<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[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 No. 0-22064
ELEK-TEK, INC.
--------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3042018
- -------------------------------- ----------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
7350 N. Linder Ave., Skokie, Illinois 60077
--------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(847) 677-7660
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 ___
---
Number of shares outstanding at August 19, 1996 6,300,000
---------
<PAGE>
ELEK-TEK, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
Balance Sheets
June 30, 1996 (Unaudited) and December 31, 1995 3
Statements of Operations
(Unaudited) - for the three months ended
June 30, 1996 and 1995 and the six months
ended June 30, 1996 and 1995 4
Statements of Cash Flows 5
(Unaudited) - for the six months ended
June 30, 1996 and 1995
Notes to Condensed Financial Statements (Unaudited) 6
Item II. Management's Discussion and Analysis of Results of
Operations and Financial Condition 7
PART II. OTHER INFORMATION
Item 3 Default Upon Senior Securities 12
Item 4 Annual Shareholder Meeting 12
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibit Index 14
2
<PAGE>
ELEK-TEK, INC
BALANCE SHEETS
(Dollars in thousands)
June 30, 1996 December 31, 1995
------------- ----------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 2,435 $ 8,064
Accounts receivable, trade 22,399 23,040
Inventories 27,726 37,852
Deferred taxes 5,199 821
Other 5,438 6,578
------------- ----------------
Total current assets 63,197 76,355
Property, plant and equipment, net 15,431 15,780
Other assets 39 69
------------- ----------------
Total assets $ 78,667 $ 92,204
------------- ----------------
------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 31,194 $ 36,295
Accrued expenses 2,930 2,570
Customer deposits 187 641
Short-Term debt 25,000 26,300
------------- ----------------
Total current liabilities 59,311 65,806
------------- ----------------
Subordinated notes payable to stockholders,
net of current maturities 4,429 4,571
------------- ----------------
Stockholders' equity:
Preferred stock, $.01 par value; 500,000
shares authorized; none issued or
outstanding
Common stock, $.01 par value;
20,000,000 shares authorized;
6,300,000 shares issued and outstanding 63 63
Paid-in capital 14,356 14,356
Retained earnings 508 7,408
------------- ----------------
Total stockholders' equity 14,927 21,827
------------- ----------------
Total liabilities and stockholders' equity $ 78,667 $ 92,204
------------- ----------------
------------- ----------------
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
ELEK-TEK, INC.
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share information)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 77,301 $ 78,964 $ 165,915 $ 162,833
Cost of sales 74,704 67,632 152,138 139,018
------------ ------------ ------------- -------------
Gross profit 2,597 11,332 13,777 23,815
Selling, general, and
administrative expenses 12,457 9,789 24,055 20,721
------------ ------------ ------------- -------------
Income (loss) from operations (9,860) 1,543 (10,278) 3,094
Other (income) expense:
Other income, net (72) (91) (148) (135)
Interest expense 575 727 1,148 1,327
------------ ------------ ------------- -------------
503 636 1,000 1,192
------------ ------------ ------------- -------------
Income (loss) before income tax povision (10,363) 907 (11,278) 1,902
Income tax provision (benefit) (4,023) 352 (4,378) 738
------------ ------------ ------------- -------------
Net income (loss) $ (6,340) $ 555 $ (6,900) $ 1,164
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Net income (loss) per share ($1.01) $0.09 ($1.10) $0.18
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Weighted average number of
common shares outstanding 6,300,000 6,300,000 6,300,000 6,300,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
ELEK-TEK, INC.
