668,830
----------- -----------
$73,577,926 $73,419,289
=========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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FORM 10-Q December 31, 1998
Page 3
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, June 30,
1998 1998
------------ -----------
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
<S> <C> <C>
Accounts payable and accrued expenses $ 15,776,208 $ 18,394,251
Current maturities of long term debt and
capitalized lease obligations 698,798 663,198
------------- ------------
Total current liabilities 16,475,006 19,057,449
Long term debt and capitalized lease obligations 20,771,957 17,036,593
Deferred compensation 725,000 700,000
SHAREHOLDERS' EQUITY
Preferred stock - authorized, 100,000 shares,
$10 par value; none issued
Common stock - authorized 10,000,000 shares,
$.10 par value; issued 4,065,721 shares
and 3,653,521 and 3,866,221
shares outstanding, respectively 406,572 406,572
Additional paid in capital, net 22,463,795 22,396,295
Accumulated other comprehensive income 172,052 164,385
Retained earnings 14,768,059 15,077,957
Treasury stock (2,204,515) (1,419,962)
------------ ------------
Total shareholders' equity 35,605,963 36,625,247
---------- ----------
$73,577,926 $73,419,289
============ ============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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FORM 10-Q December 31, 1998
Page 4
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(UNAUDITED)
1998 1997
-------------- -------------
<S> <C> <C>
NET SALES $34,966,098 $39,787,894
COST AND EXPENSES
Cost of goods sold 28,271,002 31,589,263
---------- ----------
Gross profit 6,695,096 8,198,631
Selling, general and administrative expenses 6,467,866 7,149,105
------------ ------------
Operating profit 227,230 1,049,526
Interest expense 341,022 270,343
------------ ------------
(Loss) earnings before income taxes (113,792) 779,183
Income tax benefit (provision) 46,000 (316,000)
------------ ------------
NET (LOSS) EARNINGS $ (67,792) $ 463,183
============ ============
Net (loss) earnings per common share
Basic and diluted $ (0.02) $ 0.12
============ ============
Weighted average common shares outstanding
Basic 3,654,182 3,882,851
============ ============
Diluted 3,654,182 3,938,860
============ ============
See accompanying notes to condensed consolidated financial statements.
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FORM 10-Q December 31, 1998
Page 5
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE SIX MONTHS ENDED DECEMBER 31,
(UNAUDITED)
1998 1997
-------------- -------------
<S> <C> <C>
NET SALES $68,222,554 $76,666,428
COST AND EXPENSES
Cost of goods sold 54,825,070 60,650,643
---------- ----------
Gross profit 13,397,484 16,015,785
Selling, general and administrative expenses 13,262,918 14,026,220
------------ ------------
Operating profit 134,566 1,989,565
Interest expense 654,464 542,352
------------ ------------
(Loss) earnings before income taxes (519,898) 1,447,213
Income tax benefit (provision) 210,000 (586,000)
------------ ------------
NET (LOSS) EARNINGS $ (309,898) $ 861,213
============ ============
Net (loss) earnings per common share
Basic and diluted $ (0.08) $ 0.22
============ ============
Weighted average common shares outstanding
Basic 3,725,441 3,885,537
============ ============
Diluted 3,725,441 3,939,345
============ ============
See accompanying notes to condensed consolidated financial statements.
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FORM 10-Q December 31, 1998
Page 6
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
Accumulated
Additional Other
Common Stock Paid-In Comprehensive Retained Treasury
Shares Amount Capital Income Earnings Stock
--------------- -------------- ---------------- -------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at July 1, 1998 4,065,721 $406,572 $ 22,801,295 $ 164,385 $15,077,957 $(1,419,962)
Deferred compensation expense
Purchase of treasury stock (784,553)
Unrealized gain on marketable
securities, net 7,667
Net loss (309,898)
--------------- -------------- ---------------- -------------- ----------------- ---------------
Balance at December 31, 1998 4,065,721 $406,572 $ 22,801,295 $ 172,052 $14,768,059 $(2,204,515)
=============== ============== ================ ============== ================= ===============
</TABLE>
Total
Deferred Shareholders'
Compensation Equity
--------------- --------------
Balance at July 1, 1998 $ (405,000) $36,625,247
Deferred compensation expense 67,500 67,500
Purchase of treasury stock (784,553)
Unrealized gain on marketable
securities, net 7,667
Net loss (309,898)
--------------- --------------
Balance at December 31, 1998 $ (337,500) $35,605,963
=============== ==============
See accompanying notes to condensed consolidated financial statements.
