UNITED STATES
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
For the quarterly period ended March 31, 1997
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 No. 0-11560
---------
WESTERN MICRO TECHNOLOGY, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2414428
--------------------------- ----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
254 E. Hacienda Avenue, Campbell, CA
--------------------------------------
(Address of principal executive offices)
95008
--------
(Zip Code)
(408) 379-0177
-----------------------------
(Registrant's telephone number,
including area code)
N/A
--------------------------------------
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days.
YES /X/ NO / /
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 1, 1997
----- --------------------------
Common Shares, without par value 4,801,470
1 of 15
<PAGE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Consolidated Statements of Operations for the Three Months Ended
March 31, 1997 and 1996 3
Consolidated Balance Sheets at March 31, 1997 and December 31, 1996 4
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
PART II - OTHER INFORMATION
Other Information 12
Signatures 14
Index to Exhibits 15
When used in this Report, the words "estimate," "project," "intend" and
"expect" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially. For a discussion of certain such
risks, see "Factors That May Affect Future Results" on page 9. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
publicly release updates or revisions to these statements.
2 of 15
<PAGE>
<TABLE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
--------------------------------------
1997 1996
---- ----
<S> <C> <C>
Net sales $ 35,950 $ 27,617
Cost of goods sold 29,981 24,037
-------------- -------------
Gross profit 5,969 3,580
-------------- -------------
Gross profit as % of net sales 16.60% 12.96%
Selling, general and administrative expenses 4,894 2,991
-------------- -------------
Operating income 1,075 589
Interest expense 432 237
Other income 91 53
-------------- -------------
Income before income taxes 734 405
Provision for income taxes 191 34
-------------- ------------
Net income $ 543 $ 371
============== =============
Net income per common share $ 0.11 $ 0.09
============== =============
Number of shares used in per share calculation 4,977 4,351
============== =============
The accompanying notes are an integral part
of these financial statements.
</TABLE>
3 of 15
<PAGE>
<TABLE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<CAPTION>
March 31, December 31,
ASSETS 1997 1996
----------- ----------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 2,124 $ 384
Trade accounts receivable, net of allowance for
doubtful accounts of $368 at March 31, 1997 and
$411 at December 31, 1996 27,404 25,943
Inventories 19,867 26,142
Other current assets 3,105 2,254
--------------- --------------
Total current assets 52,500 54,723
Property and equipment, net 3,494 3,276
Goodwill, net of accumulated amortization 7,377 4,937
Other assets 311 340
--------------- --------------
$ 63,682 $ 63,276
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 16,278 $ 11,277
Current portion of capital lease obligations 138 58
Accounts payable 25,912 33,956
Accrued expenses 2,046 1,984
--------------- --------------
Total current liabilities 44,374 47,275
Capital lease obligations, less current portion 510 53
Other 203 234
Commitments and contingencies
Shareholders' Equity:
Preferred Stock, no par value, 10,000,000 shares
authorized; none issued and outstanding
Common Stock, no par value, 10,000,000 shares
authorized; issued and outstanding: 4,801,470 at
March 31, 1997 and 4,488,131 at December 31, 1996 20,297 17,959
Accumulated deficit (1,702) (2,245)
--------------- --------------
Total shareholders' equity 18,595 15,714
--------------- --------------
$ 63,682 $ 63,276
=============== ==============
The accompanying notes are an integral part
of these financial statements.
</TABLE>
4 of 15
<PAGE>
<TABLE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
-------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 543 $ 371
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 393 211
Gain on sale of equipment (22)
Provision for doubtful accounts receivable 110
Change in assets and liabilities:
Accounts receivable (1,177) (3,690)
Inventories 6,275 1,678
Other current assets (792) 81
Other assets 32 7
Accounts payable (8,261) 1,099
Accrued expenses and other (5) 85
----------- ----------
Net cash used in operating activities (2,882) (180)
----------- ----------
Cash flows from investing activities:
Acquisition of business, net of cash acquired 573 (658)
Proceeds from sale of equipment 22
Acquisition of property and equipment (396) (524)
----------- ----------
Net cash provided by (used in) investing activities 177 (1,160)
----------- ----------
Cash flows from financing activities:
Net proceeds from short-term borrowings 3,801 897
Repayments on capital leases and equipment loan (51) (44)
Proceeds from exercise of stock options 18 203
Proceeds from employee stock purchase plan 120
Proceeds from equipment loan 557
----------- ----------
Net cash provided by financing activities 4,445 1,056
Net increase (decrease) in cash 1,740 (284)
Cash--beginning of period 384 546
----------- ----------
Cash--end of period $ 2,124 $ 262
=========== ==========
The accompanying notes are an integral part
of these financial statements.
