<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 1999
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ____________________
Commission file number 0-14643
---------
KENT ELECTRONICS CORPORATION
------------------------------------------------------------------------
Exact name of registrant as specified in its charter)
Texas 74-1763541
- ----------------------------------------------------- -------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 Gillingham Lane, Sugar Land, Texas 77478
----------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 243-4000
----------------
Not applicable
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
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
---------- ____________
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
At November 9, 1999, 28,072,229 shares of common stock, no par value, were
outstanding.
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
October 2, April 3,
1999 1999
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (including temporary
investments of $93,189 at October 2 and
$206,919 at April 3)............................ $103,735 $207,942
Accounts receivable, less allowance of $1,106
at October 2 and $991 at April 3................ 149,625 103,364
Inventories
Materials and purchased products................ 168,287 118,535
Work in process................................. 4,347 6,349
-------- --------
172,634 124,884
Other............................................. 13,285 17,549
-------- --------
Total current assets.......................... 439,279 453,739
PROPERTY AND EQUIPMENT
Land.............................................. 8,168 8,168
Buildings......................................... 44,045 43,817
Equipment, furniture and fixtures................. 129,219 124,194
Leasehold improvements............................ 2,867 2,681
-------- --------
184,299 178,860
Less accumulated depreciation and amortization. (58,629) (50,496)
-------- --------
125,670 128,364
OTHER ASSETS........................................... 6,827 7,095
COST IN EXCESS OF NET ASSETS ACQUIRED,
less accumulated amortization of $3,986 at
October 2 and $3,320 at April 3................... 88,884 15,443
-------- --------
$660,660 $604,641
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
Page 2 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
October 2, April 3,
1999 1999
-------- --------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable................................ $ 86,520 $ 47,149
Accrued compensation............................ 15,452 13,862
Other accrued liabilities....................... 16,327 6,950
-------- --------
Total current liabilities................... 118,299 67,961
LONG-TERM DEBT, less current maturities.............. 207,000 207,000
DEFERRED INCOME TAXES................................ 8,023 8,511
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value per share;
authorized 2,000,000 shares; none issued...... --- ---
Common stock, no par value; authorized
60,000,000 shares; 28,054,129 shares issued
and 28,004,129 shares outstanding at
October 2 and 28,013,375 shares issued and
27,963,375 shares outstanding at April 3...... 63,986 63,553
Additional paid-in capital...................... 117,654 117,511
Retained earnings............................... 146,675 141,082
-------- --------
328,315 322,146
Less common stock in treasury - at cost,
50,000 shares................................. (977) (977)
-------- --------
327,338 321,169
-------- --------
$660,660 $604,641
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
Page 3 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited - In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
------------------------------------- ----------------------------
October 2, September 26, October 2, September 26,
1999 1998 1999 1998
--------------------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Net sales....................................... $236,073 $147,500 $441,249 $304,557
Cost of sales................................... 196,363 128,149 369,509 254,118
-------- -------- -------- --------
Gross profit............................... 39,710 19,351 71,740 50,439
Selling, general and administrative expenses.... 32,423 25,374 60,514 50,005
-------- -------- -------- --------
Operating profit (loss).................... 7,287 (6,023) 11,226 434
Other income (expense)
Interest expense........................... (2,575) (2,574) (5,153) (5,148)
Other - net................................ 1,354 2,803 3,136 5,678
-------- -------- -------- --------
Earnings (loss) before income taxes...... 6,066 (5,794) 9,209 964
Income taxes.................................... 2,382 (2,273) 3,616 377
-------- -------- -------- --------
NET EARNINGS (LOSS)...................... $ 3,684 $ (3,521) $ 5,593 $ 587
======== ======== ======== ========
Earnings (loss) per share:
Basic.................................. $.13 $(.13) $.20 $.02
======== ======== ======== ========
Diluted................................ $.13 $(.13) $.20 $.02
======== ======== ======== ========
Weighted average shares:
Basic.................................. 27,993 27,603 27,984 27,408
======== ======== ======== ========
Diluted................................ 28,740 27,603 28,534 27,932
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
