<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
(Mark one)
/X/ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 27, 1997 or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
COMMISSION FILE NO. 0-16114
INACOM CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 47-0681813
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
10810 FARNAM, OMAHA, NEBRASKA 68154
(Address of principal executive
offices) (Zip Code)
</TABLE>
Registrant's phone number, including area code: (402) 392-3900
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EXCHANGE
TITLE OF EACH ON WHICH
CLASS REGISTERED
- ---------------- ------------------
<S> <C>
Common Stock, New York Stock
$.10 Par Value Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing price of the Common Stock on March 25, 1998
as reported on New York Stock Exchange (NYSE), was approximately $432,000,000.
At March 25, 1998 there were outstanding 15,335,963 common shares of the
Company.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the Proxy Statement for Registrant's 1998 Annual Meeting of
Stockholders are incorporated by reference in Part III of this Form 10-K Report.
- --------------------------------------------------------------------------------
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PAGE 1 OF 24
INDEX TO EXHIBITS, PAGE 41
<PAGE>
EXPLANATORY NOTE
This amendment to InaCom Corp.'s Annual Report on Form 10-K for the fiscal
year ended December 27, 1997 is being filed solely to report a revision to note
2 to the Company's financial statements which now includes certain pro forma
information relating to certain business acquisitions effected during 1997. The
pagination of this amendment is the same as the pagination of the Annual Report
on Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1)(2) Financial Statements. See index to consolidated financial statements
and supporting schedules.
(a) (3) Exhibits. See exhibit index, which index is incorporated herein by
reference.
(b) The Company filed a report on Form 8-K dated November 4, 1997, reporting the
issuance and sale of 3,000,000 shares of Company common stock, par value
$.10 per share, and $75,000,000 of 4.5% Subordinated Convertible Debentures
due November 1, 2004 (the "Debentures") on November 4, 1997. The Company
filed a report on Form 8-K dated November 20, 1997 reporting the issuance
and sale of an additional $11,250,000 of Debentures on December 20, 1997,
following the exercise of an overallotment option by the underwriters.
21
<PAGE>
INACOM CORP. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 27, 1997 AND DECEMBER 28, 1996
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
22
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
InaCom Corp.:
We have audited the accompanying consolidated financial statements of InaCom
Corp. and subsidiaries as listed in the accompanying index. In connection with
our audits of the consolidated financial statements, we have also audited the
financial statement schedule as listed in the accompanying index. These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of InaCom Corp.
and subsidiaries at December 27, 1997 and December 28, 1996, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 27, 1997, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
[/S/KPMG PEAT MARWICK LLP]
KPMG Peat Marwick LLP
Omaha, Nebraska
February 20, 1998
23
<PAGE>
INACOM CORP. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE(S)
---------
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Operations -- Three-Year Period Ended December 27, 1997...................... 25
Consolidated Balance Sheets -- December 27, 1997 and December 28, 1996.................................. 26
Consolidated Statements of Stockholders' Equity -- Three-Year Period
Ended December 27, 1997................................................................................ 27
Consolidated Statements of Cash Flows -- Three-Year Period Ended December 27, 1997...................... 28
Notes to Consolidated Financial Statements -- Three-Year Period Ended December 27, 1997................. 29 - 38
FINANCIAL STATEMENT SCHEDULE SUPPORTING CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE -- Valuation and Qualifying Accounts........................................................... 39
</TABLE>
All other schedules have been omitted as the required information is
inapplicable or the information is included in the consolidated financial
statements or related notes.
24
<PAGE>
INACOM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Computer products..................................................... $ 3,547,732 2,885,019 2,047,215
Computer services..................................................... 247,243 136,888 95,476
Communications products and services.................................. 101,327 80,148 57,653
------------ ------------ ------------
3,896,302 3,102,055 2,200,344
------------ ------------ ------------
Direct costs:
Computer products..................................................... 3,354,786 2,722,368 1,924,829
Computer services..................................................... 61,311 33,660 27,877
Communications products and services.................................. 79,092 62,668 43,832
------------ ------------ ------------
3,495,189 2,818,696 1,996,538
------------ ------------ ------------
Gross margin............................................................ 401,113 283,359 203,806
Selling, general and administrative expenses............................ 322,218 231,235 169,338
------------ ------------ ------------
Operating income........................................................ 78,895 52,124 34,468
Interest expense........................................................ 29,024 20,405 14,635
------------ ------------ ------------
Earnings before income taxes............................................ 49,871 31,719 19,833
Income tax expense...................................................... 20,415 12,986 8,126
------------ ------------ ------------
Net earnings............................................................ $ 29,456 18,733 11,707
------------ ------------ ------------
------------ ------------ ------------
Earnings per share:
Basic................................................................. $ 2.48 1.80 1.17
Diluted............................................................... 2.17 1.66 1.16
------------ ------------ ------------
------------ ------------ ------------
Common shares and equivalents outstanding:
Basic................................................................. 11,900 10,400 10,000
Diluted............................................................... 14,600 11,900 10,100
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
25
<PAGE>
INACOM CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 27, 1997 AND DECEMBER 28, 1996
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
1997 1996
---------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................................................ $ 52,592 31,410
Accounts receivable, less allowance for doubtful accounts of $5,941 in 1997
and $4,385 in 1996..................................................................... 252,067 288,407
Deferred income taxes.................................................................... 6,327 3,554
Inventories.............................................................................. 429,362 386,592
Other current assets..................................................................... 7,431 2,335
---------- ---------
Total current assets................................................................... 747,779 712,298
---------- ---------
Property and equipment, at cost............................................................ 175,117 116,970
Less accumulated depreciation.............................................................. 85,270 57,845
