<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the three months ended JUNE 30, 1996 Commission File Number 0-14371
- ---------------------------------------- ------------------------------
COMPUCOM SYSTEMS, INC
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 38-2363156
- ------------------------------------ ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10100 N. CENTRAL EXPRESSWAY, DALLAS, TX 75231
- ------------------------------------------ ------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 265-3600
------------------------
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 the Registrant's common stock outstanding as of August
9, 1996 was 44,756,800 shares.
________________________________________________________________________________
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
- ------- --------------------- ----
<S> <C>
Item 1. Condensed Consolidated Balance Sheets
June 30, 1996 (unaudited) and December 31, 1995 3
Condensed Consolidated Statements of Operations
Three months and six months ended June 30, 1996 and 1995
(unaudited) 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1995 (unaudited) 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
- -------- -----------------
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- --------------
Assets (unaudited)
------
<S> <C> <C>
Current assets:
Cash $ 4,273 $ 4,249
Receivables 327,746 265,071
Inventories 212,066 196,531
Other 2,367 2,151
-------------- --------------
Total current assets 546,452 468,002
Property and equipment, net 21,653 18,253
Cost in excess of fair value of tangible net assets
purchased, less accumulated amortization 16,974 18,146
Other assets 2,887 4,303
-------------- -------------
$ 587,966 $ 508,704
============== =============
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 202,937 $ 189,180
Accrued liabilities 48,527 53,867
-------------- -------------
Total current liabilities 251,464 243,047
Long-term debt 172,578 120,364
Deferred income taxes 3,955 3,952
Convertible subordinated notes 3,000 3,000
Shareholders' equity:
Preferred stock 15,000 15,000
Common stock 447 441
Additional paid-in capital 58,764 57,788
Retained earnings from July 1, 1987 82,758 65,112
-------------- -------------
Total shareholders' equity 156,969 138,341
-------------- -------------
$ 587,966 $ 508,704
============= =============
</TABLE>
See acommpanying notes to condensed consolidated financial statements.
3
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenue
Product $ 467,817 $ 324,427 $ 845,800 $ 626,828
Service 38,760 25,204 71,697 44,872
Other 2,178 1,079 4,592 2,497
-------------- -------------- -------------- --------------
Total revenue 508,755 350,710 922,089 674,197
-------------- -------------- -------------- --------------
Cost of revenue
Product 420,744 290,638 760,558 561,288
Service 27,130 16,964 47,830 31,061
Other 1,590 555 3,159 1,117
-------------- -------------- -------------- --------------
Total cost of revenue 449,464 308,157 811,547 593,466
-------------- -------------- -------------- --------------
Gross margin 59,291 42,553 110,542 80,731
Operating expenses
Selling and service 28,836 20,040 54,741 39,076
General and administrative 13,129 9,682 24,083 17,747
Depreciation and amortization 2,000 1,548 3,854 2,997
-------------- -------------- -------------- --------------
Total operating expenses 43,965 31,270 82,678 59,820
-------------- -------------- -------------- --------------
Earnings from operations 15,326 11,283 27,864 20,911
Interest expense (3,507) (3,260) (6,442) (6,497)
Non-recurring gain 8,738 8,738
-------------- -------------- -------------- --------------
Earnings before income taxes 20,557 8,023 30,160 14,414
Income taxes 8,223 3,209 12,064 5,765
-------------- -------------- -------------- --------------
Net earnings $ 12,334 $ 4,814 $ 18,096 $ 8,649
============== ============== ============== ==============
Earnings per common share
Primary $ .25 $ .12 $ .37 $ .22
Fully diluted $ .25 $ .11 $ .36 $ .19
Average common shares outstanding
Primary 47,497 36,261 47,250 35,992
Fully diluted 50,099 44,996 50,061 44,935
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1995
(In thousands)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 18,096 $ 8,649
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization 3,854 2,997
Deferred income taxes 3 (606)
Gain on sale of stock (8,738)
Changes in assets and liabilities:
Receivables (62,675) 19,035
Inventories (15,535) 5,420
Other current assets (216) 408
Accounts payable 13,757 (22,359)
Accrued liabilities and other (1,320) (3,062)
------------- -------------
Net cash provided by (used in) operating activities (52,774) 10,482
------------- -------------
Cash flows from investing activities:
Capital expenditures, net (5,874) (2,758)
Business acquisitions, net of cash acquired (5,442) (1,754)
Proceeds from sale of stock 11,368
------------- -------------
Net cash provided by (used in) investing activities 52 (4,512)
------------- -------------
Cash flows from financing activities:
Net bank credit facility and other borrowings 52,214 (5,615)
Issuance of common stock 982 488
Preferred stock dividend (450) (825)
------------- -------------
Net cash provided by (used in) financing activities 52,746 (5,952)
------------- -------------
Net increase in cash 24 18
Cash at beginning of period 4,249 4,076
------------- -------------
Cash at end of period $ 4,273 $ 4,094
============= =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1996
(1) General
-------
These condensed interim consolidated financial statements should be
read in conjunction with the consolidated financial statements and the
summary of significant accounting policies and notes thereto included in
the Company's 1995 Annual Report on Form 10-K. The information furnished is
unaudited but reflects all adjustments consisting only of normal recurring
accruals which are, in the opinion of management, necessary to present a
fair statement of the results for these interim periods. Interim results
are not necessarily indicative of results expected for the full year.
