SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 18, 1997
INTELLIGENT ELECTRONICS, INC.
-----------------------------
(Exact name of issuer as specified in charter)
PENNSYLVANIA 0-15991 23-2208404
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or file number Identification
Organization) Number)
411 Eagleview Boulevard, Exton, Pennsylvania 19341
(Address of principal executive offices)
(610) 458-5500
(Registrant's telephone number, including area code)
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Item 7. Financial Statements and Exhibits
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(b) Pro forma Financial Information
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The following unaudited Pro Forma Statements of Operations for the six
months ended August 2, 1997 and the fiscal year ended February 1, 1997 are
presented to give effect to the sale of the Company's Indirect Business
(the "RND Transaction") and the sale of certain assets of the Company's
direct computer hardware sales business and certain specified services
contracts and related assets of XLConnect Solutions, Inc. (the "XL
Transaction"). A Pro Forma Balance Sheet as of August 2, 1997 has not been
presented as it has been shown as actual in the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 2, 1997.
Historical financial data used to prepare the Pro Forma Statements of
Operations were derived from the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K for the fiscal year
ended February 1, 1997 and the unaudited consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended August 2, 1997. These Pro Forma Statements of Operations
should be read in conjunction with such historical financial statements.
The pro forma adjustments reflected herein are based on available
information and certain assumptions that the Company's management believes
are reasonable. The pro forma adjustments to the Pro Forma Statements of
Operations assume that the RND Transaction and the XL Transaction were
consummated on February 3, 1996.
The Pro Forma Statements of Operations are based on assumptions and
approximations and, therefore, do not reflect in precise numerical terms
the impact of the transactions on the historical financial statements. In
addition, such Pro Forma Statements of Operations should not be used as a
basis for forecasting future operations of the Company.
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<TABLE>
<CAPTION>
INTELLIGENT ELECTRONICS, INC. and Subsidiaries
Pro Forma Consolidated Statement of Operations
For the six months ended August 2, 1997
(in thousands, except per-share data)
(unaudited)
Deduct Pro forma Deduct Pro forma
As RND after RND XL after XL
Reported(a) Transaction(b) Transaction Transaction(f) Transaction
------------ -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $1,174,028 $787,821 $386,207 $221,297 $164,910
Cost of goods sold 1,108,197 771,851 336,346 203,294 133,052
------------ -------------- ----------- -------------- -----------
Gross profit 65,831 15,970 49,861 18,003 31,858
------------ -------------- ----------- -------------- -----------
Operating expenses:
Selling, general and administrative expenses 84,814 30,649(c) 54,165 20,884 (g) 33,281
Amortization of intangibles,
primarily goodwill 2,522 2,522 1,284 1,238
------------ -------------- ----------- -------------- -----------
Total operating expenses 87,336 30,649 56,687 22,168 34,519
------------ -------------- ----------- -------------- -----------
Loss from operations (21,505) (14,679) (6,826) (4,165) (2,661)
Other income (expense):
Investment and other income (expense), net 285 117 168 1,130 (h) 1,298
Interest expense (6,765) (4,408)(d) (2,357) (2,357)(i) 0
Loss on XL Transaction (27,194) (27,194) (27,194) 0
------------ -------------- ----------- -------------- -----------
Loss before income tax provision (benefit)
and minority interest (55,179) (18,970) (36,209) (34,846) (1,363)
Income tax provision (benefit) (2,598) (6,875) 4,277 3,856 421
------------ -------------- ----------- -------------- -----------
Loss before minority interest (52,581) (12,095) (40,486) (38,702) (1,784)
Minority interest (419) (419) (419)
------------ -------------- ----------- -------------- -----------
Net loss (53,000) (12,095) (40,905) (38,702) (2,203)
Preferred stock dividend 355 355 355
------------ -------------- ----------- -------------- -----------
Net loss applicable to common shareholders $(53,355) $(12,095) (41,260)(e) $(38,702) $(2,558)(j)
============ ============== =========== ============== ===========
Loss per share applicable to
common shareholders $(1.43) $(1.11) $(0.07)
============ =========== ===========
Weighted average number of common shares 37,303 37,303 37,303
See accompanying notes to the pro forma statements of operations.