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FORM 10-Q December 31, 1998
Page 7
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31,
(UNAUDITED)
1998 1997
----------------- -----------------
Cash flows from operating activities
<S> <C> <C>
Net (loss) earnings $ (309,898) $ 861,213
Adjustments to reconcile net (loss) earnings to net
cash provided by (used in) operating activities
Depreciation and amortization 781,948 650,795
Deferred compensation 92,500 36,250
Deferred income tax benefit (70,000) (85,000)
Provision for doubtful accounts 253,687 235,575
Gain on sale of equipment (1,655)
Changes in operating assets and liabilities,
Decrease in operating assets, net 575,494 291,333
(Decrease) increase in operating liabilities, net (2,618,043) 49,564
----------------- -----------------
Net cash (used in) provided by operating activities (1,295,967) 2,039,730
----------------- -----------------
Cash flows from investing activities
Capital expenditures (1,200,316) (1,023,300)
Increase in marketable securities, net (35,298) (63,046)
Proceeds from sale of equipment 9,689
Increase in other assets (84,507) (159,010)
----------------- -----------------
Net cash used in investing activities (1,310,432) (1,245,356)
----------------- -----------------
Cash flows from financing activities
Borrowings under line of credit 28,698,555 73,312,120
Payments under line of credit (25,089,672) (73,455,110)
Principal payments under equipment financing
and term loans (390,463) (472,997)
Purchase of treasury stock (784,553) (165,015)
----------------- -----------------
Net cash provided by (used in) financing activities 2,433,867 (781,002)
----------------- -----------------
NET (DECREASE) INCREASE IN CASH (172,532) 13,372
----------------- -----------------
Cash at beginning of period 562,556 463,352
----------------- -----------------
Cash at end of period $ 390,024 $ 476,724
================= =================
Supplemental schedule of non-cash financing and
investing activities
Equipment under capital leases $ 552,544
See accompanying notes to condensed consolidated financial statements.
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FORM 10-Q December 31, 1998
Page 8
JACO ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
1) The accompanying condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring accrual adjustments, which are
in the opinion of management, necessary for a fair presentation of the
consolidated financial position and the results of operations at and for the
periods presented. Such financial statements do not include all the information
or footnotes necessary for a complete presentation. Therefore, they should be
read in conjunction with the Company's audited consolidated statements for the
year ended June 30, 1998 and the notes thereto included in the Company's annual
report on Form 10-K. The results of operations for the interim periods are not
necessarily indicative of the results for the entire year.
2) The Company has a $30,000,000 term loan and revolving line of credit facility
with its banks, which are based principally on eligible accounts receivables and
inventories as defined in the agreement. The agreement was amended to: (i)
extend the maturity date to September 13, 2000, (ii) change the interest rate to
a rate based on the average 30 day LIBOR rate plus 3/4 % to 1 1/4% depending on
the Company's performance for the immediately preceding four fiscal quarters
measured by a certain financial ratio, and (iii) changed the requirements of
certain financial covenants. The applicable interest rate may be adjusted
quarterly and borrowings under this facility are collateralized by substantially
all of the assets of the Company.
3) The Board of Directors of the Company has authorized the purchase of up to
650,000 shares of its outstanding common stock under a stock repurchase program.
The purchases may be made by the Company from time to time on the open market.
The Company has made purchases of 412,200 shares of its common stock as of
February 12, 1999 for aggregate consideration of $2,204,515.
4) For interim financial reporting purposes, the Company uses the gross profit
method for computing inventories, which consists of goods held for resale, work
in process and raw materials.
5) In fiscal 1998, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128"), "Earnings per Share." SFAS No.
128 replaces the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earnings per share
amounts for all periods have been presented to conform to the SFAS No. 128
computation.
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FORM 10-Q December 31, 1998
Page 9
The number of shares used in the Company's basic and diluted earnings
per share computations are as follows:
Three Months Ended Six Months Ended
December 31, December 31,
--------------------------------- ------------------------------
1998 1997 1998 1997
-------------- ---------------- ------------- ------------
Weighted average common shares
outstanding net of treasury shares,
<S> <C> <C> <C> <C>
for basic earnings per share 3,654,182 3,882,851 3,725,441 3,885,537
Common stock equivalents for
stock options 56,009 53,808
-------------- ---------------- ------------- ------------
Weighted average common shares
outstanding for diluted earnings per share 3,654,182 3,938,860 3,725,441 3,939,345
============== ================ ============= ============
</TABLE>
For the three and six months ended December 31, 1998 options to
purchase 476,564 shares of common stock at a price range of $4.13 to $12.75 and
warrants to purchase 70,000 shares of common stock at $22.95 were outstanding
during the period. They were not included in the computation of diluted earnings
per share because the exercise prices were greater than the average market price
of the common shares.