---------- ---------
Net property and equipment................................................................. 89,847 59,125
---------- ---------
Other assets, net of accumulated amortization of $17,410 in 1997 and
$13,771 in 1996........................................................................... 34,502 27,531
Cost in excess of net assets of business acquired, net of accumulated
amortization of $11,662 in 1997 and $7,736 in 1996........................................ 88,411 48,646
---------- ---------
$ 960,539 847,600
---------- ---------
---------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................................................... $ 409,513 406,753
Notes payable............................................................................ -- 140,770
Income taxes payable..................................................................... 5,908 3,531
Other current liabilities................................................................ 74,372 60,941
---------- ---------
Total current liabilities.................................................................. 489,793 611,995
---------- ---------
Convertible subordinated debentures........................................................ 141,500 55,250
Other long-term liabilities................................................................ 226 73
Deferred income taxes...................................................................... 3,804 3,452
Stockholders' equity:
Capital stock:
Class A preferred stock of $1 par value. Authorized 1,000,000 shares; none issued...... -- --
Common stock of $.10 par value. Authorized 30,000,000 shares; issued 14,825,049 shares
in 1997 and 10,850,008 shares in 1996................................................ 1,482 1,085
Additional paid-in capital............................................................... 216,671 98,153
Retained earnings........................................................................ 107,063 77,607
---------- ---------
325,216 176,845
Less unearned restricted stock........................................................... -- (15)
---------- ---------
Total stockholders' equity................................................................. 325,216 176,830
---------- ---------
$ 960,539 847,600
---------- ---------
---------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
26
<PAGE>
INACOM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ADDITIONAL UNEARNED TOTAL
COMMON PAID-IN RETAINED TREASURY RESTRICTED STOCKHOLDERS'
STOCK CAPITAL EARNINGS STOCK STOCK EQUITY
----------- ----------- --------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994................. $ 1,004 89,314 47,167 (1,533) (362) 135,590
Net earnings................................. -- -- 11,707 -- -- 11,707
Issuance of 4,400 treasury shares as director
compensation................................ -- (1) -- 39 -- 38
Issuance of 89,993 treasury shares under
stock option plans.......................... -- 240 -- 790 -- 1,030
Issuance of 61,800 treasury shares as stock
awards, net of forfeitures.................. -- (25) -- 543 (108) 410
----------- ----------- --------- ----------- --- ------------
Balance at December 30, 1995................. 1,004 89,528 58,874 (161) (470) 148,775
Net earnings................................. -- -- 18,733 -- -- 18,733
Issuance of 691,131 shares in connection with
business combinations....................... 69 6,581 -- -- -- 6,650
Issuance of 132,966 treasury and common
shares under stock option plans............. 12 1,956 -- 161 -- 2,129
Issuance of 3,400 shares as director
compensation................................ -- 60 -- -- -- 60
Issuance of 2,500 shares as stock awards, net
of forfeitures.............................. -- 28 -- -- 455 483
----------- ----------- --------- ----------- --- ------------
Balance at December 28, 1996................. 1,085 98,153 77,607 -- (15) 176,830
Net earnings................................. -- -- 29,456 -- -- 29,456
Issuance of 3,000,000 shares through public
offering, net of offering expenditures...... 300 92,650 -- -- -- 92,950
Issuance of 892,708 shares in connection with
business combinations....................... 89 24,394 -- -- -- 24,483
Issuance of 3,300 shares as director
compensation................................ -- 66 -- -- -- 66
Issuance of 79,029 shares under stock option
plans....................................... 8 1,408 -- -- -- 1,416
Amortization of unearned restricted stock.... -- -- -- -- 15 15
----------- ----------- --------- ----------- --- ------------
Balance at December 27, 1997................. $ 1,482 216,671 107,063 -- -- 325,216
----------- ----------- --------- ----------- --- ------------
----------- ----------- --------- ----------- --- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
27
<PAGE>
INACOM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1997 1996 1995
------------ ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings.............................................................. $ 29,456 18,733 11,707
Adjustments to reconcile net earnings to net cash used by operating
activities:
Depreciation and amortization........................................... 31,274 21,814 19,059
Changes in assets and liabilities, net of effects from business
combinations:
Accounts receivable................................................... (29,028) (123,648) (75,333)
Inventories........................................................... (29,994) (31,794) (124,296)
Other current assets.................................................. (2,954) 97 (610)
Accounts payable...................................................... (27,943) 71,162 105,100
Other liabilities..................................................... (10,461) 20,896 5,444
Income taxes.......................................................... (44) 4,451 1,195
------------ ---------- ----------
Net cash used by operating activities............................... (39,694) (18,289) (57,734)
------------ ---------- ----------
Cash flows from investing activities:
Additions to property and equipment....................................... (50,656) (26,240) (10,346)
Business combinations..................................................... (14,850) (23,386) --
(Advances of) receipts from notes receivable.............................. (420) 446 (1,872)
Other, including advances to affiliates................................... (13,044) (11,950) (1,051)
------------ ---------- ----------
Net cash used in investing activities............................... (78,970) (61,130) (13,269)
------------ ---------- ----------
Cash flows from financing activities:
Principal payments on long-term debt...................................... -- (30,334) (6,667)
Proceeds from receivables sold............................................ 100,000 -- 100,000
Proceeds from offering of public stock.................................... 92,950 -- --
(Payments of) proceeds from notes payable................................. (140,770) 63,094 (13,184)
Proceeds from long-term debt.............................................. 86,250 55,250 --
Proceeds from the exercise of employee stock options...................... 1,416 2,129 1,030
------------ ---------- ----------
Net cash provided by financing activities........................... 139,846 90,139 81,179
------------ ---------- ----------
Net increase in cash and cash equivalents 21,182 10,720 10,176
Cash and cash equivalents, beginning of year 31,410 20,690 10,514
------------ ---------- ----------
Cash and cash equivalents, end of year $ 52,592 31,410 20,690
------------ ---------- ----------
------------ ---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
28
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) ORGANIZATION
The consolidated financial statements include the accounts of InaCom Corp.
