SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 30, 1997
SAVOIR TECHNOLOGY GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-11560 94-2414428
- - ---------------------------- ----------------- ----------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
254 EAST HACIENDA, CAMPBELL, CA 95008
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(Address of principal executive offices) (Zip Code)
(408) 379-0177
------------------------
(Registrant's telephone number,
including area code)
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This Current Report on Form 8-K is being amended to revise the pro-forma
financial statements which are exhibits hereto, to eliminate certain prior
adjustments in order to reflect events which occurred subsequent to the date of
the original filing.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Consolidated financial statements of Star Management
Services, Inc., a Delaware corporation ("Star") and
its subsidiaries, pertaining to the registrant's
acquisition of all of the outstanding common stock of
Star are submitted herewith as shown in Item 7(c)
following.
(b) Pro Forma Financial Information.
Pro forma financial statements for Savoir Technology
Group, Inc., showing the pro forma effects of the
acquisition of Star, are submitted herewith as shown
in Item 7(c) following.
(c) Exhibits.
*99.1 Financial Statements of Star Management Services,
Inc. and Subsidiaries:
a. Report of Independent Public Accountants dated
November 26, 1997
b. Consolidated Balance Sheets as of September
30, 1997 and October 31, 1996
c. Consolidated Statements of Income for the
Eleven Months ended September 30, 1997 and the
Years Ended October 31, 1996 and 1995
d. Consolidated Statements of Stockholders'
Equity for the Eleven Months ended September
30, 1997 and the Years Ended October 31, 1996
and 1995
e. Consolidated Statements of Cash Flows for the
Eleven Months ended September 30, 1997 and the
Years Ended October 31, 1996 and 1995
f. Notes to Consolidated Financial Statements for
the Eleven Months ended September 30, 1997 and
the Years Ended October 31, 1996 and 1995
99.2 Pro Forma Financial Statements of Savoir Technology
Group, Inc.:
a. Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31,
1996 (Unaudited)
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b. Notes to Pro Forma Condensed Consolidated
Statement of Operations for the Year Ended
December 31, 1996 (Unaudited)
c. Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September
30, 1997 (Unaudited)
d. Notes to Pro Forma Condensed Consolidated
Statement of Operations for the Nine Months
Ended September 30, 1997 (Unaudited)
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*Filed previously.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 16, 1998
SAVOIR TECHNOLOGY GROUP, INC.
By /S/ JAMES W. DORST
-------------------------------------
James W. Dorst
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
No. Description
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*99.1 Financial Statements of Star Management Services, Inc. and
Subsidiaries:
a. Report of Independent Public Accountants dated
November 26, 1997
b. Consolidated Balance Sheets as of September 30, 1997 and
October 31, 1996
c. Consolidated Statements of Income for the Eleven Months
ended September 30, 1997 and the Years Ended October 31,
1996 and 1995
d. Consolidated Statements of Stockholders' Equity for the
Eleven Months ended September 30, 1997 and the Years
Ended October 31, 1996 and 1995
e. Consolidated Statements of Cash Flows for the Eleven
Months ended September 30, 1997 and the Years Ended
October 31, 1996 and 1995
f. Notes to Consolidated Financial Statements for the Eleven
Months ended September 30, 1997 and the Years Ended
October 31, 1996 and 1995
99.2 Pro Forma Financial Statements of Savoir Technology
Group, Inc.:
a. Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1996 (Unaudited)
b. Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1996
(Unaudited)
c. Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1997 (Unaudited)
d. Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 1997
(Unaudited)
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*Filed previously.
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EXHIBIT 99.2
SAVOIR TECHNOLOGY GROUP, INC.
PRO FORMA FINANCIAL STATEMENTS
The accompanying pro forma condensed consolidated statements of
operations have been derived from the historical financial statements of Savoir
Technology Group, Inc. (formerly Western Micro Technology, Inc.) (the Company)
and the systems distribution business of Star Management Services, Inc. (SMS)
and adjust such information to give effect to the acquisition of the systems
distribution business of SMS.
The pro forma condensed consolidated statements of operations for the
year ended December 31, 1996 and the nine months ended September 30, 1997 assume
that the acquisition of SMS occurred on January 1, 1996.
The pro forma information is not necessarily indicative of the results
which would actually have occurred had the transactions been in effect on the
dates and for the periods indicated or which may result in the future. This pro
forma information should be read in conjunction with the notes thereto and the
historical financial information.
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SAVOIR TECHNOLOGY GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Historical
------------------------------------ Pro Forma Pro Forma
Savoir SMS Adjustments Combined
--------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net sales................................ $ 131,697 $ 76,495 $ -- $ 208,192
Cost of goods sold....................... 114,389 65,226 -- 179,615
--------------- ----------------- --------------
Gross profit............................. 17,308 11,269 -- 28,577
Selling, general and administrative
expenses............................. 14,123 8,374 2,624 (1) 22,809
(2,312) (2)
--------------- ---------------- ---------------- --------------
Operating income......................... 3,185 2,895 (312) 5,768
Interest expense......................... 978 81 4,995 (3) 6,054
Other (income) expense................... (407) -- -- (407)
--------------- ----------------- ---------------- --------------
Income before income taxes............... 2,614 2,814 (5,307) 121
Provision for income taxes............... 276 963 (1,191) (4) 48
--------------- ----------------- ---------------- --------------
Net income............................... $ 2,338 $ 1,851 $ (4,116) $ 73
=============== ================= ================ ==============
Net income per share..................... $ 0.50 $ 0.01
=============== ==============
Number of shares used in per share
calculation.......................... 4,663 -- 460 (5) 5,123
=============== ================= ================ ==============
</TABLE>
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SAVOIR TECHNOLOGY GROUP, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
Note A - Acquisition:
On September 30, 1997, Savoir Technology Group, Inc. (formerly Western
Micro Technology, Inc.) (the Company) acquired all of the capital stock of Star
Management Services, Inc. (SMS) for an aggregate of $42,149,535 in cash and
460,000 shares of the Company's common stock. Additional cash payments of
$3,675,000 are to be paid on the first and second anniversaries of the closing.
