<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended December 31, 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 1-12842
ScanSource, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0965380
- -------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporated or organization)
6 Logue Court, Suite G
Greenville, SC 29615
- -------------------------------- ------------------------------------
(Address of principal executive (Zip Code)
offices)
(864) 288-2432
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(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
------- -------
As of December 31, 1996, 3,247,986 shares of the registrant's common stock, no
par value, were outstanding.
This report contains 16 pages. The exhibit index begins on sequentially numbered
page 13.
<PAGE>
SCANSOURCE, INC.
INDEX
FORM 10-Q
December 31, 1996
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements (Unaudited)........................ 2
Condensed Balance Sheets................................ 2
Condensed Income Statements............................. 4
Condensed Statements of Cash Flows...................... 5
Notes to Condensed Financial Statements................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 10
Item 2. Changes in Securities................................... 10
Item 3. Defaults Upon Senior Securities......................... 10
Item 4. Submission of Matters to a Vote of Security-Holders..... 10
Item 5. Other Information....................................... 10
Item 6. Exhibits and Reports on Form 8-K........................ 10
SIGNATURES................................................................ 12
EXHIBIT INDEX............................................................. 13
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCANSOURCE, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ -----------
(Note 1) (Note 1)
(Unaudited)
(In thousands)
<S> <C> <C>
Assets
------
Current assets:
Cash............................................. $ -- --
Receivables:
Trade, less allowance for doubtful accounts of
$733,000 at December 31, 1996 and
$527,000 at June 30, 1996...................... 8,909 7,463
Other............................................. 367 531
------- -------
9,276 7,994
Inventories....................................... 25,169 17,538
Prepaid expenses and other........................ 126 52
Deferred tax asset................................ 1,001 1,001
------- -------
Total current assets............................ 35,572 26,585
Property and equipment, net........................ 1,354 1,184
Intangible assets, net............................. 830 871
Note from officer.................................. 83 83
Other assets....................................... 148 19
------- -------
Total assets.................................... $37,987 28,742
======= =======
</TABLE>
See notes to condensed financial statements.
2
<PAGE>
SCANSOURCE, INC.
CONDENSED BALANCE SHEETS (Continued)
<TABLE>
<CAPTION>
December 31, June 30,
Liabilities and Shareholders' Equity 1996 1996
- ------------------------------------ ----------- --------
(Note 1) (Note 1)
(Unaudited)
(In thousands)
<S> <C> <C>
Current liabilities:
Trade accounts payable............................. $15,602 8,287
Accrued compensation cost.......................... 143 97
Accrued expenses and other liabilities............. 495 600
Income tax payable................................. -- 540
------- ------
Total current liabilities........................ 16,240 9,524
Deferred tax liability............................. 26 26
Line of credit..................................... 5,069 3,779
------- ------
Total liabilities............................... 21,335 13,329
Shareholders' equity:
Preferred stock, no par value; 3,000,000 shares
authorized, none issued and outstanding......... -- --
Common stock, no par value; 10,000,000 shares
authorized, 3,247,986 and 3,235,186 issued and
outstanding at December 31, 1996 and
June 30, 1996, respectively..................... 11,958 11,935
Retained earnings.................................. 4,694 3,478
------- ------
Total shareholders' equity...................... 16,652 15,413
------- ------
Total liabilities and shareholders' equity........ $37,987 28,742
======= ======
</TABLE>
See notes to condensed financial statements.
3
<PAGE>
SCANSOURCE, INC.
