================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
Commission File Number 0-19378
LIUSKI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
6585 Crescent Drive, Norcross, Georgia
(Address of principal executive offices)
11-3065217
(I.R.S. Employer
Identification No.)
30071
(Zip Code)
Registrant's telephone number, including area code: (770) 447-9454
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 ___
As of June 30, 1996, the Registrant had 4,380,525 shares of Common Stock, $.01
par value per share outstanding.
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
Condensed Consolidated Financial Statements:
Balance sheets as of June 30, 1996 (unaudited)
and December 31, 1995........................................................3
Statements of income for the three months and six months
ended June 30, 1996 and June 30, 1995 (unaudited)............................4
Statements of cash flows for the six months ended June 30, 1996
and June 30, 1995 (unaudited)................................................5
Notes to Condensed Consolidated Financial Statements...........................6
Management's Discussion and Analysis of Financial Condition
and Results of Operations....................................................7
-2-
<PAGE>
LIUSKI INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
ASSETS (unaudited)
<S> <C> <C>
CURRENT:
Cash and cash equivalents $ 974,193 $ 200,989
Accounts receivable, net of allowance for
doubtful accounts of $1,050,000 in 1996
and 1995 39,927,881 33,013,943
Inventories 44,988,688 43,295,440
Prepaid expenses and other current assets 3,571,325 3,840,889
----------- -----------
TOTAL CURRENT ASSETS 89,462,087 80,351,261
FURNITURE, AUTOS AND EQUIPMENT, at cost,
less accumulated depreciation and amortization
of $3,109,001 in 1996 and $2,645,806 in 1995 2,959,033 3,101,973
OTHER ASSETS 253,785 254,828
----------- -----------
$92,674,905 $83,708,062
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
Accounts payable - affiliate $14,082,599 $ 9,245,742
Accounts payable - trade 19,986,306 24,491,010
Accrued expenses and other 2,107,075 1,964,893
----------- -----------
TOTAL CURRENT LIABILITIES 36,175,980 35,701,645
REVOLVING CREDIT LOAN 28,729,606 20,965,263
CAPITAL LEASE OBLIGATIONS 519,904 702,114
----------- -----------
TOTAL LIABILITIES 65,425,490 57,369,022
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value - 1,000,000 shares
authorized; none issued -- --
Common stock, $.01 par value - 7,000,000 shares
authorized; 4,380,525 issued and outstanding 43,806 43,806
Additional paid-in capital 18,435,164 18,435,164
Retained earnings 8,770,445 7,860,070
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 27,249,415 26,339,040
----------- -----------
$92,674,905 $83,708,062
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
-3-
<PAGE>
LIUSKI INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- -------------------------
1996 1995 1996 1995
---------- ----------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 101,556,939 $ 93,560,395 $ 200,184,274 $ 197,380,950
COST OF SALES 93,842,181 87,356,484 184,592,519 183,091,427
------------- ------------- ------------- -------------
GROSS PROFIT 7,714,758 6,203,911 15,591,755 14,289,523
SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES 6,584,540 7,663,011 13,147,109 14,967,918
------------- ------------- ------------- -------------
INCOME FROM OPERATIONS 1,130,218 (1,459,100) 2,444,646 (678,395)
OTHER CHARGES, net 484,326 434,279 977,271 932,474
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES 645,892 (1,893,379) 1,467,375 (1,610,869)
INCOME TAXES 245,000 (722,880) 557,000 (612,130)
------------- ------------- ------------- -------------
NET INCOME $ 400,892 $ (1,170,499) $ 910,375 $ (998,739)
============= ============= ============= =============
EARNINGS PER COMMON AND
COMMON EQUIVALENT
SHARES OUTSTANDING:
Primary and fully diluted $ 0.09 $ (0.27) $ 0.21 $ (0.23)
============= ============= ============= =============
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING:
Primary and fully diluted 4,380,525 4,380,525 4,380,525 4,380,525
============= ============= ============= =============
</TABLE>
See notes to condensed consolidated financial statements
-4-
<PAGE>
LIUSKI INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
-------------------------
1996 1995
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 910,375 $ (998,739)
----------- -----------