In addition, the selling stockholders can earn up to an additional $5,000,000 in
cash payments based upon attainment of certain performance goals. SMS is a
holding company for a family of companies including Star Data Systems, Inc. dba
Sirius Computer Solutions (Sirius), a value-added distributor for high
technology mid-range solutions in the IBM AS/400 and RS/6000 systems market.
Sirius also sells systems directly to end-user customers as an industry
remarketer. Prior to the closing of the SMS acquisition, SMS completed a
split-off of the Sirius end-user business as a separate unaffiliated company.
Upon acquiring SMS, the distribution arm was renamed Business Partner Solutions
(BPS). BPS became a wholly owned subsidiary of the company.
Note B - Pro Forma Periods and Entities:
For purposes of the pro forma combined data, SMS's financial data for
its fiscal year ended October 31, 1996 and its nine months ended July 31, 1997
have been combined with the Company's financial data for the fiscal year ended
December 31, 1996 and the nine months ended September 30, 1997. The pro forma
amounts do not include adjustments for sales that would have occurred between
the distribution business of SMS and the end-user business if the spin-off of
the end-user business had occurred at the beginning of each period presented.
The Company has assigned no value to the agreement with IBM associated with the
acquisition because: (i) the terms of the agreement can be changed by IBM with
30 days written notice; (ii) IBM may terminate the agreement upon 90 days
written notice; (iii) the agreement is non-exclusive and provides for no
franchise rights; (iv) IBM may withdraw its products or services at any time
under the agreement; and (v) IBM may assign the agreement and any outstanding
orders to any other IBM related company at any time. Sales to the end-user
business and related expenses are reflected as discontinued operations in the
historical financial statements. Such sales amounted to $38,722,000 and
$26,629,000 for the year ended December 11, 1996 and nine months ended September
30, 1997, respectively, while the related historical cost of goods sold amounted
to $36,530,000 and $25,403,000, respectively. If the IRA Agreement had been in
effect since the beginning of the fiscal year 1996 (in lieu of direct sales),
net sales would have amounted to an estimated $246,914,000 and $218,508,000 for
the fiscal year ended December 31, 1996, and nine months ended September 30,
1997, respectively. Estimated cost of goods sold for these periods would have
been $216,145,000 and $189,053,000, respectively. The difference from historical
net revenue amounts is due to the elimination of sales related to product
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lines not acquired by the Company and the effect of discounted selling prices
under the IRA Agreement, while the difference in cost of goods sold is due
solely to the exclusion of costs related to product lines not acquired
(principally Hewlett-Packard products).
Note C - Pro Forma Adjustments:
(1) Represents amortization of goodwill and other intangibles associated
with the SMS acquisition over a 20 year amortization period.
(2) Represents reduction in SMS's executive compensation costs to reflect
the acquisition.
(3) Represents increase in interest expense as a result of the placement of
$15,700,000 of subordinated debt and a $10,000,000 senior secured note
to finance the SMS acquisition, and $7,350,000 in notes issued to the
selling SMS stockholders as part of the SMS transaction.
(4) Represents tax adjustment to reflect 40% overall income tax rate
applicable to pro forma results.
(5) Represents issuance of restricted common stock as consideration in SMS
acquisition.
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SAVOIR TECHNOLOGY GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Historical
------------------------------------ Pro Forma Pro Forma
Savoir SMS Adjustments Combined
---------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net sales................................ $ 121,975 $ 69,904 $ -- $ 191,879
Cost of goods sold....................... 102,571 61,078 -- 163,649
--------------- ----------------- --------------
Gross profit............................. 19,404 8,826 -- 28,230
Selling, general and administrative
expenses................................. 16,205 6,230 1,968 (1) 23,803
(600) (2)
---------------- ----------------- ---------------- --------------
Operating income......................... 3,199 2,596 (1,368) 4,427
Interest expense......................... 1,532 -- 2,923 (3) 4,455
Other (income) expense................... (362) -- -- (362)
--------------- ----------------- ---------------- --------------
Income before income taxes............... 2,029 2,596 (4,291) 334
Provision for income taxes............... 312 -- (178) (4) 134
--------------- ----------------- ---------------- --------------
Net income............................... $ 1,717 $ 2,596 $ (4,113) $ 200
=============== ================= ================ ==============
Net income per share..................... $ 0.33 $ 0.04
=============== ==============
Number of shares used in per share
calculation.............................. 5,212 -- 460 (5) 5,672
=============== ================= ================ ==============
</TABLE>
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<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1997
(UNAUDITED)
(1) Represents amortization of goodwill and other intangibles associated
with the SMS acquisition over a 20 year amortization period.
(2) Represents reduction in SMS's executive compensation costs to reflect
the acquisition.
(3) Represents increase in interest expense as a result of the placement of
$15,700,000 of subordinated debt and a $10,000,000 senior secured note
to finance the SMS acquisition, and $7,350,000 in notes issued to the
selling SMS stockholders as part of the SMS transaction.
(4) Represents tax adjustment to reflect 40% overall income tax rate
applicable to pro forma results.
(5) Represents issuance of restricted common stock as consideration in SMS
acquisition.
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