<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 MARCH 31, 1997 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 May 8,
1997 was 45,513,013 shares.
- ------------------------------------------------------------------------------
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Index
PART I. FINANCIAL INFORMATION PAGE
- ------- --------------------- ----
Item 1. Condensed Consolidated Balance Sheets
March 31, 1997 (unaudited) and December 31, 1996 3
Condensed Consolidated Statements of Operations
Three months ended March 31, 1997 and 1996 (unaudited) 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1997 and 1996 (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 6. Exhibits and Reports on Form 8-K 11
2
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ ------------
(unaudited)
<S> <C> <C>
Assets
------
Current assets:
Cash $ 4,251 $ 4,320
Receivables 310,176 377,598
Inventories 192,298 233,464
Other 3,517 3,508
----------- -----------
Total current assets 510,242 618,890
Property and equipment, net 56,515 54,308
Cost in excess of fair value of
tangible net assets purchased,
less accumulated amortization 15,783 16,513
Other assets 4,536 3,274
----------- -----------
$ 587,076 $ 692,985
=========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 141,445 $ 217,424
Accrued liabilities 55,108 59,342
----------- -----------
Total current liabilities 196,553 276,766
Long-term debt 204,615 236,450
Deferred income taxes 5,492 5,671
Convertible subordinated notes 3,000 3,000
Shareholders' equity:
Preferred stock 15,000 15,000
Common stock 455 449
Additional paid-in capital 62,631 60,966
Retained earnings from July 1, 1987 99,330 94,683
----------- -----------
Total shareholders' equity 177,416 171,098
----------- -----------
$ 587,076 $ 692,985
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three months ended March 31, 1997 and 1996
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31,
1997 1996
------------ -----------
(unaudited)
<S> <C> <C>
Revenue
Product $ 375,605 $ 377,983
Service 53,728 32,937
Other 2,556 2,414
----------- -----------
Total revenue 431,889 413,334
----------- -----------
Cost of revenue
Product 336,673 339,814
Service 34,366 20,700
Other 1,372 1,569
----------- -----------
Total cost of revenue 372,411 362,083
----------- -----------
Gross margin 59,478 51,251
Operating expenses
Selling and service 31,230 25,905
General and administrative 14,292 10,954
Depreciation and amortization 2,591 1,854
----------- -----------
Total operating expenses 48,113 38,713
----------- -----------
Earnings before interest and
income taxes 11,365 12,538
Interest 3,245 2,935
----------- -----------
Earnings before income taxes 8,120 9,603
Income taxes 3,248 3,841
----------- -----------
Net earnings $ 4,872 $ 5,762
=========== ============
Earnings per common share
Primary $ .10 $ .12
Fully diluted $ .10 $ .12
Average common shares outstanding
Primary 47,145 46,921
Fully diluted 49,748 49,692
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1997 and 1996
(In thousands)
<TABLE>
<CAPTION>
1997 1996
---------- ----------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 4,872 $ 5,762
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,591 1,854
Deferred income taxes (179) (5)
Changes in assets and liabilities:
Receivables 67,422 (1,909)
Inventories 41,166 (34,647)
Other current assets (9) 140
Accounts payable (75,979) 21,920
Accrued liabilities and other (5,480) (5,314)
---------- ----------
Net cash provided by (used in) operating activities 34,404 (12,199)
---------- ----------
Cash flows from investing activities:
Capital expenditures, net (4,084) (1,418)
Business acquisitions, net of cash acquired (5,159)
---------- ----------
Net cash (used in) investing activities (4,084) (6,577)
---------- ----------
Cash flows from financing activities:
Net bank credit facility and other borrowings (31,835) 18,582
Issuance of common stock 1,671 408
Preferred stock dividend (225) (225)
---------- ----------
Net cash provided by (used in) financing activities (30,389) 18,765
---------- ----------
Net decrease in cash (69) (11)
Cash at beginning of period 4,320 4,249
---------- ----------
Cash at end of period $ 4,251 $ 4,238
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1997
(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 1996
Annual Report on Form 10-K for CompuCom Systems, Inc. and subsidiaries (the
Company). 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) 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.
