SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 1997
DAISYTEK INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-25400 75-2421746
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
500 North Central Expressway, Plano, TX 75074
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 881-4700
None
(Former name or former address, if changed since last report)
<PAGE>2
Item 5. Other Events
On November 5, 1997, the Registrant issued the press release filed
herewith as Exhibit 99.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits
99. Press Release dated November 5, 1997.
<PAGE>3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DAISYTEK INTERNATIONAL CORPORATION
Dated: November 5, 1997 By: /s/ THOMAS J. MADDEN
Thomas J. Madden
Chief Financial Officer,
Chief Accounting Officer,
Vice President - Finance
<PAGE>4
INDEX TO EXHIBITS
Exhibit Page
No. Exhibit Number
99. Press Release dated November 5, 1997 5
<PAGE>5
For Immediate Release
Contact: Mark C. Layton Michael A. Burns, President
President, Chief Executive Officer and Preston Kirk, APR
Chief Operating Officer Michael Burns & Associates
Daisytek International Corporation (214) 521-8596
(972) 881-4700 [email protected]
[email protected] [email protected]
or Thomas J. Madden
Vice President - Finance,
Chief Financial Officer
Daisytek International Corporation
(972) 881-4700
[email protected]
Daisytek Reports Record Second Quarter Results
DALLAS, TEXAS (Nov. 5, 1997) - Daisytek International Corporation
(Nasdaq: DZTK) today reported record second quarter results for its period
ended Sept. 30, 1997.
Net sales for the second quarter of fiscal year 1998 increased 30 percent
to $179.6 million, compared to $138.1 million for the second quarter of fiscal
year 1997. Net income for the second quarter of fiscal year 1998
was $3.9 million, up 30.9 percent over the previous fiscal year's
second quarter net income of $3.0 million. Earnings per share for the second
quarter of fiscal year 1998 was $0.54 per share on 7.2 million shares, an
increase of 25.6 percent versus the prior fiscal year's second quarter of
$0.43 per share on 6.9 million shares.
Net sales for the six months ended Sept. 30, 1997, increased 28.1
percent to $352.4 million, compared to $275.0 million for the same period
of fiscal year 1997. Net income for the six months ended Sept. 30, 1997,
was $7.7 million, up 28.4 percent over the previous fiscal year's first
six months net income of $6.0 million. Earnings per share for the first six
months of fiscal year 1998 was $1.08 per share on 7.1 million shares, an
increase of 24.1 percent versus the prior fiscal year's earnings per share
of $0.87 per share on 6.9 million shares.
"We are extremely pleased with Daisytek's net sales and net income growth
of 30% over last year's second quarter," said Mark C. Layton, president, chief
executive officer and chief operating officer. "Our international computer
supplies business units in Canada, Mexico, Australia and Latin America
continue to be significant engines of our company's growth. We also saw
solid growth in our domestic computer supplies business this quarter,
primarily driven by our retail superstore customers, contract stationers
and large value-added resellers. Our near term outlook for our domestic
business, considering the maturing of this market and the much larger revenue
base from which we operate today, is for the domestic growth rate to settle.
Internationally, we are experiencing strongly expanding markets and are
continuing to look for other areas of international opportunity."
"We are very pleased that we maintained a stable selling, general and
administrative ("SG&A") expense as a percentage of net sales, indicating that
we continue to drive our overall productivity in our core business units,"
Layton added. "This has allowed us to reinvest for our future, especially in
Priority Fulfillment Services (PFS), our call center and logistics-providing
<PAGE>6
Daisytek Second Quarter Earnings - Page 2
subsidiary. PFS boasted record revenue this past quarter, while adding two
additional outsourcing arrangements from its existing customer base. We
continue to see long-term opportunities for PFS to enhance the company's
overall gross profit and operating margin percentages. We have made recent
additions to our PFS management team's expertise, and continue to explore
different business strategies to provide expanded infrastructure for PFS."
In a move to maintain and maximize the company's return, Daisytek today
announced its decision not to match what the Company's management believes is
an aggressively low bid by a competitor for the business at one of the
company's largest customers. "To match this bid, in our opinion, would result
in a substantial operating profit loss for the sales made to this customer,
and would result in material service issues in certain products for this
customer," Layton said. "Matching the pricing levels for this business was
clearly inconsistent with our mission to maximize our return on capital and,
we believe, was not in our best interest."
