<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 4, 1997
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MERISEL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-17156 95-4172359
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(State or other jurisdiction (Commission File (I.R.S Employer
of incorporation or organization) Number) Identification No.)
200 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-0948
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 615-3080
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Item 5. OTHER EVENTS
On August 4, 1997, Merisel, Inc. issued a press release reporting its results of
operations for the second quarter of 1997, which is attached hereto as Exhibit
99.1.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release dated August 4, 1997.
<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.
MERISEL, INC
Date: August 4, 1997 By: /s/ KAREN A. TALLMAN
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Karen A. Tallman
Vice President and General Counsel
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EXHIBIT 99.1
For Immediate Release Contact: James Illson
Senior Vice President, Finance and CFO
(310) 615-1295
Financial Media/Investor Relations:
Charles B. Freedman, Assistant Treasurer
(310) 615-1376
Rivian Bell
(310) 615-6812
(310) 615-6868
(800) 686-1910 (24-hour pager)
MERISEL ACHIEVES THIRD CONSECUTIVE QUARTER OF PROFITABILITY:
$.07 INCOME PER SHARE
SALES IN NORTH AMERICAN BUSINESS IMPROVE OVER SECOND QUARTER 1996
El Segundo, Calif. (Aug. 4, 1997) -- Merisel, Inc. (NASDAQ:MSEL) announced
today that it has achieved its third consecutive quarter of profitability for
the period ended June 30, 1997. The company reported consolidated net income of
$2,046,000, or $.07 per share, on sales of $895,754,000 for the second quarter
1997 compared with a net loss of $(11,404,000), or $(.38) per share, on sales of
$l.44 billion for the second quarter 1996. The quarter ended June 30, 1997,
represented the first period in which the results of operations included only
the company's North American Business, which consists of its ongoing
distribution businesses in the United States and Canada. Merisel's North
American Business reported an 8.1 percent sales increase over sales of
$828,954,000 for the second quarter 1996.
For the six months ended June 30, 1997, Merisel reported consolidated net income
of $3,176,000, or $.11 per share, on sales of $2.01 billion versus a loss of
$(24,912,000) on sales of $2.98 billion for the same period last year. Sales
for the North American Business for the period increased 5.6 percent to $1.81
billion from $1.71 billion for the same period last year.
In the second quarter, Merisel produced $12,906,000 in earnings before interest,
income taxes, depreciation and amortization (EBITDA) compared with $2,436,000
and a loss of $(2,378,000) for the second quarter last year for consolidated
operations and the North American Business, respectively. Second quarter 1997
EBITDA includes a $1,530,000 gain on the sale of unused real estate assets in
Cary, N.C.
(more)
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Merisel/Q2 Earnings
Page 2
For the six months ended June 30, 1997, Merisel reported $26,015,000 in EBITDA
on a consolidated basis compared with $4,582,000 for the same period last year.
The company's North American Business contributed $23,271,000 in EBITDA for the
period versus a loss of $(2,238,000) for the comparable period last year.
According to Dwight A. Steffensen, Merisel chairman and chief executive officer,
"we continued to make significant progress in the areas required to complete the
company's turnaround. The factors which contributed to improvement in operating
results include the positive rate of sales growth, sustained gross margins, and
effective procedures to control operating expenses. In 1997, the rate of year-
to-year sales growth has improved measurably from 3.3 percent in the first
quarter to 8.1 percent in the second quarter, giving evidence of the company's
sales momentum. Sales growth continued especially strong in Merisel Canada, the
Merisel Open Computing Alliance (MOCA(TM)), and our value-added reseller (VAR)
business."
For the quarter, the company reported gross margins of 6.21 percent of sales
compared with gross margins of 5.52 percent of sales and 5.30 percent of sales
for the same period last year for consolidated operations and the North American
Business, respectively. The increase in second quarter gross margin levels from
the prior year reflects such factors as more effective margin management through
a stronger concentration on more profitable product lines and involvement in
special vendor purchasing and rebate programs, as well as the resolution of
certain vendor reconciliation items resulting from improved processes and
controls. Future vendor reconciliations may or may not favorably affect margins
in subsequent periods.