(3) New Accounting Pronouncement
----------------------------
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
(Statement 128). Statement 128 supersedes APB Opinion No. 15, Earnings Per
Share and specifies the computation, presentation, and disclosure
requirements for earnings per share (EPS) for entities with publicly held
common stock or potential common stock. Statement 128 replaces the
presentation of primary EPS and fully diluted EPS with a presentation of
basic EPS and diluted EPS. Statement 128 is effective for financial
statements for both interim and annual periods ending after December 15,
1997. Adoption of Statement 128 during the first quarter of 1997 would have
resulted in basic EPS of $.10 per share compared to $.13 per share for the
same period in 1996, and diluted EPS of $.10 per share during the first
quarter of 1997 compared to $.12 per share for the same period in 1996.
6
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1997
Results of Operations
- ---------------------
The following table shows the Company's total revenue, gross margin and gross
margin percentage by revenue source. Operating expenses, interest, income taxes
and net earnings are shown as a percentage of total net revenue, for the three
months ended March 31, 1997 and 1996.
<TABLE>
<CAPTION>
March 31,
1997 1996
----------------------------------
($ in thousands)
<S> <C> <C>
Revenue:
Product $ 375,605 $ 377,983
Service 53,728 32,937
Other 2,556 2,414
----------------------------------
Total revenue $ 431,889 $ 413,334
==================================
Gross margin:
Product $ 38,932 $ 38,169
Service 19,362 12,237
Other 1,184 845
----------------------------------
Total gross margin $ 59,478 $ 51,251
==================================
Gross margin percentage:
Product 10.4% 10.1%
Service 36.0% 37.2%
Other 46.3% 35.0%
----------------------------------
Total gross margin percentage 13.8% 12.4%
----------------------------------
Operating expenses:
Selling 4.7% 4.3%
Service 2.5% 2.0%
General and administrative 3.3% 2.7%
Depreciation and amortization 0.6% 0.4%
----------------------------------
Total operating expenses 11.1% 9.4%
----------------------------------
Operating earnings 2.7% 3.0%
Interest 0.8% 0.7%
----------------------------------
Earnings before income taxes 1.9% 2.3%
Income taxes 0.8% 0.9%
----------------------------------
Net earnings 1.1% 1.4%
==================================
</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 distributed
desktop computer products to corporate customers, declined slightly to $375.6
million for the first quarter of 1997, compared to $378.0 million for the same
period in 1996. The Company believes the slight decline in product revenue is
due to an overall industry-wide demand softness caused by smaller than
anticipated manufacturers' price reductions, the delay in corporate customers
upgrading to Pentium Pro technology, and increased market share gain by direct
marketers. The Company anticipates demand softness to continue into the second
quarter of 1997.
Product gross margin as a percentage of product net revenues for the first
quarter of 1997 was 10.4%, up from 10.1% compared to the same period in 1996.
This increase is primarily due to the slowdown in product sales to some of the
Company's larger customers, which typically have lower product margins. Future
product margins will be influenced by manufacturers' pricing strategies together
with competitive pressures from other resellers in the industry and the level
of sales to some of the Company's larger customers. The Company participates in
certain manufacturer-sponsored programs designed to increase sales of specific
products. These programs, excluding volume incentive programs and specific
product rebates offered by certain manufacturers, are not material when compared
to the Company's overall financial results. Due to the short order fulfillment
cycle, the Company's backlog is not considered to be a meaningful indicator of
future business prospects.
Service revenue for the first quarter of 1997 increased 63% to $53.7
million compared to $32.9 million for the same period in 1996. Service revenue
is primarily derived from systems integration services, including field
engineering, product configuration, and LAN/WAN projects. LAN/WAN projects
include consulting, network management, and help desk services. Service revenue
reflects revenue generated by the actual performance of specific services and
does not include product sales associated with service projects. Historically,
increases in service revenue have been significantly impacted by similar
increases in product sales. However, the Company's continued focus on growing
service revenues has enabled significant increases to continue despite the
slight decline in product sales. Service gross margin as a percentage of
service net revenue was 36.0% for the first quarter of 1997 as compared to 37.2%
for the same period in 1996. The slight decrease was primarily caused by a
change in the mix of services provided during the periods.
