UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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: 0-11355
BINDLEY WESTERN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 84-0601662
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8909 Purdue Road
Indianapolis, Indiana 46268
(Address of principal executive offices)
(Zip Code)
(317) 704-4000
(Registrant's telephone number,
including area code)
No Change
(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 the past 90 days.
Yes x No _________
The number of shares of Common Stock outstanding as of March 31, 1999 was
22,729,653.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(000's omitted except share data)
(unaudited)
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Three-month period ended
March 31,
----------------------------------------------------
1999 1998
----------------------------------------------------
Revenues:
Net sales from stock $ 1,216,572 $ 897,410
Net brokerage sales 758,385 1,064,361
----------------------------------------------------
Total net sales 1,974,957 1,961,771
Other income 483 615
----------------------------------------------------
1,975,440 1,962,386
----------------------------------------------------
Cost and expenses:
Cost of products sold 1,927,781 1,918,647
Selling, general and administrative 25,299 24,605
Depreciation and amortization 2,009 1,946
Interest 5,524 3,990
----------------------------------------------------
1,960,613 1,949,188
----------------------------------------------------
Earnings before income taxes 14,827 13,198
----------------------------------------------------
Provision for income taxes 5,894 5,246
Minority interest in net income of
consolidated subsidiary 378
====================================================
Net earnings $ 8,933 $ 7,574
====================================================
Earnings per share:
Basic $ 0.40 $ 0.36
Diluted $ 0.36 $ 0.34
Average shares outstanding:
Basic 22,607,443 21,144,477
Diluted 24,730,849 22,503,347
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000's omitted except share data)
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(unaudited)
March 31, December 31,
1999 1998
-------------------------------------
Assets
Current assets:
Cash $ 9,507 $ 42,982
Accounts receivable, less allowance for doubtful
accounts of $4,070 for 1999 and $3,558 for 1998 518,756 453,552
Finished goods inventory 645,691 659,484
Deferred income taxes 12,106 11,506
Other current assets 9,478 8,282
-------------------------------------
1,195,538 1,175,806
-------------------------------------
-------------------------------------
Other assets 28 38
-------------------------------------
Fixed assets, at cost 124,850 119,243
Less: accumulated depreciation (28,297) (26,491)
-------------------------------------
96,553 92,752
-------------------------------------
-------------------------------------
Intangibles 17,797 17,979
-------------------------------------
=====================================
Total assets $ 1,309,916 $ 1,286,575
=====================================
Liabilites and Shareholders' Equity
Current liabilities:
Short-term borrowings $ 122,500 $ 19,500
Securitized borrowings 237,963 224,163
Private placement debt 30,000 30,000
Accounts payable 547,913 640,540
Note payable to Priority Healthcare Corporation 13,166 16,517
Other current liabilities 16,815 18,684
-------------------------------------
968,357 949,404
-------------------------------------
-------------------------------------
Long-term debt 618 628
-------------------------------------
-------------------------------------
Deferred income taxes 3,202 3,202
-------------------------------------
Shareholders' equity:
Common stock, $.01 par value authorized 40,000,000 shares;
issued 23,602,712 and 23,433,919 shares, respectively 3,379 3,376
Special shares, $.01 par value-authorized 1,000,000 shares
Additional paid in capital 215,102 213,462
Note receivable from officer (3,283) (3,228)
Retained earnings 138,869 130,412
-------------------------------------
354,067 344,022
Less: shares in treasury-at cost
873,059 and 689,161 shares, respectively (16,328) (10,681)
-------------------------------------
-------------------------------------
Total shareholders' equity 337,739 333,341
-------------------------------------
-------------------------------------
Commitments and contingencies
-------------------------------------
=====================================
Total liabilities and shareholders' equity $ 1,309,916 $ 1,286,575
=====================================
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted except share data)
(unaudited)
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Three-month period ended
March 31,
-----------------------------------------------
1999 1998
-----------------------------------------------