(Company) and its wholly-owned subsidiaries. The Company is a provider of
management technology services which include technology procurement and
distribution of microcomputer systems, workstations, networking and
telecommunications equipment, systems integration, and support services. All
significant intercompany balances and transactions have been eliminated in
consolidation.
(B) INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of computer hardware, software, voice and data equipment, and
related materials.
(C) OTHER ASSETS
Other assets include vendor authorization rights and long-term notes
receivable. Vendor authorization rights are being amortized over their
contractual life of ten years.
(D) COST IN EXCESS OF NET ASSETS OF BUSINESS ACQUIRED
The excess of the cost over the fair value of assets of businesses acquired
is being amortized over twenty years. The Company assesses the recoverability of
intangible assets by determining whether the amortization of the asset balance
over its remaining life can be recovered through undiscounted future operating
cash flows of the acquired operation. The amount of goodwill impairment, if any,
is measured based on projected discounted future operating cash flows using a
discount rate reflecting the Company's average cost of funds.
(E) DEPRECIATION
Depreciation is provided over the estimated useful lives of the respective
assets ranging from three to thirty-one years using the straight-line method.
(F) INCOME TAXES
Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
(G) EARNINGS PER SHARE
Earnings per share of common stock have been computed on the basis of the
weighted average number of shares of common stock outstanding after giving
effect to equivalent common shares from dilutive stock options and convertible
subordinated debentures. In February 1997, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 128
"Earnings Per Share", which revised the calculation and presentation provisions
of Accounting Principles Board (APB) Opinion 15 and related interpretations.
SFAS No. 128, which is effective for periods ending after December 15, 1997,
requires companies to present, both currently and retroactively, basic earnings
per share and diluted earnings per share instead of primary and fully-diluted
earnings per share which was previously required under APB Opinion 15.
Accordingly, earnings per share for all periods presented have been restated to
apply the provisions of SFAS No. 128. Diluted earnings per share includes an
increase to the numerator of $2.3 million in 1997 and $1.1 million in 1996 for
interest expense that would not have
29
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
been incurred if the convertible subordinated debentures were converted to
common stock, and the denominator includes an increase to common shares and
equivalents outstanding of 2.7 million shares in 1997, 1.5 million shares in
1996, and 100 thousand shares in 1995, for additional common shares that would
have been outstanding if the convertible subordinated debentures and certain
stock options were exercised. Had the Company reported earnings per share under
the previous APB opinion 15, primary and fully-diluted earnings per share for
the years ending December 1997, 1996, and 1995, would have been $2.40, $1.76,
$1.14 and $2.13, $1.64, $1.14, respectively.
(H) REVENUE AND EXPENSE RECOGNITION
The Company recognizes revenue from product sales upon shipment to the
customer. Revenues from consulting and other services are recognized as the
Company performs the services.
(I) MARKETING DEVELOPMENT FUNDS
Primary vendors of the Company provide various incentives, in cash or credit
against obligations, for promoting and marketing their product offerings. The
funds or credits received are based on the purchases or sales of the vendor's
products and are earned through performance of specific marketing programs or
upon completion of objectives outlined by the vendors. Funds or credits earned
are applied to direct costs or selling, general and administrative expenses
depending on the objectives of the program. Funds or credits from the Company's
primary vendors typically range from 1% to 5% of purchases.
(J) RISKS AND UNCERTAINTIES
Financial instruments which potentially expose the Company to a
concentration of credit risk principally consist of accounts receivable. The
Company sells product to a large number of customers in many different
industries and geographies. To minimize credit concentration risk, the Company
utilizes several financial services organizations, which purchase accounts
receivable, and performs ongoing credit evaluations of its customers' financial
conditions.
The Company's business is dependent in large measure upon its relationship
with key vendors since a substantial portion of the Company's revenue is derived
from the sales of the products of such key vendors. Termination of, or a
material change to the Company's agreements with these vendors, or a material
decrease in the level of marketing development programs offered by
manufacturers, or an insufficient or interrupted supply of vendors' product
would have a material adverse effect on the Company's business.
