FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from _____________ to _______________
Commission File Number: 0-20730
MICRO WAREHOUSE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1192793
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
535 CONNECTICUT AVENUE, NORWALK, CONNECTICUT 06854
(Address of principal executive offices)
(203) 899-4000
(Registrant's telephone number, including Area Code)
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
----- -----
Indicate the number of shares outstanding of each of issuer's class of common
stock as the latest practicable date:
CLASS: COMMON STOCK OUTSTANDING SHARES AT JUNE 30, 1996: 34,263,475
------------ ----------
<PAGE>
MICRO WAREHOUSE, INC.
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
Consolidated Balance Sheets ........... ...............3
Consolidated Statements of Income .....................4
Consolidated Statements of Cash Flows .................5
Notes to Unaudited Consolidated Financial Statements ..6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ................ 7
PART II - OTHER INFORMATION................................... 12
SIGNATURE .................................................. 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MICRO WAREHOUSE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
---------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $109,310 $81,614
Marketable securities at market value 13,309 20,580
Accounts receivable, net of allowance for doubtful accounts ($6,859
and $7,498 at June 30, 1996 and December 31, 1995, respectively) 182,160 172,275
Inventories 103,769 143,941
Prepaid expenses and other current assets 23,858 28,156
Deferred taxes 5,508 5,266
------ -----
TOTAL CURRENT ASSETS 437,914 451,832
-------- -------
Property, plant and equipment, net 30,486 32,175
Goodwill, net 43,158 44,644
Other assets 2,881 4,133
------ -----
TOTAL ASSETS $514,439 $532,784
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable - trade $44,520 $65,785
Accrued expenses 46,808 36,569
Income taxes 783 5,939
Deferred revenue 7,171 4,602
Loans payable, bank 31,304 38,294
Equipment obligations 358 384
---- ----
TOTAL CURRENT LIABILITIES 130,944 151,573
-------- --------
Equipment obligations 721 668
--- ---
TOTAL LIABILITIES 131,665 152, 241
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value: - -
Authorized - 100 shares; none issued
Common stock, $.01 par value:
Authorized - 100,000 shares; issued and outstanding; 34,263 and
33,963 shares at June 30, 1996 and December 31, 1995, respectively 343 339
Additional paid in capital 268,766 265,648
Retained earnings 118,249 117,647
Cumulative translation adjustment (4,568) (1,033)
Valuation adjustment for marketable securities (16) (46)
Treasury stock 0 (2,012)
--- -------
TOTAL STOCKHOLDERS' EQUITY 382,774 380,543
-------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $514,439 532,784
======== ========
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
3
<PAGE>
MICRO WAREHOUSE, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND
JUNE 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
----------------------- ------------------
<S> <C> <C> <C> <C>
Net sales $437,175 $378,574 $951,565 $758,897
Cost of goods sold 352,188 295,619 764,889 588,766
------- ------- ------- -------
Gross profit 84,987 82,955 186,676 170,131
Selling, general and administrative expense 66,087 64,100 141,823 129,859
Write-off of goodwill 5,977 - 5,977 -
Restructuring costs - - 21,226 -
Merger costs - - 6,113
-------- ------- --------- ---------
Income from operations before interest,
income taxes and extraordinary charge 12,923 18,855 11,537 40,272
Interest income 236 254 362 524
------ ------ --- ---
Income from operations before income
taxes and extraordinary charge 13,159 19,109 11,899 40,796
Provision for income taxes 7,749 8,009 9,715 16,619
----- ----- ----- ------
Income before extraordinary charge 5,410 11,100 2,184 24,177
Extraordinary charge, net of taxes - - 1,584 -
------ ------- ----- --------
Net income $5,410 $11,100 $600 $24,177
===== ====== === ======
Net income per share $ 0.16 $0.33 $0.02 $0.73
===== ==== ==== ====
Net income per share before extraordinary
charge $0.16 $0.33 $0.06 $0.73
==== ==== ==== ====
Weighted average number of
shares outstanding 34,701 33,214 34,679 33,118
====== ====== ====== ======
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
4
<PAGE>
MICRO WAREHOUSE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)
- -------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES: 1996 1995
- ------------------------------------- ---- ----
<S> <C> <C>
Net income $ 600 $ 24,177
--- ------
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Depreciation and amortization 5,133 6,127
Write-off of goodwill 5,977 -
Deferred taxes (242) 65
Loss on disposal of equipment - 224