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 463,195 439,668
Provision for losses on accounts receivable 0 0
Changes in operating assets:
Accounts receivable (6,913,938) (783,568)
Inventories (1,693,248) (446,702)
Prepaids and other 269,564 (2,175,145)
Other assets 1,043 21,278
Changes in operating liabilities:
Accounts payable - affiliate 4,836,857 (2,875,730)
Accounts payable and accrued expenses (4,362,522) 9,445,784
----------- -----------
Total adjustments (7,399,049) 3,625,585
----------- -----------
Net cash provided (used) by operating activities (6,488,674) 2,626,846
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (320,255) (562,709)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit loan 7,764,343 (2,225,977)
Repayment of capital lease obligations (182,210) (167,098)
----------- -----------
Net cash provided by financing activities 7,582,133 (2,393,075)
----------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 773,204 (328,938)
CASH AND CASH EQUIVALENTS - beginning 200,989 834,355
----------- -----------
CASH AND CASH EQUIVALENTS - end $ 974,193 $ 505,417
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 997,581 $ 1,018,219
Income taxes $ 95,016 $ 0
</TABLE>
See notes to condensed consolidated financial statements
-5-
<PAGE>
LIUSKI INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Condensed Consolidated Financial Statements
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Management, all adjustments (consisting
of only normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six month period ended June 30,
1996 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information refer to the consolidated
financial statements and footnotes thereto in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, which are incorporated by
reference herein.
Note 2. Revolving Credit Loan
In June 1995, the Company signed a $50,000,000 credit facility replacing
the Company's existing $25,000,000 revolving credit loan and $14,000,000 line
for the floorplanning of inventory. The new facility provides for revolving
borrowings of up to $35,000,000 and $15,000,000 for inventory floorplanning.
Amounts available on the revolving credit loan are based on a formula of the sum
of up to 85% of eligible receivables and the lesser of 50% of the eligible
inventory or $15,000,000. Outstanding borrowings bear interest at 1/4% per annum
above the lending banks prime rate or 125 basis points above LIBOR rates and
mature in June, 1998. The debt is collateralized by a lien on all of the
Company's assets. As of June 30, 1996, the Company owed $28,729,606 under its
revolving credit loans.
Note 3. Contingencies
In March 1994, several shareholders of the Company filed class action
lawsuits in the United States District Court for the Eastern District of New
York against the Company and certain of its officers asserting violation of
Section 10(b) of the Securities Exchange act of 1934 and Rule 10(b)5 promulgated
thereunder. These actions, since consolidated into a single action, purport to
be based on statements contained in a press release and SEC Form 10-Q issued by
the Company in the latter part of 1993 and is entitled "In re Liuski
International, Inc. Securities Litigation," Civil Action No. 94-CV-1045. The
plaintiffs' consolidated amended complaint asserts that the Company's purported
omissions or misrepresentations falsely inflated the value of the Company's
stock. The plaintiffs seek to represent purchasers who acquired the Company's
common stock during various periods, the earliest of which commenced on November
8, 1993 and ended on March 4, 1994. No class has been certified to this date.
The complaint demands damages in an unspecified amount. In September, 1995, the
plaintiffs filed and served a second amended and consolidated complaint.
On December 4, 1995, the Company and its named officers filed a motion to
dismiss the action for failure to state a cause of action and failure to plead
fraud with particularity. That motion has been fully briefed by both sides and
submitted to the court. To date, no decision has been made on the motion. The
Company also moved for a stay of discovery pending determination of the motion
to dismiss. That motion was granted by Magistrate Judge Boyle by order dated
December 13, 1995. The Company and its named officers intend to defend this suit
vigorously.
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis should be read in conjunction with
the Condensed Consolidated Financial Statements and Notes thereto.