CONDENSED INCOME STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
December 31, December 31,
1995 1996 1995 1996
------- ------ ------ ------
(In thousands except share data)
<S> <C> <C> <C> <C>
Net sales............................. $22,437 12,489 42,110 23,277
Cost of goods sold.................... 19,407 10,716 36,382 19,928
------- ------ ------ ------
Gross profit........................ 3,030 1,773 5,728 3,349
Selling, general and administrative
expenses............................ 1,889 1,164 3,557 2,217
Amortization of intangibles........... 21 21 41 41
Total operating expenses............ 1,910 1,185 3,598 2,258
------- ------ ------ ------
Operating income.................... 1,120 588 2,130 1,091
Other income (expense):
Gain from contract termination...... -- -- -- 200
Other income (expense) net........... (88) 51 (169) 45
------- ------ ------ ------
Total other income (expense).. (88) 51 (169) 245
Income before income taxes.......... 1032 639 1,961 1,336
Income taxes.......................... 392 249 745 523
------- ------ ------ ------
Net income....................... $ 640 390 1,216 813
======= ====== ====== ======
Net income per share $ .18 .11 .35 .23
======= ====== ====== ======
Weighted average shares outstanding 3,493 3,693 3,478 3,552
======= ====== ====== ======
</TABLE>
See notes to condensed financial statements.
4
<PAGE>
SCANSOURCE, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1996 1995
(In thousands)
------- -------
<S> <C> <C>
Net cash used in operating activities................... $ (973) (4,909)
Cash flows from investing activities:
Capital expenditures, net.............................. (340) (338)
Payments to MicroBiz................................... - (68)
------ ------
Net cash used in investing activities.............. (340) (406)
Cash flows from financing activities:
Advances (repayments) on line of credit, net........... 1,290 (1,200)
Net proceeds from issuance of stock upon:
Exercise of purchase warrants prior to redemption..... - 6,342
Exercise of stock options............................. 23 69
Exercise of former underwriters' unit
purchase option...................................... - 437
------ ------
Net cash provided by (used in) financing activities... 1,313 5,648
------ ------
Increase (decrease) in cash.......................... - 333
Cash at beginning of period............................. - 187
------ ------
Cash at end of period................................... $ - 520
====== ======
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
SCANSOURCE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The interim financial information included herein is unaudited. Certain
information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC), although the
Company believes that the disclosures made are adequate to make the
information presented not misleading. These financial statements should be
read in conjunction with the financial statements and related notes
contained in the Company's annual report on Form 10-KSB for the period
ended June 30, 1996. Other than as indicated herein, there have been no
significant changes from the financial data published in that report. In
the opinion of management, such unaudited information reflects all
adjustments, consisting only of normal recurring accruals and other
adjustments as disclosed herein, necessary for a fair presentation of the
unaudited information.
Results for interim periods are not necessarily indicative of results
expected for the full year, or for any subsequent period.
The balance sheet for June 30, 1996 has been derived from the audited
balance sheet for that date.
(2) SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - The Company records revenue when products are
shipped.
Inventories - Inventories consisting of point of sale and bar code
equipment are stated at the lower of cost (first-in, first-out method) or
market.
(3) CONTRACT TERMINATION
As compensation for terminating an operations agreement with the Company
and reducing the term of a non-compete agreement, Gates Distributing Inc.
(Gates) agreed to pay the Company $1.4 million. The Company recognized the
$1.4 million, net of $100,000 of related expenses, as other income in the
income statement ratably over the remaining term of the non-compete
agreement from September 1994 to August 1995. Therefore the final $200,000
portion of this amount is shown as other income in the six month period
ended December 31, 1995.
6
<PAGE>
(4) LINE OF CREDIT
In November 1996 the Company closed a bank line of credit agreement
extending to October 31, 1998 whereby the Company can borrow up to $15
million, based upon 80% of eligible accounts receivable and 40% of non-IBM
inventory, at the 30 day Libor rate of interest, plus a rate varying from
2.00% to 2.65% tied to the Company's debt to net worth ratio ranging from
1:1 to 2:1. The revolving credit is secured by accounts receivable and
inventory. The outstanding balance on the line of credit was approximately
$5.1 million on a borrowing base of $12.2 million, leaving approximately
$7.1 million available at December 31, 1996.
(5) SUBSEQUENT EVENTS
The Company has negotiated a stock rotation with IBM whereby $6.5 million
of inventory will be returned to IBM beginning as early as February 1997.
