<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
-----------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 1, 1998
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 33760
(Address of principal executive offices)
-------------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (727) 539-7429
NOT APPLICABLE
(Former name or former address, if changed since last report.)
================================================================================
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
The undersigned registrant, Tech Data Corporation ("Tech Data" or the
"Company"), hereby amends the financial statements, exhibits and other portions
of its Current Report on Form 8-K dated July 1, 1998 and filed with the
Securities and Exchange Commission (the "Commission") on July 15, 1998, as set
forth herein. This Current Report on Form 8-K was filed to report the
acquisition of approximately 83% of the voting stock of Computer 2000 AG
("Computer 2000" or "Computer 2000 Group"), Europe's leading technology products
distributor. The Company acquired approximately 80% of the outstanding voting
stock of Computer 2000 on July 1, 1998 from its parent company, Klockner & Co.
AG, based in Duisburg, Germany. Klockner & Co. AG is a subsidiary of
Munich-based conglomerate VIAG AG. The initial acquisition was completed through
an exchange of approximately 2.2 million shares of Tech Data Corporation common
stock and $300 million of 5% convertible subordinated notes, due 2003. In a
separate cash transaction on July 1, 1998, Tech Data also acquired an additional
stake of approximately 3% of Computer 2000's shares from an institutional
investor. The combined value of these transactions, including expenses, totaled
approximately $403 million.
Item 7 of the Company's Current Report on Form 8-K dated July 1, 1998,
is hereby amended to include the financial statements and exhibits indicated in
Item 7 below.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report......................................... F-1
Consolidated Balance Sheets of the Computer 2000 Group............... F-3
Consolidated Statements of Operations of the Computer 2000 Group..... F-4
Consolidated Statements of Cash Flows of the Computer 2000 Group..... F-5
Notes to Consolidated Financial Statements........................... F-6
</TABLE>
The financial statements described above are attached hereto as
Attachment 7(a) and are incorporated herein by this reference.
<PAGE> 3
b) Pro forma financial information.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Basis of Presentation..................................................... F-20
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
April 30, 1998.......................................................... F-21
Unaudited Pro Forma Condensed Consolidated Statement of Income for the
three months ended April 30, 1998....................................... F-22
Unaudited Pro Forma Condensed Consolidated Statement of Income for the
year ended January 31, 1998............................................. F-23
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.. F-24
</TABLE>
The financial statements described above are attached hereto as
Attachment 7(b) and are incorporated herein by this reference.
(c) Exhibits
2-A(1) Share Purchase Agreement between Klockner & Co. AG and Tech Data
Corporation dated April 14, 1998 and amended June 30, 1998.
2-B(2) Side Letter Agreement between Klockner & Co. AG and Tech Data
Corporation dated April 14, 1998.
3-G(2) Amendments to By-Laws of Tech Data Corporation as adopted on June 23,
1998.
3-H(2) Articles of Amendment to Amended and Restated Articles of
Incorporation of Tech Data Corporation as of June 24, 1998.
23-A(2) Consent of KPMG Hartkopf + Rentrop KG and AWT Allgemeine
Wirtschaftstreuhand GmbH
23-B(2) Consent of Arthur Andersen LLP
- -------------
(1) Incorporated by reference to Exhibit 2-A of the Company's Current
Report on Form 8-K dated as of July 1, 1998 and filed with the
Securities and Exchange Commission on July 15, 1998.
(2) Filed herewith.
<PAGE> 4
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: September 14, 1998 By: /s/ JEFFERY P. HOWELLS
-----------------------------
Jeffery P. Howells
Executive Vice President
and Chief Financial Officer
By: /s/ JOSEPH B. TREPANI
-----------------------------
Joseph B. Trepani
Senior Vice President
and Corporate Controller
<PAGE> 5
INDEX TO FINANCIAL STATEMENTS
Attachment 7(a) - Financial Statements of Computer 2000 Group
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report......................................... F-1
Consolidated Balance Sheets of the Computer 2000 Group............... F-3
Consolidated Statements of Operations of the Computer 2000 Group..... F-4
Consolidated Statements of Cash Flows of the Computer 2000 Group..... F-5
Notes to Consolidated Financial Statements........................... F-6
</TABLE>
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Computer 2000 Aktiengesellschaft
We have audited the accompanying consolidated balance sheets of Computer 2000
Aktiengesellschaft and subsidiaries ("Computer 2000") as of September 30, 1997
and 1996 and the related consolidated statements of operations and cash flows
for each of the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We
did not audit the consolidated financial statements of AmeriQuest Technologies,
Inc. as of and for the year ended September 30, 1996, which statements reflect
total assets and revenues constituting 10 percent and 12 percent, respectively,
of the related consolidated totals. Those financial statements were audited by
other auditors whose report has been furnished to us, and in our opinion,
insofar as it relates to the amounts, before adjustments necessary for
conformity with German generally accepted accounting principles and before
translation into Deutsche Mark, is based solely on the report of the other
auditors.
We conducted our audits in accordance with generally accepted auditing standards
in Germany and the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Computer 2000 as of September 30,
1997 and 1996 and the results of their operations and their cash flows for the
years then ended in conformity with generally accepted accounting principles in
Germany.
Generally accepted accounting principles in Germany vary in certain significant
respects from generally accepted accounting principles in the United States. The
application of generally accepted accounting principles in the United States
would have affected results of operations for the years ended September 30, 1997
and 1996 and stockholders' equity as of September 30, 1997 and 1996 to the
extent summarized in Note 20 to the consolidated financial statements.
/s/ KPMG Hartkopf + Rentrop KG /s/ AWT Allgemeine Wirtschaftstreuhand GmbH
Cologne and Munich,
December 12, 1997
F-1
<PAGE> 7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To AmeriQuest Technologies, Inc.:
We have audited the consolidated balance sheet of AmeriQuest Technologies, Inc.,
(a Delaware Corporation) and subsidiaries (AmeriQuest) as of September 30, 1996
and the related consolidated statements of operations, stockholders' deficit and
cash flows, not presented separately herein, for the fiscal year then ended.