RESULTS OF OPERATIONS
Six months ended June 30, 1996 and 1995
Net Sales: Net sales for the six months ended June 30, 1996 were
$200,184,274 representing an increase of $2,803,324 (1.4%) from $197,380,950 for
the six months ended June 30, 1995. Sales from the distribution centers in the
following regions changed as follows: Southeast region, 48.2%; Northeast region
(including Canadian distribution center), -23.4%; Mid- and Southwest region,
- -39.1%; Western region, 5.7%; Pacific region, -73.3% and Mail Order, 28.0%. Part
of the decrease in the Northeast and Southwest regions and increase in the
Southeast region was caused by crediting corporate sales previously allocated to
New York to Georgia in conjunction with the relocation of corporate sales
personnel to the Georgia office.
At the beginning of March, 1996, the Company changed its computerized
management information systems software. Early in the transition, the Company
experienced several problems that temporarily impacted its ability to process
orders and ship products. While these problems are typical for such a systems
conversion and were minor in nature, they nonetheless negatively impacted sales
during March. Sales were also impacted as a result of increased pricing to allow
for the recovery of shipping costs related to certain heavy low margin products.
To a lesser extent, sales during the six months ended June 30, 1996 were
negatively affected by the shortages the Company experienced with respect to
certain multimedia kits.
Sales of the Company's Magitronic brand of personal computers and notebook
computers for the six months ended June 30, 1996 increased to $43,256,614 (21.6%
of net sales) from $31,801,248 (16.1% of net sales) for the six months ended
June 30, 1995. The Company believes that the increase in sales of these products
was due to the success of the Company's high end notebook computers, competitive
pricing, fast delivery of custom-made systems as well as the growing acceptance
of the Company's Magitronic brand in the market. In addition, sales of
Magitronic computers for the six months ended June 30, 1995 were negatively
affected by production problems associated with relocating the Company's
assembly operations from Melville, New York to Norcross, Georgia. Included in
Magitronic personal computers are private- label and brand-name components that
the Company also sells separately in its distribution business. In addition, the
Company also sells components separately under the Magitronic name. To enhance
the visibility of Magitronic products, in January, 1996, the Company created a
separate Magitronic division that will focus on distributing Magitronic products
through new distribution channels including third party mail order businesses
and other distributors. Sales of this division through these new distribution
channels was $1,358,823 for the six months ended June 30, 1996. Because the
Company is attempting to distribute products through third party mail order
businesses, the Company discontinued its own mail order efforts in June, 1996.
-7-
<PAGE>
While the Company distributes products from more than 70 U.S. suppliers,
the loss of major suppliers or a shortage in a particular product could have a
material adverse impact on the Company during the relatively brief period the
Company believes it would need to establish alternate sources of supply at
required volume levels. Although the Company's business is not highly seasonal,
the second calender quarter is generally a period of weaker net sales in
comparison to the rest of year.
Gross Profit: Gross profit increased by $1,302,232 to $15,591,755 (7.8% of
net sales) for the six months ended June 30, 1996 from $14,289,523 (7.2% of net
sales) for the six months ended June 30, 1995. The higher gross margin as a
percentage of net sales was a result of increased sales of Magitronic personal
computers and notebook computers, which generally have higher margins. Over the
last few years, the computer industry has experienced intense price competition
and Management believes that the price competitive conditions in the industry
will continue.
Selling, General and Administrative Expenses: In 1995, the Company
initiated and completed a strategic streamlining program that included the
relocation of the Company's corporate headquarters and assembly operations as
well as the restructuring and consolidation of the Company's distribution
system. Prior to the streamlining program, the Company's headquarters and
primary assembly facility were located in Melville (NY) and the Company's
products were supplied from ten distribution centers. During 1995, the Company
moved its headquarters and primary assembly operations to Norcross (GA) and
consolidated its distribution centers from ten to four. The strategic
streamlining program was implemented to provide the Company with the opportunity
to improve operating efficiencies and economies of scale.
