<PAGE> 1
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):July 29, 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 July 29, 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 July 29, 1998.
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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: July 29, 1998 By: /s/ THOMAS J. MADDEN
Thomas J. Madden
Chief Financial Officer,
Chief Accounting Officer,
Vice President - Finance
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INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT PAGE
NO. EXHIBIT NUMBER
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<S> <C> <C>
99. Press Release dated July 29, 1998 . . . . . . . . . . . . 5
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EXHIBIT 99
FOR IMMEDIATE RELEASE
Contact: MARK C. LAYTON CRAIG MCDANIEL, Vice President
President, Chief Executive Officer and AE or PRESTON F. KIRK, APR
and Chief Operating Officer Michael Burns & Associates
or THOMAS J. MADDEN (214) 521-8596
Vice President - Finance and [email protected]
Chief Financial Officer [email protected]
Daisytek International Corporation
(972) 881-4700
[email protected]
[email protected]
DAISYTEK INTERNATIONAL REPORTS 40% NET INCOME GROWTH
Strong Sales Growth and Expanded Margin Percentages Reported
DALLAS, TEXAS (JULY 29, 1998) - Daisytek International Corporation (Nasdaq:
DZTK) - the world's leading wholesale distributor of consumable computer and
office automation supplies - today reported record net sales and net income for
the first quarter period ended June 30, 1998. The results mark Daisytek's 21st
consecutive quarter of record performance compared to year-ago quarters.
"Once again, Daisytek has achieved its revenue and net income growth
objectives," said Mark C. Layton, president, chief executive officer and chief
operating officer. "We target our year-on-year objectives of net sales and net
income growth of 20 percent, and we are very happy to report that Daisytek not
only met, but exceeded those objectives this quarter."
Net sales for the first quarter of FY99, increased 28.8 percent to
$222.6 million compared to previously reported revenues of $172.8 million for
the first quarter of FY98. First quarter FY 99's operating income, excluding
acquisition related costs for The Tape Company, Inc., was $9.7 million, or 4.3
percent of net sales, compared to $6.7 million, or 3.9 percent of net sales,
previously reported for the first quarter of FY 98. Pro forma net income for the
first quarter of FY99, adjusted for acquisition related costs and certain income
tax adjustments related to the acquisition of The Tape Company, was $5.3
million, up 39.7 percent over FY98's previously reported first quarter net
income of $3.8 million. Pro forma diluted earnings per share for the first
quarter of FY99, were $0.30 per share on 17.8 million shares, versus FY 98's as
reported first quarter of $0.27 per share on 14.0 million shares.
"Daisytek's international business led our performance this quarter,
experiencing growth of approximately 40 percent," said Layton. "Our product
range, financial strength, computer supplies knowledge, and service
differentials give us a strategic advantage over the competition in these
international markets that have growth rates exponentially higher than those in
the maturing U.S. market. We are looking to identify our next area for
international expansion within the next few quarters."
"Priority Fulfillment Services (PFS), our division that provides
distribution and call-center services to businesses worldwide, continues to grow
as well," added Layton. "Business provided by existing relationships continues
to grow, providing additional service fees and product revenues. Much of our
team focused their attention this past quarter on implementing the 5 new
relationships that we announced last quarter, and we are managing new contracts
to coincide with our available implementation schedule. Our PFS lead pipeline is
strong and we are targeting to implement several more relationships this
financial year."
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DAISYTEK'S FISCAL YEAR 1999 FIRST QUARTER EARNINGS....PAGE 2
"We are also very happy to welcome The Tape Company, Inc., to the
Daisytek family," Layton also stated. "This acquisition broadens our penetration
into the Pro-Tape distribution industry." The Tape Company, a Chicago-based
independent distributor of professional grade audio and video media products,
was acquired during June of this year through a merger transaction, and was
accounted for as a pooling-of-interests. Daisytek's financial information for
the first quarter of FY 98 includes a full quarter's activity of The Tape
Company. When presented, Daisytek's previously reported financial statements
will be restated to include the financial results of The Tape Company. Daisytek
will incur approximately $0.4 million of expenses in each of the next two
quarters to cover The Tape Company merger activities.