These financial statements are the responsibility of AmeriQuest's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AmeriQuest Technologies Inc.
and subsidiaries as of September 30, 1996, and the results of their operations
and cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
Los Angeles, California
December 16, 1996
F-2
<PAGE> 8
Consolidated Balance Sheets of the Computer 2000 Group
(DM in thousands)
<TABLE>
<CAPTION>
NOTE SEPTEMBER 30, MARCH 31,
---- ------------------------ ----------
1997 1996 1998
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
NON-CURRENT ASSETS
Intangible assets (1) 3,768 4,845 4,101
Tangible assets (2) 44,892 44,180 43,712
Financial assets (3) 1,758 1,926 2,063
---------- ---------- ----------
50,418 50,951 49,876
---------- ---------- ----------
CURRENT ASSETS
Inventories (4) 659,965 537,308 907,543
Accounts receivable and other current assets (5) 913,047 789,000 1,226,181
Cash and cash equivalents 27,349 79,780 166,075
---------- ---------- ----------
1,600,361 1,406,088 2,299,799
PREPAID AND DEFERRED EXPENSES 15,341 17,846 20,890
---------- ---------- ----------
TOTAL ASSETS 1,666,120 1,474,885 2,370,565
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Share capital (6) 47,706 47,706 67,020
Capital reserves (7) 9,815 41,668 110,772
Revenue reserves (8) 47,119 47,098 (23,079)
Foreign currency translation differences 1,122 (8,083) 7,148
Unappropriated group income (loss) (70,198) 0 60,595
Minority interests 4,587 (8,435) 3,734
---------- ---------- ----------
40,151 119,954 226,190
---------- ---------- ----------
PROVISIONS AND ACCRUALS (9)
Provisions for pensions 1,985 1,146 2,332
Other accruals 211,710 114,480 226,399
---------- ---------- ----------
213,695 115,626 228,731
---------- ---------- ----------
LIABILITIES
Bank loans and overdrafts (10) 524,897 453,306 733,292
Trade accounts payable 609,202 589,007 858,539
Liabilities to related companies (11) 100,392 50,000 102,415
Other liabilities (12) 165,927 131,441 208,241
---------- ---------- ----------
1,400,418 1,223,754 1,902,487
---------- ---------- ----------
DEFERRED INCOME 11,856 15,551 13,157
---------- ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,666,120 1,474,885 2,370,565
========== ========== ==========
</TABLE>
F-3
<PAGE> 9
Consolidated Statements of Operations of the Computer 2000 Group
(DM in thousands)
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31,
------------------------ -------------------------
NOTE 1997 1996 1998 1997
---- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SALES (13) 8,229,729 6,640,373 5,219,476 4,450,280
Cost of sales 7,603,718 6,107,617 4,881,942 4,147,546
---------- ---------- ---------- ----------
GROSS PROFIT 626,011 532,756 337,534 302,734
Selling expenses 250,421 228,636 136,076 133,538
General administrative expenses 261,859 241,527 103,113 113,756
Other operating income (14) 54,162 29,294 7,702 0
Other operating expenses (15) 57,840 33,155 999 68,433
---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS 110,053 58,732 105,048 (12,993)
Interest expense, net (16) 48,698 48,657 27,866 24,994
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE EXTRAORDINARY
EXPENSE AND TAXES 61,355 10,075 77,182 (37,987)
Extraordinary expense (17) 103,999 0 0 0
Taxes on income (18) 19,448 20,064 16,762 11,636
Other taxes (19) 8,272 5,725 0 0
---------- ---------- ---------- ----------
NET INCOME (LOSS) (70,364) (15,714) 60,420 (49,623)
========== ========== ========== ==========
RECONCILIATION TO UNAPPROPRIATED GROUP LOSS
Pre-acquisition income (loss) of newly-acquired subsidiaries (498) 152 358 847
Minorities' share of income (184) (3,393) (578) (533)
Minorities' share of losses 848 15,215 395 412
---------- ---------- ---------- ----------
GROUP INCOME (LOSS) (COMPUTER 2000 AG'S SHARE) (70,198) (3,740) 60,595 (48,897)
Unappropriated group income brought forward 0 49,639 0 0
Increase of other revenue reserves (net) 0 (45,899) 0 0
---------- ---------- ---------- ----------
UNAPPROPRIATED GROUP INCOME (LOSS) (70,198) 0 60,595 (48,897)
========== ========== ========== ==========
</TABLE>
F-4
<PAGE> 10
Consolidated Statements of Cash Flows
of the Computer 2000 Group
(DM in thousands)
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31,
-------------------- --------------------
1997 1996 1998 1997
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net income (loss) for the year (70,364) (15,714) 60,420 (49,623)
Depreciation of non-current assets 23,929 22,759 11,313 11,269
Change in long-term provisions and accruals 839 (568) 347 412
Losses (profits) on disposals of non-current assets (1,005) 188 (742) 0
-------- -------- -------- --------
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES BEFORE
CHANGES IN WORKING CAPITAL (46,601) 6,665 71,338 (37,942)
(Increase) in inventories (122,657) (1,802) (247,578) (208,163)
Increase (decrease) in on-account payments received 5,507 604 (1,730) 1
Increase in receivables (121,542) (70,118) (318,684) (207,284)
Increase in liabilities 138,325 97,421 311,436 135,463
-------- -------- -------- --------
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (146,968) 32,770 (185,218) (317,925)
-------- -------- -------- --------
Goodwill (31,852) (5,554) (1,555) (8,303)
Purchases of tangible and intangible non-current assets (30,660) (25,677) (9,723) (9,919)
Purchases of financial assets (145) (2,052) (305) 0
Proceeds from disposals of non-current assets 8,414 3,713 0 0
-------- -------- -------- --------
CASH USED IN INVESTING ACTIVITIES (54,243) (29,570) (11,583) (18,222)
-------- -------- -------- --------
Proceeds from capital increase 0 59,235 121,826 0
Repayment of loan from Klockner & Co AG (50,000) 0 0 0
Loan from VIAG AG 100,346 0 0 872
Increase (decrease) in other borrowings 76,021 (25,715) 208,351 291,631
Dividends paid relating to the previous year 0 (5,975) 0 0
Other financing transactions 22,413 1,093 5,350 (6,339)
-------- -------- -------- --------
CASH PROVIDED BY FINANCING ACTIVITIES 148,780 28,638 335,527 286,164
-------- -------- -------- --------
CHANGE IN CASH AND CASH EQUIVALENTS (52,431) 31,838 138,726 (49,983)
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS AT THE END OF YEAR 27,349 79,780 166,075 29,797
======== ======== ======== ========
</TABLE>
F-5
<PAGE> 11
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
COMPUTER 2000 GROUP
A. GENERAL INFORMATION ON THE CONSOLIDATED FINANCIAL STATEMENTS OF COMPUTER
2000 AKTIENGESELLSCHAFT ("COMPUTER 2000 GROUP")
APPLICABLE REGULATIONS
The consolidated financial statements of Computer 2000 Aktiengesellschaft
("Computer 2000") for the years ended September 30, 1997 and 1996 have been
prepared in compliance with the regulations set out in the German
Commercial Code (HGB) and the German Stock Corporation Law. The income
statement has been prepared using the cost of sales classification method.
In order to improve the clarity of their presentation, certain items have been
summarized on the face of the balance sheet and income statement and are
detailed separately in the notes.
SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the
consolidated financial statements of Computer 2000 Group:
INTANGIBLE NON-CURRENT ASSETS are stated at acquisition cost and are amortized
straight-line over their estimated useful lives.
TANGIBLE NON-CURRENT ASSETS are valued at acquisition or production cost, less
accumulated depreciation from previous years together with depreciation
charged in fiscal 1996/97. Depreciable, movable non-current assets with
useful lives exceeding 3 years are depreciated using the declining-balance
method and maximum rates permitted by the tax authorities. The method is
changed to straight-line as soon as this results in a higher depreciation
charge. Unscheduled depreciation is charged on assets whose net realizable
values fall below their carrying values.