For the six months ended June 30, 1996, selling, general and administrative
expenses decreased by $1,820,809 to $13,147,109 (6.6% of net sales) from
$14,967,918 (7.6% of net sales) for the six months ended June 30, 1995,
primarily due to efficiencies from the strategic streamlining program and the
nonrecurrance of $761,000 in costs incurred during 1995 to implement the
Company's strategic streamlining program. Salaries, employment taxes and
employee benefits for the six months ended June 30, 1996 decreased to $8,477,960
from $9,303,656 for the six months ended June 30, 1995. Additional savings of
approximately $200,000 were achieved through reductions of rent, telephone and
other office expenses.
Other Charges: Net interest expense increased to $986,838 for the six
months ended June 30, 1996 from $819,170 for the first half of 1995 as a result
of the interest cost related to increased borrowings, which was partially offset
by decreases in interest costs due to the Company's new revolving credit loan.
The interest rate paid by the Company under its revolving credit loan was 1/4%
over the prime rate or 125 basis points over LIBOR.
Net Income: Net income increased by $1,909,114 to $910,375 (.5% of net
sales) for the six months ended June 30, 1996 from a net loss of $998,739 (.5%
of net sales) for the six months ended June 30, 1995.
-8-
<PAGE>
Three months ended June 30, 1996 and 1995
Net Sales: Net sales for the three months ended June 30, 1996 were
$101,556,939 representing an increase of $7,996,544 (8.5%) from $93,560,395 for
the three months ended June 30, 1995. Sales from the distribution centers in the
following regions changed as follows: Southeast region, 51.4%; Northeast region
(including Canadian distribution center), -3.4%; Mid- and Southwest region,
- -35.6%; Western region, 5.7%; Pacific region, -72.9% and Mail Order, - 66.8%.
The mail order business was discontinued in June, 1996. Part of the decrease in
the Northeast and Southwest regions and increase in the Southeast region was
caused by crediting corporate sales previously allocated to New York to Georgia
in conjunction with the relocation of corporate sales personnel to the Georgia
office. Although the Company's business is not highly seasonal, the second
quarter is generally a period of weaker net sales in comparison to the rest of
the year.
Sales of the Company's Magitronic brand of personal computers and notebook
computers for the three months ended June 30, 1996 increased to $20,588,640
(20.3% of net sales) from $13,276,158 (14.2% of net sales) for the three months
ended June 30, 1995. Sales of Magitronic personal computers during the second
quarter of 1995 were affected by production problems resulting from the
relocation of the assembly facilities from New York to Georgia. These production
problems included longer delivery times and quality control issues.
Gross Profit: Gross profit increased by $1,510,847 to $7,714,758 (7.6% of
net sales) for the three months ended June 30, 1996 from $6,203,911 (6.6% of net
sales) for the three months ended June 30, 1995. The higher gross margin was
primarily due to increased net sales and the higher gross margin as a percentage
of sales as a result of increased sales of Magitronic personal computers and
notebook computers, which generally have higher margins. Over the last few
years, the computer industry has experienced intense price competition and
Management believes that the price competitive conditions in the industry will
continue.
Selling, General and Administrative Expenses: As previously mentioned, in
1995, the Company initiated and completed a strategic streamlining program that
included the relocation of the Company's corporate headquarters and assembly
operations as well as the restructuring and consolidation of the Company's
distribution system. During the three months ended June 30, 1995, the Company
incurred $356,000 of expenses related to this program.
For the three months ended June 30, 1996, selling, general and
administrative expenses decreased by $1,078,471 to $6,584,540 (6.5% of net
sales) from $7,663,011 (8.2% of net sales) for the three months ended June 30,
1995, primarily due to efficiencies from the strategic streamlining program.
Salaries, employment taxes and employee benefits for the three months ended June
30, 1996 decreased to $4,260,960 from $4,928,701 for the three months ended June
30, 1995.