6) The company has adopted SFAS No. 130 "Reporting Comprehensive Income" which
establishes guidelines for reporting and disclosure of comprehensive income and
its components. The purpose of reporting comprehensive income is to report a
measure of all changes in equity that resulted from recognized transactions and
other economic events of the periods presented other than transactions with
stockholders. Adoption of SFAS No. 130 had no economic impact on the Company's
consolidated financial position, net earnings, stockholders' equity or cash
flows, although the presentation of certain items has changed.
Comprehensive income and its components, net of tax, are as follows:
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Three Months Ended Six Months Ended
December 31, December 31,
----------------------------- ------------------------
1998 1997 1998 1997
------------- ------------ ---------- -----------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Net (loss) earnings $(68) $463 $(310) $861
Other comprehensive income:
Net unrealized investments gains (losses) 54 (30) 8
------------- ------------ ---------- -----------
Comprehensive (loss) income $(14) $433 $(302) $861
============= ============ ========== ===========
</TABLE>
The components of accumulated other comprehensive income included in
the accompanying condensed consolidated balance sheets and consolidated
statement of changes in shareholders' equity consists of net unrealized
investment gains as of the end of the period.
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FORM 10-Q December 31, 1998
Page 10
7) The Financial Accounting Standard Board issued Statement of Financial
Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and
Related Information" ( "SFAS 131"). SFAS 131 established standards to report
information about operating segments and related discussions about products and
services, geographic areas and major customers. SFAS 131 is effective for fiscal
years beginning after December 15, 1997. This statement permits early
application and requires restatement for all prior periods. SFAS 131 is not
required to be applied to interim financial statements in the initial year of
adoption. Management believes that the adoption of this statement will not have
any material impact on previously reported information.
JACO ELECTRONICS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Statements in this filing, and elsewhere, which look forward in time
involve risks and uncertainties which may effect the actual results of
operations. The following important factors, among others, have affected and, in
the future, could affect the Company's actual results: dependence on a limited
number of suppliers for products which generate a significant portion of the
Company's sales, the effect upon the Company of increases in tariffs or duties,
changes in trade treaties, strikes or delays in air or sea transportation and
possible future United States legislation with respect to pricing and/or import
quotas on products imported from foreign countries, and general economic
downturns in the electronics distribution industry which may have an adverse
economic effect upon manufacturers, end-users of electronic components and
electronic component distributors.
GENERAL
Jaco is a distributor of electronic components, provider of contract
manufacturing and value-added services. Products distributed by Jaco include
semiconductors, capacitors, resistors, electromechanical devices, flat panel
displays and monitors, and power supplies used in the assembly and manufacturing
of electronic equipment.
The Company's customers are primarily small and medium sized
manufacturers. The trend for these customers has been to shift certain
manufacturing functions to third parties ("Outsourcing"). The Company intends to
capitalize on this trend toward Outsourcing by increasing sales of products
enhanced by value-added services. Value-added services currently provided by
Jaco consist of configuring complete computer systems to customer specifications
both in tower and desktop configurations, kitting (e.g. supplying sets of
specified quantities of products to a customer that are prepackaged for ease of
feeding the customer's production lines), automated inventory management
services and contract manufacturing through the Company's wholly-owned
subsidiary, Nexus Custom Electronics, Inc.
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FORM 10-Q December 31, 1998
Page 11
Results of Operations
The following table sets forth certain items in the Company's statement of
earnings as a percentage of net sales for the periods shown:
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Three Months Ended Six Months Ended
December 31, December 31,
------------------------------ ---------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 80.9 79.4 80.4 79.1
---------- ---------- ---------- ----------
Gross Profit 19.1 20.6 19.6 20.9
Selling, general and
administrative expenses 18.5 18.0 19.4 18.3
---------- ---------- ---------- ----------
Operating profit 0.6 2.6 0.2 2.6
Interest expense 0.9 0.6 1.0 0.7
---------- ---------- ---------- ----------
(Loss) earnings before income taxes (0.3) 2.0 (0.8) 1.9
Income tax benefit (expense) 0.1 (0.8) 0.3 (0.8)
---------- ---------- ---------- ----------
NET (LOSS) EARNINGS (0.2%) 1.2% (0.5%) 1.1%
========== ========== ========== ==========
</TABLE>
COMPARISON OF THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1998 AND DECEMBER 31,
1997.