Changes in assets and liabilities:
Accounts receivable, net (9,374) (15,320)
Inventories 41,105 (3,707)
Prepaid expenses and other assets 5,557 (880)
Accounts payable-trade (21,327) 9,891
Income taxes payable (5,156) 1,002
Accrued expenses 10,212 (14,934)
Deferred revenue 2,569 1,550
----- -----
Total adjustments 34,454 (15,982)
------ -------
Net cash provided by operating activities 35,054 8,195
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities, net 7,300 32,754
Purchases or adjustments to acquisitions
of businesses, represented by:
Goodwill (5,149) (14,936)
Other net assets (1,405) (3,706)
Acquisition of property, plant and equipment (2,394) (9,637)
Proceeds from sale of equipment - 137
------- ---
Net cash provided by investing activities (1,648) 4,612
------- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 5,134 1,516
Bank borrowings (repayments), net (6,990) 16,434
Purchase of treasury stock - (469)
Principal payments of obligations under capital leases (322) (276)
----- ----
Net cash (used) provided by financing activities (2,178) 17,205
------- ------
Effect of exchange rate changes on cash (3,532) 3,062
------- -----
Net change in cash 27,696 33,074
CASH AND CASH EQUIVALENTS:
Beginning of period 81,614 30,268
------- ------
End of period $109,310 $63,342
======= ======
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
5
<PAGE>
MICRO WAREHOUSE, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
1. FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of Micro
Warehouse, Inc. and its subsidiaries (the "Company") and have been
prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Although
the Company believes that the disclosures are adequate to make the
information presented not misleading, these financial statements should
be read in conjunction with the audited financial statements and the
notes thereto included in the Company's Annual Report to Shareholders
which was filed as an exhibit to its Annual Report on Form 10-K for the
year ended December 31, 1995.
In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present
fairly the financial position of the Company at June 30, 1996 and the
results of operations and cash flows for the three and six months ended
June 30, 1996 and 1995.
2. NET INCOME PER SHARE
Following is an analysis of the components of the shares used to
compute net income per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
(000) (000)
1996 1995 1996 1995
----------------- ------------------
<S> <C> <C> <C> <C>
Shares outstanding at beginning of period 34,020 32,555 33,963 32,525
Retirement of Treasury Shares - - - (14)
Incremental shares related to stock options 681 659 716 607
--- ----- --- ---
34,701 33,214 34,679 33,118
====== ====== ====== ======
</TABLE>
6
<PAGE>
3. BUSINESS COMBINATIONS
On January 25, 1996, the Company completed a merger with Inmac Corp. ("Inmac").
Under the terms of the merger, the Company exchanged 3,033,682 common shares for
all of Inmac's 10,816,836 common shares in a transaction accounted for as a
pooling of interests. Accordingly, all historical financial information
contained in these financial statements has been restated to include Inmac. In
connection with this transaction, the Company has recorded restructuring charges
of $21.2 million comprised of: Personnel (severance) of $10.0 million,
facilities (leases and fixed asset write-offs) of $9.6 million and other of $1.6
million. Payments through June 30, 1996 have reduced this balance to $8.0
million. Management does not believe that the total restructuring charge will be
significantly different from what was originally recorded.
4. EXTRAORDINARY CHARGE
During the first quarter of 1996, the Company recorded an extraordinary charge
of $1.6 million related to early extinguishment of debt (net of tax benefit of
$1.1 million) resulting from the mandatory prepayment of $20 million of Senior
Notes of Inmac, which action was caused by the merger. The extraordinary charge
consisted of a premium of $1.9 million paid on the redemption of the Senior
Notes and the write-off of deferred financing costs of $0.8 million.
5. WRITE-OFF OF GOODWILL
Due to uncertainties in the Apple Macintosh marketplace, the Company reevaluated
the carrying value of goodwill in its Macintosh-only subsidiaries in Australia,
Denmark, Mexico and Switzerland. As a result of that evaluation, the Company
recorded a charge of $6.0 million, which amount represents all of the goodwill
on these subsidiaries' balance sheets.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
OVERVIEW
- --------
The Company sells computer products primarily through its two main catalogs,
MacWAREHOUSE and MicroWAREHOUSE. The Company has experienced significant growth
in its customer list, catalog mailings, sales and operating profitability since
its organization in 1987.