Cash flow from operating activities:
Net income $ 8,933 $ 7,574
Adjustments to reconcile net income
to net cash provided (used) by operating activities:
Depreciation and amortization 2,009 1,946
Minority interest 378
Deferred income taxes (600) (600)
Gain on sale of fixed assets (47)
Change in assets and liabilities, net of acquisition:
Accounts receivable (65,204) 58,462
Finished goods inventory 13,792 (9,891)
Accounts payable (92,627) (99,608)
Other current assets and liabilities (3,076) 2,817
-----------------------------------------------
Net cash used by operating activities (136,773) (38,969)
-----------------------------------------------
Cash flow from investing activities:
Purchase of fixed assets and other assets (5,607) (9,584)
Proceeds from sale of fixed assets - 79
-----------------------------------------------
Net cash used by investing activities (5,607) (9,505)
-----------------------------------------------
Cash flow from financing activities:
Proceeds from sale of stock 1,642 5,145
Addition (reduction) in long term debt (10) (20)
Related party note receivable (54) (53)
Payments on note payable Priority Healthcare Corporation (3,350)
Proceeds under line of credit agreement 401,500 547,500
Payments under line of credit agreement (298,500) (516,500)
Proceeds from securitized borrowings 13,800
Purchase of common shares for treasury (5,647) (490)
Dividends (476) (317)
-----------------------------------------------
Net cash provided by financing activities 108,905 35,265
-----------------------------------------------
Net increase (decrease) in cash (33,475) (13,209)
Cash at beginning of period 42,982 42,895
===============================================
Cash at end of period $ 9,507 $ 29,686
===============================================
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. We have prepared the consolidated financial statements in this report
without audit. We condensed or omitted some information and footnote
disclosures, including significant accounting policies, that would normally
be included in financial statements prepared in accordance with generally
accepted accounting principles. These financial statements should be read
in conjunction with the financial statements and notes included in our
latest annual report. We believe that the financial statements for the
three-month periods ended March 31, 1999 and 1998 include all necessary
adjustments, which are of a normal recurring nature, for fair presentation
Results for any interim period may not be indicative of the results of the
entire year.
2. Prescription Drug Price Litigation. We were named a defendant, along with
six other pharmaceutical wholesalers and 24 pharmaceutical manufacturers in
a consolidated class action filed in the United States District Court for
the Northern District of Illinois in 1993. (In -- re Brand Name
Prescription Drugs Litigation, MDL 997.) The complaint alleged that the
defendants conspired to fix prices of brand-name prescription drugs sold to
retail pharmacies at artificially high levels in violation of the federal
antitrust laws. The complaint seeks injunctive relief, unspecified treble
damages, costs, interest and attorneys' fees. Additional complaints were
filed in the federal class action by two chain drug companies naming
certain pharmaceutical manufacturers and wholesalers, including us, as
defendants. These complaints contain allegations and claims for relief that
are substantially similar to those in the earlier class action complaint.
In addition, we are a defendant in additional actions brought by plaintiffs
who "opted out" of the federal class action. The vast majority of the
complaints in these actions contain allegations and claims for relief that
are substantially similar to those in the federal class action. The
remaining complaints add allegations that the defendants' conduct violated
state law.
On July 1, 1996, we and several other wholesalers were joined as defendants
in a proceeding filed in the Circuit Court of Greene County, Alabama.
(Durrett v. The Upjohn Company, Civil Action No. 94-029.) The plaintiffs
claim the prices of prescription drugs purchased in interstate commerce are
artificially high because of alleged illegal activities of the defendant
pharmaceutical manufacturers and wholesalers. The complaint seeks monetary
damages, injunctive relief and punitive damages.
On June 16, 1998, we were named a defendant in an action filed in the
Circuit Court for Cocke County, Tennessee purportedly on behalf of
consumers of prescription drugs in the following states: Tennessee,
Alabama, Arizona, Florida, Kansas, Maine, Michigan, Minnesota, New Mexico,
North Carolina, North Dakota, South Dakota, West Virginia and Wisconsin.
(Graves et al. v. Abbott Laboratories et al., Civil Action No. 25,109-00.)