</TABLE>
5 of 15
<PAGE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1: The unaudited consolidated financial statements which include the
accounts of Western Micro Technology, Inc. and its subsidiary 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 months ended March 31, 1997 are not
necessarily indicative of the results to be expected for a full year
or for any other period. It is suggested that these financial
statements 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, 1996.
Note 2: In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 (SFAS 128),
"Earnings Per Share," which specifies the computation, presentation
and disclosure requirements for earnings per share. SFAS 128
supersedes Accounting Principles Board Opinion No. 15 and is effective
for financial statements issued for periods ending after December 15,
1997. SFAS 128 requires restatement of all prior-period earnings per
share data presented after the effective date. SFAS 128 will not have
a material impact on the Company's financial position, results of
operations or cash flows.
Note 3: The Company has available a $25,000,000 line of credit with a
financial institution that bears interest at the financial
institution's prime lending rate (8.25% as of March 31, 1997) plus
1.50%. Borrowings under the line of credit are based on eligible
accounts receivable and inventory, as defined, and are collateralized
by substantially all assets of the Company. The facility is renewable
annually and contains restrictive covenants which include the
maintenance of minimum revenue, profit and tangible net worth ratios,
as defined. The Company was not in compliance with the tangible net
worth covenant at March 31, 1997. The financial institution granted a
waiver as of March 31, 1997 for the specific violation. Borrowings
under this line of credit were $15,500,000 at March 31, 1997. Based on
eligible assets, as of March 31, 1997, the Company had borrowings
available of approximately $2,400,000.
Note 4: The December 31, 1996 balance sheet was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles.
Note 5: Revenue Recognition and Accounts Receivable: the Company records
revenue, net of allowances for estimated returns, at the time of
product shipment. To reduce credit risk, the Company performs ongoing
credit evaluations and has credit insurance.
Note 6: 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 7: Supplemental Cash Flow Information: Cash paid for interest in the
three-month periods ended March 31, 1997 and 1996 was $436,000 and
$204,000, respectively.
6 of 15
<PAGE>
Note 8: On March 17, 1997, the Company acquired all of the common stock of
Target Solutions, Inc. ("TSI"), a privately held company, for
approximately $2,200,000, paid in common stock of the Company.
Additional consideration can be earned by TSI by meeting certain
defined gross profit targets through fiscal year 2000. The acquisition
has been accounted for as a purchase with the result that TSI
operations are included in the Company's financial statements from the
date of purchase. In connection with the acquisition, the Company
recorded approximately $2,600,000 of goodwill and other intangible
assets. The fair value of assets acquired from TSI were approximately
$1,141,000 and liabilities assumed were approximately $1,484,000.
For the year ended December 31, 1996, TSI had unaudited
revenues of approximately $15,000,000 with net income of approximately
$200,000.
Note 9: Net income per share is computed using the weighted average number
of common and common equivalent shares (when dilutive) outstanding
during each period.
7 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Recent Events
On March 17, 1997, the Company acquired all of the common stock of Target
Solutions, Inc. ("TSI"), a privately held company, for approximately $2,200,000,
paid in common stock of the Company. Additional consideration can be earned by
TSI by meeting certain defined gross profit targets through fiscal year 2000.
The acquisition has been accounted for as a purchase with the result that TSI
operations are included in the Company's financial statements from the date of
purchase. In connection with the acquisition, the Company recorded approximately
$2,600,000 of goodwill and other intangible assets. The fair value of assets
acquired from TSI were approximately $1,141,000 and liabilities assumed were
approximately $1,484,000. For the year ended December 31, 1996, TSI had
unaudited revenues of approximately $15,000,000 with net income of approximately
$200,000.
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996
Net sales for the three months ended March 31, 1997 of $35,950,000 were 30%
higher than the net sales of $27,617,000 for the corresponding period in 1996.