Page 4 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
----------------------------
October 2, September 26,
1999 1998
-------- -------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings..................................... $ 5,593 $ 587
Adjustments to reconcile net earnings to net
cash (used) provided by operating activities
Depreciation and amortization.................. 8,813 7,029
Provision for losses on accounts receivable. 115 58
Loss (gain) on disposal of property
and equipment................................. 9 (261)
Stock option expense........................... 143 161
Loss on sale of trading securities............. --- 327
Net sales of trading securities................ --- 29,619
Change in assets and liabilities, net of
effects from business acquisitions
Accounts receivable........................... (24,433) (2,646)
Inventories................................... (25,949) (2,571)
Other current assets.......................... 3,295 (6,736)
Other assets.................................. 343 (1,011)
Accounts payable.............................. 17,102 (1,427)
Accrued compensation.......................... 1,125 (2,529)
Other accrued liabilities..................... 2,034 407
Income taxes.................................. --- (2,946)
Deferred income taxes......................... 50 50
Long-term liabilities........................ --- 477
-------- -------
Total adjustments........................... (17,353) 18,001
-------- -------
Net cash (used) provided by
operating activities....................... (11,760) 18,588
</TABLE>
(Continued)
Page 5 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
---------------------------
October 2, September 26,
1999 1998
--------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures............................... $ (4,625) $ (9,428)
Business acquisitions.............................. (64,000) ---
Proceeds from sale of property and equipment....... --- 896
--------- --------
Net cash used by investing activities............ (68,625) (8,532)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on long-term debt of acquired businesses (24,255) ---
Issuance of common stock........................... 352 3,076
Tax effect of common stock issued upon exercise
of employee stock options......................... 81 5,338
--------- --------
Net cash (used) provided by financing
activities...................................... (23,822) 8,414
--------- --------
NET (DECREASE) INCREASE IN CASH...................... (104,207) 18,470
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD..... 207,942 179,907
--------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........... $ 103,735 $198,377
========= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest.......................................... $ 4,658 $ 4,658
Income taxes...................................... (916) 5,226
</TABLE>
The accompanying notes are an integral part of these statements.
Page 6 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies
The consolidated balance sheet as of October 2, 1999, and the consolidated
statements of earnings and cash flows for the thirteen and twenty-six week
periods ended October 2, 1999 and September 26, 1998, have been prepared by the
Company without audit. In the opinion of management, the financial statements
include all adjustments necessary for a fair presentation. All adjustments made
were of a normal recurring nature. Interim results are not necessarily
indications of results for a full year. For further financial information,
refer to the audited financial statements of the Company and notes thereto for
the fiscal year ended April 3, 1999, included in the Company's Form 10-K for
that period.
Business Acquisitions
On April 5, 1999, the Company acquired all the outstanding common stock of
SabreData, Inc. ("SabreData") for a cash purchase price of $31.0 million plus
the assumption of approximately $2.2 million of interest bearing obligations
which were subsequently retired. SabreData is a Texas based network integrator
with sales of approximately $37.0 million for the year ended December 31, 1998.
On June 3, 1999, the Company acquired certain assets and assumed certain
liabilities of Advacom, Inc. ("Advacom") for a cash purchase price of $33.0
million plus the assumption of approximately $21.8 million of interest bearing
obligations which were retired on the day of closing. Advacom is a Pennsylvania
based distributor of electronic connectors, passive and electromechanical
components which generated approximately $112.0 million in revenue for the year
ended December 31, 1998.
On November 1, 1999, subsequent to the close of the quarter, the Company
acquired all the outstanding common stock of Orange Coast Datacomm, Inc., Orange
Coast Cabling, Inc. and Go Telecomm, Inc., collectively known as the Orange
Coast Companies ("Orange Coast") for an aggregate purchase price of $19.0
million, which includes the issuance of an unsecured promissory note in the
amount of $9.0 million. Orange Coast, which reported sales of approximately
$19.0 million for
Page 7 of 15
<PAGE>
the year ended December 31, 1998, provides comprehensive end-to-end voice and
data network solutions to major corporations from offices in Irvine and Santa
Clara, California.