This stock rotation will result in reductions to inventory and trade
accounts payable.
In January 1997 the Company filed a registration statement with the SEC in
connection with a public offering of 2,000,000 shares of its common stock.
7
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
NET SALES. Net sales for the quarter ended December 31, 1996 increased 80%
to $22.4 million compared to $12.5 million for the comparable prior year
quarter. Net sales increased 81% to $42.1 million for the six months ended
December 31, 1996 from $23.3 million for the comparable prior year period.
Growth of net sales resulted primarily from additions to the Company's sales
force, competitive product pricing, selective expansion of its product line, and
increased marketing efforts to automatic identification (Auto ID) and point of
sale (POS) resellers.
GROSS PROFIT. Gross profit for the quarter ended December 31, 1996
increased 71% to $3.0 million compared to $1.8 million for the comparable prior
year quarter. Gross profit increased 71% to $5.7 million for the six months
ended December 31, 1996 from $3.3 million for the comparable prior year period.
Gross profit as a percentage of sales for the quarter and six months ended
December 31, 1996 was 13.5% and 13.6% compared to 14.2% and 14.4%, respectively,
for the comparable prior year periods. The reduction in gross profit as a
percentage of sales was the result of a change in the mix of sales which
included more lower margin products, as well as a greater number of volume
discounts, provided to customers on large orders.
OPERATING EXPENSES. Operating expenses, which includes selling, general and
administrative expenses (SG&A) and amortization, for the quarter ended December
31, 1996 were $1.9 million compared to $1.2 million for the comparable prior
year quarter. Operating expenses for the six months ended December 31, 1996
were $3.6 million compared to $2.3 million for the comparable prior year period.
SG&A as a percentage of sales was 8.4% for both the quarter and six months ended
December 31, 1996, compared to 9.3% and 9.5%, respectively, for the comparable
prior year periods. Generally, lower gross margin sales require the Company to
provide fewer value-added services causing a corresponding decrease in SG&A.
The decrease in SG&A as a percentage of sales was also the result of
efficiencies gained through increased sales volume and accompanying economies of
scale.
OPERATING INCOME. Operating income for the quarter ended December 31, 1996
increased 90% to $1.1 million from $588,000 for the comparable prior year
quarter driven by the improvement in gross profit from increased sales.
Operating income increased 95% to $2.1 million for the six months ended December
31, 1996 from $1.1 million for the comparable prior year period. Operating
income as a percentage of sales was 5.0% and 5.1%, respectively, for the quarter
and six months ended December 31, 1996, compared to 4.7% for both of the
comparable prior year periods.
TOTAL OTHER INCOME (EXPENSE). Total other income (expense) includes interest
income (expense), net and gain on contract termination. Interest expense for
the quarter and six months ended December 31, 1996 was $88,000 and $169,000,
respectively, which resulted from the Company's use of its line of credit to
fund growth in receivables and inventory. For the quarter and
8
<PAGE>
six months ended December 31, 1995, other income included net interest income of
$49,000 and $45,000, respectively, which resulted from earnings on invested
proceeds from the issuance of common stock upon the exercise of warrants through
September 19, 1995. The Company recognized $200,000 as other income for the six
months ended December 31, 1995 associated with the Gates/FA contract
termination. This amount constituted the final portion of the gain.
INCOME TAXES. Tax expense was provided at a 38% effective rate for both the
quarter and six months ended December 31, 1996, and represented the state and
federal tax expected to be due after annualizing income to June 30, 1997. Tax
expense was provided at a 39% effective rate for the quarter and six months
ended December 31, 1995.