Daisytek also announced today that it is in the due diligence process
for a potential acquisition target. The Company will continue to actively
pursue acquisition opportunities as a result of its growth strategy to expand
its product offering into higher gross margin categories through new product
introductions and acquisitions. It is not possible at this time, however,
to determine the likelihood that the Company will ultimately acquire this
target.
Daisytek is the world's leading distributor of computer and office
automation supplies and accessories, such as inkjet and toner cartridges,
diskettes and other data-storage media, copier supplies and printer ribbons.
Serving more than 24,000 customer locations in over 50 countries, Daisytek
distributes in excess of 8,000 consumable products from more than 150
manufacturers. Leading manufacturers Daisytek represents include
Hewlett-Packard, Sony, Canon, Epson, Kodak, Okidata, Lexmark, IBM, Imation,
Apple, Xerox, Panasonic, and Digital Equipment Corporation. Through its
strategic alliance with FedEx, Daisytek provides next business day delivery
throughout North America to its customers. Daisytek is headquartered in
Plano, Texas, and maintains sales and distribution centers in Miami, Memphis,
Mexico City, Sydney, Toronto, and Vancouver. More information about Daisytek
is available at http://www.daisytek.com.
- financial statements follow -
The matters discussed in this news release and, in particular, information
regarding future revenue, earnings and business plans and goals, consist of
forward-looking information under the Private Securities Litigation Reform
Act of 1995 and are subject to and involve risks and uncertainties which could
cause actual results to differ materially from the forward-looking
information. These risks and uncertainties include, but are not limited to,
general economic conditions, industry trends, integration of acquired business
units, the dependence upon and/or loss of key suppliers or customers, the loss
of strategic product shipping relationships, customer demand, product
availability, competition (including pricing and availability), concentrations
of credit risk, distribution efficiencies, capacity constraints, technological
difficulties, risk of international operations including exchange rate
fluctuations and the regulatory and trade environment (both domestic and
foreign). A description of these factors, as well as other factors which
could affect the Company's business, is set forth in the Company's Prospectus
dated Jan. 24, 1996, and the Company's 10-K for the fiscal year ended
March 31, 1997.
<PAGE>7
Daisytek Second Quarter Earnings - Page 3
Daisytek International Corporation and Subsidiaries
Unaudited Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
<TABLE>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------------- --------------------------------
1997 1996 %Change 1997 1996 %Change
--------- --------- ------- --------- --------- -------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET SALES $ 179,568 $ 138,148 30.0% $ 352,380 $ 275,042 28.1%
COST OF SALES 161,697 124,559 29.8% 317,203 247,783 28.0%
--------- --------- --------- ---------
Gross profit 17,871 13,589 31.5% 35,177 27,259 29.0%
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,052 8,397 31.6% 21,635 16,703 29.5%
--------- --------- --------- ---------
Income from operations 6,819 5,192 31.3% 13,542 10,556 28.3%
INTEREST EXPENSE 552 413 33.7% 1,071 845 26.7%
--------- --------- --------- ---------
Income before
income taxes 6,267 4,779 31.1% 12,471 9,711 28.4%
PROVISION FOR INCOME TAXES 2,398 1,824 31.5% 4,773 3,715 28.5%
--------- --------- --------- ---------
NET INCOME $ 3,869 $ 2,955 30.9% $ 7,698 $ 5,996 28.4%
========= ========= ========= =========
NET INCOME PER
COMMON SHARE $ 0.54 $ 0.43 25.6% $ 1.08 $ 0.87 24.1%
========= ========= ========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,210 6,921 7,117 6,915
========= ========= ========= =========
</TABLE>
<PAGE>8
Daisytek International Corporation
Page 4
Daisytek International Corporation and Subsidiaries
Consolidated Balance Sheet Data
(In Thousands)
September 30, March 31,
1997 1997
------------- ---------
(Unaudited)
Trade accounts receivable, net $ 94,160 $ 90,446
Inventories, net of Priority
Fulfillment Services Division $ 54,957 $ 54,426
Inventories, Priority Fulfillment
Services Division $ 10,224 $ 10,354
Long-term debt, less current portion $ 30,716 $ 30,454
Shareholders' equity $ 78,071 $ 67,193
-###-