A full year's depreciation is charged for additions to movable assets acquired
in the first half of the fiscal year and a half-year's depreciation is
charged on assets acquired in the second half of the year. Minor-value
assets with a purchase cost of less than DM 800 are fully depreciated in
the year of their acquisition.
FINANCIAL ASSETS are valued at acquisition cost. Write-downs are made where it
is believed there is a permanent diminution in value.
In the consolidated financial statements inventories are stated at the lower of
cost or net realizable value, whereby cost is calculated using moving
average prices.
Adjustments are made, where appropriate, to cover risks arising from slow-moving
and obsolete inventories.
TRADE ACCOUNTS RECEIVABLE, RECEIVABLES FROM RELATED COMPANIES AND OTHER CURRENT
ASSETS are included at nominal value less provisions for estimated
discounts. Specific allowances for bad debts have been set up to cover
recognized credit risks from individual receivables and a general allowance
for bad debts has been made for overall credit risk.
PENSION PROVISIONS cover all pension commitments and are calculated actuarially,
using a discount rate of 6% and applying the entry-age-normal method as
permitted by the German tax authorities. Past service cost is recognized as
permitted by ss. 6a (4) of the German Income Tax Law.
Other accruals have been set up to cover all foreseeable risks and uncertain
liabilities at the end of the year.
F-6
<PAGE> 12
Deferred taxes are calculated on temporary differences between commercial and
taxable income, together with temporary differences arising from
consolidation adjustments. Deferred taxes arising in the individual
financial statements have been combined with those arising on
consolidation.
LIABILITIES are recorded at amounts payable.
ACCOUNTS RECEIVABLE IN FOREIGN CURRENCY, to the extent they are not hedged, are
translated into Deutsche Mark at transaction date rates or, if lower, at
rates in effect on the balance sheet date. Foreign currency liabilities are
translated at forward rates, provided they were hedged at the date the
liabilities arose. Otherwise, they are translated at the higher of the
transaction date rates or rates ruling at the end of the year.
Insurance claims and marketing contributions are offset against the related
expenses in the income statement.
COMPANIES INCLUDED IN CONSOLIDATION
All major domestic and foreign subsidiaries have been included in the
consolidation financial statements of the Computer 2000 Group. The
following companies have not been included in the consolidated financial
statements, as their influence on the assets and liabilities, financial and
earnings position of the Group is not considered material: Datech 2000
Ltd., Basingstoke, Great Britain; Computer 2000 S.L., Spain; AnyBus
Technology Corporation, Hollywood, Florida, USA, AmeriQuest / 2000 Inc.,
Horsham, Pennsylvania, USA all of which are dormant companies, and Computer
2000, Vilnius, Lithuania, an operating company.
Professional Systems AS, Oslo, Norway and Datec Norway AS, Oslo, Norway, both of
which were dormant, were merged with Computer 2000 Norway AS, Oslo, Norway.
The assets and liabilities of CMS Enhancements Inc., Florida, USA were sold
as part of an asset deal. The company's name was then changed to AAG Inc.
CMS Enhancement Systems Inc., Hollywood, Florida, USA was sold as part of
the restructuring. AmeriQuest Technologies Ltd., (Australia) Pty. Ltd.,
Roseville, New South Wales, Australia was liquidated. Computer 2000 Italia
S.r.L., Milan, Italy and Bits & Bytes S.r.L., Milan, Italy, both dormant
companies, were liquidated in 1996/97.
CONSOLIDATION METHODS
The consolidation methods used have remained unchanged from the previous year.
Audited interim financial statements were drawn up for subsidiaries with
fiscal years ending on dates other than September 30.
As in previous years, subsidiaries' equity is consolidated using the purchase
method, whereby the investment in the subsidiary is offset against that
part of equity attributable to the parent company. Any resulting difference
is determined at the time of acquisition.
Differences arising on initial consolidation are offset directly against
reserves in the consolidated balance sheet, to the extent such differences
represent goodwill as defined in ss. 309 of the German Commercial Code.
Minority shareholders' interests in equity and income for the year are
calculated based on their shareholding, voting rights or economic share and
are shown separately as part of equity in the consolidated balance sheet.
Unless they are of minor importance, intercompany profits arising from
deliveries of goods and services within the Group are eliminated.
F-7
<PAGE> 13
Intercompany sales and other operating income are eliminated against
corresponding expense items.
Intercompany receivables and payables are eliminated. Any differences arising
from this elimination process, compared with differences at the beginning
of the year, are credited or charged to the income statement.
Any contingent liabilities to consolidated companies are also eliminated.
The tax effects of those consolidation adjustments affecting income are
calculated and included with deferred tax balances arising in the
individual financial statements of the companies included in consolidation.
Uniform accounting and classification policies have been applied to the
financial statements of all consolidated domestic and foreign subsidiaries.
Appropriate adjustments have been made in the event of differences between
local and German accounting policies.
FOREIGN CURRENCY TRANSLATION
In the consolidated financial statements, assets and liabilities of all foreign
subsidiaries are translated into Deutsche Marks at closing exchange rates
at the balance sheet date. Fair value adjustments to assets and liabilities
made at the time of initial consolidation are translated using exchange
rates in effect at that time. Differences arising from translating balance
sheet items at varying exchange rates are charged or credited directly to a
separate item of equity.
Items making up the income statement are translated at average exchange rates
for the year. The resulting exchange rate differences are recognized in the
income statement.
UNAUDITED INTERIM FINANCIAL DATA
The interim financial data at March 31, 1998 and for the six months ended March
31, 1998 and 1997 are unaudited; however, in the opinion of management,
such interim data includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results of the
interim periods.