The complaint charges that pharmaceutical manufacturers and wholesalers,
including us, engaged in a price-fixing conspiracy in violation of
Tennessee's Trade Practices Act and Consumer Protection Act, and the unfair
or deceptive trade practices statutes of the other jurisdictions named
therein.
We have denied any liability to the plaintiffs in the prescription drug
price litigation described above and have been defending ourselves
vigorously. On October 21, 1994, we entered into an agreement with the
other defendants, wholesalers and pharmaceutical manufacturers covering all
of the prescription drug price actions. Under this agreement: (1) the
manufacturer defendants agreed to reimburse us and the other wholesaler
defendants for litigation costs incurred, up to an aggregate amount of $9
million; and (2) if a judgment is entered against both manufacturers and
wholesalers, our total exposure for joint and several liability would be
limited to the lesser of 1% of such judgment or $1 million. In addition, we
have released any claims which we might have had against the manufacturers
for the claims presented by the plaintiffs in these actions. As a result of
the settlements discussed in the next paragraph, we expect to receive
reimbursement of some, if not all, of our legal fees and expenses in excess
of our proportionate share of the $9 million.
Several of the manufacturer defendants and the class plaintiffs have
reached settlement agreements with regard to the class action. The trial
against the remaining defendants, including us, began on September 14,
1998. On November 30, 1998, the Court granted all remaining defendants'
motions for judgments as a matter of law and dismissed all class claims
against us and other defendants. The class plaintiffs' appeal of the
Court's ruling is now pending.
After discussions with counsel, we believe that any allegations of
liability against us in the prescription drug pricing cases described above
are without merit and that any liability that we may have is not likely to
have a material adverse effect on our financial condition or results of
operations.
Other Legal Proceedings. We are also subject to ordinary and routine
lawsuits and governmental inspections, investigations and proceedings
incidental to our business, the outcome of which would not have a material
adverse effect on our financial condition or results of operations.
3. On June 3, 1998, a 4-for-3 stock split of our common stock was paid in the
form of a stock dividend to shareholders of record at the close of business
on May 21, 1998. We restated all historical weighted average shares and per
share amounts in this report to reflect the stock split. Share amounts in
the Consolidated Balance Sheets reflect the actual share amounts
outstanding for each period presented.
4. On December 31, 1998, we completed the spin-off of our subsidiary Priority
Healthcare Corporation ("Priority") by distributing to the holders of our
common stock all of the shares of Priority Class A Common Stock that we
owned. The spin-off resulted in the removal of $107.5 million of assets and
$37.2 million of liabilities from our Consolidated Balance Sheet as of
December 31, 1998. The results of operations for Priority, net of minority
interest, for the quarter ended March 31, 1998 are included in our
Consolidated Statement of Earnings because Priority remained a subsidiary
through December 31, 1998.
5. We had two reportable segments prior to the spin-off of Priority, BWI and
Priority. Both segments conducted substantially all of their business
within the United States. The BWI segment specialized in the distribution
of pharmaceuticals and related health care products to chain drug companies
which operate their own warehouses, individual drug stores, supermarkets
and mass retailers with their own pharmacies, hospitals, clinics, HMOs,
state and federal government agencies and other health care providers. The
Priority segment distributed specialty pharmaceuticals and related medical
supplies to the alternate site healthcare market and was a provider of
patient-specific, self-injectible biopharmaceuticals and disease treatment
services to individuals with chronic diseases. Our segments had separate
management teams and infrastructures to meet the specific needs of our
customers and our marketing strategies.
After the spin-off of Priority on December 31, 1998, we have only one
reportable segment. The assets, liabilities and equity of Priority are not
included in our December 31, 1998 or March 31, 1999 Consolidated Balance
Sheets and our Consolidated Statement of Earnings for the period ended
March 31, 1999 does not include the results of operations for Priority.
