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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): March 26, 1996
TECH DATA CORPORATION
(Exact name of registrant as specified in its charter)
Florida 0-14625 59-1578329
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
5350 Tech Data Drive, Clearwater, Florida 34620
(Address of principal executive offices)
Registrant's telephone number, including area code: (813) 539-7429
Not applicable
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Tech Data Corporation (the "Company") is hereby
filing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements of the Company made by, or on behalf of, the
Company.
Item 7. Financial Statements and Exhibits.
The following is filed as an Exhibit to this Report.
Exhibit Number 99
Description
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995.
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.
TECH DATA CORPORATION
Dated: March 26, 1996 By: /s/ Jeffery P. Howells
Jeffery P. Howells
Senior Vice President of Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99 Cautionary Statement For Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform
Act of 1995
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EXHIBIT 99
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Tech Data Corporation (the "Company") desires to take advantage of the
new "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995 (the "Act") and is filing this Form 8-K in order to do so. The Act
only became law in late December 1995 and, except for the Conference Report,
no official interpretations of the Act's provisions have been published. Many
of the following important factors discussed below have been discussed in the
Company's prior SEC filings and, had the Act become effective at a different
time, would have been discussed in an SEC Form 10-Q filing instead of this
Form 8-K.
The Company wishes to caution readers that the following important
factors, among others, in some cases have affected, and in the future could
affect, the Company's actual results and could cause the Company's actual
consolidated results for the first quarter of fiscal 1997, and beyond, to
differ materially from those expressed in any forward-looking statements made
by, or on behalf of, the Company.
Competition
The computer wholesale distribution industry is characterized by intense
competition, based primarily on product availability, price, speed of
delivery, credit availability, ability to tailor specific solutions to
customer needs, quality and depth of product lines and pre-sale and post-sale
training, service and support. The Company competes with a variety of
wholesale distributors, some of whom have greater financial resources than the
Company. In addition, the Company faces competition from direct sales by
vendors who can offer resellers lower prices than the Company.
Product Supply; Technological Obsolescence
The computer wholesale distribution industry is dependent upon the
supply of products available from its vendors. The industry is characterized
by periods of severe product shortages due to vendors' difficulty in
projecting demand for certain products distributed by the Company. When such
product shortages occur, the Company typically receives an allocation of
product from the vendor. There can be no assurance that vendors will be able
to maintain an adequate supply of products to fulfill all of the Company's
customer orders on a timely basis. Failure to obtain adequate product
supplies, if available to competitors, could have an adverse affect on the
Company's business. In addition, the products sold by the Company have short
product life cycles which could expose the Company to loss due to shifts in
technology in the event a vendor is unable to perform under the stock rotation
or price protection provisions of its contract with the Company.
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Vendor Relationships
The Company distributes hardware and software products from more than
600 vendors. While no single vendor has accounted for more than 10% of the
Company's sales in the past three fiscal years, the loss of certain key
vendors could have an adverse affect on the Company's business. In addition,
the Company relies on various rebate and cooperative marketing programs
offered by its vendors to defray expenses associated with distributing and
marketing the vendors' products. A reduction by the Company's vendors in
these programs could have an adverse affect on the Company's business.
Operating Margins
As a result of the intense price competition in the industry, the
Company has experienced declines in both gross profit and operating profit
margins. The Company has partially offset the effects of its low gross profit
margins by increasing sales and reducing operating expenses as a percentage of
sales; however, there can be no assurance that the Company will maintain or
increase sales or further reduce operating expenses as a percentage of sales
in the future. Future gross profit margins may be adversely affected by
changes in product mix, vendor pricing actions, and competitive and economic
pressures.
Industry Growth; Dependence on Computer and Telecommunications Systems
The Company has historically experienced rapid growth in sales as the
wholesale distribution industry has historically grown faster than the
personal computer products industry as vendors and customers have increasing
come to rely on wholesalers. The ability to adequately manage and control
this rapid growth is dependent, in part, upon the Company's ability to
maintain its internal computer and telecommunications systems infrastructure.
The failure of the Company's internal computer and telecommunications systems
to adequately handle such growth could have an adverse affect on the Company's
business.
Customer Credit Exposure
The Company sells its products to an active customer base of more than
50,000 value-added resellers, corporate resellers and retailers. The
Company's business could be adversely affected in the event of the
deterioration of the financial condition of its customers, resulting in the
customers' inability to repay the Company.
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General Economic Conditions
General economic conditions have an impact on the Company's business and
financial results. From time to time the markets in which the Company sells
its products experience weak economic conditions that may negatively affect
sales of the Company's products. Although the Company does not consider its
business to be highly seasonal, it has experienced seasonally higher sales and
earnings in the fourth quarter. To the extent that general economic conditions
affect the demand for products sold by the Company, such conditions could have
an adverse affect on the Company's business.
Exposure to Natural Disasters
The Company's headquarters facilities, certain of its distribution
centers as well as certain customers are located in areas prone to natural
disasters such as floods, hurricanes, tornadoes, earthquakes, and other
adverse weather conditions. The Company's operating results and financial
condition could be adversely affected should its ability to distribute
products be impacted by such an event.
Foreign Currency Exchange Risks
The Company operates its business in countries outside of the United
States (principally France, Canada and Latin American countries) which exposes
the Company to fluctuations in foreign currency exchange rates. The
Company enters into short-term forward exchange contracts to hedge this risk
according to its outlook on future exchange rates; nevertheless, fluctuations
in foreign currency exchange rates could have an adverse affect on the
Company's business.
Liquidity and Capital Resources
The Company has historically relied upon cash generated from operations,
bank credit lines, trade credit from its vendors and proceeds from public
offerings of its common stock to satisfy its capital needs and finance growth.
The inability to obtain such sources of capital could have an adverse affect
on the Company's business.
Labor Strikes
The Company's labor force is non-union. However, the majority of the
freight carriers used by the Company are unionized. A labor strike by one of
the Company's freight carriers, one of its vendors, a general strike by civil
service employees, or a governmental shutdown could have an adverse affect on
the Company's business.
Because of the foregoing factors, as well as other variables affecting
the Company's operating results, past financial performance should not be
considered a reliable indicator of future performance, and investors should
not use historical trends to anticipate results or trends in future periods.
In addition, the Company's participation in a highly dynamic industry often
results in significant volatility of the Company's common stock price.
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