In late 1987, the Company introduced its MacWAREHOUSE catalog for users of
Macintosh computers. In 1989, the Company began distributing its first
MicroWAREHOUSE catalog for users of IBM-compatible PCs and instituted its
business-to-business outbound sales program. The Company also publishes targeted
catalogs namely, Data CommWAREHOUSE, directed to the data communications and
networking markets, Micro SystemsWAREHOUSE, offering microcomputer systems and
peripherals to the PC/Windows market and its newest specialty catalog, Mac
SystemsWAREHOUSE, offering Mac computer systems and peripherals to the Mac
7
<PAGE>
market. During 1995, the Company combined the CD-Rom and Home ComputerWAREHOUSE
catalogs with its core catalogs and discontinued its Paper design and Micro
SuppliesWAREHOUSE catalogs.
Over the past few years, the Company has expanded its international operations.
The Company commenced full-scale operations in the United Kingdom in 1991 and in
France and Germany in 1992. In 1993, the Company established a licensing
arrangement in Australia and acquired, through newly-formed foreign
subsidiaries, businesses with operations in Denmark, Norway and Sweden. During
1994, the Company acquired eight additional businesses with operations in
Holland, Belgium, Finland, Norway, Sweden, France, Mexico and Canada. The
Company also began operations in Japan. In 1995, the Company acquired
complimentary businesses in the United Kingdom, Germany, Australia (including
its licensee) and Switzerland. Micro Warehouse international catalog
distribution includes the MacWAREHOUSE, MicroWAREHOUSE and LanWAREHOUSE (the
European counterpart to the U.S. Data CommWAREHOUSE) catalogs.
In January, the Company acquired Inmac Corp. in a stock transaction accounted
for as a pooling of interests. Prior periods have been restated to include
Inmac Corp. and all comparisons and discussions are based on the restated
figures.
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
- -----------------------------------------------------------------------------
Net sales increased by $58.6 million or 15% to $437.2 million for the three
months ended June 30, 1996 from $378.6 million for the three months ended June
30, 1995. This increase in net sales was primarily attributable to continued
growth in the core domestic business which increased by 18% to $293.9 million.
There were 1,016,000 orders fulfilled from April 1 through June 30, 1996, which
compares to 1,012,000 during the same period last year.
Domestic Macintosh sales were up 14% to $167.6 million for the three months
ended June 30, 1996 from $147.3 million for the three months ended June 30,
1995. Domestic PC/Windows sales increased 40% to $106.8 million in 1996 from
$76.5 million in 1995. These sales increases were due to increases in the
average order size coupled with increased catalog circulation. The average order
size for the domestic Macintosh platform increased to $428 in 1996 from $376 in
1995, and the PC/Windows platform increased to $523 in 1996 from $427 in 1995.
The average order sizes increased due to an increase in the proportion of
hardware sales which typically have a higher per unit price than software sales.
Circulation of the MacWAREHOUSE catalog increased by 41% to approximately 11.2
million, the MicroWAREHOUSE circulation increased by 38% to approximately 8.7
million and the Inmac circulation increased by 9% to approximately 2.0 million
catalogs. The Company's business-to-business sales program, combining outbound
telemarketing and catalog mailings to selected commercial, governmental and
educational accounts, increased by 30% over the comparable period in 1995 and
represented approximately 59% of domestic net sales excluding Inmac for the
second quarter ended June 30, 1996. This increase was primarily due to increases
8
<PAGE>
in the circulation of business-to-business catalogs, in outbound telemarketing
personnel and in penetration of existing accounts.
International sales decreased to 33% of net sales in the three months ended June
30, 1996 from 34% in the same period in 1995 but increased in total to $143.3
million from $129.9 million. The increase in dollars during the three months
ended June 30, 1996 was due primarily to increases in the average order value
and in the customer base. The decrease, as a percentage of net sales, was due to
Inmac having a higher percentage of international sales with lower growth rates.
The total international average order value increased 5.3% to $482.
Gross profit, which consists of net sales less product and transportation costs,
decreased as a percentage of net sales to 19.4% in 1996 from 21.9% during the
same period last year. The decrease in gross profit was due to a higher
proportion of hardware sales which are typically at lower margins, as a percent
of sales, than software sales. Hardware as a percent of total sales increased
from 68% in the second quarter of 1995 to 74% in the second quarter of 1996.
Selling, general and administrative expenses increased by 3.1% to $66.1 million
for the three months ended June 30, 1996 from $64.1 million for the same period
in 1995, but decreased as a percentage of net sales to 15.1% from 16.9%. The
increase in dollars during the three months ended June 30, 1996 was due
primarily to an increase in fulfillment costs resulting from increases in sales
volume and promotional spending. The decrease, as a percentage of net sales, was
attributable to cost controls coupled with a higher average order size due to
the increased hardware sales.