Sales increased due to the expansion of the Company's mid-range computer systems
distribution business and acquisitions. Gross profit as a percentage of sales
for the three months ended March 31, 1997 was 16.60% compared to 12.96% for the
comparable quarterly period one year ago. The increase in the gross profit
percentage in 1997 is a result of a shift in the relative mix of higher profit
products being sold and additional value-added and consulting services revenue
resulting from additional sales derived from the recent acquisitions of Star
Technologies, Inc., International Data Products LLC and Target Solutions, Inc.
Selling, general and administrative expense increased 64% in the three
months ended March 31, 1997 from the same period a year ago due to increased
labor costs, acquisitions, necessary personnel increases, higher depreciation
costs incurred as a result of additions to the Company's infrastructure and
higher amortization expense as a result of increased goodwill related to
acquisitions.
Interest expense increased 82% in the three months ended March 31, 1997
versus the same period in 1996 due to an overall increase in line-of-credit
borrowings. The increased borrowings were necessary in order to fund
acquisitions, infrastructure additions, expanded operations and overall Company
growth.
The Company's effective tax rate is 26% versus the statutory rate of 34%
due primarily to the utilization of net operating loss carryforwards.
Liquidity and Capital Resources
Net cash used in operating activities during the three months ended March
31, 1997 totaled $2,882,000 compared to the net cash used in operating
activities of $180,000 for the three months ended March 31, 1996.
The increase in the accounts receivable of $1,177,000 was primarily due to
the purchase of assets from TSI. This was offset by a decrease in inventory of
$6,275,000 as a result of increased emphasis on inventory management, and by a
decrease in accounts payable of $8,261,000 as a result of the payment of year
end purchases.
Net cash provided by investing activities totaled $177,000 for the three
months ended March 31, 1997 compared to net cash used in investing activities of
$1,160,000 for the three months ended March 31, 1996. The significant investing
activities for 1997 consisted of the TSI purchase as well as continuing
leasehold and computer hardware and software investments made at the Company's
headquarters and sales office sites.
The Company has available a $25,000,000 line of credit with a financial
institution that bears interest at the financial institution's prime lending
rate (8.25% as of March 31, 1997) plus 1.50%. Borrowings under the line of
credit are based on eligible accounts receivable and inventory, as defined, and
are collateralized by substantially
8 of 15
<PAGE>
all assets of the Company. The facility is renewable annually and contains
restrictive covenants which include the maintenance of minimum revenue, profit
and tangible net worth ratios, as defined. The Company was not in compliance
with the tangible net worth covenant at March 31, 1997. The financial
institution granted a waiver as of March 31, 1997 for the specific violation.
Borrowings under this line of credit were $15,500,000 at March 31, 1997. Based
on eligible assets, as of March 31, 1997, the Company had borrowings available
of approximately $2,400,000.
The Company has required substantial working capital to finance accounts
receivable, inventories and capital expenditures and has financed its working
capital requirements, capital expenditures and acquisitions primarily through
bank borrowings and cash generated from operations. The Company believes that
its existing cash and available bank borrowings are sufficient to fund the
Company's operations through the end of 1997. The Company is actively
considering other alternatives for raising additional cash including public
equity, private equity, or appropriate alternative debt financing. There can be
no assurance that the Company will be able to obtain additional financing on
acceptable terms or at sufficient levels.
Factors That May Affect Future Results
Industry Consolidation; Ability to Maintain Most Favorable Volume Discount
Status. The systems distribution industry is currently experiencing a
consolidation of distributors, which has resulted in the mergers of certain of
the Company's major competitors. To the extent that any increased sales volumes
resulting from the mergers relate to the products of International Business
Machines Corporation ("IBM"), these mergers may result in raising the sales
volume threshold required to maintain most favorable volume discount status with
IBM. In furtherance as its business strategy, and in order to maintain most
favorable volume discount status with IBM, the Company has recently completed
several acquisitions and is actively engaged in an ongoing search for additional
acquisitions. The Company intends to continue to aggressively seek acquisitions
of businesses that are complementary to the Company's business in order to
strengthen the Company's business and market position. However, there can be no
assurance that the Company will be successful in completing any future
acquisitions and the failure by the Company to successfully complete additional
acquisitions would have a material adverse effect on the Company's business,
financial condition and results of operations.
Supplier Concentration. During the year ended December 31, 1996 and the
quarter ended March 31, 1997, approximately 50% of the Company's net sales was
generated from the sale of products purchased from IBM. The Company's business,
financial condition and results of operations are dependent upon the Company's
relationship with IBM and upon the market for IBM products. Any disruption or
change in the Company's relationship with IBM or in the manner in which IBM
distributes its products, the failure of IBM to develop new products which are
accepted by the Company's customers or the failure by the Company to maintain
sufficient sales volumes of certain IBM products to maintain most favorable
volume discount status, would have a material adverse effect upon the Company's
business, financial condition and results of operations.