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these consolidated financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
(K) FINANCIAL INSTRUMENTS
The carrying amounts for cash and cash equivalents, accounts receivable,
accounts payable, and notes payable approximate fair value because of the short
maturity of these instruments. The fair values of the convertible subordinated
debentures are based on the amount of future cash flows associated with each
instrument discounted using the Company's current borrowing rate for similar
debt instruments of comparable maturity. The estimated fair value of the
Company's convertible subordinated debentures at December 27, 1997 and December
28, 1996, approximates book value.
30
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company occasionally uses derivative financial instruments to limit the
effect of increases in the interest rates on any floating-rate debt. The Company
does not hold or issue derivative financial instruments for trading purposes. In
January 1997 and October 1997, the Company entered into two separate one-year
interest rate swap agreements with an unrelated financial institution which
resulted in certain floating-rate interest payment obligations becoming
fixed-rate interest payment obligations at 5.8% and 5.7%, respectively, with an
aggregate notional amount of $100 million per each agreement. As a result of
these swap agreements, interest expense was increased by approximately $260
thousand in 1997. The fair value of the swap agreements as of December 27, 1997
was $9.6 thousand. The January 1997 agreement expired in January 1998.
(L) CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the Company
considers cash and temporary cash investments with a maturity of three months or
less to be cash equivalents.
(M) STOCK-BASED COMPENSATION
The Company accounts for stock options in accordance with the provisions of
APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related
interpretations. As such, compensation expense would be recorded on the date of
grant only if the current market price of the underlying stock exceeded the
exercise price. Accordingly, the Company has not recognized compensation expense
for its options granted in 1997, 1996 and 1995. In 1996, the Company adopted
FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, which permits
entities to recognize as expense over the vesting period the fair value of all
stock-based awards on the date of grant. FASB Statement No. 123 also allows
entities to continue to apply the provisions of APB Opinion No. 25 and provide
pro forma net earnings and earnings per share disclosures for employee stock
option grants made in 1995 and future years as if the fair-value-based method
defined in FASB Statement No. 123 had been applied. The Company has elected to
continue to apply the provisions of APB Opinion No. 25 and provide the pro forma
disclosure provisions of FASB Statement No. 123.
(2) BUSINESS COMBINATIONS
During 1997, the Company completed several acquisitions. The total
consideration given for the 1997 acquisitions was $39.4 million, which included
$14.9 million in cash and 892,708 shares of common stock, in transactions
accounted for as purchases. The excess purchase price over the estimated fair
value of the net assets acquired was $40.0 million in 1997; the excess is being
amortized using the straight line method over twenty years.
The following unaudited pro forma summary presents the consolidated results
of operations of the Company as if the 1997 acquisitions had occurred on
December 31, 1995:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Revenues.......................................................... $ 4,091,346 $ 3,381,772
Net Income........................................................ 30,420 18,269
Basic EPS......................................................... $ 2.47 $ 1.62
Diluted EPS....................................................... $ 2.18 $ 1.51
</TABLE>
31
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(2) BUSINESS COMBINATIONS (CONTINUED)
During 1996, the Company completed several acquisitions. The total
consideration given for the 1996 acquisitions was $30.5 million, which included
$23.4 million in cash and 327,495 shares of common stock, in transactions
accounted for as purchases. The excess purchase price over the estimated fair
value of the net assets acquired was $24.2 million in 1996; the excess is being
amortized using the straight line method over twenty years.
Also during 1996, the Company acquired all the issued and outstanding shares
of two network consulting organizations for 272,726 and 90,910 shares of Common
Stock, respectively, in transactions accounted for as a pooling of interests.
The Company's consolidated financial statements for the year ended December 28,
1996, include the fourth fiscal quarter's activity for the acquired businesses.
Prior period financial statements were not restated as the results of operations
would not have been materially different than those previously reported by the
Company. The effect of the immaterial poolings was to increase stockholders'
equity by approximately $643,000.
If the 1996 business combinations had occurred on January 1, 1995, the pro
forma operations of the Company would not have been materially different than
that reported in the accompanying consolidated statements of operations.