Segment information for the quarter ended March 31, 1998 was as follows:
BWI Priority Total
----------------------- ------------------ ------------------
Revenues $ 1,903,642 $ 58,129 $ 1,961,771
Segment net earnings 5,498 2,076 7,574
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Overview
On December 31, 1998, we completed the spin-off of our subsidiary
Priority Healthcare Corporation ("Priority") by distributing to the holders of
our common stock, all of the shares of Priority Class A Common Stock that we
owned. The spin-off resulted in the removal of $107.5 million of assets and
$37.2 million of liabilities from our Consolidated Balance Sheet as of December
31, 1998. The results of operations for Priority, net of minority interest, for
the quarter ended March 31, 1998 are included in our Consolidated Statement of
Earnings because Priority remained a subsidiary through December 31, 1998.
Results of Operations
Net sales for the first quarter increased 1% from $1,962 million in
1998 to $1,975 million in 1999. In the first quarter of 1998, Priority's sales
accounted for approximately 3% of total sales. In the first quarter of 1999,
brokerage type sales ("brokerage sales") experienced a 29% decrease from the
first quarter of 1998. This decrease resulted from the loss of a single chain
warehouse customer during the second quarter of 1998. Although brokerage sales
generate very little gross margin, they provide increased working capital and
support our programs to attract more direct store delivery business from chain
warehouse customers. Sales from inventory ("from stock sales") increased 36% in
the first quarter of 1999 over the first quarter of 1998 (45% when excluding
Priority's sales from 1998 results). From stock sales include sales from
inventory to chain warehouse customers and direct store delivery sales. In the
first quarter of 1999, we continued to expand our presence in the direct store
delivery portion of the business through increased sales to existing customers
and the addition of new customers. Direct store delivery sales increased by 39%
(49% when Priority's sales are excluded from 1998 results) when comparing the
first quarter of 1999 to the first quarter of 1998. As a percentage of total
sales, direct store delivery sales increased from 43% for the first quarter of
1998 to 60% for the first quarter of 1999. This increase is attributed to both
the loss of the chain warehouse customer and the increase in the direct store
delivery sales. In both the first quarter of 1999 and 1998, the increase related
to price increases was approximately equal to the increase in the Consumer Price
Index.
Gross margin of $47.2 million for the first quarter of 1999 represented
an increase of 9% over the first quarter of 1998. However, when Priority's
margins are excluded from the 1998 results, gross margins increased by 30%. In
both periods, the pressure on sell side margins continued to be a significant
factor and the purchasing gains associated with pharmaceutical price inflation
remained relatively constant. Gross margin as a percentage of net sales
increased to 2.39% for the first quarter of 1999 from 2.20% for the first
quarter of 1998 (1.91% after the exclusion of Priority). This increase was the
result of the change in mix away from the lower margin brokerage sales to the
higher margin from stock sales. This change in mix resulted from both the loss
of the chain warehouse customer and the increase in direct store delivery
business.
Other income decreased because the first quarter of 1999 did not
include the interest income that Priority had earned on the proceeds of its
October 1997 initial public offering. Other income for 1999 is attributed to
finance charges on customers' receivables.
Selling, general and administrative ("SGA") expenses for the
three-month period increased 3% from $24.6 million in 1998 to $25.3 million in
1999. When Priority is excluded from the 1998 results, the increase in SGA was
18%. This increase is the result of normal inflationary increases and increased
variable costs to support our growing direct store delivery programs. These
variable costs include, among others, delivery expenses, warehouse expense and
labor costs. SGA expenses will continue to increase as direct store delivery
sales increase. However, total SGA expense as a percent of from stock sales for
the first quarter decreased from 2.7% (2.5% excluding Priority) in 1998 to 2.1%
in 1999. We remain focused on controlling SGA through improved technology,
better asset management and opportunities to consolidate distribution centers.
In 1999, SGA included $200,000 of non-recurring charges associated with the
start-up of new distribution centers in Milwaukee, Wisconsin and Kansas City,
Missouri. SGA in 1998 included non-recurring expenses of approximately $250,000
related to start up expenses of new distribution centers in Portland, Oregon and
Woodland, California.
