<PAGE> 1
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 0-11560
WESTERN MICRO TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
California 94-2414428
-------------- --------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
12900 Saratoga Avenue, Saratoga, CA 95070
--------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(408) 725-1660 N/A
------------------ -------
(Registrant's telephone number, (Former name, former address and former fiscal year,
including area code) if changed since last report)
</TABLE>
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 at least the past 90 days.
YES [x] NO [ ]
Indicate by number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<S> <C>
Class Outstanding at June 30, 1995
----- ----------------------------
Common Shares, without par value 3,703,007
</TABLE>
<PAGE> 2
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Statements of Operations for the Three and Six Months Ended
June 30, 1995 and 1994 3
Consolidated Balance Sheets at June 30, 1995 and December 31, 1994 4
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
1995 and 1994 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
PART II - OTHER INFORMATION 11
Item 1. Legal proceedings 11
Item 5. Other Information 12
Signatures 18
Index to Exhibits 19
</TABLE>
<PAGE> 3
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------ ------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 30,018 $ 29,188 $ 63,515 $ 59,271
Cost of goods sold 26,421 24,789 55,875 51,183
-------- -------- -------- --------
Gross profit 3,597 4,399 7,640 8,088
-------- -------- -------- --------
Gross profit as % of net
sales 11.98% 15.07% 12.03% 13.65%
Selling, general and
administrative expenses 4,494 4,523 9,044 8,144
Restructuring costs 3,600 -- 3,600 --
-------- -------- -------- --------
Operating loss (4,497) (124) (5,004) (56)
Interest expense (net) 287 212 562 370
Other income (expense) -- 1 31 (2)
-------- -------- -------- --------
Loss from operations before income
taxes (4,784) (335) (5,535) (428)
Provision for income taxes -- 63 -- 90
-------- -------- -------- --------
Loss from continuing
operations (4,784) (398) (5,535) (518)
Discontinued operations, net of
taxes:
Income from discontinued
operations -- 195 -- 362
-------- -------- -------- --------
Net loss $ (4,784) $ (203) $ (5,535) $ (156)
======== ======== ======== ========
Net (loss) income per common
share:
Continuing operations $ (1.29) $ (0.12) $ (1.49) $ (0.15)
Discontinued operations $ -- $ 0.06 $ -- $ 0.10
-------- -------- -------- --------
Net loss per common
share $ (1.29) $ (0.06) $ (1.49) $ (0.05)
======== ======== ======== ========
Number of shares used in per share
calculation 3,705 3,449 3,705 3,459
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements
3 of 19
<PAGE> 4
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
1995 1994
-------- --------------
<S> <C> <C>
Current Assets:
Cash $ 176 $ 138
Trade accounts receivable, net of allowance 14,735 15,170
for doubtful accounts of $501 at June 30, 1995
and $393 at December 31, 1994
Inventories, net 18,378 18,959
Other current assets 940 1,095
-------- --------
Total current assets 34,229 35,362
Property and equipment, net 1,222 889
Goodwill, net of accumulated amortization -- 1,389
Other assets 215 258
-------- --------
TOTAL ASSETS $ 35,666 $ 37,898
======== ========
LIABILITIES
Current liabilities:
Notes payable $ 8,691 $ 9,175
Current portion of capital leases 102 86
Accounts payable 14,662 11,949
Accrued expenses 2,838 1,818
-------- --------
Total current liabilities 26,293 23,028
Capital lease obligations, less current portion 91 65
Other 387 381
-------- --------
TOTAL LIABILITIES 26,771 23,474
======== ========
Commitments and contingencies (Note 5)
SHAREHOLDERS' EQUITY
Preferred Stock, without par value, 10,000,000 -- --
shares authorized; none issued and outstanding
Common Stock, without par value, 10,000,000 13,915 13,909
shares authorized; issued and outstanding:
3,703,007 at June 30, 1995 and 3,702,007 at
December 31, 1994
Retained earnings (deficit) (5,020) 515
-------- --------
TOTAL SHAREHOLDERS' EQUITY 8,895 14,424
-------- --------
TOTAL LIABILITIES & EQUITY $ 35,666 $ 37,898
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4 of 19
<PAGE> 5
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