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ($6,900) $1,164
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 1,119 1,135
Deferred taxes (4,378) -
Changes in assets and liabilities:
Accounts receivable, trade 641 (3,188)
Inventories 10,126 4,866
Other assets 1,170 482
Accounts payable (5,101) (14,771)
Accrued expenses and customer deposits (94) (298)
--------- ---------
Net cash used in operating activities (3,417) (10,610)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (770) (1,387)
--------- ---------
Net cash used in investing activities (770) (1,387)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on revolving bank line of credit 40,100 51,200
Payments on revolving bank line of credit (41,400) (43,700)
Payments on subordinated notes payable to stockholders (142) (571)
--------- ---------
Net cash (used in) provided by financing activities (1,442) 6,929
--------- ---------
Net decrease in cash and cash equivalents (5,629) (5,068)
Cash and cash equivalents, beginning of period 8,064 8,164
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,435 $ 3,096
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
ELEK-TEK, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The financial information included herein is unaudited, but in the opinion of
management reflects all adjustments (which include only normal recurring
adjustments, except for special charges described below) necessary for a fair
presentation of the results for the interim periods. The interim results of
operations and cash flows are not necessarily indicative of such results and
cash flows for the entire year. The year-end condensed balance sheet data was
derived from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. These financial
statements should be read in conjunction with the financial statements and notes
thereto contained in the ELEK-TEK, Inc. (the "Company") Form 10-K for the year
ended December 31, 1995.
2. SPECIAL CHARGES
During the second quarter the Company incurred $6.4 million (pre-tax) in special
charges. The charges taken by the Company consisted primarily of vendor
payable adjustments of $3.5 million to reflect estimated amounts of contested
balances outstanding and an inventory valuation adjustment of $1.5 million, both
of which entries affected gross margin. In addition, the Company recorded $1.1
million of charges to selling, general and administrative expense relating to
severance costs and recruiting costs associated with the transition at the
senior management level. The Company has also recorded approximately $0.3
million in professional fees associated with the company-wide software
requirement definition and vendor software selection process.
3. SHORT-TERM DEBT
On April 15, 1996, the Company extended its revolving bank credit agreement
through April, 1997. The agreement requires the Company to maintain financial
covenants including a minimum tangible net worth amount and a leverage ratio as
defined in the agreement. The facility is subject to certain conditions,
including the Company be profitable for the third quarter and calendar year of
1996. Based upon the results of the current quarter, the Company is in
violation of the tangible net worth and leverage ratio covenants and does not
anticipate being profitable for calendar year 1996. The Company has obtained a
waiver from the bank of these defaults through September 13, 1996. This
waiver requires that no other events of default occur through the September 13,
1996 and the Company executes and delivers to the bank a modification
agreement to the credit agreement in a form satisfactory to the bank by the
September 13, 1996. The debt is classified as current on the balance sheet at
June 30, 1996.
4. INCOME TAXES
The Company recorded $0.8 million of deferred tax benefits at December 31, 1995.
Due to the loss recorded in the current period including additional reserves and
liabilities, the Company increased the deferred tax asset by $4.4 million.
Management believes that this deferred tax asset will be realized.
The Company's effective income tax rate in 1996 and 1995 varies from the federal
statutory tax rate of 34% principally due to state income taxes.
5. RECLASSIFICATION
Certain reclassifications have been made to conform prior years' data to the
current presentation. These reclassifications have no effect on operations or
total stockholders' equity of the Company.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, items in the
condensed statements of operations, expressed as a percentage of net sales:
Three Months Ended Six Months Ended
June 30, June 30
----------------------------------------
1996 1995 1996 1995
----- ---- ----- ----
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 96.6% 85.7% 91.7% 85.4%
Gross profit 3.4% 14.3% 8.3% 14.6
Selling, general and administrative
expenses 16.1% 12.4% 14.5% 12.7%
Income from operations -12.8% 1.9% -6.2% 1.9%
Other income, net 0.1% -.1% .1% -.1%
Interest expense .7% .9% .7% .8%
Income before taxes -13.4% 1.1% -6.8% 1.2%
Net income -8.2% .7% -4.2% .7%
Three Months Ended June 30, 1996
Net sales for the three month period ended June 30, 1996 were $77.3 million, a
decrease of $1.7 million (2.1%) from the $79.0 million for the comparable 1995
quarter. Mail order sales decreased $4.7 million (19.1%) and retail superstore
sales decreased $1.9 million (5.8%). This was offset by an increase in sales
from the corporate sales channel of $3.5 million (12.2%).
Corporate sales accounted for 42.0% of the Company sales for the second quarter.
Total corporate sales were $32.4 million in the second quarter of 1996 versus
$28.9 million in the second quarter of 1995. The sales increase was primarily
the result of the success the sales staff has had in Chicago, increasing sales
to new and existing corporate customers by $1.9 million (14.9%). Sales
continued to increase from the Kansas City and Denver markets, which were opened
in September and December of 1994, respectively. Sales in Kansas City and
Denver increased $.7 million (33.7%) and $.3 million (6.5%). In addition,
government and educational sales increased by $.5 million primarily due to new
customers in the Chicago market.