Depreciation and amortization on new facilities, expansion and
automation of existing facilities and investments in management information
systems resulted in increases in depreciation and amortization expense. For the
three-month period the expense increased from $1.9 million ($1.6 million
excluding Priority) in 1998 to $2.0 million in 1999.
Interest expense for the three-month period increased from $4.0 million
in 1998 to $5.5 million in 1999. The average short-term borrowings outstanding
in 1998 were $189 million at an average short-term interest rate of 6.5%, as
compared to $335 million at an average short-term interest rate of 5.1% in 1999.
The provision for income taxes represented 39.75% of earnings before
taxes for the first quarter of both 1998 and 1999.
Liquidity-Capital Resources
For the three-month period ended March 31, 1999, our operations
consumed $136.8 million in cash. The use of funds resulted from a reduction in
accounts payable and an increase in accounts receivables. These uses were offset
by a slight decrease in inventories. The reduction in accounts payable is
attributed to the timing of payments of invoices related to inventory purchases
and the increase in accounts receivables is a direct result of the significant
increase in direct store sales. We continue to closely monitor working capital
in relation to economic and competitive conditions. However, our emphasis on
direct store delivery business will continue to require both net working capital
and cash.
Capital expenditures were $5.6 million during the first quarter of
1999. These were predominantly for the corporate offices and warehouse
facilities, the expansion and automation of existing warehouses and the
investment in additional management information systems. On April 30, 1999, we
sold our corporate office building to an unrelated party for approximately $21.5
million and signed a 15 year lease for the top two floors of the building. The
proceeds of the sale were used to reduce our borrowings under our bank credit
facility.
Under our receivables securitization facility, we sell substantially
all of our receivables arising in connection with the sale of goods or the
rendering of services to Bindley Western Funding Corporation ("Funding Corp."),
a wholly owned special purpose corporation subsidiary. The Receivables are
sold to Funding Corp. on a continuous basis. The cash generated by sales of
interests in the receivables and from collections on the receivables retained is
used by Funding Corp. to purchase additional receivables. The assets of Funding
Corp. are available first to satisfy any claims of Funding Corp. creditors.
Funding Corp. sells our receivables at specified discount rates to a
group of banks. At March 31, 1999, there were $238 million of receivables
interests outstanding that have been sold at an annual average discount rate of
5.1%. We account for the receivables facility as a financing transaction in our
consolidated financial statements.
Our bank credit facility allows us to borrow up to $174.5 million. The
net increase in borrowings under our bank credit agreement was $103 million
during the period. At March 31, 1999 we had outstanding borrowings of $122.5
million and a remaining availability of $52 million.
We believe that our cash on hand, cash equivalents, line of credit and
working capital management efforts are sufficient to meet our future working
capital requirements.
Our principal working capital needs are for inventory and accounts
receivables. We sell inventory to our chain warehouse and other customers on
various payment terms. This requires significant working capital to finance
inventory purchases and entails accounts receivables exposure in the event any
of our chain warehouse or other significant customers encounter financial
difficulties. Although we monitor closely the creditworthiness of our major
customers and, when feasible, obtain security interests in the inventory sold,
we cannot assure you that we will not incur the write off or write down of chain
warehouse customer or other significant accounts receivables in the future.
Year 2000
The year 2000 will pose a unique set of challenges to those industries
reliant on information technology. As a result of the methods employed by early
programmers, many software applications and operational programs may be unable
to distinguish the year 2000 from the year 1900. If not effectively addressed,
this problem could result in the production of inaccurate data, or in the worst
cases, the inability of the systems to continue to function altogether. We and
other companies in the same business are vulnerable to this problem because we
depend on our distribution and communications systems.
Our Daily Sales System, which controls ordering, pricing, inventory
control, and shipping, which accounts for 70% of our total investment in
software, was initially designed and programmed to be Year 2000 compliant. We
anticipate that our remaining systems will be Year 2000 compliant by the end of
the second quarter of 1999. Furthermore, all major software purchases that we
made within the past three years have been warranted to be compliant by the
vendor. We have upgraded and replaced our hardware and network systems for
reasons other than Year 2000 compliance, however, this new hardware and network
systems will be fully tested during 1999 to determine if they are also Year 2000
compliant. We estimate of the total cumulative costs to make our systems
compliant for the Year 2000 is approximately $1 million, of which approximately
$700,000 had been incurred as of March 31, 1999.