(3) PROPERTY AND EQUIPMENT
A summary of property and equipment follows:
<TABLE>
<CAPTION>
1997 1996
----------- ---------
<S> <C> <C>
Land, buildings and improvements...................................... $ 22,763 13,911
Furniture, fixtures and equipment..................................... 51,681 27,875
Computer equipment.................................................... 77,783 53,239
Computer parts held for repair and exchange........................... 22,890 21,945
----------- ---------
$ 175,117 116,970
----------- ---------
----------- ---------
</TABLE>
(4) INCOME TAXES
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
1997 1996 1995
---------- --------- ---------
<S> <C> <C> <C>
Current:
Federal....................................................... $ 19,867 10,195 6,151
State......................................................... 2,969 1,488 943
Deferred:
Federal....................................................... (2,251) 1,209 897
State......................................................... (170) 94 135
---------- --------- ---------
$ 20,415 12,986 8,126
---------- --------- ---------
---------- --------- ---------
</TABLE>
32
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(4) INCOME TAXES (CONTINUED)
The reconciliation of the statutory federal income tax rate and the
effective tax rate are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Statutory federal income tax rate................................ 35.0% 35.0% 35.0%
State income taxes, net of federal benefit....................... 3.6 3.2 3.6
Other............................................................ 2.4 2.8 2.4
--- --- ---
41.0% 41.0% 41.0%
--- --- ---
--- --- ---
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Deferred tax assets:
Valuation reserves....................................................... $ 6,475 5,726
Accrued expenses not deducted until paid................................. 5,305 2,188
Other.................................................................... 163 --
--------- ---------
Total deferred tax assets.............................................. 11,943 7,914
--------- ---------
Deferred tax liabilities:
Vendor discounts......................................................... 2,374 2,766
Depreciation............................................................. 5,600 4,241
Other.................................................................... 1,446 805
--------- ---------
Total deferred tax liabilities......................................... 9,420 7,812
--------- ---------
Net deferred tax assets................................................ $ 2,523 102
--------- ---------
--------- ---------
</TABLE>
There was no valuation allowance for deferred tax assets at December 27,
1997 or December 28, 1996.
(5) NOTES PAYABLE AND CONVERTIBLE SUBORDINATED DEBENTURES
The Company's primary sources of liquidity are provided through an inventory
and working-capital financing agreement of $550.0 million (increased from $350.0
million as of June 27, 1997), convertible subordinated debentures of $141.5
million, and a revolving credit facility of $40.0 million.
The $550.0 million facility provided by IBM Credit Corp. can be used by the
Company at its discretion, subject to a borrowing base, for its working-capital
needs and IBM Corp. inventory purchases. The inventory and working-capital
financing agreement expires June 29, 1998. On December 27, 1997, $167.6 million
was outstanding under the inventory and working-capital financing agreement, of
which the entire balance is included in the accompanying consolidated balance
sheet as non-interest bearing trade accounts payable. There were no outstanding
balances related to the interest-bearing working-capital portion of the
agreement, however, the interest rate would have been 7.6% based on three-month
LIBOR. This inventory and working-capital financing agreement is secured by
inventory and other assets.
The $40.0 million revolving credit facility agreement expires in February
1999. On December 27, 1997, there were no outstanding balances under the
revolving credit facility, however, the interest rate would
33
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(5) NOTES PAYABLE AND CONVERTIBLE SUBORDINATED DEBENTURES (CONTINUED)
have been 7.0% based on three-month LIBOR. The revolving credit facility is
secured by inventory and other assets.
The debt agreements contain certain restrictive covenants, including the
maintenance of minimum levels of working capital, tangible net worth,
limitations on incurring additional indebtedness, and restrictions on the amount
of net loss the Company can incur. Retained earnings on December 27, 1997 would
not be restricted as to payments of cash dividends under the most restrictive
covenants in such agreements. The Company was in compliance with the covenants
contained in the agreements on December 27, 1997.
The $141.5 million of convertible subordinated debentures consist of $86.25
million of 4.5% convertible subordinated debentures and $55.25 million of 6.0%
convertible subordinated debentures. In November 1997, the Company issued $86.25
million of 4.5% convertible subordinated debentures due November 1, 2004. The
1997 debentures are convertible into common stock of the Company at a conversion
rate of 25.235 shares per each $1,000 principal amount of debentures (equivalent
to a conversion price of $39.63 per share), subject to adjustments under certain
circumstances. The 1997 debentures are not redeemable by the Company prior to
November 1, 2001 and thereafter the Company may redeem the debentures at various
premiums to principal amount. The 1997 debentures may also be redeemed at the
option of the holder if there is a Change in Control (as defined in the
indenture) at a price equal to 100% of the principal amount plus accrued
interest at the date of redemption. The net proceeds from the sale of the 4.5%
debentures were used to repay, in part, indebtedness and fund other capital
requirements.
In June 1996, the Company issued $55.25 million of 6.0% convertible
subordinated debentures due June 15, 2006. The 1996 debentures are convertible
into common stock of the Company at a conversion price of $24.00 per share,
subject to adjustments under certain circumstances. The 1996 debentures are not
redeemable by the Company prior to June 16, 2000 and thereafter the Company may
redeem the debentures at various premiums to par. The 1996 debentures may also
be redeemed at the option of the holder if there is a Change in Control (as
defined in the indenture) at a price equal to 100% of the principal amount plus
accrued interest at the date of redemption. The net proceeds from the sale of
the 6.0% debentures were used to reduce a portion of the outstanding balance of
the working-capital financing agreement which carried an interest rate at the
time of the debenture sale of 7.3%
34
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(6) ACCOUNTS RECEIVABLE AND CREDIT ARRANGEMENTS
The Company has entered into an agreement to sell $200 million of accounts
receivable, with limited recourse, to an unrelated financial institution. The
agreement was initially entered into in June 1995 with respect to $100 million
of accounts receivable and was amended in January 1997 to sell an additional
$100 million of accounts receivable. New qualifying receivables are sold to the
financial institution as collections reduce previously sold receivables in order
to maintain a balance of $200 million sold receivables. On December 27, 1997,
$46.8 million of additional accounts receivable were designated to offset
potential obligations under limited recourse provisions; however, historical
losses on Company receivables have been substantially less than such additional
amount. On December 27, 1997, the implicit interest rate on the receivable sale
transaction was 6.2%.