F-8
<PAGE> 14
B. NOTES TO THE BALANCE SHEETS
Statement of movements on non-current assets
(DM in thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
ACQUISITION AND PRODUCTION COST
- --------------------------------------------------------------------------------------------------------------------
Balance at Exchange rate Reclassi- Balance at
Oct. 1, 1996 adjustments Additions Disposal fications Sept. 30, 1997
------------ ------------- --------- -------- --------- --------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTANGIBLE ASSETS
Franchises, patents,
trademarks and similar
rights and assets, and
licenses to such rights
and assets 14,883 733 2,092 1,836 (11) 15,861
On-account payments 0 0 28 0 0 28
-------- -------- -------- -------- -------- --------
14,883 733 2,120 1,836 (11) 15,889
-------- -------- -------- -------- -------- --------
TANGIBLE ASSETS
Land and buildings 1,210 188 19 0 0 1,417
Machinery and equipment 117,597 8,994 22,540 20,302 1,644 130,473
On-account payments 1,241 37 3,028 0 (1,633) 2,673
-------- -------- -------- -------- -------- --------
120,048 9,219 25,587 20,302 11 134,563
-------- -------- -------- -------- -------- --------
FINANCIAL ASSETS
Shares in related companies 0 0 9 0 0 9
Investments 489 0 135 0 0 624
Securities included in non-
current assets 1,437 1 0 313 0 1,125
-------- -------- -------- -------- -------- --------
1,926 1 144 313 0 1,758
-------- -------- -------- -------- -------- --------
136,857 9,953 27,851 22,451 0 152,210
======== ======== ======== ======== ======== ========
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------
DEPRECIATION
- ---------------------------------------------------------------------------------------
Accumulated Book value Book value Depreciation
depreciation Sept. 30, 1997 Sept. 30, 1996 for the year
------------ -------------- -------------- ------------
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTANGIBLE ASSETS
Franchises, patents,
trademarks and similar
rights and assets, and
licenses to such rights
and assets 12,121 3,740 4,845 3,106
On-account payments 0 28 0 0
-------- -------- -------- --------
12,121 3,768 4,845 3,106
-------- -------- -------- --------
TANGIBLE ASSETS
Land and buildings 136 1,281 1,143 55
Machinery and equipment 89,535 40,938 41,796 20,768
On-account payments 0 2,673 1,241 0
-------- -------- -------- --------
89,671 44,892 44,180 20,823
-------- -------- -------- --------
FINANCIAL ASSETS
Shares in related companies 0 9 0 0
Investments 0 624 489 0
Securities included in non-
current assets 0 1,125 1,437 0
-------- -------- -------- --------
0 1,758 1,926 0
-------- -------- -------- --------
101,792 50,418 50,951 23,929
======== ======== ======== ========
- ---------------------------------------------------------------------------------------
</TABLE>
F-9
<PAGE> 15
NON-CURRENT ASSETS
The "exchange rate adjustments" column in the statement of movements on
non-current assets for the Group represents differences between historical
exchange rates used for acquisition and production costs brought forward
and exchange rates in effect at the end of the year.
(1) INTANGIBLE ASSETS
These are primarily made up of rights to software programs.
(2) TANGIBLE ASSETS
A detailed statement of movements on the tangible non-current assets of Computer
2000 Group is set out on the preceding page.
(3) FINANCIAL ASSETS
A list of Computer 2000 AG's shareholdings as required by ss.285 no. 11 and
ss.313 (2) of the German Commercial Code has been filed with the trade register
at the Munich district court under number HR B 81532.
(4) INVENTORIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
1. Work-in-progress, contracts-in-progress 441 2,028
2. Finished goods and merchandise 642,800 508,914
3. Advance payments 16,724 26,366
------- -------
659,965 537,308
======= =======
</TABLE>
(5) ACCOUNTS RECEIVABLE AND OTHER CURRENT ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
1. Trade accounts receivable 777,680 681,923
2. Receivables from related companies 4,894 1,305
of which due after more than one year 0 0
3. Other assets 130,473 105,772
of which due after more than one year (5,502) (762)
of which not yet legally receivable (10,453) (4,793)
------- -------
913,047 789,000
======= =======
</TABLE>
Trade accounts receivable have been reduced by DM 194 million as a result of an
asset-backed securitization program. At the same time, other assets include DM
23 million retentions which serve as security in connection with the program.
F-10
<PAGE> 16
SHAREHOLDERS' EQUITY
(6) SHARE CAPITAL
Share capital amounted to DM 47,706,000 at the end of the fiscal year, divided
into 954,129 bearer shares with a nominal value of DM 50 each. Type I authorized
capital totaled DM 164,000 at September 30, 1997, is solely available for the
issue of employee shares and may not be issued in the form of a rights issue to
shareholders. The creation of DM 17,900,000 type II authorized share capital was
approved by the annual general meeting on April 30, 1997. The type III
authorized capital totaled DM 5,734,000 at the end of the year and is approved
for issue up to April 24, 2001.
Full use was made of the type I authorized capital with an entry in the trade
register on November 6, 1997 and, as a result, the share capital was increased
for the issue of employee shares. Following an entry in the trade register on
November 13, 1997 and a capital increase of DM 19,150,000 in December, 1997 the
share capital of Computer 2000 AG totaled DM 67,020,000. Following the capital
increase type II authorized capital amounts to DM 4,484,000 and full use was
made of the type III authorized capital.
The additional authorized capital approved by the shareholders for issue under
certain conditions remained unchanged at DM 11,250,000 at the end of the year.
In accordance with ss. 20 (4) of the German Stock Corporation Law, Klockner & Co
AG, Duisburg announced that it has a direct majority shareholding in Computer
2000 AG.
At the same time VIAG AG has also announced that it has an indirect majority
holding in Computer 2000 AG.
(7) CAPITAL RESERVES
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
Balance at beginning of the year 41,668 0
+ Additions arising from share premium 0 47,222
- - Goodwill on equity consolidation (31,853) (5,554)
- - Transfer to offset loss for the year 0 0
------- -------
9,815 41,668
======= =======
</TABLE>
(8) REVENUE RESERVES
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
Statutory reserve 218 218
Other revenue reserves at October 1 46,880 982
+ Goodwill on equity consolidation 21 0
+ Transfer from unappropriated income 0 49,638
- - Transfer to offset loss for the year 0 (3,740)
------- -------
46,901 46,880
------- -------
47,119 47,098
======= =======
</TABLE>
F-11
<PAGE> 17
OTHER INFORMATION CONCERNING SHAREHOLDERS' EQUITY
Debit balances on minority interests of DM 261,000 have been offset against
minority interest credit balances in the consolidated balance sheet. Profits of
DM 498,000 were included in the group loss for the year on equity consolidation.
(9) PROVISIONS AND ACCRUALS
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
-------- --------
(DM IN THOUSANDS)
<S> <C> <C>
Provisions for pensions and
similar obligations 1,985 1,146
Tax accruals 14,676 14,552
Other provisions and accruals of which: 197,034 99,928
- - personnel-related accruals (36,498) (25,239)
- - warranties (14,556) (7,228)
- - outstanding credit notes (10,148) (9,299)
- - outstanding invoices (18,639) (16,961)
- - other (117,194) (41,201)
-------- --------
213,695 115,626
======== ========
</TABLE>
The pension provision was set up solely to cover pension plans relating to
members of the executive board. The addition to pension provisions with respect
to past service cost was spread over three years in accordance with the option
permitted in ss. 6a (4) of the German Income Tax Law. At the end of the year,
unamortized past service cost amounted to DM 83,000. The calculation of the
pension provision was made using a discount rate of 6% and mortality tables
issued by Dr. Klaus Heubeck.
Group tax accruals include deferred tax liabilities of DM 893,000.
Other provisions and accruals consist mainly of costs, the reason for or amount
of which has not yet been determined, and relate to the restructuring of
AmeriQuest Technologies Inc., Horsham, Pennsylvania, USA, for consultancy,
repairs and year-end closing costs, etc.
(10) BANK LOANS AND OVERDRAFTS
DM 11,711,000 of Group bank loans and overdrafts are secured locally (assignment
of accounts receivable, chattel mortgages, etc.). DM 24,306,000 of Group bank
loans and overdrafts have a remaining term of 1-5 years and DM 739,000 have a
remaining term of more than 5 years.
