SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 13, 2000
MicroAge, Inc.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE File No. 0-15995 86-03221346
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
2400 South MicroAge Way, Tempe, Arizona 85282-1896
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:(480) 804-2000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 3. BANKRUPTCY OR RECEIVERSHIP.
On April 13, 2000, MicroAge, Inc. ("MicroAge"), and eleven of its
subsidiaries, including its integration business, MicroAge
Technology Services, L.L.C. and its distribution business,
Pinacor, Inc. filed voluntary petitions for reorganization
under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court in Phoenix, Arizona (the "Bankruptcy
Court").
MicroAge and its subsidiaries will all continue to operate on a
business-as-usual basis while restructuring and have received
approval from the Bankruptcy Court for "debtor-in-possession"
interim financing.
A press release regarding these filings for bankruptcy protection
was made on April 13, 2000 and is attached hereto as Exhibit 99.1.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
99.1 Press Release dated April 13, 2000
announcing the filing of petitions
for relief under Chapter 11 of the
Bankruptcy Code.
<PAGE>
SIGNATURE
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 hereunto duly authorized.
MICROAGE, INC.
Date: April 17, 2000 By: /s/ Raymond L. Storck
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Raymond L. Storck
Vice President, Controller,
Chief Financial Officer
and Treasurer
CONTACT: MicroAge, Inc.
Michelle Gorel
480-366-1218
Sitrick And Company, Inc.
Michael Sitrick
Ann Julsen
310-788-2850
MICROAGE, INC. FACILITATES TRANSITION TO A B2B TECHNOLOGY
SOLUTIONS PROVIDER THROUGH CHAPTER 11 FILING
RECEIVES COMMITMENT FOR $225 MILLION IN POST-PETITION FINANCING
TEMPE, ARIZ. - APRIL 13, 2000 - MicroAge, Inc. (NASDAQ:MICA) announced
today that, to facilitate the restructuring necessary to continue its
transformation into a business-to-business (B2B) technology solutions provider,
the Company and certain subsidiaries have filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code.
In conjunction with the filing, MicroAge has received a commitment from a
group of financial institutions led by Citibank, N.A. for $225 million in
debtor-in-possession (DIP) financing. The DIP financing facility, which is
subject to Court approval, is expected to provide adequate funding for all
post-petition trade and employee obligations, as well as the Company's ongoing
operating needs during the restructuring process.
"The actions we have taken today, as painful as they are, will allow us to
accelerate the transformation of the Company to effectively compete in the
digital marketplace," said Jeffrey D. McKeever, Chairman and Chief Executive
Officer. "Over the next several weeks and months, MicroAge will make the changes
necessary to meet the demands of the dynamically changing computer industry.
Business will go on as usual, and MicroAge will continue to operate without
interruption. The quality standards we've been known for in the past remain
important to our future. Our customers can continue to expect our ongoing
commitment to fulfilling their needs.
"During the past few months," McKeever continued, "the Company has taken
significant steps to consolidate support functions for its two largest business
units and to streamline its operations, which is expected by the end of the
current quarter to reduce operating expenses by $164 million on an annualized
basis. We recently introduced industry leading e-commerce solutions and formed a
separate e-business subsidiary, Eleris, specializing in the development of B2B
e-commerce procurement solutions."
McKeever said that in February MicroAge restructured its management team,
appointing Christopher J. Koziol to the positions of president and chief
operating officer to head strategic development and day-to-day operations of the
Company.
"The new business model that we have developed will allow MicroAge to
respond to the rapidly changing marketplace," Koziol stated. "MicroAge is
evolving to serve the needs of businesses in a connected economy. This
reorganization will allow us to focus on our strategic initiatives to become a
leader in e-commerce and will expand our ability to unleash exciting new
technologies. As we retool our operations, MicroAge will have the ability to
deliver technology products and services more efficiently and effectively than
ever before."
McKeever noted that the decline in the Company's sales during the first
quarter, predominantly related to a lack of client demand associated with Year
2000 concerns resulted in constraints by the Company's lenders and a tightening
of credit terms from its vendors, this made it more difficult to obtain
sufficient product at prices and terms necessary to successfully meet customer
needs and demand. "The new DIP financing and the priority status the Bankruptcy
Court affords to payment for post-petition purchases of goods during this
process should facilitate improved trade terms with our vendors," McKeever said.
McKeever said that the Company is in contact with a number of its major
vendors and "we expect them to support the Company during this process. We are
encouraged by our new business model and the advantages it provides. We are
confident that these changes will provide the foundation for our future
success."
The Company filed Chapter 11 petitions in the U.S. Bankruptcy Court for the
District of Arizona in Phoenix for MicroAge, Inc. and its principal
subsidiaries, including Pinacor, Inc. and MicroAge Technology Services, L.L.C.
MicroAge, Inc., a Fortune 500 company, is a global provider of efficient
technology solutions. The Company is composed of information technology
businesses that deliver technology infrastructure solutions through ISO
9001-certified, multi-vendor integration services and distributed computing
solutions to large organizations and computer resellers worldwide. The Company
does business in more than 40 countries and offers over 250,000 products from
more than 1,000 vendors backed by a suite of technical, financial, logistics and
account management services.
This press release contains forward-looking statements, which are
inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified. Future events and actual results could differ materially from
those set forth in, contemplated by, or underlying the forward-looking
statements. Some of the important factors that could cause future events and
actual results to differ materially from those projected in forward-looking
statements include, but are not limited to, intense competition; narrow margins;
the capital intensive nature of the Company's business and the availability of
working capital financing; changes in vendor terms and conditions; product
supply and dependence on key vendors; and changes in customer demand. In
addition, please refer to Part II, Item 7 to the Company's Report on Form 10-K
for the fiscal year ended October 31, 2000 and Item 2 in the Company's most
recent 10-Q for a discussion of some of the important factors that could cause
the Company's actual results to differ materially form those projected in
forward-looking statements made by the Company.
