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 September 30, 2000
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: (631) 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 November 6, 2000
- 5,633,959 (Excluding 618,300 Shares of Treasury Stock).
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FORM 10-Q September 30, 2000
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
2000 2000
-------------- ----------
ASSETS
Current Assets
<S> <C> <C>
Cash $ 985,334 $ 617,603
Marketable securities 879,026 880,954
Accounts receivable - net 52,598,027 42,179,468
Inventories 61,212,582 53,415,793
Advance to supplier 6,539,961
Prepaid expenses and other 1,289,787 887,804
Deferred income taxes 2,077,000 1,975,000
------------ ------------
Total current assets 125,581,717 99,956,622
Property, plant and equipment - net 7,581,348 6,926,734
Excess of cost over net
assets acquired - net 16,387,588 16,600,432
Other assets 2,823,250 2,845,305
------------ ------------
$152,373,903 $126,329,093
============ =============
See accompanying notes to condensed consolidated financial
statements.
</TABLE>
2
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<TABLE>
FORM 10-Q September 30, 2000
Page 3
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
2000 2000
-------------- ---------
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
<S> <C> <C>
Accounts payable and accrued expenses $ 45,415,387 $ 39,190,011
Current maturities of long term debt and
capitalized lease obligations 4,479,261 807,444
Income taxes payable 2,938,392 1,575,319
------------- -------------
Total current liabilities 52,833,040 41,572,774
Long term debt and capitalized lease obligations 51,037,360 40,940,877
Deferred income taxes 212,000 225,000
Deferred compensation 812,500 800,000
SHAREHOLDERS' EQUITY
Preferred stock - authorized, 100,000 shares,
$10 par value; none issued
Common stock - authorized 10,000,000 shares,
$.10 par value; issued 6,252,259 shares
and 5,633,959 shares outstanding 625,226 625,226
Additional paid-in capital - net 23,940,051 23,906,301
Retained earnings 24,954,069 20,296,761
Accumulated other comprehensive income 164,172 166,669
Treasury stock (2,204,515) (2,204,515)
------------- -------------
Total shareholders' equity 47,479,003 42,790,442
------------- -------------
$ 152,373,903 $ 126,329,093
============= =============
See accompanying notes to condensed consolidated financial
statements.
</TABLE>
3
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<TABLE>
FORM 10-Q September 30, 2000
Page 4
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
2000 1999
----------- -----------
<S> <C> <C>
NET SALES $94,158,828 $42,017,363
COST AND EXPENSES
Cost of goods sold 73,541,170 34,081,758
----------- -----------
Gross profit 20,617,658 7,935,605
Selling, general and administrative expenses 11,834,056 7,248,597
----------- -----------
Operating profit 8,783,602 687,008
Interest expense 888,735 322,933
----------- -----------
Earnings before income taxes 7,894,867 364,075
Income tax provision 3,237,000 150,000
----------- -----------
NET EARNINGS $ 4,657,867 $ 214,075
=========== ===========
Net earnings per common share:
Basic $ 0.83 $ 0.04
=========== ===========
Diluted $ 0.75 $ 0.04
=========== ===========
Weighted average common shares outstanding:
Basic 5,633,959 5,480,282
=========== ===========
Diluted 6,234,768 5,564,175
=========== ===========
See accompanying notes to condensed consolidated financial
statements.