(11) LIABILITIES TO RELATED COMPANIES
VIAG AG, the indirect majority shareholder, provided Computer 2000 AG with a DM
100 million loan. The loan and any accumulated interest are due for repayment
within one year. There are also liabilities on current account of DM 57,424,000
with a remaining term of less than one year.
F-12
<PAGE> 18
(12) OTHER LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
1. On-account payments received on orders 6,372 866
2. Bills of exchange payable 24,291 19,860
3. Other liabilities 135,264 110,715
of which for taxes (70,426) (52,034)
of which for social security (3,383) (5,012)
------- -------
165,927 131,441
======= =======
</TABLE>
DM 95,000 of other Group liabilities have a remaining term of 1-5 years. All
other liabilities which have not been mentioned separately have a remaining term
of less than 1 year.
F-13
<PAGE> 19
C. NOTES TO THE INCOME STATEMENT
(13) SALES BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN MILLIONS)
<S> <C> <C>
1) Central Europe 2,674.9 2,123.7
2) Northern Europe 3,175.1 2,471.4
3) Southern and Eastern Europe 1,636.6 1,204.7
4) Non-European 743.1 840.6
------- -------
8,229.7 6,640.4
======= =======
</TABLE>
(14) OTHER OPERATING INCOME
In the consolidated income statement this item mainly comprises foreign exchange
gains and income not related to the period in the amount of DM 6.7 million from
the release of provisions and accruals as well as from the sale of fixed assets.
(15) OTHER OPERATING EXPENSES
This item consists primarily of foreign exchange losses, translation losses
arising on the consolidation of foreign subsidiaries' income statements and
losses on disposals of non-current assets.
(16) INTEREST EXPENSE, NET (INCLUDING LONG TERM LOANS)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
Other interest and similar income 4,319 3,489
- - of which from related companies (1) 0
Interest and similar expense 53,017 52,146
- - of which to related companies (1,941) (2,256)
------- -------
Interest expense, net (48,698) (48,657)
======= =======
</TABLE>
(17) EXTRAORDINARY EXPENSE
Extraordinary expense is made up primarily of costs for restructuring AmeriQuest
Technologies Inc., Pennsylvania, USA and subsequent, related expenses.
(18) TAXES ON INCOME
Taxes on income include corporation tax for domestic companies and similar
income-related taxes charged in other countries. These are calculated in
accordance with local tax regulations for each company. The expense also
includes deferred taxes on temporary differences between the commercial and tax
balance sheet and on consolidation adjustments.
(19) OTHER TAXES
Other taxes include net worth tax, vehicle tax and consumption taxes.
F-14
<PAGE> 20
D. GERMAN GAAP TO US GAAP RECONCILIATION
(20) SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN GERMAN GAAP AND U.S. GAAP
The audited consolidated financial statements have been prepared and are
presented in accordance with German generally accepted accounting principles
which differ from U.S. GAAP.
The following is a summary of those significant adjustments to consolidated net
income and consolidated shareholders' equity for Computer 2000 Group and
subsidiaries which would be required if U.S. GAAP were applied instead of German
GAAP.
<TABLE>
<CAPTION>
Year ended Six months ended
September 30, March 31,
------------------ ------------------
1997 1996 1998 1997
------- ------- ------- -------
(DM in thousands) (DM in thousands)
(Unaudited)
<S> <C> <C> <C> <C>
Consolidated net income (loss) as reported in the
consolidated income statements under German GAAP (70,364) (15,714) 60,420 (49,623)
Pre-acquisition income (loss) of newly-acquired subsidiaries (498) 152 358 847
Plus loss applicable to minority shareholders 848 15,215 395 412
Less income (loss) applicable to minority shareholders (184) (3,393) (578) (533)
------- ------- ------- -------
Adjusted consolidated net income (loss) under German GAAP (70,198) (3,740) 60,595 (48,897)
------- ------- ------- -------
Adjustments to conform with U.S. GAAP
Goodwill
Amortization (A) (5,898) (9,713) (3,118) (2,805)
Impairment (A) (9,928) (79,441) 0 (1,310)
Other accruals (B) 53,000 0 0 53,000
Foreign currency translation (D) 4,294 1,593 (771) 3,878
Loss allocated to Computer 2000 Group (G) 0 (13,689) 0 0
Loss allocated to minority interests (C) 3,445 0 0 0
Other (E) 251 729 35 126
Deferred taxes (F) 47,920 65,372 (9,394) 16,507
Tax effect of U.S. GAAP adjustments (F) (154) (445) 2,546 (77)
------- ------- ------- -------
Consolidated net income (loss) in accordance with U.S. GAAP
22,732 (39,334) 49,893 20,422
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Year ended Six months ended
September 30, March 31,
------------------ ------------------
1997 1996 1998 1997
------- ------- ------- -------
(DM in thousands) (DM in thousands)
(Unaudited)
<S> <C> <C> <C> <C>
Consolidated shareholders' equity as reported in the
consolidated balance sheets under German GAAP 40,151 119,954 226,190 58,205
Less minority interests (4,587) 8,435 (3,734) 14,148
------- ------- ------- -------
Adjusted consolidated shareholders' equity under
German GAAP 35,564 128,389 222,456 72,353
Adjustments to conform with U.S. GAAP
Goodwill (A) 85,995 86,097 84,431 93,363
Other accruals (B) 53,000 0 53,000 53,000
Minority interests (C) 3,445 (16,128) 3,445 (17,438)
Other (E) (609) (861) (574) (735)
Deferred taxes (F) 130,527 82,607 123,700 95,981
Tax effect of U.S. GAAP adjustments (F) 371 525 350 3,581
------- ------- ------- -------
Consolidated shareholders' equity in accordance with
U.S. GAAP 308,293 280,629 486,808 300,105
======= ======= ======= =======
</TABLE>
F-15
<PAGE> 21
NOTES TO GERMAN GAAP TO U.S. GAAP RECONCILIATIONS
(A) GOODWILL
In accordance with German GAAP, the difference between the purchase price
and fair value of net assets acquired as part of a business combination
(goodwill) may be charged directly to shareholders' equity. Under U.S. GAAP,
goodwill must be capitalized and amortized through the income statement over
its useful life not to exceed 40 years.
Under U.S. GAAP management must assess the recoverability of long-lived
assets, including goodwill, by determining whether the amortization of the
balance over the remaining life can be recovered through the undiscounted
future operating cash flows of the respective assets. As a result of an
impairment, the Company wrote off its investment in AmeriQuest Technologies,
Inc. during the year ended September 30, 1996. In addition, the goodwill
arising from the purchase of DM 5.0 million was written off in fiscal 1997.
(B) OTHER ACCRUALS
Under German GAAP, accruals are determined by reasonable and prudent
estimates reflecting the expected costs and expenses.
Under U.S. GAAP, an estimated loss from a loss contingency shall be charged
to income only if it is probable that an asset had been impaired or a
liability had been incurred at the date of the financial statements and the
amount of the loss can be reasonably estimated. If a loss is probable and
the reasonable estimate of the loss is a range and no amount within the
range appears to be a better estimate than any other amount, the minimum
amount in the range shall be accrued. General or unspecified business risks
do not meet the conditions for accrual and, therefore, no accrual shall be
made. Gain contingencies shall not be credited to income.