Other Charges: Net interest expense increased to $523,951 for the three
months ended June 30, 1996 from $373,850 for the second quarter of 1995 as a
result of the interest cost related to increased borrowings, which was partially
offset by decreases in interest costs due to the Company's new revolving credit
loan. The interest rate paid by the Company under its revolving credit loan was
1/4% over the prime rate or 125 basis points over LIBOR.
Net Income: Net income increased by $1,571,391 to $400,892 (.4% of net
sales) for the three months ended June 30, 1996 from a net loss of $1,170,499
(1.3% of net sales) for the three months ended June 30, 1995.
-9-
<PAGE>
IMPACT OF INFLATION
The Company has not been adversely affected by inflation because
technological advances and competition within the microcomputer industry have
generally caused prices of products sold by the Company to decline. The Company
has flexibility in its pricing because it has no long-term contracts with any of
its customers and, accordingly, could, if necessary, and depending on
competitive factors, pass along price changes to its customers.
LIQUIDITY AND CAPITAL RESOURCES
The Company finances its growth through borrowings under its revolving
credit loan, equity capital and credit terms from its major suppliers. In the
six months ended June 30, 1996, net cash used by operating activities was
$6,488,674 compared to net cash provided by operating activities of $2,626,846
for the six months ended June 30, 1995. The change in net cash flow from
operating activities between the six months ended June 30, 1996 and June 30,
1995, in the amount of $9,115,520, was primarily due to higher growth in
accounts receivable and inventories. In addition, one of the Company's vendors
provided a special discount to pay early for a large purchase of inventory. The
Company may experience shifts in cash flow in the future, particularly if its
suppliers provide more restrictive credit terms than the Company currently is
afforded. For the six month periods ended June 30, 1996 and June 30, 1995, the
Company generally paid its suppliers approximately 35-40 days from the date of
invoice. Terms vary from 1 day to 60 days. The Company takes most early pay
discounts when offered.
Working capital was $53,286,107 as of June 30, 1996 and $44,649,616 as of
December 31, 1995. On June 23, 1995, the Company signed a new three year
$50,000,000 credit facility replacing its existing $25,000,000 revolving credit
loan and $14,000,000 line for floorplanning of inventory. The new facility
provides for revolving cash borrowings of up to $35,000,000 and $15,000,000 for
inventory floorplanning. Borrowings under the revolving credit loan bear
interest at 125 basis points over LIBOR or the prime rate plus 1/4%. Amounts
available under the revolving credit loan are based on a formula of the sum of
up to 85% of eligible receivables and 50% of eligible inventory not to exceed
$15,000,000. At June 30, 1996 and December 31, 1995, the Company owed
$28,729,606 and $20,965,263, respectively, under its revolving credit loans. The
Company was obligated under letters of credit in the amount of $742,800 on June
30, 1996 and had no such obligations outstanding as of December 31, 1995,
leaving an availability under its revolving credit loan of $5,527,594 on June
30, 1996 and $14,034,737 on December 31, 1995.
ASSET MANAGEMENT
Inventory: Management attempts to maximize product availability and
delivery while minimizing inventory levels so as to lessen the risk of product
obsolescence and price fluctuations. Most products are stocked to provide a 30
to 45-day supply. The Company often reduces prices of products in its inventory
in order to improve its turnover rate. The Company turned its inventory on an
average every 44 days during the first six months of 1996 and 1995. The Company
takes a physical inventory every month which is compared to its perpetual
inventory and monitors inventory levels daily according to sales made by product
and distribution center.
-10-
<PAGE>
Most of the Company's U.S. suppliers provide price protection, by way of
credits, against price reductions by the supplier between the time of the
initial sale to the Company and the subsequent sale by the Company to its
customer. Such suppliers accept defective merchandise returned within 12 to 15
months after shipment to the Company and some permit the Company to rotate its
inventory by returning slow moving inventory for other inventory.