</TABLE>
4
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<TABLE>
FORM 10-Q September 30, 2000
Page 5
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
Accumulated
Additional other
paid-in Retained comprehensive Treasury
Shares Amount capital earnings income stock
--------------- -------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at July 1, 2000 6,252,259 $625,226 $ 24,041,301 $ 20,296,761 $ 166,669 $ (2,204,515)
Net earnings 4,657,867
Unrealized loss on marketable
securities - net (2,497)
Comprehensive income
Payment of fractional shares (559)
Deferred compensation
--------------- -------------- ---------------- ---------------- ---------------- --------------
Balance at September 30, 2000 6,252,259 $625,226 $ 24,041,301 $ 24,954,069 $ 164,172 $ (2,204,515)
=============== ============== ================ ================ ================ ==============
Total
Deferred shareholders'
compensation equity
--------------- --------------
<S> <C> <C> <C>
Balance at July 1, 2000 $ (135,000) $42,790,442
-----------
Net earnings 4,657,867
Unrealized loss on marketable
securities - net (2,497)
----------
Comprehensive income 4,655,370
----------
Payment of fractional shares (559)
Deferred compensation 33,750 33,750
--------------- --------------
Balance at September 30, 2000 $ (101,250) $ 47,479,003
=============== ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
5
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<TABLE>
FORM 10-Q September 30, 2000
Page 6
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
2000 1999
------------------ -----------------
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 4,657,867 $ 214,075
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities
Depreciation and amortization 735,220 438,686
Deferred compensation 46,250 46,250
Deferred income tax benefit (113,600) (110,000)
Provision for doubtful accounts 360,703 119,950
Changes in operating assets and liabilities,
Increase in operating assets - net (25,517,995) (2,251,239)
Increase in operating liabilities - net 7,588,449 1,912,628
------------ ------------
Net cash (used in) provided by operating activities (12,243,106) 370,350
------------ ------------
Cash flows from investing activities
Capital expenditures (1,133,573) (112,242)
Increase in marketable securities (1,969) (1,864)
(Increase) decrease in other assets (21,362) 22,995
------------ ------------
Net cash used in investing activities (1,156,904) (91,111)
------------ ------------
Cash flows from financing activities
Borrowings under line of credit 87,922,848 12,795,589
Payments under line of credit (73,943,121) (12,860,157)
Principal payments under equipment financing
and term loans (211,427) (200,740)
Payment of fractional shares (559)
------------ ------------
Net cash provided by (used in) financing activities 13,767,741 (265,308)
------------ ------------
NET INCREASE IN CASH 367,731 13,931
------------ ------------
Cash at beginning of period 617,603 922,247
------------ ------------
Cash at end of period $ 985,334 $ 936,178
============ ============
Supplemental schedule of non-cash financing and
investing activities:
Equipment under capital leases $ 126,229
See accompanying notes to condensed consolidated financial statements.
</TABLE>
6
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FORM 10-Q September 30, 2000
Page 7
JACO ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 financial statements
for the year ended June 30, 2000 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 $60,000,000 term loan and revolving line of credit facility
with its banks, which is based principally on eligible accounts receivable and
inventories as defined in the loan agreement. At September 30, 2000 the unused
portion of the line was $6,177,864. The agreement was amended to (i) increase
the amount available under the revolving line of credit to $60,000,000 through
January 31, 2001 at which point it will revert back to $50,000,000, (ii) extend
the maturity date to September 14, 2002, (iii) change the interest rate to a
rate based on the average 30-day LIBOR plus 1-3/4% through the quarter ended
September 30, 2000 at that point the rate converts to 30-day LIBOR plus 1% to
2-1/4% depending on the Company's performance for the immediately preceding four
fiscal quarters measured by a certain financial ratio, and (iv) change 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 had authorized the purchase of up to
975,000 shares of its outstanding common stock under a stock repurchase program.
The purchases were made by the Company from time to time on the open market. The
Company had made purchases of 618,300 shares of its common stock from July 31,
1996 through September 13, 2000 for aggregate consideration of $2,204,515. On
September 14, 2000, the Board of Directors passed a resolution to terminate the
stock repurchase program.
4) For interim financial reporting purposes, the Company uses the gross profit
method for computing inventories, which consists of goods held for resale.
5) On June 6, 2000, the Company acquired all of the issued and outstanding
shares of common stock, no par value, of Interface Electronics Corp.
("Interface"), a distributor of electronic parts, components and equipment,
located in Massachusetts. The purchase price was $15,400,000 payable in cash at
the closing, (June 6, 2000) plus a deferred payment of up to $3,960,000, payable
approximately one year from the anniversary of the closing. This payment will be
made provided that certain conditions, as defined in the purchase agreement, are
met. On the second anniversary of the closing date a deferred payment of up to
$2,640,000 shall be paid provided that certain conditions, as defined in the
purchase loan agreement, are met. When this contingency is resolved, the Company
shall record the current fair value of the consideration paid as additional
goodwill which will be amortized over the remaining life of the asset.
7
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FORM 10-Q September 30, 2000
Page 8
The acquisition has been accounted for as a purchase and the operations of
Interface have been included in the Company's Statement of Earnings since the
date of acquisition, June 6, 2000. Included in other assets are the costs of the
identifiable intangible assets acquired, principally an employment agreement and
a franchise agreement which are being amortized on a straight-line basis over
five and fifteen years, respectively. The excess of the purchase price and
related expenses over the net tangible and identifiable intangible assets
acquired amounted to approximately $13,048,000 and is being amortized on a
straight-line basis over twenty years.