Earnings Per Share
Basic earnings per common share is computed using the weighted average number of
shares outstanding. Diluted earnings per common share is computed using the
weighted average number of shares outstanding adjusted for the incremental
shares attributed to outstanding options to purchase common stock. Incremental
shares of 0.7 million and 0.5 million were used in the calculation of diluted
earnings per common share for the thirteen and twenty-six week periods ended
October 2, 1999, respectively. Incremental shares were not used in the
calculation of diluted earnings per common share for the thirteen weeks ended
September 26, 1998 since the effect of their inclusion would be antidilutive.
For the twenty-six week period ended September 26, 1998, incremental shares of
0.5 million were used in the calculation. The calculation of earnings per share
does not include approximately 4.2 million shares issuable upon conversion of
the 4 1/2% Convertible Subordinated Notes due 2004 because inclusion of such
shares would be antidilutive.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the thirteen and twenty-six week periods ended October 2, 1999
increased $88.6 million, or 60.0%, and $136.7 million, or 44.9%, compared to the
same periods a year ago. Distribution and network integration sales increased
61.3% and 44.8% from the prior year thirteen and twenty-six week periods,
respectively, primarily as a result the SabreData and Advacom acquisitions, an
improved demand for networking products and services, and a strengthening market
for passive components. Contract manufacturing revenues increased 56.8% and
45.2% from the prior year thirteen and twenty-six week periods, respectively,
primarily as a result of sales of the division's expanded manufacturing services
to customers in the network systems and telecommunications industries and as a
result of increased sales to the semiconductor capital equipment industry.
Page 8 of 15
<PAGE>
Gross profit increased $20.4 million, or 105.2%, for the thirteen weeks and
$21.3 million, or 42.2%, for the twenty-six weeks compared to the corresponding
periods a year ago primarily due to increased sales. For the thirteen week
period, gross profit as a percentage of sales increased to 16.8% from 13.1% in
the same period last year and up from the 15.6% reported in the quarter ending
July 3, 1999. The increase in the gross profit percentage for the thirteen week
period resulted from improved plant utilization in the Company's contract
manufacturing business and the impact of the acquisitions of SabreData and
Advacom. For the twenty-six week period, the gross profit percentage was 16.3%,
slightly lower than the 16.6% reported in the comparable period of the previous
year primarily due to product mix changes.
Selling, general and administrative ("SG&A") expenses increased $7.0 million, or
27.8%, and $10.5 million, or 21.0% for the thirteen and twenty-six week periods,
respectively. The increase in SG&A expenses was primarily due to the
acquisitions of SabreData and Advacom and the expenses necessary to support the
Company's existing operations. The Company continues to focus on cost
containment and expense reduction initiatives across the Company. As a
percentage of sales, SG&A expenses decreased to 13.7% in both the thirteen and
twenty-six week periods from 17.2% in the thirteen week period and 16.4% in the
twenty-six week period a year ago.
Interest expense consists of interest on the 4 1/2% Convertible Subordinated
Notes due 2004.
Other-net consists principally of interest and dividend income generated by cash
and cash equivalents. The decrease in interest and dividend income for the
thirteen and twenty-six week periods compared to the corresponding periods a
year ago was primarily due to lower cash balances resulting from the
acquisitions of SabreData and Advacom during the first quarter of fiscal 2000.
The Company reported net earnings of $3.7 million for the thirteen week period
compared to a net loss of $3.5 million in the corresponding period a year ago.
For the twenty-six week period, net earnings were $5.6 million compared to $0.6
million last year. The increase in net earnings for both periods was primarily
the result of increased gross profit partially offset by an increase in SG&A
expenses.