-------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,535) $ (156)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Disposal of property and equipment -- 5
Depreciation and amortization 273 206
Provision for doubtful accounts receivable 206 214
Provision for restructuring costs 3,600 0
Change in assets and liabilities:
Accounts receivable 230 (287)
Inventories (492) (2,207)
Other current assets 154 194
Other assets 43 52
Accounts payable 2,714 580
Accrued expenses and other (151) 164
------- -------
Net cash provided (used) by operating activities 1,042 (1,235)
Cash flows from investing activities:
Net acquisition of property and equipment (570) (219)
------- -------
Net cash used by investing activities (570) (219)
Cash flows from financing activities:
Proceeds from short-term borrowings 57,750 60,400
Repayments of short-term borrowings (58,233) (59,449)
Payments on lease obligations (58) (35)
Proceeds from exercise of stock options 6 44
Proceeds from equipment loan 101 116
Cash acquired by acquisition -- 58
------- -------
Net cash provided (used) by financing activities (434) 1,134
Net increase (decrease) in cash 38 (320)
Cash--beginning of period 138 414
------- -------
Cash--end of period $ 176 $ 94
------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5 of 19
<PAGE> 6
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
Note 1: The unaudited consolidated financial statements which include the
accounts of Western Micro Technology, Inc. and its subsidiaries
have been prepared in accordance with the instructions to Form
10-Q and do not include all information and footnotes necessary to
comply with generally accepted accounting principles. In the
opinion of management, all normal recurring adjustments considered
necessary for a fair presentation have been included. The
consolidated statements of operations for the three and six months
ended June 30, 1995 are not necessarily indicative of the results
to be expected for a full year or for any other period. These
financial statements should be read in conjunction with the
Financial Statements and the notes thereto included in the
Company's latest Audited Financial Statements for the year ended
December 31, 1994.
Note 2: The December 31, 1994 balance sheet was derived from audited
financial statements, but does not include all disclosures
required by generally accepted accounting principles.
Note 3: Inventories, consisting primarily of purchased product held for
resale, are stated at the lower of cost (first-in, first-out)
or net realizable value.
Note 4: Supplemental Cash Flow Information: Cash paid for interest in the
six-month period ended June 30, 1995 and 1994 was $536,000 and
$311,000 respectively.
Note 5: In the course of its business, the Company is sometimes named as
a defendant in litigation. On June 27, 1995, the Company learned
that the shareholder's attorneys had filed a derivative action on
June 21, 1995 in Case No. CV750498 in the Superior Court of the
State of California, County of Santa Clara, Joel Feldman,
Plaintiff, vs. R. Mabry, R. Gesell, G. Reyes, K. William Sickler,
W. Welling, Western Micro Technology, and Reptron Electronics,
Inc., Defendants, and Western Micro Technology, Inc., Nominal
6 of 19
<PAGE> 7
Defendant. On July 18, 1995, an order of dismissal without prejudice
was entered by the Court and notice thereof given to counsel for the
parties.
Note 6: The Consolidated Statement of Operations for
the three and six months ended June 30, 1994 and the Consolidated
Statement of Cash Flows for the six months ended June 30, 1994 have
been restated to reflect the acquisition of First Computer Corporation
as a pooling of interests in the fourth calendar quarter of 1994.
Note 7: As of September 30, 1994, the Company discontinued
its Testing Division. Operating results of this division are included
in the Consolidated Statements of Operations for the three months and
six months ended June 30, 1994, under the caption, "Discontinued
Operations, Net of Taxes." Revenues applicable to the Testing
Division were $839,000 for the quarter ended June 30, 1994 and
$1,551,000 for the six months ended June 30, 1994. As of September
30, 1994, remaining assets of the Testing Division amounted to
$193,000 and liabilities amounted to $510,000.