(2) Long-Term Debt
--------------
During April 1996, the Company executed amendments to the August 1993
Financing and Security Agreement ("Credit Facility") eliminating the $60
million fixed rate portion and increasing the amount of borrowings the
Company may allocate to LIBOR tranches up to $165 million. The amount of
the Credit Facility remained at $175 million, with the interest rate on the
remaining $10 million priced at prime. The amendment also extended the
maturity date of the Credit Facility to April 1, 1998. In addition, during
April 1996, the Company entered into an agreement for a $75 million
receivable securitization whereby a portion of trade receivables are
pledged to a third party as collateral, increasing its financing capability
to $250 million. The interest rate applicable to the receivable
securitization is based upon the bank's commercial paper rate (which at
June 30, 1996 was 5.4%) plus 55 basis points, and matures on April 1, 1998,
subject to certain conditions.
(3) Investments
-----------
During the second quarter of 1996, the Company participated in the
secondary stock offering of PC Service Source, Inc. ("PCSS") resulting in
an after tax, non-recurring gain on the sale of securities of $5.2 million.
The Company founded PC Service Source, Inc. in 1990 and, after the sale,
owns less than 5% of the outstanding common shares of PCSS.
(4) Contingencies
-------------
The Company is involved in various claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position and results of operations, taken
as a whole.
(5) Reclassifications
-----------------
Certain amounts in the 1995 condensed consolidated financial
statements have been reclassified to conform with the 1996 presentation,
the most significant of which is the reclassification of direct expenses
related to the service business from operating expense to cost of revenue.
6
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and Results of
Operations June 30, 1996
Results of Operations
- ---------------------
The following table shows the Company's total revenue, gross margin and
gross margin percentage by revenue source. Operating expenses, interest and net
earnings are shown as a percentage of total net revenue, for the three months
and six months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
------------- ------------- ------------ -------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenue:
Product $ 467,817 $ 324,427 $ 845,800 $ 626,828
Service 38,760 25,204 71,697 44,872
Other 2,178 1,079 4,592 2,497
------------- ------------- ------------ -------------
Total revenue 508,755 350,710 922,089 674,197
------------- ------------- ------------ -------------
Gross margin:
Product 47,073 33,789 85,242 65,540
Service 11,630 8,240 23,867 13,811
Other 588 524 1,433 1,380
------------- ------------- ------------ -------------
Total gross margin 59,291 42,553 110,542 80,731
------------- ------------- ------------ -------------
Gross margin percentage:
Product 10.1% 10.4% 10.1% 10.5%
Service 30.0% 32.7% 33.3% 30.8%
Other 27.0% 48.6% 31.2% 55.3%
------------- ------------- ------------ -------------
Total gross margin 11.6% 12.1% 12.0% 12.0%
Operating expenses:
Selling 3.7% 4.4% 4.0% 4.6%
Service 1.9% 1.3% 2.0% 1.3%
General and administrative 2.6% 2.8% 2.6% 2.6%
Depreciation and amortization 0.4% 0.4% 0.4% 0.4%
------------- ------------- ------------ -------------
Total operating expenses 8.6% 8.9% 9.0% 8.9%
------------- ------------- ------------ -------------
Earnings from operations 3.0% 3.2% 3.0% 3.1%
Interest expense (0.7%) (0.9%) (0.7%) (1.0%)
Non-recurring gain 1.7% 1.0%
------------- ------------- ------------ -------------
Earnings before income taxes 4.0% 2.3% 3.3% 2.1%
Income taxes 1.6% 0.9% 1.3% 0.8%
------------- ------------- ------------ -------------
Net earnings 2.4% 1.4% 2.0% 1.3%
============= ============= ============ =============
</TABLE>
(Continued)
7
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Product revenue, which is primarily derived from the sale of personal
computer hardware, software and peripherals to corporate customers, for the
quarter and six months ended June 30, 1996 increased 44% and 35% from the same
periods in 1995 to $467.8 million and $845.8 million, respectively. This
increase in product revenue reflects higher demand for personal computers,
particularly related to the current Pentium upgrade cycle occurring in large
corporations, as well as increased demand for laptops. The strong product
results also reflect the advancements the Company has made in customer
procurement systems, data warehouse queries and web-based order statusing,
reducing the customers' overall procurement cost.