We believe that the expenditures required to make our systems Year 2000
compliant will not have a materially adverse effect on our future performance.
However, the Year 2000 problem is pervasive and complex and can potentially
affect any computer process. Accordingly, we cannot assure you that Year 2000
compliance can be achieved without additional unanticipated expenditures and
uncertainties that might affect our future financial results.
Moreover, to operate our business, we rely on governmental agencies,
utility companies, telecommunications companies, shipping companies, suppliers
and other third party service providers over which we can assert little control.
Our ability to conduct our business is dependent upon the ability of these third
parties to avoid Year 2000 related disruptions. We are in the process of
contacting our third party service providers about their Year 2000 readiness,
but we have not yet received complete assurance from such third parties about
their Year 2000 compliance. If our key third party service providers do not
adequately address their Year 2000 issues, our business may be materially
affected, which could result in a materially adverse effect on our results of
operations and financial condition.
We have not to date developed any formal contingency plans, as such
plans will depend in part on the responses from our third party service
providers. However, if required, critical functions could be handled on a manual
basis until such time that the Year 2000 malfunction was identified and
resolved.
Forward Looking Statements
We make forward-looking statements in this report which represent our
expectations or beliefs about future events and financial performance.
Forward-looking statements are subject to known and unknown risks and
uncertainties, including:
o changes in interest rates;
o competitive pressures;
o changes in customer mix;
o financial stability of major customers;
o investment procurement opportunities;
o changes in governmental regulations or the interpretation and enforcement
of these regulations; o asserted and unasserted claims; and o our ability
and the ability of entities with which we do business to modify or redesign
our and their computer systems to work properly in the year 2000.
In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this report might not occur. In addition,
actual results could differ materially from those suggested by the
forward-looking statements, and therefore you should not place undue reliance on
the forward-looking statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
Item 3. Qualitative and Quantitative Disclosures About Market Risks
There have been no material changes in our market risk exposure from the risks
described in our Annual Report on Form 10-K for the year ended December 31,
1999.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth in Note 2 to the Notes to Consolidated
Financial Statements set forth elsewhere in this Report is incorporated herein
by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Selected Financial Data Schedule
(b) Reports on Form 8-K
On January 4, 1998, we filed a current report on Form
8-K reporting the distribution to our shareholders of
all the shares of Priority Healthcare Corporation
common stock that we then owned.
<PAGE>
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 thereunto duly authorized.
March 17, 1999 BINDLEY WESTERN INDUSTRIES, INC.
BY /s/ Thomas J. Salentine
Thomas J. Salentine
Executive Vice President
(Principal Financial Officer)
<TABLE> <S> <C>
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<CIK> 0000722808
<NAME> Bindley Western Drug Company
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 9,507
<SECURITIES> 0
<RECEIVABLES> 518,756
<ALLOWANCES> 4,070
<INVENTORY> 645,691
<CURRENT-ASSETS> 1,195,538
<PP&E> 124,850
<DEPRECIATION> 28,297
<TOTAL-ASSETS> 1,309,916
<CURRENT-LIABILITIES> 968,357
<BONDS> 618
0
0
<COMMON> 3,379
<OTHER-SE> 350,688
<TOTAL-LIABILITY-AND-EQUITY> 1,309,916
<SALES> 1,974,957
<TOTAL-REVENUES> 1,975,440
<CGS> 1,927,781
<TOTAL-COSTS> 1,960,613
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<LOSS-PROVISION> 724
<INTEREST-EXPENSE> 5,524
<INCOME-PRETAX> 14,827
<INCOME-TAX> 5,894
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<CHANGES> 0
<NET-INCOME> 8,933
<EPS-PRIMARY> .40
<EPS-DILUTED> .36
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