Summarized below are the unaudited pro forma results of operations of the
Company as if Interface has been acquired at the beginning of the fiscal periods
presented:
Three months ended
September 30,
2000 1999
---------- --------
Net sales $94,158,828 $50,175,194
Net earnings (loss) 4,657,867 (547,229)
Net earnings (loss) per
common share:
Basic $0.83 $(0.10)
Diluted $0.75 $(0.10)
The pro forma financial information presented above for the three months
ended September 30, 1999 is not necessarily indicative of either the results of
operations that would have occurred had the acquisition taken place at the
beginning of the periods presented or of future operating results of the
combined companies.
6) On February 25, 2000, the Company purchased the operating assets of PGI,
Industries, Inc., ("PGI") an exporter of electronic components, located in
Ronkonkoma, New York. The purchase price was $1,200,000 paid in cash, plus a
deferred payment of $100,000 payable over the next two years based on certain
conditions, as defined in the purchase agreement. When this contingency is
resolved, the Company shall record the current fair value of the consideration
issued as additional costs of the acquired enterprise. These additional costs
shall be amortized over the remaining life of the asset. The acquisition has
been accounted for as a purchase and the operations of PGI have been included in
the Company's Statement of Earnings since the date of acquisition, February 25,
2000. The excess of the purchase price over the fair value of the assets
acquired, approximately $210,000, is being amortized on a straight-line basis
over twenty years. Pro forma results of operations are not material.
7) On June 26, 2000, the Company announced a 3-for-2 stock split which was in
the form of a 50% common stock dividend payable on July 24, 2000 to shareholders
of record on July 10, 2000. All references to the number of weighted average
common shares outstanding and earnings per share have been restated to reflect
the 3-for-2 stock split.
8
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FORM 10-Q September 30, 2000
Page 9
8) The number of shares used in the Company's basic and diluted earnings per
share computations are as follows:
Three Months Ended
September 30,
------------------------------
2000 1999
------------ ------------
Weighted average common shares
outstanding net of treasury shares,
for basic earnings per share 5,633,959 5,480,282
Common stock equivalents
for stock options 600,809 83,893
------------ ------------
Weighted average common shares
outstanding for diluted earnings
per share 6,234,768 5,564,175
============ ============
Excluded from the calculation of earnings per share are options and
warrants to purchase 435,444 shares for the three months ended September 30,
1999, as their inclusion would have been antidilutive.
9) The Company has two reportable segments: electronics parts distribution and
contract manufacturing. The Company's primary business activity is conducted
with small and medium sized manufacturers, located in North America, that
produce electronic equipment used in a variety of industries. Information
pertaining to the Company's operations in different geographic areas for the
three months ended September 30, 2000 and 1999 is not considered material to the
financial statements.
The Company's chief operating decision maker utilizes net sales and net earnings
information in assessing performance and making overall operating decisions and
resource allocations. The accounting policies of the operating segments are the
same as those described in the summary of significant accounting policies
included in the Company's annual report to shareholders. Information about the
Company's segments is as follows:
9
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FORM 10-Q September 30, 2000
Page 10
Three Months Ended,
September 30,
---------------------------
2000 1999
------ ------
(in thousands)
Net sales from external customers
Electronics components distribution $87,767 $39,224
Contract manufacturing 6,392 2,793
------- -------
$94,159 $42,017
====== ======
Intersegment net sales
Electronics components distribution $ 128 $ 68
Contract manufacturing
----- -----
$ 128 $ 68
========= ========
Operating profit
Electronics components distribution $ 8,259 $ 582
Contract manufacturing 525 105
--------- ---------
$ 8,784 $ 687
========= =======
Interest expense
Electronics components distribution $ 752 $ 192
Contract manufacturing 137 131
-------- --------
$ 889 $ 323
======= =======
Income tax provision (benefit)
Electronics components distribution $ 3,078 $ 161
Contract manufacturing 159 (11)
------- --------
$ 3,237 $ 150
========= =======
Identifiable assets
Electronics components distribution $ 138,719 $ 64,699
Contract manufacturing 13,655 10,224
---------- ----------
$ 152,374 $ 74,923
========= ========
Capital expenditures
Electronics components distribution $ 333 $ 66
Contract manufacturing 801 46
---------- ---------
$ 1,134 $ 112
=========== =========
Depreciation and amortization
Electronics components distribution $ 536 $ 288
Contract manufacturing 199 151
---------- ----------
$ 735 $ 439
========= =========
10
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FORM 10-Q September 30, 2000
Page 11
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
seek 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 automated inventory management services, 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), and contract
manufacturing through Nexus Custom Electronics, Inc., a wholly owned subsidiary
of the Company. The Company is also expanding in the flat panel display
value-added market which includes full system integration, kitting and the
implementation of touch technologies.