The Company also has floor plan agreements to take advantage of vendor
financing programs. The Company has entered into dealer working-capital
financing agreements with several financial services organizations which
purchase, primarily, accounts receivable from the Company. The Company had
contingent liabilities of $2.4 million at December 27, 1997 and $1.8 million at
December 28, 1996 relating to these agreements.
(7) LEASES
The Company operates in leased premises which include the general offices,
warehouse facilities and Company-owned branches. Operating lease terms range
from monthly to ten years and generally provide for renewal options.
Rent expense for operating leases was approximately $17.9 million, $12.0
million and $9.8 million for the three years ended December 27, 1997,
respectively.
Future minimum operating lease obligations for the years 1998 through 2002
are $14.3 million, $13.2 million, $10.5 million, $8.1 million, and $6.3 million,
respectively. It is anticipated that leases will be renewed or replaced as they
expire such that future annual lease obligations will approximate rent expense
for 1997.
(8) EMPLOYEE BENEFIT PLAN
The Company maintains a qualified savings plan under Section 401(k) of the
Internal Revenue Code (IRC) which covers substantially all full-time employees.
Annual contributions to the qualified plan, based on participant's annual pay,
are made by the Company. Participants may also elect to make contributions to
the plan. Employee contributions are matched by the Company up to limits
prescribed by the IRC. Company contributions to the plan approximated $5.1
million in 1997, $3.3 million in 1996 and $2.4 million in 1995.
The Company maintains a nonqualified savings plan for employees whose
benefits under the qualified savings plans are reduced because of limitations
under Federal tax laws. Contributions made to this plan were not material.
35
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(9) LITIGATION
The Company is involved in a limited number of legal actions. Management
believes that the ultimate resolution of all pending litigation will not have a
material adverse effect on the Company's consolidated financial statements.
(10) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest and income taxes paid are summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---------- --------- ---------
<S> <C> <C> <C>
Interest paid........................................................... $ 29,537 19,611 14,054
Income taxes paid....................................................... 20,459 8,176 6,931
---------- --------- ---------
---------- --------- ---------
</TABLE>
Components of cash used for acquisitions as reflected in the consolidated
statements of cash flows are summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---------- --------- ---------
<S> <C> <C> <C>
Fair value of assets acquired, including goodwill....................... $ 94,098 41,965 --
Liabilities assumed..................................................... (54,748) (11,436) --
Fair value of common stock issued....................................... (24,500) (7,143) --
---------- --------- ---------
Cash paid at closing, net of cash acquired.............................. $ 14,850 23,386 --
---------- --------- ---------
---------- --------- ---------
</TABLE>
(11) STOCK OPTION AND AWARD PROGRAMS
The Company has three stock plans approved by the shareholders in 1997, 1994
and 1990, and a nonqualified stock options plan approved by shareholders in
1987. Options granted under the stock plans may be either nonqualified or
incentive stock options. The option price, vesting period and term under the
stock plans and the nonqualified stock option plan are set by the Compensation
Committee of the Board of Directors of the Company. The option price may not be
less than the fair market value per share at the time the option is granted. The
vesting period of options granted typically ranges from two to five years, and
the term of any option granted may not exceed ten years. The stock plans also
permit the issuance of restricted or bonus stock awards by the Compensation
Committee. At December 27, 1997, the Company had approximately 789,000 shares
available for issuance pursuant to subsequent grants under the plans.
In addition, the Company awarded 26,750 stock appreciation rights (SARs) to
certain employees in 1997. The SARs which were awarded and are currently
outstanding have a basis of $38.125 and are exercisable on June 30, 1998, and
June 30, 1999. On June 30, 1998 and June 30, 1999, the SARs allow the employees
to receive a cash payment equal to the fair market value on that date less the
basis or adjusted basis of the SARs. The Company recognizes compensation expense
over the term of the SARs based on changes in the fair market value of the
Company's stock.