Product gross margin as a percentage of product net revenue for the three
months and six months ended June 30, 1996 was 10.1%, down from the same periods
in 1995 of 10.4% and 10.5%, respectively, but constant with the first quarter of
1996. These lower 1996 margins are principally due to pricing to win new
business and increased pricing pressures from competition. Future product
margins will be influenced by manufacturers' pricing strategies together with
competitive pressures from other resellers in the industry.
Service revenue for the three months and six months ended June 30, 1996
increased 54% and 60% from the same periods in 1995 to $38.8 million and $71.7
million, respectively. As the service revenue base continues to increase, future
service percentage growth rates are expected to decline. For example, second
quarter service revenue reflects an increase of approximately 18% over the first
quarter of 1996. Service revenue is primarily derived from systems integration
services, including product configuration, field engineering, network
management, help desk services and network project management. Service revenue
reflects revenue generated by the actual performance of specific services and
does not include product sales associated with service projects. The increase in
service revenue reflects the Company's continued focus on expanding its network
and technology services at competitive prices, as well as the impact of various
small service acquisitions.
Service gross margin as a percentage of service net revenue for the quarter
ended June 30, 1996 decreased to 30% in 1996 from 32.7% in 1995, primarily as a
result of the Company's increased investment in expanding its service offerings
and lower gross margins in its field engineering business, primarily relating to
the utilization of engineers, partially offset by an increase in higher margin
services. On a year-to-date basis, service gross margin as a percentage of
service net revenue improved to 33.3% from 30.8% in 1995 primarily due to an
increase in higher-end, higher margin services performed for customers.
Operating expenses for the three month and six month period ended June 30,
1996 increased $12.7 and $22.9 million, respectively, from the comparable
periods of 1995, to support the continued revenue growth. As a percentage of
net revenue, operating expenses for the quarter and six months ended June 30,
1996 decreased to 8.6% and 9.0%, compared to 8.9% and 8.9% in 1995,
respectively, principally as a result of the significant revenue growth and
management's continued efforts to control operating expenses. The Company's
operating expenses are reported net of reimbursements by certain manufacturers
for specific training, promotional and marketing programs. These reimbursements
offset the expenses incurred by the Company.
(Continued)
8
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and Results of
Operations
On a quarterly and year-to-date basis, service expense, which increased
both as a percentage of net revenue and in absolute dollars, primarily reflects
costs related to the infrastructure established starting in 1995 necessary to
manage and expand the service business and the investment in development of
certain aspects of the service business which should enable the Company to
increase its service offerings. Selling expense, as a percentage of net
revenues, for the first six months of 1996 decreased when compared to 1995
primarily as a result of continued improvement in product sales productivity.
For the second quarter, general and administrative expense, as a percentage of
net revenue, decreased from 2.8% in 1995 to 2.6% primarily due to the fixed
component of expense being spread over higher volume. General and administrative
expense, on a year-to-date basis, remained flat as a percentage of net revenue
with 1995.