(C) LOSSES ALLOCATED TO MINORITY INTERESTS
Under German GAAP minority interests are classified as a separate component
of equity and can be allocated unlimited losses generated by the respective
investment. Under U.S. GAAP minority interests are not classified as equity
and losses allocated to minority interests are limited to the extent of
minority interests.
(D) FOREIGN CURRENCY TRANSLATION
Under German GAAP the Company translates assets and liabilities of foreign
subsidiaries at spot rate at balance sheet date and income statement items
at average rate. The consolidated net income (loss) for the year, however,
is translated at spot rate and the resulting exchange rate difference is
recognized in income.
Under U.S. GAAP, generally all assets and liabilities of foreign
subsidiaries are translated using the exchange rate at period end and income
statement items are translated at average exchange rates prevailing during
the period. Resulting translation adjustments are recorded as a separate
component of equity.
(E) OTHER
Under German GAAP the Company provides for pension obligations using the
entry age normal method as defined in the German tax code. U.S. GAAP require
that the projected unit credit method be used and is more prescriptive as to
the use of actuarial assumptions.
F-16
<PAGE> 22
(F) DEFERRED TAXES AND TAX EFFECT OF U.S. GAAP ADJUSTMENTS
Under German GAAP, deferred tax assets and liabilities are not generally
recognized for all temporary differences between the book carrying values
and tax bases of the assets and liabilities. Under U.S. GAAP, with some
exceptions, deferred tax assets and liabilities are recognized for all
temporary differences between the book carrying values and tax bases of the
assets and liabilities and the net operation loss carry forwards using
future statutory tax rates. The measurement of deferred assets is reduced,
if necessary, by the amount of any tax benefits that, based on available
evidence, are not expected to be realized.
(G) LOSS ALLOCATED TO COMPUTER 2000 GROUP
German GAAP allows the allocation of operating losses to minority interest
even when the allocated losses will exceed the minority equity so that in
total a negative minority equity will be stated.
Differing from the above mentioned German GAAP method, U.S. GAAP only
allows the allocating of operating losses to minority interest up to the
amount of the stated minority equity. Therefore the actual loss 1996 of
minority interest of the AmeriQuest Group was allocated to the Computer 2000
Group level.
ACCOUNTS RECEIVABLE
Under German GAAP trade receivables sold under an asset backed securitization
program are removed from the balance sheet. Under U.S. GAAP unless specific
requirements are met many such transactions are treated as a financing
transaction and as such the trade receivables continue to be reflected on the
balance sheet. As a result of such sales of receivables, assets and liabilities
as of September 30, 1997 and 1996, respectively, would have been DEM 193.6
million and DEM 90.0 million higher than under German GAAP.
EXTRAORDINARY ITEM
Certain income and expense items, including losses in regard to AmeriQuest
Technologies, Inc., can be classified as extraordinary income or expense for
German GAAP purposes which can not be classified as extraordinary under U.S.
GAAP.
F-17
<PAGE> 23
OTHER NOTES
COST OF MATERIALS
The cost of raw materials, consumables, supplies and purchased merchandise in
the Group was DM 7,582 million. The cost of services amounted to DM 610,000.
EMPLOYEES
An average of 3,346 (previous year: 3,181) persons were employed during 1996/97.
PERSONNEL COSTS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
----------------------------
1997 1996
------- -------
(DM IN THOUSANDS)
<S> <C> <C>
Wages and salaries 226,270 201,227
Social security, pension and welfare expense 43,745 37,769
of which for pensions (961) (1,486)
------- -------
270,015 238,996
======= =======
</TABLE>
REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD AND THE EXECUTIVE BOARD
The remuneration of members of the supervisory board during the year totaled DM
48,000 (1995/96: DM 48,000). The remuneration of members of the executive
board for 1996/97 amounted to DM 3,035,000 (1995/96: DM 2,804,000).
OTHER FINANCIAL COMMITMENTS
At the end of the year there were forward foreign currency contracts totaling
DM 106 million, made by the Group to hedge open US $ purchase commitments.
Contingent liabilities arising from leasing agreements are of a volume which is
normal for the business.
F-18
<PAGE> 24
Attachment 7(b) - Pro forma financial information.
INDEX TO PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Basis of Presentation................................................. F-20
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
April 30, 1998..................................................... F-21
Unaudited Pro Forma Condensed Consolidated Statement of Income for
the three months ended April 30, 1998.............................. F-22
Unaudited Pro Forma Condensed Consolidated Statement of Income for
the year ended January 31, 1998.................................... F-23
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements......................................................... F-24
</TABLE>
F-19
<PAGE> 25
TECH DATA CORPORATION
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The following Unaudited Condensed Consolidated Financial Statements
give effect to the acquisition by Tech Data Corporation ("Tech Data" or the
"Company") of approximately 83% of the voting stock of Computer 2000 AG
("Computer 2000") on July 1, 1998. The Unaudited Pro Forma Condensed
Consolidated Balance Sheet is based upon the individual consolidated balance
sheets of the Company as of April 30, 1998 and of Computer 2000 as of March 31,
1998. The Unaudited Pro Forma Condensed Consolidated Statements of Income are
based upon the individual consolidated statements of income of the Company for
the three months ended April 30, 1998 and the year ended January 31, 1998 and of
Computer 2000 for the three months ended March 31, 1998 and the year ended
September 30, 1997. The results of operations of Tech Data and Computer 2000
have been combined to give effect to the acquisition as if it had occurred at
the beginning of the periods presented.
The unaudited pro forma consolidated financial information is based
upon preliminary fair value allocations relative to the purchase of Computer
2000. The final allocation of the purchase price may vary as additional
information is obtained, and accordingly, the ultimate allocations may differ
from the allocations used in the unaudited pro forma consolidated financial
statements.
The following pro forma financial information has been prepared from
and should be read in conjunction with the historical financial statements and
related notes thereto of Computer 2000 appearing in the response to Item 7(a) of
this Current Report on Form 8-K/A and the historical financial statements and
related notes thereto of Tech Data Corporation for the year ended January 31,
1998 and the three months ended April 30, 1998, previously filed with the
Securities and Exchange Commission.
The unaudited pro forma consolidated financial information is not
necessarily indicative of the financial position or operating results that would
have occurred had the acquisition been consummated on the date or at the
beginning of the periods for which the acquisition is being given effect nor is
it necessarily indicative of future operating results or financial position.