The balance of the Company's net sales is derived from products of a
relatively limited number of other suppliers, with approximately 25% derived
from systems products manufactured by Data General Corporation, NCR Corporation,
and Unisys Corporation. The loss of a major supplier or the interruption of
certain supplier relationships, the inability of any of these suppliers to
successfully develop, manufacture or sell new products, and any decrease in the
sales or market acceptance of these suppliers' products, could materially and
adversely affect the Company's business, financial condition and results of
operations.
Acquisitions and Expansion. Acquisitions have played an important role in
the implementation of the Company's business strategy and the Company believes
that additional acquisitions are critical to the Company's future growth,
development and continued ability to compete effectively in the marketplace.
Prior acquisitions have placed substantial demands on the Company's management
and financial resources. The integration of the acquired companies' operations
have on occasion been slower, more complex and more costly than originally
anticipated. There can be no assurance that the combined companies will realize
the full cost savings or revenue enhancements the Company expects to realize as
a result of the recent acquisitions and the consolidation of certain of the
operations of the acquired companies or that such savings or enhancements will
be realized at the points in time
9 of 15
<PAGE>
currently anticipated. Furthermore, there can be no assurance that any cost
savings which are realized will not be offset by increases in other expenses or
operating losses. The Company will encounter similar uncertainties and risks
with respect to any future acquisitions it may make.
Substantial Competition. The Company competes with national, regional, and
local distributors such as Dickens Data Systems, Inc., Gates/Arrow Commercial
Systems, a division of Arrow Electronics, Inc., Hall-Mark Computer Products, a
subsidiary of Avnet, Inc., Sirius Computer Solutions, Inc., SupportNet, Inc.
and, in some limited circumstances, competes with its own vendors. The Company
has experienced and expects to continue to experience increased competition from
current and potential competitors, many of which have substantially greater
financial, technical, sales, marketing and other resources, as well as greater
name recognition and a larger customer base, than the Company. Accordingly, such
competitors or future competitors may be able to respond more quickly to new or
emerging technologies and changes in customer requirements or devote greater
resources to the development, promotion and sales of their products than the
Company. Competitors which are larger than the Company may be able to obtain
pricing and terms from vendors that are more favorable than the pricing and
terms accorded to the Company. As a result, the Company may be at a disadvantage
when competing with these larger companies.
Future Capital Needs; Uncertainty of Additional Financing. The Company's
operations to date have required substantial amounts of capital and as a result
the Company maintains a line of credit secured by substantially all of the
Company's assets. In order to pursue the Company's expansion and acquisition
strategy, the Company will need to obtain additional financing. Although the
Company believes it has sufficient funds, or alternate source of funds, to carry
on its business through 1997, in order to achieve the growth (including possible
acquisitions) contemplated by the Company's business plan, the Company will need
to raise additional amounts through public or private debt and/or equity
financings. There can be no assurance that such additional financing will be
available. If additional funds are raised through the issuance of equity or
convertible debt securities, the percentage ownership of the shareholders of the
Company will be reduced and shareholders may experience additional dilution.
There can be no assurance that additional financing will be available on
acceptable terms, if at all and failure to obtain such financing, if necessary,
could adversely affect the Company's business, financial condition and results
of operations.
Fluctuations in Operating Results. The Company's past operating results
have been, and its future operating results will be, subject to fluctuations
from quarter to quarter and on an annual basis due to a variety of factors,
including, without limitation, the cost and effect of acquisitions, the addition
or loss of a key supplier or customer, unexpected customer defaults on payments
due to the Company, price competition, changes in the mix of products sold
through distribution channels and in the mix of products purchased by OEMs, and
changes in the supply and demand for mid-range computer systems, peripheral
equipment, software and related services. Operating results could also be
adversely affected by general economic and other conditions affecting the timing
of customer orders and capital spending, a downturn in the market for computers,
and order cancellations or rescheduling. In addition, a substantial portion of
the Company's sales are made in the last few days of a quarter. Accordingly, the
Company's quarterly results of operations are difficult to predict and delays in
the closings of sales near the end of a quarter could cause quarterly revenues
to fall substantially short of anticipated levels and, to a greater degree,
adversely affect profitability. The Company's future operating results are
expected to fluctuate as a result of these and other factors, which could have a
material adverse effect on the Company's business, operating results and
financial condition.