11
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FORM 10-Q September 30, 2000
Page 12
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:
Three Months Ended
September 30,
-------------------------------
2000 1999
--------- ---------
Net sales 100.0% 100.0%
Cost of goods sold 78.1 81.1
--------- ---------
Gross profit 21.9 18.9
Selling, general and
administrative expenses 12.6 17.3
--------- ---------
Operating profit 9.3 1.6
Interest expense 0.9 0.7
--------- ---------
Earnings before income taxes 8.4 0.9
Income tax provision 3.5 0.4
--------- ---------
NET EARNINGS 4.9% 0.5%
======== ==========
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2000 ("FISCAL 2001") WITH
THREE MONTHS ENDED SEPTEMBER 30, 1999 ("FISCAL 2000")
Our net sales for the first three months of fiscal 2001 were
$94.2 million, an increase of $52.2 million, or 124.1%, as compared to $42.0
million reported for the first three months of fiscal 2000. The increase in net
sales was principally the result of a continued strong demand for components
throughout the electronics industry. The Company is benefiting from substantial
investments made in sales personnel and infrastructure. The Company added new
customers and expanded our relationships with existing customers as a result of
the value-added services offered to assist customers in procurement and
inventory management. Net sales includes the acquisition of Interface
Electronics Corp. ("Interface"), which was completed during June 2000.
Our gross profit was $20.6 million for the first three months of
fiscal 2001, an increase of $12.7 million, or 159.8%, compared to $7.9 million
for the first three months of fiscal 2000. Gross profit margins as a percentage
of net sales were 21.9% for the quarter compared to 18.9% for the same quarter
last fiscal year. The strong demand for components was primarily attributable
for the increase in gross profit margin as a percentage of net sales. The higher
gross profit percentage plus the strong sales growth resulted in the increase in
gross profit.
12
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FORM 10-Q September 30, 2000
Page 13
Our selling, general and administrative ("SG&A") expenses were $11.8
million for the first three months of fiscal 2001, an increase of $4.6 million,
or 63.3%, compared to $7.2 million for the same quarter last fiscal year. As a
percentage of net sales, SG&A expenses decreased to 12.6% for the first three
months of fiscal 2001 compared to 17.3% for the comparable period last fiscal
year. The increase in spending is primarily attributable to expenses necessary
to support the growth in sales. These expenses include additional sales and
marketing personnel, investments in our infrastructure, variable costs
associated with our increase in sales and the additional costs associated with
the acquisition of Interface. The decrease as a percentage of net sales reflects
operating efficiencies realized with higher revenue levels.
Our operating profit for the first three months of fiscal 2001 was $8.8
million as compared to $0.7 million for the first three months of fiscal 2000.
As a percentage of net sales, operating profit increased to 9.3% for the current
quarter, compared to 1.6% for the same quarter last fiscal year.
Our interest expense increased to $0.9 million for the first three months
of fiscal 2001, as compared to $0.3 million for the first three months of fiscal
2000. The increase was primarily due to the additional borrowings of
approximately $15 million to acquire Interface during the fourth quarter of
fiscal year ended June 30, 2000 and the additional borrowings required due to
the increase in accounts receivable and inventory necessary to support the
growth in sales.
Our net earnings for the first three months of fiscal 2001 were $4.7
million, or $0.75 per share diluted, as compared to net earnings of $0.2
million, or $0.04 per share diluted for the first three months of fiscal 2000.
Dilutive earnings per share includes the dilutive effect of outstanding stock
options. The increase in net earnings was attributable to the increase in net
sales, the increase in gross profit margins, and the reduction in SG&A expenses
as it relates to a percentage of net sales. The Company also benefited from the
acquisition of Interface as well as strong demand during the quarter for
components throughout the electronics industry.