Depreciation and amortization expense increased in absolute dollars but
remained relatively constant as a percentage of net revenue for the quarter and
six months ended June 30, 1996. The dollar increase reflects amortization
expense associated with the Company's recent acquisitions, as well as increased
depreciation expense related to fixed asset purchases in 1996 and 1995.
Interest expense increased in absolute dollars for the three months ended
June 30, 1996 primarily due to increased borrowing to support the significant
revenue growth, partially offset by a lower effective interest rate resulting
from amendments to the credit facility, particularly the use of LIBOR tranches
and, to a lesser extent, the receivable securitization, and the redemption in
October 1995 of the Company's $18.5 million 9% Convertible Subordinated Notes
("Notes"). The Notes were converted into 8.4 million shares of the Company's
common stock resulting in an interest expense savings of almost $1.7 million
annually. On a year-to-date basis, interest expense was relatively constant with
the prior year.
During the second quarter of 1996, the Company participated in the
secondary stock offering of PC Service Source, Inc. ("PCSS") resulting in an
after tax, non-recurring gain on the sale of securities of $5.2 million. The
Company founded PC Service Source, Inc. in 1990 and, after the sale, owns less
than 5% of the outstanding common shares of PCSS.
Net earnings, excluding the non-recurring gain, increased 47% to $7.1
million in the second quarter of 1996 from $4.8 million in 1995 and for the
first six months 1996 increased 49% to $12.9 million, up from $8.6 million in
1995. Net earnings, including the non-recurring gain, for the three months and
six months were $12.3 million and $18.1 million, respectively, reflecting an
increase of 156% and 109% over prior year. The earnings per share impact of the
non-recurring gain was $.11 and $.10 on fully diluted basis for the three months
and six months ended June 30, 1996, respectively. Future improved profitability
will depend on the Company's ability to retain and hire quality service
personnel, increased focus on providing technical service and support to
customers, competition, manufacturer product pricing changes, as well as the
Company's control of operating expenses, product availability, and effective
utilization of vendor programs.
(Continued)
9
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussionand Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources
- -------------------------------
During recent years, the Company has utilized the bank credit facility,
operating earnings, equity financing and long-term subordinated notes to fund
its significant revenue growth and related operating asset requirements. During
April 1996, the Company executed amendments to the August 1993 Financing and
Security Agreement ("Credit Facility") eliminating the $60 million fixed rate
portion and increasing the amount of borrowings the Company may allocate to
LIBOR tranches up to $165 million. The amount of the Credit Facility remained at
$175 million, with the interest rate on the remaining $10 million priced at
prime. The amendment also extended the maturity date of the Credit Facility to
April 1, 1998. In addition, during April 1996, the Company entered into an
agreement for a $75 million receivable securitization, whereby a portion of
trade receivables are pledged to a third party as collateral, increasing its
financing capability to $250 million. The interest rate applicable to the
receivable securitization is based upon the bank's commercial paper rate (which
at June 30, 1996 was 5.4%) plus 55 basis points, and matures on April 1, 1998,
subject to certain conditions. At June 30, 1996 approximately $75 million was
outstanding on the receivable securitization and $95 million was outstanding on
the credit facility, with an additional $80 million available for borrowing.
Working capital at June 30, 1996 is $295 million compared to $225 million
at December 31, 1995 resulting in an increase in the working capital ratio from
1.9 to 2.2. The increase in working capital was principally due to higher
accounts receivable primarily related to the Company's significant revenue
growth and higher levels of inventory allocated to specific customers, partially
offset by a corresponding increase in accounts payable.
The business is not capital asset intensive, and capital expenditures in
any year normally would not be significant in relation to total assets. Capital
asset requirements are generally funded through the bank credit facility,
internally generated funds or leasing sources. Capital expenditures are expected
to be approximately $9 million in 1996, of which approximately $5.9 million was
spent during the first and second quarters. There are no material capital asset
purchase commitments at June 30, 1996. However, the Company is presently
evaluating alternatives to meet additional office space requirements in Texas,
including the possible relocation to a new headquarters facility.