Accounts Receivable: The Company primarily sells its products on a cash,
C.O.D. or terms of up to 30 days basis. The Company's average days' receivable
was approximately 33 days for the six month period ended June 30, 1996 and
approximately 20 days for the six month period ended June 30, 1995. This
increase in the average days sales receivable results from the Company extending
credit to more of its customers.
MANAGEMENT ESTIMATES
Financial statements prepared in conformity with generally accepted
accounting principles necessitates the use of management estimates. Management
has estimated reserves for inventory obsolescence and uncollectible accounts
receivable based upon historical and developing trends, aging of items, and
other information it deems pertinent to estimate collectibility and
realizability. It is possible that these reserves will change within a year, and
the effect of the change could be material to the Company's consolidated
financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
Stock Based Compensation: The Financial Accounting Standards Board has
issued Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", which establishes financial and reporting standards
for stock-based employee compensation plans. The Company intends to adopt this
statement during its year ending December 31, 1996. Other than additional
disclosures in the financial statements regarding stock options granted pursuant
to the Company's 1991 and 1994 Stock Option Plans, this statement will not have
an effect on the Company's consolidated financial statements.
Long-Lived Assets: The Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of",
which requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company intends to adopt this statement during the year ending
December 31, 1996. Management does not believe this statement will have a
material impact on the Company's consolidated financial statements.
-11-
<PAGE>
FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE
This report contains forward-looking statements and information that are
based on management's beliefs, as well as assumptions made by, and information
currently available to, management. When used in this document, the words
"anticipate," "believe," "estimate" and "expect," and similar expressions are
intended to identify forward-looking statements. Such statements involve a
number of risks and uncertainties. Among the factors that could cause actual
results to differ materially are the following: business conditions and growth
in the industry, general economic conditions, rapid or unexpected techological
changes, product development, inventory risks due to shifts in product demand,
competition, domestic and foreign government regulations, fluctuations in
foreign exchange rates, rising costs for components or unavailability of
components, the timing of orders booked, and the risks factors listed from time
to time in the Company's SEC reports.
-12-
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
The Company held its Annual Meeting of Stockholders on June 28, 1996. The
Company's stockholders elected Manuel C. Tan and Kenny Liu as Class 2 directors
and ratified the appointment of BDO Seidman as the Company's Independent
Auditors for the calendar year ending December 31, 1996, by the following
stockholders' vote:
(a) Election of Directors
Votes received (net Votes
Name of all votes withheld) withheld
---- ---------------------- --------
Manuel C. Tan 4,056,733 24,113
Kenny Liu 4,057,783 23,063
(b) Ratification of the appointment of Independent Public Accountants:
For 4,062,084
Against 11,211
Withheld 7,551
Item 6. Exhibits and Reports on Form 8-K
(a) (i) Exhibit 11 (statement concerning computation of per share earnings)
is hereby incorporated by reference from Part I - Financial Information, Item 1
- - Financial Statements, contained in this Form 10-Q.
(ii) Exhibit 27 (financial data schedule for the first six months of
1996)
(b) No reports on Form 8-K were filed by the Registrant during the period
ended June 30, 1996.
-13-
<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.
Dated: August 12, 1996
LIUSKI INTERNATIONAL, INC.
By: /s/Mark K. Rafuse
-----------------------------------
Mark K. Rafuse
Chief Financial Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 974
<SECURITIES> 0
<RECEIVABLES> 39,928
<ALLOWANCES> 1,050
<INVENTORY> 44,989
<CURRENT-ASSETS> 89,462
<PP&E> 2,959
<DEPRECIATION> 3,109
<TOTAL-ASSETS> 92,675
<CURRENT-LIABILITIES> 36,176
<BONDS> 0
0
0
<COMMON> 44
<OTHER-SE> 27,205
<TOTAL-LIABILITY-AND-EQUITY> 92,675
<SALES> 200,184
<TOTAL-REVENUES> 200,184
<CGS> 184,593
<TOTAL-COSTS> 184,593
<OTHER-EXPENSES> 13,147
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</TABLE>