Operating expenses increased $9.4 million for the first quarter of 1997 as
compared to the same period in 1996. As a percentage of net revenue, operating
expenses for the first quarter of 1997 increased to 11.1% compared to 9.4% for
the same period in 1996. This increase was principally the result of the
Company's continued investment in its service business and information system
enhancements. However, the Company's focus on controlling expenses resulted in
a $4.4 million reduction in operating expenses in the first quarter of 1997 as
compared to the fourth quarter of 1996.
Selling expense, as a percentage of net revenues, increased for the first
quarter of 1997 when compared to the same period in 1996, primarily as a result
of the growth in service revenue, as services typically carry a higher
commission rate than product sales. Service expense, which increased both as a
percentage of net revenues and in absolute dollars, primarily reflects costs
related to the enhanced infrastructure the Company began developing in 1996 and
the continued investment in the development of certain aspects of the service
business which has enabled the Company to increase its service offerings.
(Continued)
8
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
General and administrative expense, as a percentage of net revenue,
increased to 3.3% during the first quarter of 1997 as compared to 2.7% for the
same period in 1996. This increase was primarily due to the continued
investment in information system resources required to broaden the Company's
electronic commerce capabilities. 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.
Depreciation and amortization expense increased in absolute dollars and as
a percentage of net revenue for the first quarter of 1997 as compared to the
same period in 1996. The dollar increase reflects amortization expense
associated with facility improvements and warehouse equipment for the Company's
new eastern distribution facility, enhancements to the Company's information
systems, and furniture and fixtures required to support business activity. The
Company expects to substantially complete the refurbishment of its new corporate
headquarters and operations campus during the second half of 1997 and will
commence depreciation of the facility at that time.
Interest expense increased in both absolute dollars and as a percentage of
net revenue for the first quarter of 1997 as compared to the same period in
1996, primarily due to increased borrowings, which was partially offset by a
lower effective interest rate. The Company's effective interest rate during the
first quarter of 1997 was 6.5%, as compared to 7.5% in the first quarter of
1996.
As a result of the factors discussed above, net earnings for the first
quarter of 1997 decreased 15% to $4.9 million as compared to the same period in
1996. Future improved profitability will depend on the Company's ability to
retain and hire quality service personnel while effectively managing the
utilization of such personnel. It will also depend on increased focus on
providing technical service and support to customers, product demand,
competition, manufacturer product availability and pricing changes, effective
utilization of vendor programs as well as the Company's control of operating
expenses.
Liquidity and Capital Resources
- -------------------------------
The Company has financing arrangements which total $325 million. These
consist of a $200 million working capital facility and a $25 million real estate
loan (collectively, the "Credit Facility"), as well as a $100 million receivable
securitization. The $200 million working capital facility is priced at LIBOR
plus 1% and matures in September 1999. The $25 million real estate loan was
used in 1996 to finance the purchase of real property that will be utilized as
the Company's corporate headquarters and operations campus. This facility is
priced at LIBOR plus 1.25% and is payable in equal installments of $12.5 million
in September of 1998 and 1999. The Company is currently evaluating other
permanent financing options for the $25 million real estate loan. All pricing on
the Credit Facility is subject to adjustment based on certain performance
criteria. Total borrowings are based on certain limits, as defined, and secured
by substantially all the assets of the Company. The Credit Facility subjects the
Company to certain restrictions and covenants related to, among others, tangible
net worth, debt to tangible net worth and net earnings, and limits the amount
available for capital expenditures and dividends.
(Continued)
9
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
The $100 million receivable securitization is an agreement whereby a
portion of trade receivables are pledged to a third party as collateral for up
to $100 million, and matures in September 1999, subject to certain conditions.
The interest rate applicable to the receivable securitization is based upon the
bank's commercial paper rate plus 55 basis points.