The Company's mail order channel generated sales of $13.9 million in the second
quarter of 1996, which was a 19.1% decrease from the same period one year ago.
The mail order business represented 18.0% of total sales in the second quarter
of 1996. Similar to last year, there was a catalog mailed at the end of
March. In 1996, there was an additional catalog distributed in June which did
not have a significant impact on the second quarter's results due to its late
distribution. Management believes the sales decrease is primarily attributed
to the March catalog distribution decreasing by 17% and only including 50% of
the page count in comparison to the catalog mailed in 1995. As the Company
receives additional vendor advertising support dollars, the Company's intention
is to increase the page count with each additional catalog distributed during
the remainder of 1996. Also, the Company intends to reduce catalog distribution
expenses and to improve catalog revenues by improved targeting of selected
customers.
7
<PAGE>
The retail superstore channel accounted for 40.0% of second quarter sales in
1996. Retail sales decreased for the second quarter of 1996 by 5.8% from
$32.8 million in 1995 to $30.9 million in 1996, despite one additional store
opening in the Chicago-Lakeview location. The lower sales are due to a decrease
in retail store traffic and a lower average transaction size. A decision was
made during the management changes to decrease advertising . This impacted
sales in the mail order channel and to a greater degree in the retail
superstore channel. The new senior management team plans an aggressive
marketing campaign to increase consumer awareness. The new campaign will use
radio, print and direct mail pieces. There is no assurance that the new
marketing campaign will result in additional sales.
Gross margin for the three month period ending June 30, 1996 was $2.6 million
(3.4% of net sales) compared to $11.3 million (14.3% of net sales) for the same
period one year ago.
During the current quarter there were special charge adjustments impacting gross
margin relating to accounts payable, to reflect estimated amounts of contested
balances outstanding and to inventory valuations. Additionally, an adjustment
of $1.4 for inventory shrink was recorded in 1996 versus $.4 million recorded in
1995. The impact of these adjustments lowered gross margin by $6.4 million or
8.3 % of net sales in 1996. Excluding these adjustments, gross margin as a
percentage of sales would have been 11.7% in 1996. The gross margin percentage
is down from the same period last year as a result of lower vender rebates as
well as additional pressure put on gross margins by the consumer electronic and
office product retailers. Both of these groups price their computer products
aggressively as a way to gain market share and the Company has adjusted its
prices accordingly. Whether significant pricing reductions will continue is
uncertain, but it is the Company's intent not to allow its competitors to gain a
pricing advantage in the markets in which it operates. Additionally, because of
the larger proportion of sales now being contributed by corporate sales, which
are at lower margin rates, the Company's overall gross margin percentage has
been reduced.
At the end of the second quarter of 1996, selling, general and administrative
expenses were $12.5 million (16.1% of net sales) compared to $9.8 million (12.4%
of net sales) for the comparable three month period in 1995, an increase of $2.7
million (27.3%). The primary reason for the increase relates to $.8 million in
higher charges and increases in the allowances for uncollectable trade accounts
receivable, returned customer checks and bankcard chargebacks; a $.8 million
charge relating to severance costs associated with the 20% headcount reduction,
which the Company implemented, and $.3 million in recruiting costs associated
with the transition at the senior management level. In addition, the current
quarter's selling, general and administrative expenses are higher because of
$.5 million in higher net advertising costs resulting from a lower level of
vendor reimbursement and $.3 million in professional fees associated with the
company-wide software requirement definition and vendor software selection
process. These costs were offset in part by lower salary costs associated with
the headcount reduction.
Interest expense for the three month period ended June 30, 1996 was $.6 million
compared to $.7 million for the same period one year ago. The main reason for
the decrease was the lower average borrowing base during the second quarter in
1996. Borrowings decreased due to lower inventory levels and improved cash
management practices.
Net loss for the second quarter of 1996 was $6.3 million, compared to net income
for the same period in 1995 of $.6 million.