"Looking forward, we continue to target growth rates of approximately
30 percent internationally while our U.S. business is targeted to contribute
steady low to mid-teen growth. Combining this business with the higher-margins
available in both our PFS operations and our new Pro-Tape division, and our
continued pursuit of acquisition opportunities that bring us profit
enhancements, we continue to target overall growth objectives of 20 percent in
net sales and net income."
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 and fax supplies, and printer
ribbons. Serving more than 25,000 customer locations in over 50 countries,
Daisytek distributes in excess of 10,000 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.
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 March 26, 1998, and the
Company's 10-K for the fiscal year ended March 31, 1998.
- FINANCIAL STATEMENTS FOLLOW -
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DAISYTEK'S FISCAL YEAR 1999 FIRST QUARTER EARNINGS....PAGE 3
DAISYTEK INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
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Three Months Ended
June 30, Three Months Ended
-------------------------- June 30,
1997 1997
1998 Reported (1) % Change Restated (2)
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Net sales $ 222,589 $ 172,812 28.8% $ 182,777
Cost of sales 196,062 155,506 163,154
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Gross profit 26,527 17,306 53.3% 19,623
Selling, general and administrative expenses 16,875 10,583 59.5% 12,522
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Income from operations before acquisition related costs 9,652 6,723 43.6% 7,101
Acquisition related costs 405 -- --
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Income from operations 9,247 6,723 37.5% 7,101
Interest expense 852 519 586
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Income before income taxes 8,395 6,204 6,515
Provision for income taxes 3,002 2,375 2,415
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Net income $ 5,393 $ 3,829 40.8% $ 4,100
========== ========== ==========
Net income per common share:
Basic $ 0.32 $ 0.29 10.3% $ 0.29
Diluted $ 0.30 $ 0.27 11.1% $ 0.27
Pro forma data (3):
Historical net income $ 5,393 $ 3,829 $ 4,100
Pro forma adjustments:
Provision for income taxes (291) -- (82)
Acquisition related costs, net of tax 246 -- --
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Pro forma net income $ 5,348 $ 3,829 39.7% $ 4,018
========== ========== ==========
Pro forma net income per common share:
Basic $ 0.31 $ 0.29 6.9% $ 0.28
Diluted $ 0.30 $ 0.27 11.1% $ 0.27
Weighted average common and
common share equivalents outstanding:
Basic 17,005 13,364 27.2% 14,339
Diluted 17,814 14,008 27.2% 14,983
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(1) Results previously reported for Daisytek International Corporation prior to
the acquisition of The Tape Company, Inc. during June 1998.
(2) Restated for pooling of interests to combine the results of operations of
Daisytek and The Tape Company.
(3) Pro forma data includes the following adjustments: (a) The Tape Company
included a business unit organized as a subchapter S corporation, whereby
income taxes were paid individually by the owners. The pro forma provision
for income tax adjustment is provided to reflect income tax under a
corporate tax structure. (b) Daisytek incurred various acquisition related
accounting, legal and other costs applicable to the acquisition of The Tape
Company. The pro forma adjustment for acquisition related costs, net of
tax, excludes such costs from pro forma net income for the three months
ended June 30, 1998.
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DAISYTEK'S FISCAL YEAR 1999 FIRST QUARTER EARNINGS....PAGE 4
DAISYTEK INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In Thousands)
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Reported Restated
June 30, March 31, March 31,
1998 1998 (1) 1998 (2)
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<S> <C> <C> <C>
Trade accounts receivable, net $ 114,651 $ 122,621 $ 127,563
Inventories, net of Priority Fulfillment Services Division $ 104,998 $ 78,060 $ 81,956
Inventories, Priority Fulfillment Services Division $ 14,375 $ 11,634 $ 11,634
Trade accounts payable $ 83,868 $ 83,787 $ 87,390
Long-term debt, less current portion $ 37,189 $ 12,655 $ 17,468
Shareholders' equity $ 143,678 $ 139,370 $ 137,729
</TABLE>
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(1) Financial position previously reported for Daisytek prior to the
acquisition of The Tape Company during June 1998.
(2) Restated for pooling of interests to combine the financial position of
Daisytek and The Tape Company.
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