Net sales for the three and six months ended December 31, 1998 were $35.0
million and $68.2 million, respectively compared to $39.8 million and $76.7
million for the three and six months ended December 31, 1997, respectively
representing decreases in net sales of 12.1% and 11.0%. The Company's net sales
were impacted by continued industry wide pricing pressures; compounded by the
softening demand for electronic components which has affected the electronics
industry for over two years. The Company has targeted flat panel displays and
monitors as an area of growth, and net sales in this area have increased in
recent quarters.
Gross profit margins as a percentage of net sales were 19.1% and 19.6 %
for the three and six months ended December 31, 1998, respectively compared to
20.6% and 20.9% for the three and six months ended December 31, 1997,
respectively. The decrease is attributable to pricing pressures along with a
change in product mix.
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FORM 10-Q December 31, 1998
Page 12
Selling, general and administrative expenses ("S,G&A") for the three and
six months ended December 31, 1998 were $6.5 million and $13.3 million,
decreases of $.7 and $.8 million or 9.5% and 5.4% when compared to the three and
six months ended December 31, 1997. In addition, S,G&A for the second quarter of
fiscal 1999 decreased $.3 million when compared to the first quarter of fiscal
1999. The decrease in S,G&A is the result of cost savings initiatives which the
Company had implemented in prior periods.
Interest expense increased to $341,000 and $654,000 for the three and
six months ended December 31, 1998 compared to $270,000 and $542,000 for the
three and six months ended December 31, 1997, increases of $71,000 and $112,000
or 26.1% and 20.7%. The increases are primarily attributable to increased
borrowings due to the Company's purchases of its common stock under its stock
repurchase program, along with fixed asset additions primarily for the contract
manufacturing business.
The net losses for the three and six months ended December 31, 1998
were $68,000 and $310,000 or $0.02 and $0.08 per share, compared to net income
of $463,000 and $861,000 or $0.12 and $0.22 per share, during the same periods
last fiscal year. The weighted average number of diluted shares outstanding were
3,654,182 and 3,725,441 for the three and six months ended December 31, 1998
compared to 3,938,860 and 3,939,345 for the same periods last fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's agreement with its banks, as amended, provides the
Company with a $30,000,000 term loan and revolving line of credit facility based
principally on eligible accounts receivable and inventories of the Company as
defined in the agreement which expires September 13, 2000. The interest rate of
the credit facility is based on the average 30 day LIBOR rate plus 3/4% to
1-1/4% depending on the Company's performance for the immediately preceding four
fiscal quarters measured by a certain financial ratio, and may be adjusted
quarterly. The outstanding balance on the revolving line of credit facility was
$18,921,967 at December 31, 1998. The term loan, with a remaining balance of
$482,143 at December 31, 1998, requires monthly principal payments of $17,857,
together with interest through September 13, 2000, with a final payment of
$107,146 due on September 13, 2000. Borrowings under this facility are
collateralized by substantially all of the assets of the Company. The agreement
contains provisions for maintenance of certain financial ratios, all of which
the Company is in compliance with at December 31, 1998, and prohibits the
payment of cash dividends.
For the six months ended December 31, 1998, the Company's net cash used in
operating activities was approximately $1.3 million compared to net cash
provided by operating activities of approximately $2.0 million for the six
months ended December 31, 1997. The decrease is primarily attributable to the
reduction in accounts payable and accrued expenses. Net borrowings under the
Company's line of credit was approximately $3.6 million for the six months ended
December 31, 1998 compared to a net repayment of approximately $.1 million for
the six months ended December 31, 1997. The additional borrowings is primarily
attributable to the purchase of $.8 million of treasury stock along with fixed
asset additions primarily for the contract manufacturing business. The Company's
cash expenditure may vary significantly from current levels, based on a number
of factors, including, but not limited to, future acquisitions if any.
For the first six months of fiscal 1999 and fiscal 1998 inventory
turnover was 3.2:1 and 3.7:1, respectively. The average days outstanding of the
Company's accounts receivable at December 31, 1998 was 58 days, as compared to
54 days at December 31, 1997.