Six Months Ended June 30, 1996
For the six months ending June 30, 1996 net sales increased 1.9% from $162.8
million to $165.9 million. Positive sales increases were generated by the
corporate sales channel which was partially offset by the decreases in the mail
order and retail superstore sales channels during the period. Corporate sales,
mail order and retail superstore contributed 38.8%, 18.4% and 42.8% of the total
sales respectively.
8
<PAGE>
Growth was achieved by corporate sales, in which sales during the first six
month of 1996 grew by 15.8% from $55.6 million in 1995 to $64.4 million.
Contributing to this increase were the Kansas City and Denver sales regions as
these operations continued to increase market share after they were opened in
September and December of 1994. The Chicago region also continued to increase
market penetration . Chicago, Kansas City and Denver corporate sales increased
$2.6 million (10.1%), $2.9 million (78.7%), and $2.7 million (41.4% )
respectively over the first six month of 1995. The Company's strongest base,
the Chicago region, accounted for 44.2% of total corporate sales.
The mail order sales decreased for the six month period ending June 30,1996 over
the same period last year. Mail order sales declined from $32.9 million to
$30.5 million, a 7% decrease. The mail order channel represented 18.4% of total
sales during the first six months of 1996. Similar to last year there was a
catalog mailed at the end of March. In 1996 there was an additional catalog
distributed in June. The June catalog mailing did not have a significant
impact to the first six month's results because of its late distribution.
Management believes the sales decrease is primarily attributed to the March
catalog distribution decreasing by 17% and only including 50% of the page count
in comparison to the catalog mailed in 1995. As the Company receives additional
vendor advertising support dollars, the Company's intention is to increase the
page count with each additional catalog distributed during the remainder of
1996. Also, the Company intends to reduce catalog distribution expenses and to
improve catalog revenues by improved targeting of selected customers.
Sales in the retail superstores channel declined 4.5% for the six month period
ending June 30,1996 over the same period last year from $74.3 million to $71.0
million. The majority of this decrease occurred in the four existing
Chicagoland area stores. The Denver and Kansas City stores also had sales
decreases while the Indianapolis store sales increased slightly. Offsetting
this were sales associated with the new Lakeview store which opened in June of
1996. The lower sales are due to a decrease in retail store traffic and a
lower average transaction size. A decision was made during the management
changes to decrease advertising. This impacted sales in the mail order
channel and to a greater degree in the retail superstore channel. The new
senior management team plans an aggressive marketing campaign to increase
consumer awareness. The new campaign will use radio, print and direct mail
pieces. There is no assurance that the new marketing campaign will result in
additional sales.
For the six month period ended June 30, 1996 gross margin was $13.8 million
(8.3% of net sales) compared to $23.8 million (14.6% of net sales) for the same
period last year. During the second quarter of 1996, there were special
charge adjustments impacting gross margin relating to accounts payable, to
reflect estimated amounts of contested balances outstanding and to inventory
valuations. Additionally, an adjustment of $2.4 for inventory shrink was
recorded in 1996 versus $.6 million recorded in 1995. The impact of these
adjustments lowered gross margin by $7.4 million or 4.5 % of net sales in
1996. Excluding these adjustments, gross margin as a percentage of sales would
have been 12.8%. This is down from the same period last year as a result of
lower vendor rebates, higher level of purchases from secondary sources as well
as additional pressure put on gross margins by the consumer electronic and
office products retailers. Whether significant pricing reductions will continue
is uncertain, but it is the Company's intent not to allow its competitors to
gain a pricing advantage in the markets in which it operates. Additionally,
because of the larger proportion of sales now being contributed by corporate
sales, which are at lower margin rates, the Company's overall gross margin
percentage has been reduced
Selling, general and administrative expenses for the six month period ending
June 30, 1996 increased 16.1% from $20.7 ( 12.7% to net sales ) to $24.0 million
(14.5% to net sales ) from the same period last year. The major reasons for the
$3.3 million increase were:
Salaries increased $1.3 million primarily due to employee severance totaling
$.9 million; the Company restructured the executive and middle
management teams in 1996. The remainder of the increase was commission
expense. Commissions expense increased $.4 million which is related to the
increase in corporate sales (15.8%) this period over the same period
last year.