Working capital at March 31, 1997 was $314 million compared to $342
million at December 31, 1996. The decrease was due to a $41 million reduction
in inventory and a reduction in accounts receivable from December 31, 1996
offset by a smaller reduction in accounts payable. These changes resulted in an
increase in the working capital ratio from 2.2 to 2.6.
The Company's capital asset requirements are generally funded through
the Credit Facility, receivables securitization, internally generated funds or
leasing sources. The business is not capital asset intensive, and capital
expenditures in any year normally would not be significant in relation to the
overall financial position of the Company. The Company has begun to refurbish
and update its new headquarters and operations campus and currently anticipates
the consolidation of its existing Dallas headquarters and operations from two
leased facilities to the new site by the third quarter of 1997. After that
consolidation is complete, the Company expects to sell the headquarters facility
it currently owns and occupies. Capital expenditures were approximately $4.0
million during the first quarter of 1997. These expenditures were primarily
related to getting the Company's new headquarters and operations campus ready
for full occupancy. The Company expects capital expenditures to return to more
normal levels after the ongoing construction on its new headquarters and
operations campus has been significantly completed.
This document contains "forward-looking statements" regarding revenues,
margins, earnings, growth rates and certain business trends that are subject to
risks and uncertainties that could cause actual results to differ materially
from the results described herein. Recipients of this document are cautioned to
consider these risks and uncertainties and to not place undue reliance on these
forward-looking statements.
10
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
--------
Exhibit
No. Description
------- -----------
10.1 Amendment No. 3 to Transfer and Administration Agreement, dated
as of February 1, 1997, among CSI Funding, Inc., CompuCom
Systems, Inc., Enterprise Funding Corporation and NationsBank,
N.A. (exhibits omitted)
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 March 31, 1997.
11
<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: May 14, 1997 /s/ Edward Anderson
-------------------------------------
Edward Anderson,
President and Chief Executive Officer
DATE: May 14, 1997 /s/ M. Lazane Smith
-------------------------------------
M. Lazane Smith,
Senior Vice President, Finance and
Chief Financial Officer
12
<PAGE>
EXHIBIT 10.1
AMENDMENT NO. 3 TO TRANSFER AND ADMINISTRATION AGREEMENT
AMENDMENT NO. 3 (this "Amendment"), dated as of February 1, 1997, TO
---------
TRANSFER AND ADMINISTRATION AGREEMENT dated as of April 1, 1996, as amended as
of September 25, 1996 and as of December 5, 1996, by and among CSI FUNDING INC.,
a Delaware corporation, as transferor (hereinafter, together with its successors
and assigns in such capacity, called the "Transferor"), COMPUCOM SYSTEMS, INC.,
----------
a Delaware corporation, as collection agent (hereinafter, together with its
successors and assigns in such capacity, called the "Collection Agent"),
----------------
ENTERPRISE FUNDING CORPORATION, a Delaware corporation (hereinafter, together
with its successors and assigns, called the "Company") and NATIONSBANK, N.A., a
national banking association, as agent for the benefit of the Company and the
Bank Investors (hereinafter, together with its successors and assigns in such
capacity, called the "Agent").
-----
W I T N E S S E T H:
-------------------
WHEREAS, the Transferor, the Collection Agent, the Company and the Agent
have entered into a Transfer and Administration Agreement, dated as of April
1, 1996 (such agreement, as amended to the date hereof, the "Agreement"); and
---------
WHEREAS, the parties hereto wish to amend the Agreement as hereinafter
provided.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1. Defined Terms. Unless otherwise defined herein, the terms used
-------------
herein shall have the meanings assigned to such terms in, or incorporated by
reference into, the Agreement.
SECTION 2. Amendments to Agreement. The definition of "Delinquency
-----------------------
Ratio" set forth in Section 1.1 of the Agreement is hereby amended, effective on
the Effective Date, to read as follows (solely for convenience, language added
to such definition is italicized):
""Delinquency Ratio" means, with respect to any date of determination,
-----------------
the ratio (expressed as a percentage) computed by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding balance of all Receivables as of such date less
Defaulted Receivables as of such date; provided, however, that at any time prior
-------- -------
to March 31, 1997 Receivables with respect to which "AT&T Corporation" is the
Obligor shall be excluded from the calculation of clauses (i) and (ii) above."