36
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(11) STOCK OPTION AND AWARD PROGRAMS (CONTINUED)
Additional information as to shares subject to options is as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER OF EXERCISE
OPTIONS PRICE
---------- -----------
<S> <C> <C>
Options outstanding at December 31, 1994......................................... 800,500 13.01
Granted........................................................................ 157,000 9.82
Exercised...................................................................... (90,000) 10.26
Canceled....................................................................... (68,500) 12.45
----------
Options outstanding at December 30, 1995......................................... 799,000 12.76
Granted........................................................................ 36,500 35.56
Exercised...................................................................... (133,000) 10.77
Canceled....................................................................... (21,000) 9.56
----------
Options outstanding at December 28, 1996......................................... 681,500 14.47
Granted........................................................................ 710,950 33.23
Exercised...................................................................... (78,100) 10.28
Canceled....................................................................... (25,200) 34.03
----------
Options outstanding at December 27, 1997......................................... 1,289,150 24.67
---------- -----
---------- -----
Exercisable at December 27, 1997............................................... 464,773 13.74
---------- -----
---------- -----
</TABLE>
<TABLE>
<CAPTION>
EXERCISABLE AT
OPTIONS OUTSTANDING AT DECEMBER 27, 1997 DECEMBER 27, 1997
----------------------------------------- --------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
REMAINING EXERCISE EXERCISE
RANGE OF OPTION EXERCISE NUMBER OF CONTRACTUAL PRICE PER NUMBER OF PRICE PER
PRICE OPTIONS LIFE OPTION OPTIONS OPTION
- --------------------------- ---------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
$8.00 to 12.00 286,330 5.97 years $ 10.21 252,733 $ 10.26
14.25 to 21.56 284,290 4.95 years 17.36 194,290 16.27
24.00 to 36.56 718,530 7.87 years 33.34 17,750 35.56
---------- -------------- ------ ----------- ------
$8.00 to 36.56 1,289,150 6.81 years $ 24.67 464,773 $ 13.74
---------- -------------- ------ ----------- ------
---------- -------------- ------ ----------- ------
</TABLE>
37
<PAGE>
INACOM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE-YEAR PERIOD ENDED DECEMBER 27, 1997
(COLUMNAR DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(11) STOCK OPTION AND AWARD PROGRAMS (CONTINUED)
Pro-forma information regarding net income and earnings per share is
required by FASB Statement No. 123 and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The following weighted-average fair values for these options were
estimated at the date of grant using a Black-Scholes option-pricing model with
these weighted-average assumptions for 1997, 1996, and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Fair value of options granted during the year................................ $ 21.51 $ 20.76 $ 6.77
Risk-free interest rate...................................................... 6.0% 6.1% 5.7%
Expected dividend yield...................................................... 0.0% 0.0% 0.0%
Expected volatility factor................................................... 96.9% 92.5% 94.7%
Expected life................................................................ 3.5 years 2.5 years 3.7 years
</TABLE>
Since the Company applies APB Opinion No. 25 in accounting for its plans, no
compensation cost has been recognized for its stock options in the consolidated
financial statements. Had the Company recorded compensation cost based on the
fair value at the grant date for its stock options under FASB Statement No 123,
the Company's net earnings for 1997, 1996 and 1995 would have been reduced by
approximately 4.4%, 1.6% and 0.5%, respectively, and the Company's diluted
earnings per share for 1997, 1996 and 1995 would have been reduced by
approximately 4.1%, 1.3% and 0.6%, respectively.
Pro forma net income reflects only options granted in 1997, 1996 and 1995.
Therefore, the full impact of calculating compensation cost for stock options
under FASB Statement No. 123 is not reflected in the pro forma net earnings
amounts presented above, because compensation cost is reflected over the
options' vesting periods for the 1997, 1996 and 1995 options, respectively.
Compensation costs for options granted prior to January 1, 1995 are not
considered.
38
<PAGE>
SCHEDULE
INACOM CORP. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO
BEGINNING COSTS AND AMOUNTS WRITTEN BALANCE AT END
OF PERIOD EXPENSES OFF (1) OF PERIOD
---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C>
Fiscal year ended December 27, 1997 --
Allowance for doubtful accounts........................... $ 4,385 3,444 1,888 5,941
---------- ----- ----- -----
---------- ----- ----- -----
Fiscal year ended December 28, 1996 --
Allowance for doubtful accounts........................... $ 3,537 1,626 778 4,385
---------- ----- ----- -----
---------- ----- ----- -----
Fiscal year ended December 30, 1995 --
Allowance for doubtful accounts........................... $ 2,626 2,308 1,397 3,537
---------- ----- ----- -----
---------- ----- ----- -----
</TABLE>
- ------------------------
(1) The deductions from reserves are net of recoveries.
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this amendment
to report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 15th day of January,
1999.
InaCom Corp.
By /s/ BILL L. FAIRFIELD
------------------------------------
Bill L. Fairfield, PRESIDENT
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of InaCom Corp.
and in the capacities indicated on the 15th day of January, 1999.
<TABLE>
<C> <S>
/s/ BILL L. FAIRFIELD President (Principal Executive Officer) and
- ------------------------------------------- Director
Bill L. Fairfield
/s/ DAVID C. GUENTHNER Executive Vice President and Chief Financial
- ------------------------------------------- Officer (Principal Financial and Accounting
David C. Guenthner Officer)
JOSEPH AUERBACH* Director
MOGENS C. BAY* Director
JAMES Q. CROWE* Director
W. GRANT GREGORY* Director
JOSEPH INATOME* Director
RICK INATOME* Director
GARY SCHWENDIMAN* Director
LINDA S. WILSON* Director
*Bill Fairfield, by signing his name hereto, signs this Amendment to Annual Report on
behalf of each of the persons indicated. A power of attorney authorizing Bill L.
Fairfield to sign the Amendment to Annual Report on Form 10-K on behalf of each of the
indicated directors of Inacom Corp. has previously been filed as Exhibit 24.
/s/ BILL L. FAIRFIELD
- -------------------------------------------
Bill L. Fairfield
ATTORNEY-IN-FACT
</TABLE>
40
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
3.1 Restated Certificate of Incorporation of the Company, with amendments, incorporated by reference
from the Company's Annual Report on Form 10-K for the year ended December 27, 1997.