9
<PAGE>
The Company incurred $.3 million in recruiting costs associated with the
transition at the senior management level.
Professional fees increased $.5 million in the first six month of 1996
versus the same period in 1995. Approximately $.2 million resulting
from the use of consultants for an inventory management project. The
consultants were contracted to design and implement a new supply chain to
reduce inventory levels while improving in-stock positions. In addition,
$.3 million in professional fees were incurred relating to the company-
wide software requirement definition and vendor software selection process.
An increase of $.8 million in higher charges and increases in the
allowances for uncollectable trade accounts receivable, returned
customer checks and bankcard chargebacks.
Interest expense for the six month period ended June 30, 1996 was $1.1 million
compared to $1.3 million for the same period one year ago, a decrease of roughly
$.2 million. The main reason for the decrease was the lower average borrowing
base during the first six months of 1996. Borrowings decreased due to lower
inventory levels and because of improved cash management practices.
Net loss was $6.9 million for the six month period ended June 30, 1996 compared
to $1.2 million net income for the same period last year.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the six month period ended June 30,
1996 was $3.4 million compared to $10.6 million for the same six month period a
year ago. The decrease in net cash used in operating activities during 1996
resulted from the net operating loss of $6.9 million, an additional deferred tax
asset of $4.4 million resulting from the net operating loss tax benefit and a
reduction in accounts payable of $5.1 million relating to the timing of
payments. Primarily offsetting the above is $10.1 million of cash provided by
operating activities from inventory reduction because of improved inventory
stocking programs.
Net cash used in investing activities consisted of property and equipment
acquisitions of $ 0.7 million, which primarily related to establishing the
company-wide computer network and leasehold improvements and equipment purchases
for the new retail superstore at the Lakeview-Chicago location.
Net cash used in financing activities totaled $1.4 million and was primarily due
to net payments on the Company's revolving credit facility.
The Company expects to continue to finance future operations through cash flows
from operations and its revolving credit facility. Management expects cash
requirements to be lower than in 1995 but will increase during the remainder of
1996 because of seasonal factors. The Company's revolving bank credit facility
remains at $35 million; at June 30, 1996 the outstanding balance was $25
million. Recognition of the second quarter loss places the company in violation
of certain basic covenants of its lending agreement with its principal bank
lender. The Company has obtained a waiver from the bank of these defaults
through September 13, 1996. This waiver requires that no other events of
default occur through the waiver date and the Company executes and delivers to
the bank a modification agreement to the credit agreement in a form
satisfactory to the bank by the waiver date.
The Company is prohibited from making principal payments on subordinated notes
under its senior lending agreements. During the second quarter the Company did
not make the principal payment on its subordinated debt. One of the two
subordinated note holders notified the company he had not agreed to suspending
principal payments.
10
<PAGE>
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements made in this quarterly report that are not historical facts, are
forward looking statements, and therefore, involve risks and uncertainties,
including, but not limited to, the following risks: interest rates may rise
instead of decreasing, competitors may open more stores in each of the Company's
markets, further intensifying competitive pressures; catalog production and
mailing costs may continue to rise; the new marketing program for mail order may
not prove successful; increased competition in all channels may adversely affect
gross margin, as well as other risks; and the terms of the new bank agreement
may not be as favorable as the current agreement. Accordingly, actual results
may differ materially from those set forth in the forward looking statements.
11
<PAGE>
PART II. OTHER INFORMATION
Items 3 - Default upon Senior Securities
On April 15, 1996, the Company extended its revolving bank credit agreement
through April, 1997. The agreement requires the Company to maintain financial
covenants including a minimum tangible net worth amount and a leverage ratio as
defined in the agreement. The facility is subject to certain conditions,
including the Company be profitable for the third quarter and calendar year of
1996. Based upon the results of the current quarter, the Company is in
violation of the tangible net worth and leverage ratio covenants and does not
anticipate being profitable for calendar year 1996. The Company has obtained a
waiver from the bank of these defaults through September 13, 1996. This
waiver requires that no other events of default occur through the September 13,
1996 and the Company executes and delivers to the bank a modification
agreement to the credit agreement in a form satisfactory to the bank by the
September 13, 1996. The debt is classified as current on the balance sheet at
June 30, 1996.