Page 9 of 15
<PAGE>
Liquidity and Capital Resources
Working capital at October 2, 1999 was $321.0 million, a decrease of $64.8
million, or 16.8%, since April 3, 1999. The decrease was primarily the result
of the cash expended for the purchase of SabreData and Advacom during the first
quarter of fiscal 2000.
Included in the Company's working capital at October 2, 1999 are investments of
$93.2 million, a decrease of $113.7 million since April 3, 1999. The Company's
investment strategy is low-risk and short-term, keeping the funds readily
available to meet capital requirements as they arise in the normal course of
business. At October 2, 1999, funds were invested in institutional money market
funds, which are compatible with the Company's stated investment strategy.
The Company intends to apply its capital resources to expand its business by
establishing or acquiring similar distribution and manufacturing operations in
geographic areas that are attractive to the Company. In addition to the capital
required to purchase existing businesses or to fund start-up operations, the
expansion of the Company's operations at both new and existing locations will
require greater levels of capital to finance the purchase of additional
equipment, increased levels of inventory and greater accounts receivable. The
Company believes that current resources including funds generated from
operations should be sufficient to meet its current capital requirements.
Year 2000 Statement
The Year 2000 Issue results from computer hardware and software systems that
were not designed to distinguish between centuries and may not accommodate some
or all dates beyond the year 1999. Therefore, some computer hardware and
software systems will need to be modified prior to the year 2000 in order to
remain functional.
The Company has completed a comprehensive inventory of its critical systems,
equipment and facilities. The Company's business Information Technology (IT)
systems include business applications, computing hardware and software and
related networking equipment and software. Non-IT systems are primarily
embedded technology such as microcontrollers, used in the Company's facilities
and the manufacture or distribution of its products. As part of its systems
inventory process, the Company categorized each of its IT and non-IT systems as
critical,
Page 10 of 15
<PAGE>
medium, or low priority, based upon the potential impact to the Company of the
failure of such a system to be ready for the year 2000. As a result of the
Company's strategic migration to new application systems that began in 1995,
substantially all of the Company's IT systems use hardware and software
platforms that the vendors have represented to be Year 2000 compliant. The
Company has resolved most Year 2000 Issues with the IT systems of SabreData and
Advacom through integration with the Company's systems. The failure of any
remaining systems of SabreData and Advacom not integrated into the Company's
systems that are not Year 2000 ready have not been determined to be critical and
any such failure is not likely to have a material effect on the Company's
financial condition, business activities or results of operations. The Company
expects the systems of Orange Coast to be compliant or replaced by the end of
calendar 1999. In addition, vendors have represented that the majority of the
Company's non-IT systems are Year 2000 compliant. Nonetheless, for hardware or
software which the Company had categorized as being critical and medium, the
Company conducted testing to verify the vendors' representations. Testing of
the Company's IT and non-IT systems that the Company categorized as critical and
medium is complete. Many low priority systems will not be tested as their
failure would not be expected to have a material impact on the Company. The
Company estimates that the costs to be incurred in calendar 1999 and 2000
associated with assessing, remediating and testing its IT and non-IT systems
will not exceed $0.5 million. This estimate assumes that the Company will not
incur significant Year 2000 related costs on behalf of its suppliers, customers
or third parties. It is possible that the Company may need to reassess its
estimate of Year 2000 costs in the event the Company completes an acquisition
of, or makes a material investment in, substantial facilities or another
business entity.
One component of the Company's Year 2000 program is to monitor the Year 2000
readiness efforts of suppliers, service providers and other entities with which
the Company has a business relationship. These assessments of third parties are
nearing completion. Although the Company does not expect the costs of its Year
2000 project to have a material adverse effect on its financial position,
results of operations or cash flows, because the Company is relying, in large
measure, on statements made by such third parties in order to prepare its
assessment of third parties and its estimates of costs, the lack of
responsiveness or accuracy in such third-party statements could materially
affect the assessments and the costs of the Company's Year 2000 project. As a
result, the Company cannot predict the
Page 11 of 15
<PAGE>
potential consequences if third parties or their products are not Year 2000
compliant. While the Company believes its efforts to address the Year 2000
Issues will be successful in avoiding any material adverse effect on the
Company's operations or financial condition, the most reasonably likely worst
case Year 2000 scenario would be the failure of a group of third-party suppliers
to be Year 2000 ready, causing the Company to be unable to fully maintain,
manufacture and distribute its products and services for some indeterminate
period of time. The Company relies on third-party suppliers of products that
the Company distributes and on third-party suppliers of transportation services,
including express delivery services. If there were a widespread failure in the
ability of suppliers to ship products or of transportation enterprises to be
able to provide services, it would likely cause temporary financial losses and
an inability of the Company to provide products and services to its customers.