Operating income for the second quarter of 1996 was $12.9 million as compared to
$18.9 million for the same period in 1995. The operating income in 1996 includes
a $6.0 million write-off of goodwill in the Company's Macintosh-only
subsidiaries. International operations during the second quarter of 1996
generated net country operating income of $2.0 million as compared to $4.7
million for the comparable period in 1995.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
- -------------------------------------------------------------------------
Net sales increased by $192.7 million or 25% to $951.6 million for the six
months ended June 30, 1996 from $758.9 million for the six months ended June 30,
1995. This increase in net sales was primarily attributable to an increase in
the circulation of both the MacWAREHOUSE and MicroWAREHOUSE catalogs.
Circulation of the MacWAREHOUSE catalog increased by 59% to 24.7 million and the
MicroWAREHOUSE catalog circulation increased by 38% to 17.5 million. The
Company's business-to-business sales program increased by 37% over the
comparable period in 1995, and represented approximately 38% of net sales for
the first six months of 1996. This increase was primarily due to an increase in
the circulation of business-to-business catalogs. International sales decreased
to 34% of net sales in the first six months of 1996 from 36% in the same period
in 1995 but increased in total to $324.0 million from $274.1 million. Also
contributing to the increase in net sales on a worldwide basis was the increase
in the average order size to $455 in 1996 from $381 in 1995. Total orders
fulfilled increased from 2,177,000 to 2,279,000.
9
<PAGE>
Gross profit decreased as a percentage of net sales to 19.6% in 1996 from 22.4%
during the same period last year. The decrease in gross profit was due to a
reduction in gross margins attributable to a higher proportion of hardware sales
which are typically at lower margins than software sales as well as a reduction
of Inmac gross margins which were made to improve its competitiveness. Hardware
as a percent of total sales increased from 65% in 1995 to 73% in 1996.
Selling, general and administrative expenses increased by 9.2% to $141.8 million
for the six months ended June 30, 1996 from $129.9 million for the same period
in 1995, but decreased as a percentage of net sales to 14.9% from 17.1%. The
increase in dollars during the first six months of 1995 was due primarily to an
increase in fulfillment costs resulting from increased sales volume and
increased promotional spending. The decrease, as a percentage of net sales, was
attributable to cost controls coupled with a higher average order size due to
the increased hardware sales.
Operating income for the first six months of 1996 was $11.5 million compared to
$40.3 million for the same period last year. The operating income in 1996
includes $27.3 million of restructuring and merger costs relating to the
acquisition of Inmac Corp. as well as a $6.0 million write-off of goodwill in
the Company's Macintosh-only subsidiaries. International operations generated a
net operating loss of $3.7 million in 1996 as compared to operating income of
$10.9 million for the first six months of 1995. The international net loss in
1996 includes $12.4 million of the total restructuring and merger costs.
Interest income totaled $0.4 million for the first six months of 1996 compared
to $0.5 million for the first six months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
In October 1995, the Company completed a follow-on offering of its common stock
resulting in net proceeds to the Company of $50.8 million. As of June 30, 1996,
the Company had cash and short-term investments totaling $122.6 million.
Inventories decreased to $103.8 million at June 30, 1996 from $144.0 million at
December 31, 1995. Inventory turns increased to 12.7 at June 30, 1996 from 10.3
at June 30, 1995. Accounts receivable increased to $182.2 million at June 30,
1996 from $172.3 million at December 31, 1995. The days sales outstanding
increased to 46.0 days in 1996 from 43.8 days in 1995.
Capital expenditures for the first six months of 1996 and 1995 were $2.7 million
and $9.6 million, respectively, primarily for computer systems and distribution
equipment both in the United States and internationally. Although the Company's
primary capital needs will be to fund its working capital requirements for
expected sales growth, the Company expects that future growth will also require
continued expansion of its computer systems and distribution capacity. The
Company has a multi-currency borrowing facility for $75 million. The purpose of
this facility is to provide working capital financing for its foreign
subsidiaries in local currencies, thus limiting exposure to foreign exchange
fluctuation. Total borrowings as of June 30, 1996 under this arrangement were
$31.3 million. Additionally, at June 30, 1996 the Company had an unused line of
10
<PAGE>
credit in the United States which provided for unsecured borrowings of up to
$15.0 million for working capital purposes. During 1996, the Company paid off
bank debts totaling $7.0 million by using funds from its cash and short-term
investments.
The Company believes that its existing cash reserves, cash flow from operations
and existing credit facilities will be sufficient to satisfy its operating cash
needs for at least the next 12 months. Thereafter, the Company may require
additional cash reserves.