NET INCOME. Net income for the quarter ended December 31, 1996 increased 64%
to $640,000 from $390,000 for the comparable prior year quarter. Net income for
the six months ended December 31, 1996 increased 50% to $1.2 million from
$813,000 for the comparable prior year period. Net income as a percentage of
sales was 2.9% for both the quarter and six months ended December 31, 1996
compared to 3.1% and 3.5%, respectively, for the comparable prior year periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company financed its initial operating requirements and growth through
private financing totalling $500,000. In March 1994, the Company completed an
initial a public offering of common stock and warrants which provided the
Company with approximately $4.6 million. The Company also received proceeds of
approximately $6.3 million from common stock issued upon the exercise of stock
purchase warrants prior to their redemption date in September 1995.
In November 1996 the Company renegotiated a bank line of credit agreement
extending to October 31, 1998 whereby the Company can borrow up to $15 million,
based upon 80% of eligible accounts receivable and 40% of non-IBM inventory, at
the 30 day LIBOR rate of interest, plus a rate varying from 2.00% to 2.65% tied
to the Company's debt to net worth ratio ranging from 1:1 to 2:1. The revolving
credit is secured by accounts receivable and inventory. The outstanding balance
on the line of credit was approximately $5.1 million on a borrowing base of
$12.2 million, leaving approximately $7.1 million available at December 31,
1996.
For the six months ended December 31, 1996, net cash of $973,000 was used in
operating activities compared to $4,909,000 for the six months ended December
31, 1995. Cash used in operations was primarily from growth in trade
receivables and inventory partially offset by an increase in trade payables.
Cash used in investing activities of $340,000 for the six months ended
December 31, 1996 was primarily for capital expenditures. Cash used in investing
activities for the six months ended December 31, 1995 was $406,000 and consisted
of $338,000 for capital expenditures and payments to MicroBiz Corporation for
$68,000.
9
<PAGE>
Cash provided by financing activities for the six months ended December 31,
1996 was $1.3 million which represented primarily borrowings on the line of
credit. Cash provided by financing activities for the quarter ended December
31, 1995, was $5.6 million and included net proceeds of $6.3 million, $437,000
and $69,000 from the issuance of stock upon the exercise of stock purchase
warrants, a portion of the former underwriter's purchase option, and employee
stock options, respectively. A portion of these proceeds was used to repay the
Company's line of credit for $1.2 million.
In January 1997 the Company filed a registration statement with the SEC in
connection with a public offering of 2,000,000 shares of common stock. The
Company believes that the net proceeds from this offering, together with the
existing bank line of credit will be sufficient to meet its cash requirements
for the next 18 months.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
None.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
(a) The Company's annual meeting of shareholders was held on
December 3, 1996.
(b) The four directors listed in subsection (c) below were
elected at the meeting. The Company has the meeting. no
other directors whose term of office continued after the
meeting.
(c) (i) Election of Directors:
Number of Shares
----------------
Withhold
Nominees For Authority
-------- --- ---------
Michael L. Baur 3,081,625 5150
Steven H. Owings 3,082,025 4750
Steve R. Fischer 3,082,025 4750
James G. Foody 3,082,025 4750
(ii) Proposal to amend the Company's 1993 Incentive Stock
Option Plan, increasing the number of shares
reserved for the plan from 200,000 to 280,000, and
altering the rights of plan participants to exercise
vested plan options after termination of employment:
Number of Shares
----------------
For 3,044,635
Against 13,965
Abstain 3,175
Not voted 25,000
(iii) Proposal to ratify the appointment of KPMG Peat
Marwick LLP as the Company's independent auditors
for the fiscal year ending June 30, 1997:
Number of Shares
----------------
For 3,078,525
Against 7,150
Abstain 1,100
Item 5. OTHER INFORMATION.
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit Index is at page 13.
(b) Reports on Form 8-K: None
11
<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.
SCANSOURCE, INC.
/s/ Steven H. Owings
-----------------------------------------
STEVEN H. OWINGS
Chief Executive Officer
/s/ Jeffery A. Bryson
-----------------------------------------
JEFFERY A. BRYSON
Chief Financial Officer
Date: February 6, 1997
12
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
3.1 - Amended and Restated Articles of Incorporation of the
Registrant. (Incorporated by Reference to Exhibit 3.1 to
Registrant's Form SB-2 filed with the Commission on February 7,
1994, Registration No. 33-75026-A).