Note 8: On July 26, 1995, the Company sold its electronic
components distribution assets to Tampa, Florida-based Reptron
Electronics, Inc. (Nasdaq: REPT). The transaction, valued at
approximately $12,500,000, consisted of a $9,200,000 payment in cash
and the assumption of $3,300,000 in accounts payable. Of the
$9,200,000 cash payment, $1,000,000 was held back in escrow for six
months to serve as a source of certain specified rights within the
purchase agreement with Reptron. The sale included the Company s
semiconductor component inventory, certain receivables, furniture and
equipment. In addition, Reptron Electronics, Inc. assumed certain
building and equipment lease obligations. As a result of this sale,
the Company recorded a restructuring charge of $3,600,000. Of this
amount, $2,326,000 was for non-cash write-offs comprised of
$1,353,000 in goodwill and a $973,000 increase to inventory related
reserves. Severance and other exit related charges related to the
sale comprised the remaining $1,274,000. See Item 5 for certain
unaudited pro forma financial information concerning the transaction.
7 of 19
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Recent Events
On July 26, 1995, the Company sold its electronic components
distribution assets to Tampa, Florida-based Reptron Electronics, Inc. (Nasdaq:
REPT). The transaction, valued at approximately $12,500,000, consisted of a
$9,200,000 payment in cash and the assumption of $3,300,000 in accounts
payable. Of the $9,200,000 cash payment, $1,000,000 was held back in escrow
for six months to serve as a source of certain specified rights within the
purchase agreement with Reptron. The sale, which was approved by the
Comopany's shareholders, included the Company's semiconductor component
inventory, certain receivables, furniture and equipment. In addition, Reptron
Electronics, Inc. assumed certain building and equipment lease obligations. As
a result of this sale, the Company recorded a restructuring charge of
$3,600,000. Of this amount, $2,326,000 were non-cash write-offs comprised of
$1,353,000 in goodwill and a $973,000 increase to long-term inventory related
reserves. Severance and other exit related charges related to the sale
comprised the remaining $1,274,000. The Company will now focus its efforts on
its mid-range computer systems distribution business, concentrating on solution
sales and services to Value Added Resellers, Integrators, and Original
Equipment Manufacturers (OEMs).
Three Months Ended June 30, 1995 Compared to Three Months Ended June 30, 1994
The Company s revenues and gross profits for the quarter were generated
entirely from the distribution business, a result of the discontinuance of the
Company s Testing Division in the quarter ended September 30, 1994 (see Note
7). The Consolidated Statement of Operations and Consolidated Statement of
Cash Flows for the quarter ended June 30, 1994 have been restated to reflect
this change as well as to reflect the acquisition of First Computer
Corporation, as a pooling of interests, in the fourth calendar quarter of 1994.
Net sales for the three months ended June 30, 1995 were relatively flat
compared to the same period one year ago. However, sales related to the
ongoing mid-range computer systems business were approximately $19,583,000 for
the three months ended June 30, 1995, compared to $14,399,000 for the three
months ended June 30, 1994, an increase of 36%. Semiconductor components
sales, representing the balance of the reported consolidated net sales,
decreased 33% as a result of the loss of eight semiconductor component lines in
the 18 month period ending June 30, 1995. Gross profit as a percentage of net
sales for the three months ended June 30, 1995 was 11.98% compared to 15.07%
for the same period one year ago. The decrease in gross profit was
attributable to the lower average selling prices of component products, mainly
memories, and the effect of the increase in mid-range computer systems sales,
which typically yield a lower gross profit.
Selling, general, and administrative expense remained flat for the three
months ended June 30, 1995, compared to the same period one year ago.
8 of 19
<PAGE> 9
Interest expense increased 35.4% in the three months ended June 30, 1995
versus June 30, 1994 due to increased bank borrowings.