Furthermore, some of the products distributed by the Company are available only
from a single source (due to product branding) or from a limited group of
suppliers (due to technical specifications). Consequently, the failure of such
suppliers to be fully prepared for the Year 2000 advent could disrupt the
Company's ability to timely meet customer orders.
Throughout calendar 1999 and the early part of the year 2000, the Company will
continue to assess its Year 2000 Issues related to its physical plant and
equipment, products, suppliers, and customers. As a part of that assessment, the
Company is engaged in a contingency planning process integral to its Year 2000
program. The contingency planning phase consists of developing a risk profile of
the Company's critical business processes, and then establishing a plan of
action that the Company may pursue to keep such processes operational in the
event that either the Company or critical third parties suffer Year 2000
disruptions. The Company will continue to monitor the efforts of third parties
and public infrastructure to prepare for the Year 2000, and may modify and
adjust its contingency plan throughout the year as additional information
becomes available. In certain cases, especially the failure of national
infrastructure, there may be no practical alternative course of action available
to the Company.
The above disclosure is a "Year 2000 Readiness Disclosure" made with the
intention to comply fully with the Year 2000 Information and Readiness
Disclosure Act of 1998, Pub. L. No. 105-271, 112 Stat. 2386, signed into law
October 19, 1998. All statements made herein shall be construed within the
confines of that Act. To the
Page 12 of 15
<PAGE>
extent that any reader of the above Year 2000 Readiness Disclosure is other than
an investor or potential investor in the Company's -- or any affiliate's --
equity or debt securities, this disclosure is made for the sole purpose of
communicating or disclosing information aimed at correcting, helping to correct
and/or avoid Year 2000 failures.
Risks Relating to Forward-Looking Statements
The Company is including the following cautionary statements to secure the
protection of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 for all forward-looking statements made by the Company in
this Quarterly Report on Form 10-Q. Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate or imply future
results, performance or trends, and may contain the words "expect," "should,"
"will" or words or phrases of similar meaning. In addition, the forward-looking
statements speak only of the Company's view as of the date the statement was
made, and the Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date hereof.
Forward-looking statements involve risks and uncertainties which could cause
actual results, performance or trends to differ materially from those expressed
in the forward-looking statements. The Company believes that all forward-
looking statements made by it have a reasonable basis, but there can be no
assurance that management's expectations, beliefs or projections as expressed in
the forward-looking statements will actually occur or prove to be correct.
Factors that could cause actual results to differ materially from those
discussed in the forward-looking statements include, but are not limited to, the
factors discussed in the Company's Annual Report on Form 10-K for the fiscal
year ended April 3, 1999.
Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, the Company could be exposed to market risk
from changes in interest rates. The Company continually monitors exposure to
market risk and, when appropriate, develops strategies to manage this risk.
Management does not use derivative financial instruments for trading or to
speculate on changes in interest rates. Currently, the Company's interest rate
risk, if any, relates to its 4 1/2% Convertible Subordinated Notes Due 2004.
Page 13 of 15
<PAGE>
PART II - OTHER INFORMATION
Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
4 - Rights Agreement between the Company and ChaseMellon Shareholder
Services, L.L.C. dated October 21, 1999, which includes as Exhibit
A the Amended and Restated Certificate of Designation, Preferences
and Rights of Series A Preferred Stock, as Exhibit B the form of
Rights Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Stock. Incorporated by reference to Exhibit 1
to the Company's Form 8-A filed with the Securities and Exchange
Commission on November 5, 1999.