The Board of Directors of the Company had authorized the purchase of up
to 250,000 shares of its common stock under a stock repurchase program. During
fiscal 1999, the Board of Directors authorized the repurchase of up to an
additional 400,000 shares of the Company's common stock. The purchases may
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FORM 10-Q December 31, 1998
Page 13
be made by the Company from time to time on the open market at the Company's
discretion and will be dependent on market conditions. Through February 12, 1999
the Company has purchased 412,200 shares of its common stock for aggregate
consideration of $2,204,515 under this program.
The Company believes that cash flow from operations and funds available
under its credit facility will be sufficient to fund the Company's capital needs
for at least the next twelve months.
Year 2000 Compliance
The year 2000 ("Y2K") issue is the result of computer programs using a
two-digit format, as opposed to four digits, to indicate the year. Such computer
systems will be unable to interpret dates beyond the year 1999, which could
cause a system failure or other computer errors, leading to disruptions in
operations. In April 1996, the Company developed a three-phase program for Y2K
information systems compliance. Phase I was to identify those systems with which
the Company has exposure to Y2K issues. Phase II was the development and
implementation of action plans to be Y2K compliant in all areas by late 1998.
Phase III, to be fully completed by mid 1999, is the final major area of
exposure to ensure compliance. The Company has identified three major areas
determined to be critical for successful Y2K compliance: (1) financial and
informational system applications, (2) manufacturing applications and (3) third
party relationships.
As of September 1, 1998, Jaco had completed the redesign and
development of an entirely new distribution software system. All of the dates in
this new database are 8 characters, including the century. The system has been
tested and has been in operation since September 1, 1998. The systems include
customer order entry, purchase order entry to the Company's manufacturers,
warehousing and inventory control.
The financial systems, Accounts Payable and General Ledger have been
Y2K compliant since April 1997. The Accounts Receivable system is Y2K compliant
as of September 1, 1998.
Jaco's distribution facilities: warehouse, shipping and other physical handling
have been tested and are Y2K compliant.
The Company, as it relates to the contract manufacturing operations in
accordance with Phase I of the program, is in the process of conducting an
internal review of all systems and contacting all software suppliers to
determine major areas of exposure to Y2K issues. In the financial and
information system area a number of applications have been identified as Y2K
compliant due to their recent implementation. The contract manufacturing core
financial and reporting systems are not Y2K compliant but are scheduled to be
complete and fully tested by mid 1999. The costs relating to Y2K compliance in
the contract manufacturing area, are not expected to be material to the Company.
In the third party area the Company has contacted most of its major third
parties. These parties state that they intend to be Y2K compliant by the year
2000.
The Company believes it will cost approximately $1.8 million to replace the
core financial and reporting software systems for its distribution business. The
Company is utilizing outside consultants to undertake a portion of such work.
INFLATION
Inflation has not had a significant impact on the Company's operations
during the last three fiscal years.
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FORM 10-Q December 31, 1998
Page 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Nothing to Report
Item 2. Changes in Securities and Use of Proceeds
Nothing to Report
Item 3. Defaults Upon Senior Securities
Nothing to Report
Item 4. Submission of Matters to a Vote of Security Holders
Jaco's Annual Meeting of Shareholders was held on December 7,
1998. The Shareholders approved the following:
(i) The election of each of the nominees to the Board of Directors:
Stephen A. Cohen For: 3,238,267 Withheld: 29,891
Edward M. Frankel For: 3,238,267 Withheld: 29,891
Charles B. Girsky For: 3,238,090 Withheld: 30,068
Joel H. Girsky For: 3,238,090 Withheld: 30,068
Joseph F. Hickey, Jr. For: 3,238,267 Withheld: 29,891
(ii) An amendment to the Company's 1993 Non Qualified
Stock Option Plan (the "1993 Non-Qualified Plan") as
amended, to provide that directors will be eligible
to receive stock options under the 1993 Non-Qualified
Plan.
For: 1,919,135 Against: 1,216,222 Abstention 132,801
(iii) An amendment to the Company's Restricted Stock Plan
to provide that directors will be eligible to receive
awards under the Restricted Stock Plan.
For: 2,966,946 Against: 168,169 Abstention: 133,043
Item 5. Other Information
Nothing to Report
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27.1 Financial Data Schedule
b) Reports on Form 8-K: None
<PAGE>
S I G N A T U R E
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.
JACO ELECTRONICS, INC.
(Registrant)
BY: Jeffrey D. Gash
Jeffrey D. Gash, Vice President/Finance
(Principal Financial Officer)
DATED February 12, 1999
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the unaudited condensed consolidated balance sheet as of December
31, 1998 and the unaudited condensed consolidated statement of earnings for the
six months ended December 31, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
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0
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