As of June 30, 1995, the Company was in violation of a profitability and
debt to equity covenant required by its line of credit provider. The Company
has received a waiver for such covenants.
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Net sales for the six months ended June 30, 1995 were 7.2% higher than
for the comparable period one year ago. Sales related to the ongoing mid-range
computer systems business were approximately $36,897,000 for the six months
ended June 30, 1995 compared to $28,320,000 for the six months ended June 30,
1994, an increase of 30.3%. Semiconductor components sales, representing the
balance of the reported consolidated net sales, decreased 14.0% as a result of
the loss of eight semiconductor component lines in the 18 month period ending
June 30, 1995. Gross profit as a percentage of net sales for the six months
ended June 30, 1995 was 12.03%, compared to 13.65% for the same period one year
ago. The decrease in gross profit was attributable to the lower average
selling prices of component products and an increase in mid-range computer
systems sales, which typically yield a lower gross profit.
Selling, general, and administrative expenses increased 11.1% in the six
months ended June 30, 1995 from the same period a year ago due to several
factors which occurred almost entirely in the first three months of the current
fiscal year. A Chief Executive Officer had not been hired until April 1994,
and a Senior Vice President to run its semiconductor components group had not
been hired until June 1994. In addition, operating expenses associated with
National Information Systems, Inc. (NIS) accounted for as stock purchase, are
not included until its acquisition on June 1, 1994. Also, during the first
three months of the current fiscal year, the Company had incurred significant
development and promotional expense related to its Design Shop internet
electronic catalog.
Interest expense increased 51.9% in the six months ended June 30,1995
versus June 30, 1994 due to increased bank borrowings.
As of June 30, 1995, the Company was in violation of a profitability and
debt to equity covenant required by its line of credit provider. The Company
has received a waiver for such covenants.
Liquidity and Capital Resources
Net cash provided by operating activities during the six months ended
June 30, 1995 totaled $1,042,000 compared to the net cash used by operating
activities of $1,235,000 for the six months ended June 30, 1994.
As a result of the sale of assets related to the Company s semiconductor
components group, the Company recorded a restructuring charge of $3,600,000.
Of this amount, $2,326,000
9 of 19
<PAGE> 10
was for non-cash write-offs comprised of $1,353,000 in goodwill and a $973,000
increase to long-term inventory related reserves. Severance and other exit
related charges related to the sale comprised the remaining $1,274,000.
The increase in accounts payable of $2,714,000 is due to increased
inventory purchases required to meet sales demand for mid-range computer
systems product during the last weeks of the quarter and to satisfy sales
backorder demands for the beginning of the subsequent quarter, without a
concurrent increase in net inventory balances.
The Company has required substantial working capital to finance
inventories, accounts receivable capital expenditures and ongoing operational
losses and has financed its working capital requirements primarily through bank
borrowings.
In conjunction with the aforementioned asset sale, the Company has
renegotiated its line of credit from $15 million to $10 million, collateralized
by trade accounts receivable and inventory, on terms substantially similar to
those of the former $15 million line of credit. The approximate $8,200,000
cash payment received from the sale (excluding $1,000,000 held back in escrow)
was used to retire most of the outstanding balance on the Company's line of
credit. With its short term debt significantly reduced, the Company believes
the current line of credit should provide sufficient resources to fund its
operations through the fiscal year ended December 31, 1995. Borrowings under
the $15 million line of credit were $8,691,000 as of June 30, 1995.
Factors Affecting Future Results
The Company's past operating results have been and its future operating
results will be, subject to the variety of uncertainties. The Company's
quarterly operating results may be subject to fluctuations as a result of a
number of factors, including the addition or loss of key suppliers or
customers, price competition and changes in the supply and demand for computer
products. Price competition in the industries in which the Company competes is
intense and could result in gross margin declines, which could have a material
adverse impact on the Company's profitability. The Company's future success
depends in part on the continued service of its key personnel, and its ability
to identify and hire additional personnel. There is intense competition for
qualified personnel in the areas of the Company's activities and there can be
no assurance that the Company will be able to continue to attract and retain
qualified personnel necessary for the development of its business. Loss of the
services of, or failure to recruit, key sales and management personnel could be
significantly detrimental to the Company.