</TABLE>
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<TABLE>
<CAPTION>
INTELLIGENT ELECTRONICS, INC. and Subsidiaries
Pro Forma Consolidated Statement of Operations
For the year ended February 1, 1997
(in thousands, except per-share data)
(unaudited)
Deduct Pro forma Deduct Pro forma
As RND after RND XL after XL
Reported Transaction(b) Transaction Transaction(f) Transaction
---------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $3,346,557 $2,566,915 $779,642 $474,275 $305,367
Cost of goods sold 3,190,683 2,485,757 704,926 446,935 257,991
---------- -------------- ----------- -------------- -----------
Gross profit 155,874 81,158 74,716 27,340 47,376
---------- -------------- ----------- -------------- -----------
Operating expenses:
Selling, general and administrative expenses 174,230 72,731(c) 101,499 41,491 (g) 60,008
Amortization of intangibles,
primarily goodwill 8,311 3,351 4,960 2,397 2,563
Branch closure costs 9,790 9,790 9,790 0
Impairment losses 61,576 61,576 0 0
---------- -------------- ----------- -------------- -----------
Total operating expenses 253,907 137,658 116,249 53,678 62,571
---------- -------------- ----------- -------------- -----------
Loss from operations (98,033) (56,500) (41,533) (26,338) (15,195)
Other income (expense):
Investment and other income (expense), net (451) (651) 200 2,033 (h) 2,233
Interest expense (12,018) (3,306)(d) (8,712) (6,326)(i) (2,386)
---------- -------------- ----------- -------------- -----------
Loss before income tax benefit
and minority interest (110,502) (60,457) (50,045) (34,697) (15,348)
Income tax benefit (6,518) (623) (5,895) (3,186) (2,709)
---------- -------------- ----------- -------------- -----------
Loss before minority interest (103,984) (59,834) (44,150) (31,511) (12,639)
Minority interest (70) (70) (70)
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Net loss (104,054) (59,834) (44,220) (31,511) (12,709)
Preferred stock dividend 120 120 120
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Net loss applicable to common shareholders $(104,174) $(59,834) $(44,340)(e) $(31,511) $(12,829)(j)
========== ============== ============ ============== ===========
Loss per share applicable to
common shareholders $(2.98) $(1.27) $(0.37)
========== ============= ============
Weighted average number of common shares 34,988 34,988 34,988
See accompanying notes to the pro forma statements of operations.
/TABLE
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INTELLIGENT ELECTRONICS, INC. and Subsidiaries
Notes to the Pro Forma Statements of Operations
(unaudited)
(a) Reflects consolidated results for the six months ended August 2,
1997 as if the Indirect Business was not treated as a discontinued
operation. Also excludes the gain from the RND Transaction.
(b) Represents the elimination of revenues and expenses related to the
operations of the Indirect Business.
(c) Excludes allocated corporate general and administrative expenses.
(d) Represents the elimination of interest expense incurred by the
Indirect Business.
(e) The accompanying Pro Forma Statements of Operations do not include
any non-recurring effects directly attributable to the RND
Transaction. The Company has provided a reserve for all expected
costs associated with the RND Transaction. Such costs included
professional fees paid to attorneys, accountants and advisors,
printing charges and filing fees. The amount of such costs totaled
approximately $1.6 million and is included as a reduction in the
after-tax gain reflected in retained earnings on the Consolidated
Balance Sheet.
(f) Represents the elimination of revenues and expenses related to the
businesses sold pursuant to the XL Transaction.
(g) Excludes allocated corporate general and administrative expenses.
(h) Represents investment income from excess cash proceeds over the
amount assumed to repay outstanding borrowings.
(i) Represents the elimination of interest expense incurred with
respect to the businesses sold pursuant to the XL Transaction and
the reduction of interest expense from the repayment of
outstanding borrowings.
(j) The accompanying Pro Forma Statements of Operations do not include
any non-recurring effects directly attributable to the XL
Transaction. The Company has provided a reserve for all expected
costs associated with the XL Transaction. Such costs included
professional fees paid to attorneys, accountants and advisors,
printing charges and filing fees. The amount of such costs totaled
approximately $1.5 million and is included as an increase in the
after-tax loss reflected in retained earnings on the Consolidated
Balance Sheet.
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SIGNATURE
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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.
INTELLIGENT ELECTRONICS, INC.
Date: September 30, 1997 By:/s/ Eugene E. Marinelli, Jr.
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Eugene E. Marinelli, Jr.
Vice President and
Chief Financial Officer