SECTION 3. Effectiveness. This Amendment shall become effective on the
-------------
first date on which the parties hereto shall have executed and delivered one or
more counterparts to this Amendment and each shall have received one or more
counterparts of this amendment executed by the others.
SECTION 4. Execution in Counterparts. This Amendment may be executed in
-------------------------
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Amendment.
<PAGE>
SECTION 5. Consents; Binding Effect. The execution and delivery by the
------------------------
Seller and the Purchaser of this Amendment shall constitute the written consent
of each of them to this Amendment. This Amendment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.
SECTION 6. Governing Law. This Amendment shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
SECTION 7. Severability of Provisions. Any provision of this Amendment
--------------------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8. Captions. The captions in this Amendment are for convenience of
--------
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 9. Agreement to Remain in Full Force and Effect. Except as amended
--------------------------------------------
hereby, the Agreement shall remain in full force and effect and is hereby
ratified, adopted and confirmed in all respects. This Amendment shall be deemed
to be an amendment to the Agreement. All references in the Agreement to "this
Agreement", "hereunder", "hereof", "herein", or words of like import, and all
references to the Agreement in any other agreement or document shall hereafter
be deemed to refer to the Agreement as amended hereby.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
Transfer and Administration Agreement to be executed as of the date and year
first above written.
ENTERPRISE FUNDING CORPORATION,
as Company
By: /s/ Stewart L. Cutler
Name: Stewart L. Cutler
Title: Vice President
CSI FUNDING INC., as Transferor
By: /s/ Patrick D. Lane
Name: Patrick D. Lane
Title: Vice President
COMPUCOM SYSTEMS, INC.,
as Collection Agent
By: /s/ Daniel L. Celoni
Name: Daniel L. Celoni
Title: Treasurer
NATIONSBANK, N.A., as Agent
and as Bank Investor
Commitment: By: /s/ Michele M. Heath
$100,000,000 Name: Michele M. Heath
Title: Vice President
<PAGE>
COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES
Exhibit 11 - Computation of Per Share Earnings
(In thousands, except per share amounts)
Three months ended
March 31,
-------------------
1997 1996
-------------------
PRIMARY EARNINGS PER COMMON SHARE
- ---------------------------------
Net earnings $ 4,872 $ 5,762
Preferred stock dividend (225) (225)
-------- --------
$ 4,647 $ 5,537
======== ========
Average common shares outstanding 45,326 44,273
Average common share equivalents 1,819 2,648
-------- --------
Average number of common shares and
common share equivalents outstanding 47,145 46,921
======== ========
Primary earnings per common share $ .10 $ .12
======== ========
FULLY DILUTED EARNINGS PER COMMON SHARE
- ---------------------------------------
Primary net earnings $ 4,872 $ 5,762
Interest expense, net of income tax expense 23 23
-------- --------
$ 4,895 $ 5,785
======== ========
Average number of common shares outstanding 45,326 44,273
Average common share equivalents outstanding 1,819 2,816
Additional shares issuable 2,603 2,603
-------- --------
Average number of common shares
assuming full dilution 49,748 49,692
======== ========
Fully diluted earnings per common share $ .10 $ .12
======== ========
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 AND THE CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,251
<SECURITIES> 0
<RECEIVABLES> 312,601
<ALLOWANCES> 2,425
<INVENTORY> 192,298
<CURRENT-ASSETS> 510,242
<PP&E> 75,163
<DEPRECIATION> 18,648
<TOTAL-ASSETS> 587,076
<CURRENT-LIABILITIES> 196,553
<BONDS> 207,615
0
15,000
<COMMON> 455
<OTHER-SE> 161,961
<TOTAL-LIABILITY-AND-EQUITY> 587,076
<SALES> 375,605
<TOTAL-REVENUES> 431,889
<CGS> 336,673
<TOTAL-COSTS> 372,411
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,245
<INCOME-PRETAX> 8,120
<INCOME-TAX> 3,248
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,872
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