10 of 19
<PAGE> 11
PART II. OTHER INFORMATION
Item 1 Legal proceedings. In the course of its business, the Company is
sometimes named as a defendant in litigation. On May 22, 1995,
Joel Feldman, a shareholder of the Company, by and through his
attorneys, made written derivative demand upon the Board, inter
alia, to cancel, terminate or otherwise not consummate the sale of
the electronic semiconductor components distribution business to
Reptron Electronics, Inc. (the "Transaction") on the grounds that
the proceeds to be paid the Company on account of the Transaction
allegedly are unconscionable, unfair and grossly inadequate.
Counsel for the Company responded to the derivative demand by
notifying the shareholder's attorneys of the Company's intention
to hold a special meeting of Shareholders to consider a proposal
to approve the Transaction. On June 27, 1995, the Company learned
that the shareholder's attorneys had filed a derivative action on
June 21, 1995 in Case No. CV750498 in the Superior Court of the
State of California, County of Santa Clara, Joel Feldman,
Plaintiff, vs. R. Mabry, R. Gesell, G. Reyes, K. William Sickler,
W. Welling, Western Micro Technology, and Reptron Electronics,
Inc., Defendants, and Western Micro Technology, Inc., Nominal
Defendant. The complaint in the derivative action (the
"Complaint") was filed purportedly on behalf of a class of persons
consisting of all shareholders of the Company and names the
Company, the Purchaser and the entire Board as defendants. The
Complaint sought to enjoin the consummation of the Transaction
under the terms proposed. The Complaint also sought recovery of
compensatory and punitive damages and attorney's fees based on
allegations that defendants participated in the breach of
fiduciary duties owed to the Company, including asserted abuse of
control and waste of corporate assets. On July 18, 1995, an order
of dismissal without prejudice was entered by the Court and notice
thereof given to counsel for the parties.
Item 2 Changes in Securities. None.
Item 3 Defaults on Senior Securities. None.
Item 4 Submission of Matters to a Vote of Security Holders. None.
11 of 19
<PAGE> 12
Item 5 Other Information.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidated Financial Statements
are based upon the consolidated historical financial statements of the Company
adjusted to give effect to the sale of the Company's electronic component
semiconductor business to Reptron Electronics, Inc., which closed on July 26,
1995 (the "Transaction").
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30,
1995 gives effect to the elimination of the disposed business assuming that the
disposition had taken place on June 30, 1995 and the cash proceeds had been
received at that time. The Unaudited Pro Forma Condensed Consolidated
Statements of Operations for the year ended December 31, 1994 and the six
months ended June 30, 1995 give effect to the elimination of the disposed
business assuming the disposition of the business had taken place on
January 1, 1994.
The Company did not declare any cash dividends per common share during the
periods for which financial data is presented. The pro forma adjustments are
based upon available information and certain assumptions that management
believes are reasonable.