3.2 - Bylaws of the Registrant (Incorporated by Reference to Exhibit
3.2 to Registrant's Form SB-2 filed with the Commission on
February 7, 1994, Registration No. 33-75026-A).
4.1 - Form of Common Stock Certificate (Incorporated by Reference to
Exhibit 4.1 to Registrant's Form SB-2 filed with the Commission
on February 7, 1994, Registration No. 33-75026-A).
10.9 - Stock Option Agreement dated July 1, 1993 covering stock options
issued to Michael L. Baur. (Incorporated by Reference to Exhibit
10.9 to the Registrant's Form SB-2 filed with the Commission on
February 7, 1994, Registration No. 33-75026-A).
10.10 - 1993 Incentive Stock Option Plan (As Amended) of the Registrant
and Form of Stock Option Agreement.
10.11 - 1994 Stock Option Plan for Outside Directors of the Registrant
and Form of Stock Option Agreement. (Incorporated by Reference
to Exhibit 10.11 to the Registrant's Form SB-2 filed with the
Commission on February 7, 1994, Registration No. 33-75026-A).
10.13 - Stock Option Agreement dated December 30, 1993 covering stock
options issued to Irwin Lieber. (Incorporated by Reference to
Exhibit 10.13 to the Registrant's Form SB-2 filed with the
Commission on February 7, 1994, Registration No. 33-75026-A).
10.18 - Agreement to Terminate Distribution Services dated June 24, 1994
between the Registrant and Gates/FA Distributing, Inc.
(Incorporated by Reference to Exhibit 99.1 to Registrant's Form
8-K filed with the Commission on June 6, 1994).
10.19 - Stock Option Agreement dated September 1, 1995 between Globelle,
Inc., the Registrant, and Dennis Gates. (Incorporate by
reference to Exhibit 10.19 to the Registrant's Form 10-KSB for
the fiscal year ended June 30, 1996).
10.20 - Letter agreement dated September 1, 1995 between the Registrant
and Transition Marketing, Inc. (Incorporated by reference to
Exhibit 10.20 to the Registrant's Form 10-KSB for the fiscal
year ended June 30, 1996).
10.21 - Software License Agreement dated April 18, 1995 between the
Registrant and Technology Marketing Group, Inc. d/b/a Globelle,
including letter agreement dated November 22, 1995 between the
parties with respect to stock options. (Incorporated by
reference to Exhibit 10.21 to the Registrant's registration
statement on Form S-3 filed with the Commission on December 29,
1995, Registration No. 33-81043).
10.22 - Schedule of Material Details of Unit Purchase Option Agreements
dated March 18, 1994, between the Registrant and each of David
M. Nussbaum, Robert Gladstone, Roger Gladstone, and Richard
Buonocoure (Form of Unit Purchase Option Agreement incorporated
by reference to Exhibit 4.3 to the Registrant's Form SB-2 filed
with the Commission on March 2, 1994, Registration No. 33-75026-
A and Schedule of Materials Details incorporated by reference to
Exhibit 10.22 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.23 - Stock Warrant dated November 29, 1995 from the Registrant to Eli
Oxenhorn. (Incorporated by reference to Exhibit 10.23 to the
Registrant's Form S-1 filed with the Commission on January 23,
1997, Registration No. 333-20231).
10.24 - Stock Warrant dated November 29, 1995 from the Registrant to
Barry Rubenstein. (Incorporated by reference to Exhibit 10.24 to
the Registrant's Form S-1 filed with the Commission on
January 23, 1997, Registration No. 333-20231).
10.25* - Agreement for Wholesale Financing (Security Agreement) dated
April 8, 1996 between the Registrant and IBM Credit Corporation,
including letter agreement dated April 17, 1996 between the
parties. (Incorporated by reference to Exhibit 10.25 to the
Registrant's Form S-1 filed with the Commission on January 23,
1997, Registration No. 333-20231).