10
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
The Company held its Annual Meeting of Shareholders on May 21, 1996. At
the meeting, the shareholders voted in favor of electing as directors the eleven
nominees named in the Proxy Statement dated April 12, 1996, and for an amendment
to the Company's Management Incentive Compensation Plan. The number of votes
cast for, against or withheld, as well as, the number of abstentions and broker
non-votes were as follows:
<TABLE>
<CAPTION>
Election of Directors:
For Withheld
--- --------
<S> <C> <C>
Charles A. Root 53,755,932 121,460
Edward R. Anderson 53,770,032 107,360
Daniel F. Brown 53,769,732 107,660
James W. Dixon 53,764,132 113,260
Michael J. Emmi 53,768,232 109,160
Richard F. Ford 53,759,932 117,460
Ira M. Lubert 53,769,159 108,223
Warren V. Musser 53,767,059 110,333
Edward N. Patrone 53,769,159 108,233
Delbert W. Johnson 53,770,632 106,760
John D. Loewenberg 53,768,032 109,360
</TABLE>
Proposal to Amend the Company's Management Incentive Compensation Plan:
For Against Abstain Broker Non-Votes
- --- ------- ------- ----------------
42,903,205 1,721,698 149,231 0
11
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
--------
Exhibit
No. Description
------- ---------------------------------------
11 Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K have been filed by the Registrant during
the three months ended June 30, 1996.
12
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
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.
COMPUCOM SYSTEMS, INC.
----------------------------------------
(Registrant)
DATE: August 14, 1996 /s/ Edward Anderson
----------------------------------------
Edward Anderson,
President and Chief Executive Officer
DATE: August 14, 1996 /s/ Robert J. Boutin
----------------------------------------
Robert J. Boutin,
Senior Vice President, Finance and
Chief Financial Officer
15
<PAGE>
EXHIBIT 11
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Exhibit 11 - Computation of Per Share Earnings
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- -------------------------
1996 1995 1996 1995
------------ ----------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE
- ---------------------------------
Net earnings $ 12,334 $ 4,814 $ 18,096 $ 8,649
Preferred dividend (225) (300) (450) (600)
------------ ----------- ------------ -----------
$ 12,109 $ 4,514 $ 17,646 $ 8,049
============ =========== ============ ===========
Average common shares outstanding 44,604 34,011 44,439 33,956
Average common share equivalents 2,893 2,250 2,811 2,036
------------ ----------- ------------ -----------
Average number of common shares and
common share equivalents outstanding 47,497 36,261 47,250 35,992
============ =========== ============ ===========
Primary earnings per common share $ .25 $ .12 $ .37 $ .22
============ =========== ============ ===========
FULLY DILUTED EARNINGS PER COMMON SHARE
- ---------------------------------------
Primary net earnings $ 12,334 $ 4,814 $ 18,096 $ 8,649
Preferred dividend (300) (600)
Interest expense, net of income tax expense 23 250 46 500
------------ ----------- ------------ -----------
$ 12,357 $ 4,764 $ 18,142 $ 8,549
============ =========== ============ ===========
Average common shares outstanding 44,604 34,011 44,439 33,956
Average common share equivalents 2,892 2,576 3,019 2,570
Additional shares issuable 2,603 8,409 2,603 8,409
------------ ----------- ------------ -----------
Average number of common shares
assuming full dilution 50,099 44,996 50,061 44,935
============ =========== ============ ===========
Fully diluted earnings per common share $ .25 $ .11 $ .36 $ .19
============ =========== ============ ===========
</TABLE>
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,273
<SECURITIES> 0
<RECEIVABLES> 330,287
<ALLOWANCES> 2,541
<INVENTORY> 212,066
<CURRENT-ASSETS> 546,452
<PP&E> 35,750
<DEPRECIATION> 14,097
<TOTAL-ASSETS> 587,966
<CURRENT-LIABILITIES> 251,464
<BONDS> 175,578
0
15,000
<COMMON> 447
<OTHER-SE> 141,522
<TOTAL-LIABILITY-AND-EQUITY> 587,966
<SALES> 845,800
<TOTAL-REVENUES> 922,089
<CGS> 760,558
<TOTAL-COSTS> 774,428
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 450
<INTEREST-EXPENSE> 6,442
<INCOME-PRETAX> 30,160
<INCOME-CONTINUING> 0
<INCOME-TAX> 12,064
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,096
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.36
</TABLE>
