<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
Pioneer-Standard Reports Record Sales, Earnings and Earnings Per Share for
Fiscal 2001 Second Quarter
CLEVELAND, Oct 26, 2000 /PRNewswire / -- Pioneer-Standard Electronics, Inc.
(Nasdaq: PIOS) announced today that it posted record sales and earnings for the
second quarter of fiscal 2001.
Excluding extraordinary and one-time items, net income of $11.7 million for the
second quarter of fiscal 2001 increased 27 percent compared with net income of
$9.2 million last year. The extraordinary charge net-of-tax of $470,000, or $.01
per share, resulted from the write-off of deferred financing fees related to the
early extinguishment of bank debt recorded in the fiscal 2001 second quarter.
The one-time after-tax gain of $1.1 million, or $.03 per share, resulted from a
sale of assets in the second quarter of fiscal 2000.
Reported net income before extraordinary charge for the quarter grew to $11.7
million or $.36 per share compared with last year's net income of $10.3 million,
or $.32 per share.
Sales for the fiscal 2001 second quarter were $715 million, a 13 percent
increase over sales of $631 million in the previous year. The Industrial
Electronics Division, which continues to experience increasing demand, tight
supply and improved average selling prices for electronic components, accounted
for $389 million in sales for the quarter, a 15 percent increase over the same
quarter last year. The Computer Systems Division posted sales of $326 million
resulting from higher demand for server, storage and software products. This
performance represents an increase of 11 percent for the division compared with
the same period in fiscal 2000.
"Our commitment to technology distribution continues to serve us very well,"
said James L. Bayman, Pioneer-Standard chairman and chief executive officer.
"The growth in the Internet, communications and computer markets continues to
drive demand for technology products to record levels. We are pleased to report
that the semiconductor market, served by our Industrial Electronics Division, in
particular remains very robust. Demand for mid-range computer systems, storage
and software sold by the Computer Systems Division remains strong. However,
several mix-related issues and this quarter's limited availability of certain
mid-range computer systems have pressured the Computer Systems Division's
operating profit margins."
Six Month Results
For the six months ended September 30, 2000, revenues were $1.4 billion, a 15
percent increase over revenues of $1.2 billion in the first six months of fiscal
2000. Diluted earnings per share before the extraordinary charge increased 17
percent to $0.68 compared with $0.58 reported in the prior year.
Business Outlook
In connection with the new fair disclosure regulations issued by the Securities
and Exchange Commission, which took effect October 23, 2000, Pioneer-Standard
will modify its procedures for publishing and updating its "Business Outlook"
contained in its quarterly earnings release. The Company will offer quarterly
financial estimates and an analysis of market conditions on a regular basis
through its earnings releases and conference calls. Subsequent to the
publication and broadcast of this information, Pioneer- Standard will keep the
Business Outlook publicly available on its website ( www.pioneerstandard.com ).
Prior to the start of a "Quiet Period" as defined below, the public may continue
to rely on the Business Outlook available on the website as being
Pioneer-Standard's current expectations unless the Company publishes a press
release to the contrary.
Approaching the end of each fiscal quarter, Pioneer-Standard will declare a
Quiet Period when it no
<PAGE> 2
longer publishes or updates the Business Outlook. Pioneer-Standard
representatives will not comment concerning the Business Outlook during this
time. The Quiet Period will extend until the next public release of quarterly
earnings. For Pioneer-Standard's fiscal third quarter, the Quiet Period will
begin December 16, 2000 and extend through the date of next quarter's earnings
release, currently expected to be January 25, 2001.
For the third quarter of fiscal 2001, the Company expects revenues to increase
between 14 and 18 percent from last year's third quarter level of $668 million.
Net income is expected to be in the range of $.38 to $.41 per share for the
third quarter, compared with fiscal 2000 third quarter results of $.34 per
share.
Looking ahead to the last half of fiscal 2001, Bayman said, "We are on course
for another record year, with both of our divisions making significant
contributions to our financial success. Based on the market conditions we are
seeing today, we expect to finish the year with diluted earnings per share in
the range of $1.45 to $1.49 per share, before the extraordinary charge.
"We are continuing to benefit from the dynamic growth in the communications and
computer markets. Companies and individuals are taking advantage of the
exploding technologies now available in the areas of cellular technology,
network applications and internet communications. In addition, internet service
providers continue to make large investments to improve and enlarge their
infrastructures. These economic trends benefit both of Pioneer Standard's
operating divisions."