Merisel continues to move forward with its proposed debt restructuring and last
week commenced the solicitation of stockholder proxies and a noteholder exchange
offer. As announced, proxies from stockholders as of July 22 will be voted at a
special meeting on Friday, Aug. 29, 1997. The exchange offer expires on the
same date. The company is also exploring arrangements for alternative financing
in the event the existing debt restructuring plan is not implemented in
accordance with its terms.
Except for the historical financial information contained herein, the matters
discussed in this news release constitute forward looking information, and
actual results could differ materially from current expectations. Among the
factors that could impact actual results are any change in the company's pending
debt restructuring, and other items detailed periodically in the company's SEC
reports on forms 10-K, 10-Q, and 8-K.
(more)
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Merisel/Q2 Earnings
Page 3
Merisel, Inc. (NASDAQ:MSEL) is a leading distributor of computer hardware,
software and networking products. Merisel distributes a full line of 25,000
products and services from the industry's leading manufacturers to more than
45,000 resellers throughout North America.
The company offers extensive support services, including training, marketing,
technical support, configuration, merchandising, telemarketing, information
services and third-party financing. @Merisel, the company's corporate home page,
is located at http://www.merisel.com. Additional information can be obtained by
fax at (310) 615-6811.
MERISEL, INC. AND SUBSIDIARIES SUMMARY OPERATING RESULTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
3 MONTHS ENDED JUNE 30, 6 MONTHS ENDED JUNE 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $895,754 $1,442,668 $2,008,855 $2,979,257
Gross Profit 55,653 79,587 120,631 166,810
Income(Loss) Before
Income Taxes 2,205 (11,958) 3,509 (24,986)
Net Income(Loss) 2,046 (11,404) 3,176 (24,912)
Net Income(Loss) Per
Share $ 0.07 $ (0.38) $ 0.11 $ (0.83)
Weighted Average Shares
Outstanding 30,078 29,878 30,078 29,871
</TABLE>
# # #
(Financial tables follow)
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MERISEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
<TABLE>
<S> <C>
NET SALES $895,754
COST OF SALES 840,101
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GROSS PROFIT 55,653
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 43,299
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OPERATING INCOME 12,354
INTEREST EXPENSE 7,760
OTHER EXPENSES 2,389
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INCOME BEFORE INCOME TAXES 2,205
INCOME TAX PROVISION 159
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NET INCOME $ 2,046
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WEIGHTED AVERAGE SHARES OUTSTANDING 30,078
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NET INCOME PER SHARE $ 0.07
========
</TABLE>
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MERISEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
<TABLE>
<S> <C>
NET SALES $2,008,855
COST OF SALES 1,888,224
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GROSS PROFIT 120,631
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 94,820
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OPERATING INCOME 25,811
INTEREST EXPENSE 16,383
OTHER EXPENSES 5,919
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INCOME BEFORE INCOME TAXES 3,509
INCOME TAX PROVISION 333
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NET INCOME $ 3,176
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WEIGHTED AVERAGE SHARES OUTSTANDING 30,078
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NET INCOME PER SHARE $ 0.11
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</TABLE>
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MERISEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
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<S> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 48,563
ACCOUNTS RECEIVABLE
(net of allowance for doubtful accounts of $23,105) 181,809
INVENTORIES 346,730
PREPAID EXPENSES AND OTHER CURRENT ASSETS 20,912
DEFERRED INCOME TAX BENEFIT 478
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TOTAL CURRENT ASSETS 598,492
PROPERTY AND EQUIPMENT, NET 54,866
COST IN EXCESS OF NET ASSETS ACQUIRED, NET 25,914
OTHER ASSETS 7,805
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TOTAL ASSETS $ 687,077
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 347,627
ACCRUED LIABILITIES 37,517
SUBORDINATED DEBT - CURRENT 4,400
LONG-TERM DEBT - CURRENT 10,645
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TOTAL CURRENT LIABILITIES 400,189
LONG-TERM DEBT 259,723
SUBORDINATED DEBT 8,800
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TOTAL LIABILITIES 668,712
STOCKHOLDERS' EQUITY:
CAPITAL STOCK 301
ADDITIONAL PAID IN CAPITAL 142,300
ACCUMULATED DEFICIT (117,988)
CUMULATIVE TRANSLATION ADJUSTMENT (6,248)
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TOTAL STOCKHOLDERS' EQUITY 18,365
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 687,077
=========
</TABLE>