Seasonality. While the Company's business is not generally affected by
seasonal trends, its business is influenced by trends affecting its suppliers
and customers. For example, the Company's largest vendor, IBM, sells
approximately 40% of its products in the last calendar quarter, which in the
future could have an effect on the Company's revenues from quarter to quarter.
Due to the Company's recent significant growth through acquisitions, and IBM's
recent prominence as a supplier to the Company, the Company has not yet
experienced any material seasonal variations in its operating results, but such
seasonal variations may occur in the future, and could have a material adverse
effect on the Company's business, operating results and financial condition.
10 of 15
<PAGE>
Rapid Technological Changes, Price Reductions and Inventory Risk. The
market for products sold by the Company is extremely competitive and is
characterized by declining selling prices over the life of a particular product
and rapid technological changes. Since the Company acquires inventory in advance
of product shipments, and because the markets for the Company's products are
volatile and subject to rapid technological and price changes, there is a risk
that the Company will forecast incorrectly and stock excessive or insufficient
inventory of particular products. Although the Company has stock rotation rights
and price protection with certain vendors permitting it to return discontinued
products, or receive price protection (should the vendor reduce the price of
product that is already in the Company's inventory) in the form of cash refunds
or credits for the purchase of additional product, if the Company is forced to
sell its inventory for less than its targeted or traditional margins it could
have a material adverse effect upon the Company's financial condition and
results of operations. The markets in which the Company competes currently are
subject to intense price competition and the Company expects additional price
and product competition as other companies enter these markets and new products
and technologies are introduced. Increased competition may result in further
price reductions, reduced gross margins and loss of market share, any of which
could materially and adversely affect the Company's business, financial
condition and results of operations.
Credit Facility Agreement: Limitations and Requirement of Consent. The
Company's credit facility agreement with IBM Credit Corporation ("ICC") is
structured to provide favorable financing for the purchase of IBM products, and
provides a limited amount of additional financing to carry the inventory of
third-party products. The Company presently has no other facility for financing
the purchase of products from third parties. While the ICC facility is adequate
for the Company's present purchases of products of third-party vendors, if the
Company increases the purchase of such products, it may need to obtain
additional inventory financing, in which case it will need to obtain a
modification or waiver of its credit facility agreement with ICC (which is
presently secured by all of the assets of the Company, including all inventory
purchased from third-party vendors). The Company's credit facility with ICC is
not sufficient to provide the necessary funding for the future acquisitions
contemplated by the Company's business plan. There can be no assurance that such
additional financing will be available to the Company when needed or on
acceptable terms, or that IBM will consent to modifying the current credit
facility agreement in order to allow such alternate financing.
Management of Growth; Dependence on Key Personnel. Since the sale of its
semiconductor business in July 1995, the Company has experienced significant
growth in the number of its employees and in the scope of its operating and
financial systems, resulting in increased responsibilities for the Company's
management. To manage future growth effectively, the Company will need to
continue to improve its operational, financial and management information
systems, procedures and controls, and expand, train, motivate, retain and manage
its employee base. There can be no assurance that the Company will be able to
manage its growth effectively, and failure to do so could have a material
adverse effect on the Company's business, financial condition and results of
operations.
The Company's future success depends in part on the continued service of
its key sales, marketing and executive personnel, and its ability to identify
and hire additional personnel. Competition for such personnel is intense and
there can be no assurance that the Company can retain and recruit adequate
personnel to operate its business. The loss of key personnel could have a
material adverse effect on the Company's business and operating results. The
Company does not maintain key man insurance on any of its employees.
11 of 15
<PAGE>
PART II. OTHER INFORMATION
Item 1 Legal proceedings.
-----------------
None.
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.
Item 5 Other Information.
-----------------
None.
Item 6 Exhibits and Reports on Form 8-K.
--------------------------------
A. Exhibits
--------
3.1(a) Articles of Incorporation for Silicon Valley Services,
Inc. filed with the California Secretary of State on
December 30, 1975, filed as Exhibit 3-A to the
Company's Form S-1, Registration No. 2-86846, is hereby
incorporated by reference.