"In our Industrial Electronics Division," said Arthur Rhein, Pioneer Standard's
president and chief operating officer, "lead times and average selling prices
remain favorable and will enable us to continue to improve our profitability.
Current indications are that the robust demand for our products will continue.
"At the same time, sales continue to grow in our Computer Systems Division.
Demand for computer servers, storage and software remains strong to support
growth in the Internet and communications markets."
Forward-Looking Language
Portions of this earnings release, particularly the statements made by
management and those included in the Business Outlook section, are forward-
looking statements that involve a number of risks and uncertainties. In addition
to the factors noted above, other factors could cause the Company's performance
to differ materially from that contemplated by such statements for a variety of
reasons, and include, but are not limited to: competition, dependence on the
computer and semiconductor markets, technology changes, dependence on key
suppliers, the effects of industry consolidation and other risks detailed in the
Company's filings with the Securities and Exchange Commission.
Conference Call on the Web
A live Internet broadcast of the Company's conference call discussing quarterly
results can be accessed via the investor relations page on Pioneer Standard's
web site ( www.pioneerstandard.com ) at 10 a.m. Eastern Time on Thursday,
October 26, 2000. A replay of the call will be available shortly after the end
of the conference call through December 31, 2000.
About Pioneer-Standard Electronics, Inc.
Pioneer-Standard Electronics, Inc. is one of the world's largest distributors of
electronic components and computer systems, with annual revenues of $2.6 billion
for the fiscal year ended March 31, 2000. A Fortune 1000 company headquartered
in Cleveland, Ohio, Pioneer-Standard serves international customers in Europe
and Asia through its strategic partners: Taiwan-based World Peace Industrial Co.
<PAGE> 3
Ltd.; U.K.-based Eurodis Electron PLC; and Germany-based Magirus AG. Additional
information about Pioneer-Standard can be found at www.pioneerstandard.com.
PIONEER-STANDARD ELECTRONICS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the periods Three Months Six Months
ended September 30, 2000 1999 2000 1999
Net sales $714,846 $631,322 $1,389,931 $1,207,295
Cost of sales 605,691 535,104 1,177,694 1,021,803
Gross profit on sales 109,155 96,218 212,237 185,492
Operating expenses 79,628 71,998 155,945 139,140
Operating income 29,527 24,220 56,292 46,352
Other income (426) (146) (471) (334)
Gain on sale of assets - (1,845) - (1,845)
Interest expense 8,296 6,326 15,933 12,422
Income before taxes 21,657 19,885 40,830 36,109
Taxes 8,463 8,125 15,940 15,181
Preferred stock
distribution 1,479 1,462 2,954 2,921
Income before extraordinary
charge for early
extinguishment of debt,
net of tax $ 11,715 $ 10,298 $ 21,936 $ 18,007
Extraordinary charge for
early extinguishment
of debt, net of tax (470) - (470) -
Net income $ 11,245 $ 10,298 $ 21,466 $ 18,007
Per share data:
Net income - basic $.42 $.39 $.80 $.68
Income before extraordinary
charge - diluted $.36 $.32 $.68 $.58
Extraordinary charge (01) - (01) -
Net income - diluted $.35 $.32 $.67 $.58
Dividend $.03 $.03 $.06 $.06
Weighted average shares outstanding:
- Basic 26,777 26,361 26,752 26,358
- Diluted 36,738 36,208 36,712 35,989
<PAGE> 4
PIONEER-STANDARD ELECTRONICS, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30 March 31
2000 2000
<S> <C> <C>
Assets
Current assets:
Cash $ 40,081 $ 34,253
Accounts receivable-net 432,479 407,309
Merchandise inventory-net 436,849 348,120
Other 11,823 12,049
Total current assets 921,232 801,731
Net fixed assets 103,363 105,897
Intangibles-net and other 235,008 204,588
Total Assets $1,259,603 $1,112,216
Liabilities & Shareholders' Equity
Current liabilities:
Accounts payable $ 260,019 $ 240,229
Notes payable 16,789 26,086
Other 35,483 33,883
Total current liabilities 312,291 300,198
Long-term debt 420,130 320,205
Other long-term liabilities 31,622 23,998
Convertible trust preferred
securities 143,750 143,750
Shareholders' equity 351,810 324,065
Total $1,259,603 $1,112,216
</TABLE>
/CONTACT: Steven M. Billick, Senior Vice President & Chief Financial Officer of
Pioneer-Standard Electronics, Inc., 440-720-8680/
