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): January 28, 1998
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)
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Item 5. Other Events
On January 28, 1998, 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 January 28, 1998.
<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: January 28, 1998 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 January 28, 1998 5
<PAGE>5
For Immediate Release
Contact: Mark C. Layton
President, Chief Executive Officer and
Chief Operating Officer
or Thomas J. Madden
Vice President - Finance and Chief Financial Officer
Daisytek International Corporation
(972) 881-4700
[email protected]
[email protected]
Craig McDaniel, Vice President and AE
or Preston Kirk, APR
Michael Burns & Associates
(214) 521-8596
[email protected]
[email protected]
Daisytek Reports 19th Straight Quarter of Record Results
Sales to International Markets, PFS Subsidiary Fuel Growth
DALLAS, TEXAS (Jan. 28, 1998) - Daisytek International Corporation
(NASDAQ: DZTK) - the world's largest wholesale distributor of
consumable computer and office automation supplies - today reported
record net sales and net income for the third quarter ended Dec. 31, 1997.
The results mark the company's 19th consecutive quarter of record
performance as compared to year-ago quarters.
"Our business model and team of people continue to perform in an
outstanding manner," said Mark C. Layton, president, chief executive
officer and chief operating officer. "We are especially pleased with the
overall performance of our international division, which grew by more
than 35 percent and now represents more than 23 percent of Daisytek's
revenue. In addition, our Priority Fulfillment Service subsidiary ("PFS")
experienced strong revenue and profitability growth, and continues to
broaden its position as an outsourcing provider of advanced call-center and
logistics solutions."
Net sales for the third quarter of fiscal year 1998 (FY98) increased
20.8 percent to $186.6 million, compared to $154.4 million for the third
quarter of FY97. Net income for the third quarter of FY 1998 was $4.1
million, up 23 percent over the previous fiscal year's third quarter net
income of $3.4 million. Diluted earnings per share for the third quarter of
FY 1998 was $0.58 per share on 7.2 million shares, an increase of 18.4
percent versus the prior fiscal year's third quarter of $0.49 per share on 6.9
million shares.
Net sales for the nine months ended Dec. 31, 1997, increased 25.5
percent to $539 million, compared to $429.5 million for the same period of
FY 1997. Net income for the nine months ended Dec. 31, 1997, was $11.8
million, up 26.5 percent over the previous fiscal year's first nine months
net income of $9.4 million. Diluted earnings per share for the first nine
months of fiscal year 1998 was $1.66 per share on 7.1 million shares, an
increase of 23.0 percent versus the prior fiscal year's earnings per share of
$1.35 per share on 6.9 million shares.
"Our management team remains committed to growth, with
targeted growth objectives for revenues and profits in excess of 20%,"
Layton noted. "These initiatives are coupled with our objectives to
maintain a strong gross profit margin as a percentage of net sales, while
continuing to operate as a low cost distributor in this industry. For this
quarter, our focus on optimizing our gross profit margin resulted in gross
profit at 10.1 percent of net sales. Earnings before interest and taxes
("EBIT") was 3.9 percent of net sales for the quarter and was near the top
end of our EBIT objective of 3.5 percent to 4 percent."
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Daisytek Third Quarter Earnings..Page 2
International Outlook: Canada, Australia, Latin America and Pacific
Rim
"Our international growth was propelled by especially strong
performances in Canada and Australia," Layton said. "Our Canadian
growth was a direct result of our focus on the retailer segment of our
business, and our position as the only national distributor of computer
supplies in Canada that is not a competitor to its own customers. Our
Australian subsidiary, acquired during the past fiscal year, continues to
reap the benefits of applying Daisytek's business model and management
know-how to an already strong business, and experienced further success
in growing sales to superstore customers in that market. Daisytek's
Mexico operations and our Latin American export business, based in
Miami, Florida, also experienced solid growth."
"With the opening this January of our Singapore sales and
distribution center, we have made an additional step into the Pacific Rim
region, positioning ourselves to take advantage of a market estimated to be
more than $500 million in size with a historical growth rate in excess of 40
percent a year," added Layton. "Because this business will be primarily
U.S.-dollar-based, we hope to limit our exposure to currency fluctuations.
Of course, near-term economic issues may temper our start-up speed in this
region. With the entry into the Pacific Rim and the outstanding results in
our other international markets, we are targeting an international growth
objective in the 25 percent to 35 percent range."
PFS Gaining Momentum
"PFS, our subsidiary dedicated to providing advanced call-center
and logistics solutions, also provided us with record revenues this quarter.
PFS added one new relationship from our existing client base during the
quarter in addition to better than expected growth from our existing
contracts. This is an indication we are meeting with success in providing
high levels of quality and service to our clients. We continue to target
opportunities with potential clients both inside and outside the computer
supplies industry," Layton confirmed.
Domestic Business and Overall Outlook
"On the domestic front, our U.S. business remains solid," Layton
emphasized. "Future growth will come through continued introduction of
new products, including the products we've added through the acquisition
of Steadi-Systems, Inc. this January, and the introduction of new "value
adds" for our customers, especially in the area of electronic commerce.
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 Company's domestic growth rate to settle around 15
percent."
"The combination of our U.S., international and PFS initiatives
provide the basis for our targeted top and bottom line growth objectives in
excess of 20 percent," Layton stated.
Background: 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, Singapore, Sydney,
Toronto, and Vancouver. More information about Daisytek is available at
www.daisytek.com.
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Daisytek Third Quarter Earnings..Page 3
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.
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Daisytek Third Quarter Earnings..Page 4
Daisytek International Corporation and Subsidiaries
Unaudited Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------------- --------------------------------
1997 1996 %Change 1997 1996 %Change
--------- --------- ------- --------- --------- -------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET SALES $ 186,586 $ 154,429 20.8% $ 538,966 $ 429,471 25.5%
COST OF SALES 167,823 139,225 20.5% 485,026 387,008 25.3%
--------- --------- --------- ---------
Gross profit 18,763 15,204 23.4% 53,940 42,463 27.0%
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,508 9,375 22.8% 33,143 26,078 27.1%
--------- --------- --------- ---------
Income from operations 7,255 5,829 24.5% 20,797 16,385 26.9%
INTEREST EXPENSE 548 375 46.1% 1,619 1,220 32.7%
--------- --------- --------- ---------
Income before
income taxes 6,707 5,454 23.0% 19,178 15,165 26.5%
PROVISION FOR INCOME TAXES 2,569 2,090 22.9% 7,342 5,805 26.5%
--------- --------- --------- ---------
NET INCOME $ 4,138 $ 3,364 23.0% $ 11,836 $ 9,360 26.5%
========= ========= ========= =========
INCOME PER
COMMON SHARE:
Basic $ 0.61 $ 0.52 17.3% $ 1.75 $ 1.45 20.7%
Diluted $ 0.58 $ 0.49 18.4% $ 1.66 $ 1.35 23.0%
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 6,816 6,485 6,765 6,452
Diluted 7,154 6,917 7,130 6,916
</TABLE>
Consolidated Balance Sheet Data
(In Thousands)
December 31, March 31,
1997 1997
------------- ---------
(Unaudited)
Trade accounts receivable, net $ 95,943 $ 90,778
Inventories, net of Priority
Fulfillment Services Division $ 60,131 $ 54,426
Inventories, Priority Fulfillment
Services Division $ 11,664 $ 10,354
Long-term debt, less current portion $ 28,732 $ 30,454
Shareholders' equity $ 81,740 $ 67,193
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