11 - Computation of Earnings Per Share.
27 - Financial Data Schedule.
(b) Reports on Form 8-K:
On November 8, 1999, the Company filed with the Securities and
Exchange Commission a report on Form 8-K, relating to the Rights
Agreement between the Company and ChaseMellon Shareholders Services,
L.L.C. dated October 21, 1999, pursuant to which one preferred stock
purchase right was created for each outstanding share of Company
common stock. No financial statements were filed in relation to this
8-K.
Page 14 of 15
<PAGE>
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.
KENT ELECTRONICS CORPORATION
--------------------------------------
(Registrant)
Date: November 12, 1999 By: /s/ Morrie K. Abramson
----------------- ----------------------------------
Morrie K. Abramson
Chairman of the Board, Chief
Executive Officer and Director
(Principal Executive Officer)
Date: November 12, 1999 By: /s/ Stephen J. Chapko
----------------- -----------------------------------
Stephen J. Chapko
Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary (Principal Financial
Officer)
Date: November 12, 1999 By: /s/ David D. Johnson
----------------- ----------------------------------
David D. Johnson
Vice President, Corporate
Controller (Principal Accounting
Officer)
Page 15 of 15
<PAGE>
KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Thirteen Weeks Ended For the Thirteen Weeks Ended
October 2, 1999 September 26, 1998
--------------------------------- ----------------------------------
Per-Share Earnings Per-Share
Earnings Shares Amount (Loss) Shares Amount
---------- -------- --------- --------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Net earnings (loss) $3,684 27,993 $0.13 $(3,521) 27,603 $(0.13)
========= =========
EFFECT OF DILUTIVE SECURITIES
Excess of shares issuable upon
exercise of stock options over
shares deemed retired utilizing
the treasury stock method - 747 - -
------ -------- -------- ------
DILUTED EARNINGS PER SHARE
Net earnings (loss) plus assumed
conversions $3,684 28,740 $0.13 $(3,521) 27,603 $(0.13)
====== ======== ========= ======== ====== =========
</TABLE>
<TABLE>
<CAPTION>
For the Twenty-Six Weeks Ended For the Twenty-Six Weeks Ended
October 2, 1999 September 26, 1998
--------------------------------- ----------------------------------
Per-Share Per-Share
Earnings Shares Amount Earnings Shares Amount
---------- -------- --------- --------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Net earnings $5,593 27,984 $0.20 $587 27,408 $0.02
===== =====
EFFECT OF DILUTIVE SECURITIES
Excess of shares issuable upon
exercise of stock options over
shares deemed retired utilizing
the treasury stock method - 550 - 524
------ ------ -------- ------
DILUTED EARNINGS PER SHARE
Net earnings plus assumed conversions $5,593 28,534 $0.20 $587 27,932 $0.02
====== ====== ===== ======== ====== =====
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-01-2000
<PERIOD-END> OCT-02-1999
<CASH> 103,735
<SECURITIES> 0
<RECEIVABLES> 150,731
<ALLOWANCES> 1,106
<INVENTORY> 172,634
<CURRENT-ASSETS> 439,279
<PP&E> 184,299
<DEPRECIATION> 58,629
<TOTAL-ASSETS> 660,660
<CURRENT-LIABILITIES> 118,299
<BONDS> 207,000
0
0
<COMMON> 63,009
<OTHER-SE> 264,329
<TOTAL-LIABILITY-AND-EQUITY> 660,660
<SALES> 441,249
<TOTAL-REVENUES> 441,249
<CGS> 369,509
<TOTAL-COSTS> 369,509
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 115
<INTEREST-EXPENSE> 5,153
<INCOME-PRETAX> 9,209
<INCOME-TAX> 3,616
<INCOME-CONTINUING> 5,593
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,593
<EPS-BASIC> 0.20
<EPS-DILUTED> 0.20
</TABLE>