12 of 19
<PAGE> 13
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT JUNE 30, 1995
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
WMT, Inc. Computer Systems
Consolidated Business
Balance Sheet Components Group Pro Forma
at June 30, Disposition Balance Sheet
1995 Adjustments at June 30, 1995
------------ ----------- ----------------
(1)
<S> <C> <C> <C>
Assets
------
Current assets:
Cash $ 176 $ -- $ 176
Escrow receivable 1,000 (a) 1,000
Trade accounts receivable, net 14,735 (5,037)(b) 9,698
Inventories, net 18,378 (7,204)(c) 11,174
Other current assets 940 -- 940
-------- -------- --------
Total current assets 34,229 (11,241) 22,988
Property and equipment, net 1,222 (78)(d) 1,144
Goodwill, net -- -- --
Other Assets 215 -- 215
-------- -------- --------
Total assets $ 35,666 $(11,319) $ 24,347
======== ======== ========
Liabilities
-----------
Current liabilities:
Notes Payable $ 8,691 $ (8,052)(e) $ 639
Current portion of capital leases 102 -- 102
Accounts payable 14,662 (3,361)(f) 11,301
Accrued expenses 2,838 -- 2,838
-------- -------- --------
Total current liabilities 26,293 (11,413) 14,880
Capital lease obligations, less current portion 91 -- 91
Other 387 -- 387
-------- -------- --------
Total liabilities 26,771 (11,413) 15,358
Shareholder's equity
--------------------
Preferred Stock -- --
Common Stock 13,915 13,915
Retained earnings (5,020) 94 (d) (4,926)
--------- ------- --------
Total Shareholders' equity 8,895 94 8,989
-------- -------- --------
Total liabilities and shareholder's equity $ 35,666 $(11,319) $ 24,347
======== ======== ========
Book Value Per Common Share (2) $ 2.40 $ 2.43
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
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<PAGE> 14
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
SIX MONTHS ENDED JUNE 30, 1995
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Computer
WMT, Inc. Systems
Consolidated Components Business
Six months ended Group Pro Forma
June 30, Disposition Six months ended
1995 Adjustments June 30, 1995
------------ ----------- -------------
(3)
<S> <C> <C> <C>
Net sales $ 63,515 $ 26,618 $ 36,897
Cost of goods sold 55,875 22,743 33,132
-------- --------
Gross profit 7,640 3,765
-------- --------
Gross profit as % of net sales 12.03% 10.20%
Selling, general and administrative
expenses 9,044 5,233 3,811
Restructuring costs 3,600 (3,600) --
-------- --------
Operating loss (5,004) (46)
Interest expense (net) 562 562 --
Other income (expense) 31 14 17
-------- --------
Loss from operations before income
taxes (5,535) (29)
Provision for income taxes -- --
-------- -------- --------
Loss from continuing operations $ (5,535) $ (29)
======== ========
Loss per common share from
continuing operations $ (1.49) $ (1.18) $ (.01)
======== ======== ========
Number of shares used in per share
calculation 3,705 3,705
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
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<PAGE> 15
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
YEAR ENDED DECEMBER 31, 1994
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
WMT, Inc. Computer Systems
Consolidated Business
Fiscal Year Components Pro Forma
Ended Group Year Ended
December 31, Disposition December 31,
1994 Adjustments 1994
------------ ----------- ------------
(3) (4)
<S> <C> <C> <C>
Net sales $119,285 $ 59,351 $ 59,934
Cost of goods sold 102,662 49,423 53,239
-------- --------
Gross profit 16,623 6,695
-------- --------
Gross profit as % of net sales 13.94% 11.17%
Selling, general and
administrative expenses 16,968 10,122 6,846
-------- --------
Operating loss (345) (151)
Interest expense (net) 884 884 --
Other income (expense) 10 5 5
-------- --------
Loss from operations before income
taxes (1,219) (146)
(Benefit from)/Provision for
income taxes (217) (217) --
-------- --------
Loss from continuing operations $ (1,002) $ (146)
======== ========
Loss per common share from
continuing operations $ (0.27) $ (0.04)
======== ========
Number of shares used in per share
calculation 3,669 3,669
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
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<PAGE> 16
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT
JUNE 30, 1995 AND FOR THE YEAR ENDED DECEMBER 31, 1994 AND THE SIX MONTHS ENDED
JUNE 30, 1995
Balance Sheet Footnotes
NOTE 1:
(a) Amount held back in escrow.
(b) Semiconductor components receivable acquired by Purchaser.
(c) Purchaser acquired $7,204,000 in semiconductor components inventory.
(d) Net book value of $78,000 in equipment acquired by Purchaser and
associated gain on sale of $94,000.