Item 4 - Annual Shareholders Meeting
On June 13, 1996 ELEK-TEK, Inc. held its annual shareholders meeting. Present
at this meeting, in person and by proxy, were stockholders representing
3,519,021 shares of common stock (55.9% of the total number of shares of Common
Stock outstanding and entitled to vote). At that time, the following Directors
were elected to the Board:
Number of Votes
Name For Withheld
- ---- --------------------------
Dennis Flanagan 3,466,771 52,250
Susan Kaiser 3,466,771 52,250
Harvey Kinzelberg 3,500,871 18,150
Robert Lipsig 3,500,546 18,475
Alvin Richer 3,465,871 53,150
Richard Rodriguez 3,501,671 17,350
Also voted upon was a proposed amendment to the Elek-Tek, Inc. 1993 Incentive
Stock Option Plan to increase the number of shares of Common Stock available for
awards thereunder from 300,000 shares to 500,000 shares. The results from the
vote were as follows:
For 3,443,453 Against 67,903 Abstain 7,665
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(c) No reports on Form 8-K were filed during the quarter ended
June 30, 1996.
12
<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.
ELEK-TEK, INC.
--------------
(Registrant)
Date: August 19, 1996 By: _______________________________
Richard L. Rodriguez.
President, Chief Executive Officer,
and Director
Date: August 19, 1996 By: _________________________________
Miguel A. Martinez, Jr.
Vice President, Chief Financial Officer and
Secretary (Principal Financial and
Accounting Officer)
13
<PAGE>
ELEK-TEK, INC.
EXHIBIT INDEX
Exhibit
Number Exhibit Description Page
- ------ ------------------- ----
11 Computation of Earnings Per Share 15
27 Financial Data Schedule 16
14
<PAGE>
Exhibit 11
ELEK-TEK, INC.
COMPUTATION OF EARNINGS (LOSS) PER SHARE
(Dollars in thousands, except per share information)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
--------------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS (LOSS) PER COMMON SHARE
Net earnings (loss) $ (6,340.00) $ 555.00 $ (6,899.00) $ 1,164.00
Weighted average common shares outstanding 6,300,000 6,300,000 6,300,000 6,300,000
Primary earnings (loss) per common share $ (1.01) $ 0.09 $ (1.10) $ 0.18
- ------------------------------------------------------------------------------------------------------------------------
FULLY DILUTED EARNINGS (LOSS) PER COMMON SHARE
Net earnings (loss) $ (6,340.00) $ 555.00 $ (6,899.00) $ 1,164.00
Weighted average common shares outstanding 6,300,000 6,300,000 6,300,000 6,300,000
Stock options assumed to be exercised 0 0 0 0
--------------- ----------- ------------- --------------
Weighted average common shares outstanding,
as adjusted 6,300,000 6,300,000 6,300,000 6,300,000
--------------- ----------- ------------- --------------
--------------- ----------- ------------- --------------
Fully diluted earnings (loss) per common share $ (1.01) $ 0.09 $ (1.10) $ 0.18
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
There were 271,500 and 333,500 stock options outstanding in 1995 and 1996
respectively, which have not been included in the earnings per share calculation
in the applicable years as the exercise price was below market price.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000908613
<NAME> ELEK-TEK, INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,435,000
<SECURITIES> 0
<RECEIVABLES> 23,119,000
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<INVENTORY> 27,726,000
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<PP&E> 27,122,000
<DEPRECIATION> 11,690,000
<TOTAL-ASSETS> 78,667,000
<CURRENT-LIABILITIES> 59,311,000
<BONDS> 0
0
0
<COMMON> 63,000
<OTHER-SE> 14,864,000
<TOTAL-LIABILITY-AND-EQUITY> 78,667,000
<SALES> 163,451,000
<TOTAL-REVENUES> 165,915,000
<CGS> 152,138,000
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<OTHER-EXPENSES> 24,055,000
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<INTEREST-EXPENSE> 1,148,000
<INCOME-PRETAX> (11,278,000)
<INCOME-TAX> (4,378,000)
<INCOME-CONTINUING> (6,900,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,900,000)
<EPS-PRIMARY> (1.10)
<EPS-DILUTED> (1.10)
</TABLE>