LIQUIDITY AND CAPITAL RESOURCES
Our agreement with our banks, as amended on September 28, 2000, expires on
September 14, 2002. Our agreement provides us with a $60 million term loan and
revolving line of credit facility based principally on eligible accounts
receivable and inventories as defined in the agreement. On February 1, 2001, the
revolving line of credit reduces to $50 million. The interest rate of the credit
facility was based on the average 30-day LIBOR rate plus 1.75% through the
quarter ending September 30, 2000. After September 30, 2000, the rate converts
to the average 30-day LIBOR rate plus 1.0%-2.25% depending on our 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 $53.7 million at September 30, 2000.
Borrowings under this facility are collateralized by substantially all of our
assets. The agreement contains provisions for maintenance of certain financial
ratios, all of which we were in compliance with at September 30, 2000, and
prohibits the payment of cash dividends.
For the first three months of fiscal 2001, our cash used in operating
activities was approximately $12.2 million, as compared to net cash provided by
operating activities of $0.4 million for the same period last fiscal year. The
increase in net cash used is primarily attributable to an increase in accounts
receivable, inventory and an advance to supplier. This was partially offset by
an increase in accounts payable and accrued expenses and net earnings for the
quarter. The increase in accounts receivable was the result of the increase in
net sales during the quarter. The increase in inventory and an advance to our
supplier, which amounted to approximately $15 million, was the result of a
significant purchase order at the end of the quarter which is expected to result
in shipments during the next two quarters. Net cash provided by financing
activities was $13.8 million for the first three months of fiscal 2001 as
compared to net cash used in financing activities of $0.3 million for the
comparable period last fiscal year. The increase is primarily attributable to
the increase in net borrowings under the line of credit of approximately $14.0
million required to fund the increase in inventory and the advance to the
supplier described above.
13
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FORM 10-Q September 30, 2000
Page 14
Our cash expenditures may vary significantly from current levels, based on
a number of factors, including, but not limited to future acquisitions, if any.
For the first three months of fiscal 2001 and fiscal 2000, our
inventory turnover was 5.1x and 4.1x, respectively. The average days outstanding
of our accounts receivable at September 30, 2000 was 46 days, as compared to 53
days at September 30, 1999.
We believe that cash flow from operations and funds available under our
credit facility will be sufficient to fund our capital needs for at least the
next twelve months.
Inflation
Inflation has not had a significant impact on the Company's operations
during the last three fiscal years.
Quantitative and Qualitative Disclosure about Market Risk.
We are exposed to interest rate changes with respect to our credit facility
which bears interest at the higher of the prime rate or the federal funds rate
plus 0.5%, or at our option, at a rate equal to the average 30-day LIBOR rate
plus 1.0% to 2.25% depending on our performance for the immediately preceding
four fiscal quarters measured by a certain financial ratio, and may be adjusted
quarterly. At September 30, 2000, $53.7 million was outstanding under the credit
facility. Changes in the LIBOR interest rate during the fiscal year will have a
positive or negative effect on our interest expense. Each 1.0% fluctuation in
the LIBOR interest rate will increase or decrease interest expense for us by
approximately $0.5 million based on outstanding borrowings at September 30,
2000. The impact of interest rate fluctuations on other floating rate debt is
not material.
14
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FORM 10-Q September 30, 2000
Page 15
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
Nothing to Report
Item 5. Other Information
Nothing to Report
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27.1 Financial Data Schedule
99.8.8 Amendment to Second Restated
and Amended Loan and Security Agreement
dated September 28, 2000
b) Reports on Form 8-K
1) On October 20, 2000, a Current Report on Form 8-K,
Amendment No. 2, was filed to include revised audited financial
statements of Interface Electronics Corp. as of and for the year
ended December 31, 1999, unaudited statements of Interface
Electronics Corp. for the nine months ended March 31, 2000 and
related proforma information.
2) On November 13, 2000, a Current Report on Form 8-K was
filed to include under Item 5 the declaration of a three-for-two
stock split in the form of a 50% stock dividend with respect to
the common stock of the Comapny.
15
<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: /s/ Jeffrey D. Gash
------------------------
Jeffrey D. Gash, Vice President/Finance
(Principal Financial Officer)
DATED: November 14, 2000