3.1(b) Certificate of Amendment of Articles of Incorporation
of Silicon Valley Services, Inc. (part of which changed
the name of the Company to Western Micro Technology,
Inc.) filed with the California Secretary of State on
April 1, 1977, filed as Exhibit 4.2 to the Company's
Form S-8, Registration No. 33-60778, is hereby
incorporated by reference.
3.1(c) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on August
30, 1983, filed as Exhibit 4.3 to the Company's Form
S-8, Registration No. 33-60778, is hereby incorporated
by reference.
3.1(d) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on April
5, 1988, filed as Exhibit 3.1 to the Company's Form
10-K for the year ended March 31, 1988, is hereby
incorporated by reference.
3.2 Amended Bylaws dated June 15, 1994, filed as Exhibit A
to the Company's Definitive Proxy Statement dated May
23, 1994 as filed with the Commission on May 24, 1994,
are hereby incorporated by reference.
11.1 Computation of Net Income Per Share
27 Financial Data Schedule
12 of 15
<PAGE>
B. Reports on Form 8-K.
-------------------
None.
13 of 15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Registrant:
WESTERN MICRO TECHNOLOGY, INC.
Dated: May 13, 1997 By /s/ P. SCOTT MUNRO
-------------------------------------
P. Scott Munro
Chief Executive Officer and President
Dated: May 13, 1997 By /s/ JAMES W. DORST
------------------------------------
James W. Dorst
Chief Financial Officer
14 of 15
<PAGE>
INDEX TO EXHIBITS
Exhibit Page
- ------- ----
3.1(a) Articles of Incorporation for Silicon Valley Services, Inc. filed *
with the California Secretary of State on December 30, 1975,
filed as Exhibit 3-A to the Company's Form S-1, Registration No.
2-86846, is hereby incorporated by reference.
3.1(b) Certificate of Amendment of Articles of Incorporation of Silicon *
Valley Services, Inc. (part of which changed the name of the
Company to Western Micro Technology, Inc.) filed with the
California Secretary of State on April 1, 1977, filed as Exhibit
4.2 to the Company's Form S-8, Registration No. 33-60778, is
hereby incorporated by reference.
3.1(c) Certificate of Amendment of Articles of Incorporation filed *
with the California Secretary of State on August 30, 1983,
filed as Exhibit 4.3 to the Company's Form S-8, Registration
No. 33-60778, is hereby incorporated by reference.
3.1(d) Certificate of Amendment of Articles of Incorporation filed *
with the California Secretary of State on April 5, 1988,
filed as Exhibit 3.1 to the Company's Form 10-K for the year
ended March 31, 1988, is hereby incorporated by reference.
3.2 Amended Bylaws dated June 15, 1994, filed as Exhibit A to the *
Company's Definitive Proxy Statement dated May 23, 1994 as
filed with the Commission on May 24, 1994, are hereby
incorporated by reference.
11.1 Computation of Net Income Per Share
27 Financial Data Schedule
* Incorporated by reference
15 of 15
EXHIBIT 11.1
<TABLE>
WESTERN MICRO TECHNOLOGY, INC. AND SUBSIDIARY
COMPUTATION OF NET INCOME PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
----------------------
1997 1996
---- ----
<S> <C> <C>
Weighted average shares outstanding for the period 4,558 4,180
Dilutive effect of employee stock options at average market
price 419 146
------- ------
Average shares for computing primary net income per
share 4,977 4,326
Adjustment for dilutive effect of employee stock options at
ending market price -- 25
------- ------
Average shares for computing fully diluted net income per
share 4,977 4,351
======= ======
Net income $ 543 $ 371
======= ======
Net income per primary share $ 0.11 $ 0.09
======= ======
Net income per fully diluted share $ 0.11 $ 0.09
======= ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,124
<SECURITIES> 0
<RECEIVABLES> 27,772
<ALLOWANCES> 368
<INVENTORY> 19,867
<CURRENT-ASSETS> 52,500
<PP&E> 6,068
<DEPRECIATION> 2,574
<TOTAL-ASSETS> 63,682
<CURRENT-LIABILITIES> 44,374
<BONDS> 0
0
0
<COMMON> 20,297
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 63,682
<SALES> 35,950
<TOTAL-REVENUES> 35,950
<CGS> 29,981
<TOTAL-COSTS> 4,894
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 432
<INCOME-PRETAX> 734
<INCOME-TAX> 191
<INCOME-CONTINUING> 543
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 543
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