F-20
<PAGE> 26
TECH DATA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF APRIL 30, 1998
(U.S. dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
Tech Data Computer Pro Forma Combined
Corporation 2000 Adjustments Pro Forma
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,249 $ 89,843 $ -- $ 91,092
Accounts receivable, net 914,837 690,520 1,605,357
Inventories 969,570 490,962 1,460,532
Prepaid and other assets 57,399 45,120 102,519
---------- ---------- ---------- ----------
Total current assets 1,943,055 1,316,445 -- 3,259,500
Property and equipment, net 110,792 23,647 134,439
Excess of cost over acquired net assets, net 57,088 45,675 198,562 (c)(e) 301,325
Other assets, net 22,994 70,571 (25,629)(e) 67,936
---------- ---------- ---------- ----------
$2,133,929 $1,456,338 $ 172,933 $3,763,200
========== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving credit loans $ 335,053 $ 567,738 $ 18,269 (d) $ 921,060
Accounts payable 949,580 409,943 1,359,523
Accrued expenses 101,877 215,149 317,026
---------- ---------- ---------- ----------
Total current liabilities 1,386,510 1,192,830 18,269 2,597,609
Long-term debt 8,627 -- 8,627
Convertible subordinated notes -- 300,000 (a) 300,000
---------- ---------- ---------- ----------
Total liabilities 1,395,137 1,192,830 318,269 2,906,236
---------- ---------- ---------- ----------
Minority interest 3,431 156 32,648 (b) 36,235
---------- ---------- ---------- ----------
Total shareholders' equity 735,361 263,352 (177,984)(a)(b)(e) 820,729
---------- ---------- ---------- ----------
$2,133,929 $1,456,338 $ 172,933 $3,763,200
========== ========== ========== ==========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
F-21
<PAGE> 27
TECH DATA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED APRIL 30, 1998
(U.S. dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Tech Data Computer Pro Forma Combined
Corporation 2000 Adjustments Pro Forma
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 2,184,366 $ 1,494,967 $ -- $ 3,679,333
----------- ----------- ----------- -----------
Cost and expenses:
Cost of products sold 2,044,599 1,397,745 -- 3,442,344
Selling, general and administrative expenses 94,801 67,634 626 (f)(g) 163,061
----------- ----------- ----------- -----------
2,139,400 1,465,379 626 3,605,405
----------- ----------- ----------- -----------
Operating profit 44,966 29,588 (626) 73,928
Interest expense 7,954 7,977 3,903 (h) 19,834
----------- ----------- ----------- -----------
Income before income taxes 37,012 21,611 (4,529) 54,094
Provision for income taxes 13,815 6,977 (1,444)(i) 19,348
----------- ----------- ----------- -----------
Income before minority interest 23,197 14,634 (3,085) 34,746
Minority interest 92 (58) 2,643 (j) 2,677
----------- ----------- ----------- -----------
Net income $ 23,105 $ 14,692 $ (5,728) $ 32,069
=========== =========== =========== ===========
Net income per common share:
Basic $ .48 -- -- $ .64
=========== =========== =========== ===========
Diluted $ .46 -- -- $ .60
=========== =========== =========== ===========
Weighted average common shares outstanding:
Basic 48,285 -- 2,196 (1) 50,481
=========== =========== =========== ===========
Diluted 50,323 -- 7,529 (l) 57,852
=========== =========== =========== ===========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
F-22
<PAGE> 28
TECH DATA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED JANUARY 31, 1998
(U.S. dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Tech Data Computer Pro Forma Combined
Corporation 2000 Adjustments Pro Forma
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 7,056,619 $ 4,746,095 $ -- $ 11,802,714
------------ ------------ ------------ ------------
Cost and expenses:
Cost of products sold 6,590,873 4,420,426 11,011,299
Selling, general and administrative expenses 293,108 273,832 (3,197)(f)(g) 563,743
------------ ------------ ------------ ------------
6,883,981 4,694,258 (3,197) 11,575,042
------------ ------------ ------------ ------------
Operating profit 172,638 51,837 3,197 227,672
Interest expense 29,908 28,017 15,611 (h) 73,536
Impairment of Assets -- 29,411 (29,411)(k) --
------------ ------------ ------------ ------------
Income (loss) before income taxes 142,730 (5,591) 16,997 154,136
Provision for income taxes 52,816 (16,331) 22,721 (i)(k) 59,206
------------ ------------ ------------ ------------
Income (loss) before minority interest 89,914 10,740 (5,724) 94,930
Minority interest 429 (2,370) 3,935 (j) 1,994
------------ ------------ ------------ ------------
Net income $ 89,485 $ 13,110 $ (9,659) $ 92,936
============ ============ ============ ============
Net income per common share:
Basic $ 2.00 -- -- $ 1.98
============ ============ ============ ============
Diluted $ 1.92 -- -- $ 1.89
============ ============ ============ ============
Weighted average common shares outstanding:
Basic 44,715 -- 2,196 (1) 46,911
============ ============ ============ ============
Diluted 46,610 -- 7,529 (1) 54,139
============ ============ ============ ============
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
F-23
<PAGE> 29
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Note (1) - Pro Forma Balance Sheet Adjustments
On July 1, 1998 Tech Data Corporation ("Tech Data" or the "Company")
acquired approximately 83% of the outstanding voting stock of Computer 2000 AG
("Computer 2000"). The Company acquired approximately 80% of the outstanding
voting stock of Computer 2000 from its parent company, Klockner & Co. AG through
an exchange of approximately 2.2 million shares of Tech Data Corporation common
stock and $300 million of 5% convertible subordinated notes, due 2003. In a
separate cash transaction on July 1, 1998, Tech Data also acquired an additional
stake of approximately 3% of Computer 2000's shares from an institutional
investor. The combined value of these transactions, including expenses, totaled
approximately $403 million. The transactions have been accounted for under the
purchase method of accounting.
The following are the pro forma balance sheet adjustments to reflect
the purchase:
(a) Reflects the issuance of $300 million of 5% convertible subordinated
notes and the issuance of 2.2 million shares of the Company's common
stock paid as consideration in connection with the acquisition of
Computer 2000.
(b) Reflects the elimination of the common stock, additional paid in
capital and retained earnings of Computer 2000 and the establishment of
minority interest.
(c) Reflects elimination of acquired goodwill of $46 million and the
recognition of goodwill recorded on the acquisition. For purposes of
the Unaudited Pro Forma Condensed Balance Sheet as of April 30, 1998,
the goodwill was computed by subtracting from the estimated purchase
price of $403 million the fair value of net assets acquired as of
March 31, 1998 (net of minority interest).
(d) Reflects the debt issued to finance estimated acquisition costs and
additional purchases of the outstanding common stock of C2000
subsequent to the initial acquisition financed through advances on the
Company's revolving credit loans.
(e) Reflects the reduction of the acquired deferred tax asset to reflect
the anticipated effective tax rate and related impact on the amount to
be realized.
F-24
<PAGE> 30
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS - CONTINUED
Note (2) - Pro Forma Income Statement Adjustments
(f) Reflects the elimination of amortization expense relating to acquired
goodwill.
(g) Reflects the amortization of goodwill resulting from the acquisition of
Computer 2000 over a period of 40 years. Note that the goodwill of
C2000 is computed herein based upon the difference between the purchase
price and the preliminarily estimated fair value of net assets acquired
as of the date of the closing of the transaction.
(h) Reflects the recognition of interest expense resulting from the
issuance of $300 million, 5% subordinated debentures and additional
debt advanced on the Company's revolving credit loans used to fund the
acquisition of Computer 2000 common stock.