3.2 Bylaws of the Company, as amended to date, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 28, 1996.
4.1 Inventory Working Capital Financing Agreement dated June 29, 1995 between InaCom and IBM Credit
Corporation, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 1, 1995.
4.2 Amendments to Inventory Working Capital Financing Agreement incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 28, 1997 and Annual Report on
Form 10-K for the fiscal year ended December 28, 1996.
4.3 Amended and Restated Receivable Purchase Agreement dated as of August 21, 1995 between InaCom,
InaCom Finance Corp. and certain financial institutions, incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
4.4 Amendments to Amended and Restated Receivable Purchase Agreement incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1996.
4.5 Amendments to Amended and Restated Receivable Purchase Agreement, incorporated by reference from
the Company's Annual Report on Form 10-K for the year ended December 27, 1997.
4.6 Subordinated Indenture dated June 14, 1996 between the Company and First National Bank of Omaha,
and related debenture, with respect to the Company's 6% convertible subordinated debentures due
June 15, 2000, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 29, 1996.
4.7 Subordinated Indenture dated September 30, 1997 between the Company and Norwest Bank Minnesota,
National Association and First Supplemental Indenture thereto dated November 4, 1997
incorporated by reference to the Company's Current Report on Form 8-K dated November 4, 1997.
4.8 4.50% Subordinated Convertible Debenture, Due November 1, 2004 incorporated by reference to the
Company's Current Report on Form 8-K dated November 4, 1997.
4.9 4.50% Subordinated Convertible Debenture, Due November 1, 2004 incorporated by reference to the
Company's Current Report on Form 8-K dated November 20, 1997.
10.1 1987 Stock Option Plan of the Company, incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended December 27, 1997.
10.2 1990 Stock Plan of the Company, with amendments thereto, incorporated herein by reference to
Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
10.3 1994 Stock Plan of the Company, incorporated herein by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 26, 1994.
10.4 1997 Stock Plan of the Company, incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended December 27, 1997.
10.5 Executive Incentive Plan, incorporated by reference from the Company's Annual Report on Form 10-K
for the year ended December 27, 1997.
10.6 Nonqualified Deferred Compensation Plan of the Company, incorporated herein by reference to
Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
10.7 First Amendment to the Nonqualified Deferred Compensation Plan, incorporated herein by reference
to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December
30, 1995.
10.8 Second Amendment to the Nonqualified Deferred Compensation Plan, incorporated by reference from
the Company's Annual Report on Form 10-K for the year ended December 27, 1997.
10.9 Rick Inatome Consulting Agreement, with amendment thereto, incorporated herein by reference to
Exhibit 10.11 to the Company's Annual Report on Form 10-K for the fiscal year ended December 30,
1995.
10.10 Executive Death Benefit Plan, incorporated by reference from the Company's Annual Report on Form
10-K for the year ended December 27, 1997.
10.11 Executive Disability Wage Continuation Plan, incorporated by reference from the Company's Annual
Report on Form 10-K for the year ended December 27, 1997.
10.12 Form of Severance Benefit Agreement between the Company and seven of its officers, incorporated
herein by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.
10.13 Restricted Stock Agreements between the Company and Bill L. Fairfield, incorporated herein by
reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
10.14 Lease Agreement between the Company and Maple Avenue Limited Liability Company dated September 5,
1994, incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 24, 1994.
11 Statement re: Computation of Earnings Per Share, incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 27, 1997.
12 Statement re: Ratio of Earnings to Fixed Charges, incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 27, 1997.
21 Subsidiaries of the Company, incorporated by reference from the Company's Annual Report on Form
10-K for the year ended December 27, 1997.
23 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney, incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended December 27, 1997.
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
27.1 Financial Data Schedule, incorporated by reference from the Company's Annual Report on Form 10-K
for the year ended December 27, 1997.
27.2 Financial Data Schedule, incorporated by reference from the Company's Annual Report on Form 10-K
for the year ended December 27, 1997.
</TABLE>
Pursuant to Item 601(h)(4) of Regulation S-K, certain instruments with respect
to the Company's long-term debt are not filed with this Form 10-K. The Company
will furnish a copy of such long-term debt agreements to the Securities and
Exchange Commission upon request.
Management contracts and compensatory plans are set forth as Exhibits 10.1
through 10.14 above.
43
<PAGE>
Exhibit 23
ACCOUNTANTS' CONSENT
The Board of Directors
InaCom Corp.:
We consent to incorporation by reference in the Registration Statement Nos.
33-21438, 33-38385, 33-42277, 33-81240 and 333-25791 on Form S-8 and
Registration Statement Nos. 333-11687, 333-14299, 333-25823, 333-36815,
333-39545, 333-51651 and 333-57775 on Form S-3 of InaCom Corp. of our report
dated February 20, 1998 relating to the consolidated balance sheets of InaCom
Corp. and subsidiaries as of December 27, 1997 and December 28, 1996 and the
related consolidated statements of operations, stockholders' equity and cash
flows and related financial statement schedule for each of the years in the
three-year period ended December 27, 1997, which reports are included or
incorporated by reference in the December 27, 1997 Annual Report on Form
10-K/A of InaCom Corp.
KPMG Peat Marwick LLP
Omaha, Nebraska
January 15, 1999