(e) Cash proceeds of $8,052,000 used to retire most of the Note Payable
of $8,691,000.
(f) Purchaer's assumption of $3,361,000 in components-related trade
accounts payable.
NOTE 2:
The $.03 difference between the historical and pro forma per common share
book values indicated is attributable to the $94,000 net gain on the sale of
equipment.
Income Statement Footnotes
NOTE 3:
Eliminates the operating results of the Components Group included in Western
Micro Technology, Inc.'s consolidated statement of operations for the six
months ended June 30, 1995 and the fiscal year ended December 31, 1994.
Eliminates interest expense associated with Notes Payable assuming proceeds of
transaction used to retire all short term debt on January 1, 1994. For the six
months ended June 30, 1995, also includes the reversal of nonrecurring costs
associated with the disposal of the components group and related restructuring.
NOTE 4:
Includes $384,000 in non-recurring non-cash compensation expense related to
the acquisition of First Computer Corporation in December 1994.
16 of 19
<PAGE> 17
Item 6 Exhibits and Reports on Form 8-K.
<TABLE>
<S> <C>
A - Exhibit 11.1. Computation of (Loss) Income Per Share
------------
B - Reports on Form 8-K. The Company filed a Form 8-K dated
-------------------
April 17, 1995 under Item 5 thereof announcing the signing
of a letter of intent with Reptron Electronics, Inc.
</TABLE>
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<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
Registrant:
WESTERN MICRO TECHNOLOGY, INC.
Dated: August 14, 1995 By /s/ P. SCOTT MUNRO
----------------------------------------
P. Scott Munro
Chief Executive Officer, President
Dated: August 14, 1995 By /s/ JAMES W. DORST
----------------------------------------
James W. Dorst
Chief Financial Officer
</TABLE>
18 of 19
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
11.1 Computation of (Loss) Income Per Share for the Three and Six Months
Ended June 30, 1995 and 1994
</TABLE>
19 of 19
<PAGE> 1
EXHIBIT 11.1
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARIES
COMPUTATION OF (LOSS) INCOME PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30 Ended June 30
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average shares 3,705 3,327 3,705 3,309
outstanding for the period
Dilutive effect of stock -- 122 -- 150
options at average market price
Average shares for computing 3,705 3,449 3,705 3,459
primary net (loss) income per
share
Adjustment for dilutive -- -- -- --
effect of stock options at ending
market price
Average shares for computing 3,705 3,449 3,705 3,459
fully diluted net (loss) income
per share
Loss from continuing (4,784) (398) (5,535) (518)
operations
Income from discontinued -- $ 195 -- $ 362
------- ------- ------- -------
operations
Net loss $(4,784) $ (203) $(5,535) $ (156)
======= ======= ======= =======
Net (loss) income per common
share:
Continuing operations ($1.29) ($0.12) ($1.49) ($0.15)
Discontinued operations -- $ 0.06 -- $ 0.10
------- ------- ------ -------
Net loss per primary share ($1.29) ($ 0.06) ($1.49) ($0.05)
======== ======== ====== =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<CASH> 176
<SECURITIES> 0
<RECEIVABLES> 15,236
<ALLOWANCES> 501
<INVENTORY> 18,378
<CURRENT-ASSETS> 34,229
<PP&E> 4,612
<DEPRECIATION> 3,390
<TOTAL-ASSETS> 35,666
<CURRENT-LIABILITIES> 26,293
<BONDS> 0
<COMMON> 13,915
0
0
<OTHER-SE> (5,020)
<TOTAL-LIABILITY-AND-EQUITY> 35,666
<SALES> 63,515
<TOTAL-REVENUES> 63,515
<CGS> 55,875
<TOTAL-COSTS> 9,044
<OTHER-EXPENSES> 3,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 562
<INCOME-PRETAX> (5,535)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,535)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,535)
<EPS-PRIMARY> (1.49)
<EPS-DILUTED> (1.49)
</TABLE>