OUTLOOK
- -------
The Company expects that the installed base of personal computers will continue
to expand but at slower rates than experienced in the past. Furthermore, Apple
Computer has experienced difficulties in the past two quarters. Although the Mac
business performed well for the Company in the 1996 first quarter with a growth
rate of 50%, this business softened considerably to approximately 12% in the
second quarter reflecting uncertainties in the Apple marketplace. The growth in
the installed base of personal computers, coupled with the Company's prospecting
activities for new customers should increase the Company's sales in the future.
Furthermore, the Company will continue to pursue acquisition opportunities that
should allow it to increase its customer base and product offerings.
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
- ------------------------------------------------------------
With the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements that involve risk
and uncertainties including but not limited to economic, competitive,
governmental and technological factors outside of the control of the Company.
These factors more specifically include: Uncertainties surrounding the demand
for and supply of products manufactured by and compatible with those of Apple
Computer, Inc.; success of the Company's diversification away from its Apple
products; growth of the personal computer industry; timely availability of
existing and new products; and competition from other catalog and retail store
resellers. These and other factors are described generally in the MD&A section
of the Company's 1995 Annual Report to Stockholders and most specifically in the
paragraphs in that section captioned "Liquidity and Capital Resources", "Impact
of Inflation and Seasonality", "Subsequent Event", and "Outlook".
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
None
ITEM 2. CHANGES IN SECURITIES
---------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
The Annual Meeting of Stockholders of Micro Warehouse, Inc. was held
on June 4, 1996. At that meeting, the stockholders elected the following
individuals to serve as members of the Board of Directors in accordance with
the votes indicated below.
NAME FOR WITHHELD AUTHORITY
---- --- ------------------
Felix Dennis 30,606,678 256,795
Frederick H. Fruitman 30,606,678 256,795
Peter Godfrey 30.606,678 256,795
Melvin Seiler 30,606,678 256,795
Joseph M. Walsh 30,606,678 256,795
In addition, the stockholders approved an amendment to the 1994 Stock
Option Plan. The results were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
28,515,673 1,964,425 18,061
The stockholders approved an increase in the authorized common stock of
the Company. The results were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
29,433,748 1,090,104 13,206
12
<PAGE>
The stockholders did not approve an amendment to the Company's
Certificate of Incorporation to require a supermajority vote for amendment or
repeal of the By-laws or certain provisions of the Restated Certificate of
Incorporation. The results were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
11,613,443 17,266,072 80,013
The stockholders approved an amendment to the Company's Certificate of
Incorporation limiting the liability of Directors for monetary damages. The
results were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
29,363,748 1,079,484 105,251
Finally, the stockholders ratified the appointment of KPMG Peat Marwick
LLP as the Company's independent auditors for the year ending December 31, 1996.
The results were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
30,840,075 10,120 13,278
ITEM 5. OTHER INFORMATION
-----------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
1. The Company filed a Form 8-K pursuant to Item 5 on June 7,
1996 to report that its second quarter earnings would be below analysts'
expectations.
2. The Company filed a Form 8-K pursuant to Item 5 on June 19,
1996 to report that it had adopted a stockholder rights plan.
13
<PAGE>
MICRO WAREHOUSE, INC.
FORM 10-Q
JUNE 30, 1996
-------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MICRO WAREHOUSE, INC.
The Registrant
Date: August 9, 1996
/s/STEVEN PURCELL
-----------------
STEVEN PURCELL
Vice President-Finance, Chief
Financial Officer and Treasurer
(Duly Authorized Officer of the Registrant
and Principal Financial Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule
Pursuant to Article 5 of Regulation S-X
(in thousands, except per share data)
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 109,310
<SECURITIES> 13,309
<RECEIVABLES> 182,160
<ALLOWANCES> 6,859
<INVENTORY> 103,769
<CURRENT-ASSETS> 437,914
<PP&E> 30,486
<DEPRECIATION> 35,000
<TOTAL-ASSETS> 514,439
<CURRENT-LIABILITIES> 130,944
<BONDS> 721
0
0
<COMMON> 343
<OTHER-SE> 382,431
<TOTAL-LIABILITY-AND-EQUITY> 514,439
<SALES> 437,175
<TOTAL-REVENUES> 437,175
<CGS> 352,188
<TOTAL-COSTS> 418,275
<OTHER-EXPENSES> 5,977
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 236
<INCOME-PRETAX> 13,159
<INCOME-TAX> 7,749
<INCOME-CONTINUING> 5,410
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,410
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0
</TABLE>