(i) Records the tax benefit related to the recognition of interest expense
on indebtedness incurred in connection with the acquisition.
(j) Recognizes the impact of the outstanding minority interest on Computer
2000's earnings after giving effect to pro forma adjustments and
related tax effects.
(k) Represents adjustment to eliminate non-recurring charges and related
tax effects associated with AmeriQuest (a subsidiary of Computer 2000).
(l) Reflects the adjustment to basic and diluted weighted average common
shares outstanding related to the issuance of common stock and
convertible subordinated debt to finance the acquisition.
F-25
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
2-A(1) Share Purchase Agreement between Klockner & Co. AG and Tech
Data Corporation dated April 14, 1998 and amended June 30,
1998.
2-B(2) Side Letter Agreement between Klockner & Co. AG and Tech
Data Corporation dated April 14, 1998.
3-G(2) Amendments to By-Laws of Tech Data Corporation as adopted on
June 23, 1998.
3-H(2) Articles of Amendment to Amended and Restated Articles of
Incorporation of Tech Data Corporation as of June 24, 1998.
23-A(2) Consent of KPMG Hartkopf + Rentrop KG and AWT Allgemeine
Wirtschaftstreuhand GmbH
23-B(2) Consent of Arthur Andersen LLP
</TABLE>
- -------------
(1) Incorporated by reference to Exhibit 2-A of the Company's Current
Report on Form 8-K dated as of July 1, 1998 and filed with the
Securities and Exchange Commission on July 15, 1998.
(2) Filed herewith.
F-26
<PAGE> 1
EXHIBIT 2-B
SIDE LETTER AGREEMENT
Tech Data Corporation ("TDC") hereby agrees with Klockner & Co. AG ("KLOCKNER")
and VIAG AG ("VIAG") that so long as Klockner and/or VIAG, or any of their
subsidiaries, own any or all of the 5% Convertible Subordinated Notes due
[insert 60 months after date of closing], 2003 (the "NOTES") issued under the
Trust Indenture dated as of [insert date of closing], 1998 (the "INDENTURE"),
TDC will not redeem those Notes owned by Klockner or VIAG, or any of their
subsidiaries, unless the closing price of the common stock of TDC into which the
Notes may be converted is at least equal to 100% of the Conversion Price in
effect for 15 Trading Days within a period of 30 Trading Days ending within 5
Trading Days prior to the notice of redemption. This limitation on the right of
redemption does not apply to Notes owned by parties other than Klockner or VIAG.
In the event that TDC issues or intends to issue securities of TDC convertible
into or exchangeable for shares of common stock of TDC, equity interests in TDC
or additional shares of common stock of TDC (other than shares of common stock
of TDC under a qualified or non-qualified stock option plan of TDC or share
issued in conjunction with an acquisition) (an "ISSUANCE") Klockner and VIAG,
(or any subsidiary of VIAG designated for the purpose by Klockner) shall have
the right of first refusal to purchase up to an amount of the issuance necessary
to maintain Klockner and VIAG's then percentage ownership in the equity of TDC,
including the total number of TDC shares issuable upon conversation. TDC shall
notify Klockner and VIAG of TDC's intent to make an issuance in writing and to
indicate the anticipated offering price for the issuance. Klockner and VIAG (or
any subsidiary of VIAG designated for the purpose by Klockner) shall each have
until the earlier of the date of issuance or 15 days following formal notice
within which to ex-
<PAGE> 2
-2-
ercise the right of first refusal. In the event either Klockner or VIAG fail to
notify TDC of its intention related to an issuance in the time specified above,
the party that fails to provide such notice shall be deemed to have waived its
right of first refusal as to that issuance only.
Signed this fourteenth day of April, 1998.
Tech Data Corporation
By: /s/
----------------------
As its:
----------------------
Chairman and Chief Executive Officer
<PAGE> 1
EXHIBIT 3-G
AMENDMENT TO BYLAWS OF
TECH DATA CORPORATION
The Bylaws of TECH DATA CORPORATION are amended pursuant to resolution
of the Board of Directors adopted on June 23, 1998 as follows:
1. Section B of Article III - Board of Directors shall be and
hereby is amended to read as follows:
ARTICLE III.
BOARD OF DIRECTORS
Section B. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be not less than one (1) nor more
than thirteen (13). Each director shall hold office until such
director's successor shall have been duly elected and shall have
qualified, unless such director sooner dies, resigns or is removed by
the stockholders at any annual or special meeting. It shall not be
necessary for directors to be stockholders. All directors shall be
natural persons who are 18 years of age or older.
<PAGE> 1
EXHIBIT 3-H
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TECH DATA CORPORATION
1. The name of the corporation is Tech Data Corporation (the "Corporation").
2. Article IX subparagraph (i) of the Articles of Incorporation of the
Corporation is amended to read as follows:
(i) The number of directors shall consist of not less than one nor more
than thirteen members, the exact number of which shall be fixed from
time to time in accordance with the Bylaws of the Corporation.
3. This Amendment was recommended by the board of directors to the Corporation's
shareholders on March 27, 1998.
4. This Amendment was approved by the holders of more than a majority of the
Corporation's common stock and the holders of all the shares of preferred stock,
the only groups of the Corporation's shareholders entitled to vote on the
Amendment, and the number of votes in favor of the Amendment was sufficient for
approval.
IN WITNESS WHEREOF, Tech Data Corporation has caused these Articles of
Amendment to be executed on this 24th day of JUNE , 1998.
---- ------------
TECH DATA CORPORATION
By: /s/ Arthur W. Singleton
--------------------------------
Arthur W. Singleton, Secretary
<PAGE> 1
EXHIBIT 23-A
Consent of Independent Accountants
To the Board of Directors of
Computer 2000 Aktiengesellschaft
We consent to the incorporation by reference in the registration statements
(Nos. 33-21879, 33-41074, 33-62181 and 33-60479) on Form S-8 of Tech Data
Corporation of our report dated December 12, 1997, with respect to the
consolidated balance sheets of Computer 2000 Aktiengesellschaft and subsidiaries
as of September 30, 1997 and 1996, and the related consolidated statement of
operations and cash flows for each of the years then ended, which report appears
in the Form 8-K/A of Tech Data Corporation dated September 14, 1998.
/s/ KPMG Hartkopf + Rentrop KG /s/ AWT Allgemeine Wirtschaftstreuhand GmbH
Cologne and Munich
September 10, 1998
<PAGE> 1
EXHIBIT 23-B
CONSENT OF ARTHUR ANDERSEN LLP
As independent certified public accountants, we hereby consent to the use of our
report dated December 16, 1996, with respect to the September 30, 1996
consolidated financial statements of AmeriQuest Technologies, Inc., and to all
references to our Firm, made a part of this Tech Data Corporation Form 8-K/A
Report, into Tech Data Corporation's previously filed Registration Statements
File Nos. 33-21879, 33-41074, 33-62181 and 33-60479.
/s/ Arthur Andersen LLP
Los Angeles, California
September 10, 1998