10.26 - Intercreditor Agreement dated April 8, 1996 among the
Registrant, IBM Credit Corporation, and Branch Banking and Trust
Company. (Incorporated by reference to Exhibit 10.26 to the
Registrant's Form S-1 filed with the Commission on January 23,
1997, Registration No. 333-20231).
10.27 - Loan and Security Agreement dated November 25, 1996 between the
Registrant and Branch Banking and Trust Company. (Incorporated
by reference to Exhibit 10.27 to the Registrant's Form S-1 filed
with the Commission on January 23, 1997, Registration
No. 333-20231).
10.28 - Employment Agreement dated as of January 1, 1997 between the
Registrant and Steven H. Owings. (Incorporated by reference to
Exhibit 10.28 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.29 - Employment Agreement dated as of January 1, 1997 between the
Registrant and Michael L. Baur. (Incorporated by reference to
Exhibit 10.29 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
10.30 - Employment Agreement dated as of January 1, 1997 between the
Registrant and Jeffery A. Bryson. (Incorporated by reference to
Exhibit 10.30 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.31 - Stock Option Agreement dated July 18, 1996 covering stock
options granted to Steven R. Fisher. (Incorporated by reference
to Exhibit 10.31 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.32 - Stock Option Agreement dated July 18, 1996 covering stock
options granted to James G. Foody. (Incorporated by reference to
Exhibit 10.32 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.33 - Stock Option Agreement dated December 3, 1996 covering stock
options granted to Steven H. Owings. (Incorporated by reference
to Exhibit 10.33 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.34 - Stock Option Agreement dated December 3, 1996 covering stock
options granted to Michael L. Baur. (Incorporated by reference
to Exhibit 10.34 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.35* - Distribution Agreement dated October 1, 1994 between the
Registrant and Symbol Technologies, Inc. (Incorporated by
reference to Exhibit 10.35 to the Registrant's Form S-1 filed
with the Commission on January 23, 1997, Registration
No. 333-20231).
10.36* - Distribution Agreement dated January 1, 1996 between the
Registrant and IBM Corporation. (Incorporated by reference to
Exhibit 10.36 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.37 - Stock Option Agreement dated January 17, 1997 covering options
granted to Steven H. Owings. (Incorporated by reference to
Exhibit 10.37 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.38 - Stock Option Agreement dated January 17, 1997 covering options
granted to Michael L. Baur. (Incorporated by reference to
Exhibit 10.38 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.39 - Stock Option Agreement dated January 17, 1997 covering options
granted to Jeffrey A. Bryson. (Incorporated by reference to
Exhibit 10.39 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
11 - Statement re: Computation of Per Share Earnings. (Incorporated
by reference to Exhibit 11 to the Registrant's Form S-1 filed
with the Commission on January 23, 1997, Registration
No. 333-20231).
27 - Financial Data Schedule.
</TABLE>
- -----------
* Confidential Treatment pursuant to 17 CFR (S)(S) 200.80, 200.83, and 230.406
and 5 USC (S) 502 has been requested regarding certain portions of the
indicated Exhibit, which portions have been filed separately with the
Commission.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND INCOME STATEMENT AS OF AND FOR THE SIX MONTH PERIOD ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 8,909
<ALLOWANCES> 733
<INVENTORY> 25,169
<CURRENT-ASSETS> 35,572
<PP&E> 1,887
<DEPRECIATION> 533
<TOTAL-ASSETS> 37,987
<CURRENT-LIABILITIES> 16,240
<BONDS> 0
0
0
<COMMON> 11,958
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 37,987
<SALES> 42,110
<TOTAL-REVENUES> 42,110
<CGS> 36,382
<TOTAL-COSTS> 3,598
<OTHER-EXPENSES> 26
<LOSS-PROVISION> 0
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