SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 21, 1996.
CHS ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-24244
FLORIDA 87-0435376
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2153 N.W. 86TH AVENUE
MIAMI, FLORIDA 33122
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number: (305) 716-8273
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On February 21, 1996, CHS Electronics, Inc. ("Company"), closed the
transactions contemplated by the Purchase Agreement dated January 31, 1996
("Agreement"), pursuant to which the Company acquired effective January 31,
1996, 51% of the outstanding capital of Kventa Hungary Kft., a Hungary limited
liability company ("Kventa"). The transaction was reported in a report on Form
8-K dated February 28, 1996 ("Initial Filing"). The Initial Filing did not
contain the financial statements and pro forma financial information required by
Item 7 of Form 8-K. Pursuant to the requirements of the form, the Initial Filing
is hereby amended by the addition of the following items.
(a) Financial Statements. Financial statements of Kventa, for the year ended
December 31, 1995, together with the Report of Independent Auditors' pertaining
thererto, are presented beginning at page F-46 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company, File No. 333-03864, filed
with the Commission on May 9, 1996 (the "Form S-1 Filing"), and are
incorporated herein by this reference.
(b) Pro Forma Financial Information. Attached are the pro forma condensed
consolidated financial statements (unaudited) of the Company and Kventa,
containing the following:
(1) Basis of Presentation
(2) Unaudited Pro Forma Consolidated Condensed Balance Sheet
as of December 31, 1995
(3) Unaudited Pro Forma Consolidated Condensed Statement of
Operations, Year Ended December 31, 1995
(4) Notes to the Unaudited Pro Forma Consolidated Condensed
Financial Statements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CHS ELECTRONICS, INC.
DATED: May 9, 1996 By /s/ CRAIG S. TOLL
--------------------------------------
Craig S. Toll, Chief Financial Officer
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CHS Electronics, Inc.
Basis of Presentation
The following pro forma condensed consolidated statement of operations
for the year ended December 31, 1995 and the proforma condensed consolidated
balance sheet as of December 31, 1995 give effect to the acquisition by the
Company of Kventa, KFT. subsequent to December 31, 1995. This acquisition, from
unrelated parties, will be accounted for using the purchase method of
accounting. The pro forma consolidated condensed statement of operations for the
year ended December 31, 1995 presents the proforma results of operations
assuming the acquisition occurred on January 1, 1995. The pro forma consolidated
condensed balance sheet as of December 31, 1995 is presented as if the
acquisition had taken place on that date.
The unaudited pro forma consolidated condensed financial statements
have been prepared based upon the historical financial statements of CHS and the
acquired company for the periods stated above. Such pro forma statements may not
be indicative of the results that would have occurred if the acquisitions had
been consummated on the indicated dates, or of the operating results that may be
achieved by the combined companies in the future. The pro forma financial
statements should be read in conjunction with the financial statements and
related notes of CHS.
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<TABLE>
<CAPTION>
CHS Electronics, Inc.
Unaudited Pro Forma Consolidated Condensed Balance Sheet
December 31, 1995
(In $000,except share data)
Historical Historical Pro forma
Company Kventa, KFT. Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash 10,454 1,208 -3,519 (a) 8,143
Accounts Receivable-net 117,065 3,089 120,154
Inventories 89,865 1,295 91,160
Deferred tax asset 456 0 456
Prepaid Expenses 8,925 417 9,342
------------------------------------------ -------
Total Current Assets 226,765 6,009 -3,519 229,255
Property and Equipment-net 8,126 183 8,309
Costs in excess of assets 0
acquired-net 14,922 0 12,809 (b) 27,731
Other Assets 1,737 95 14,586 (a) 1,832
-14,586 (b)
------------------------------------------ -------
251,550 6,287 9,290 267,127
========================================== =======
Current liabilities
Notes payable 45,967 29 45,996
Accounts payable 144,093 1,398 145,491
Accrued liabilities 11,778 944 12,722
Note payable to affiliate 2,879 0 2,879
Income taxes payable 937 432 1,369
Total current liabilities 205,654 2,803 208,457
Long term debt 8,801 0 8,801
Minority Interest 1,707 (b) 1,707
Stockholders' Equity
Common stock 8 7 1 (a) 9
-7 (b)
Additional paid-in capital 31,724 0 11,066 (a) 42,790
Retained earnings 4,996 3,477 -3,477 (b) 4,996
Translation adjustment 367 0 367
------------------------------------------ -------
Total stockholders' equity 37,095 3,484 7,583 48,162
------------------------------------------ -------
251,550 6,287 9,290 267,127
========================================== =======
</TABLE>
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<TABLE>
<CAPTION>
CHS Electronics, Inc.
Unaudited Pro Forma Consolidated Condensed Statement of Operations
Year ended December 31,1995
(In $000,except share data)
Historical Historical Pro Forma
Company Kventa, KFT. Adjustments Combined
<S> <C> <C> <C> <C>
Net Sales 862,324 21,087 883,411
Cost of Sales 800,578 17,895 818,473
----------------------------------------------- ---------
Gross Profit 61,746 3,192 64,938
Operating expenses 51,220 770 640 (c) 52,630
----------------------------------------------- ---------
Operating Income 10,526 2,422 (640) 12,308
Interest expense 4,082 -88 3,994
----------------------------------------------- ---------
Earnings before income tax 6,444 2,511 (640) 8,315
Provision for income tax 1,701 465 2,166
Minority interest 1,002 (d) 1,002
----------------------------------------------- ---------
Net Earnings 4,743 2,045 (1,642) 5,146
=============================================== =========
Net earnings per common share -primary 0.65 0.62
========= =========
Net earnings per common share -fully diluted 0.65 0.62
========= =========
Weighted average number
of common shares outstanding - primary 7,282,785 1,006,000 8,288,785
========= ========= =========
Weighted average number
of common shares outstanding - fully diluted 7,282,785 1,006,000 8,288,785
========= ========= =========
</TABLE>
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CHS Electronics, Inc.
Notes to Unaudited Pro Forma Consolidated Condensed Financial Statements
a. In January 1996, effective February 1, 1996, the Company acquired 51% of
Kventa KFT, (CHS Hungary) for contingent consideration equal to 51% of the
book value of CHS Hungary, measured under U.S. generally accepted accounting
principles on December 31, 1996 and 51% of seven times earnings for the year
then ended. CHS Hungary is based in Budapest, Hungary and is a distributor
and retailer of similar products as the Company. This transaction is
accounted for under purchase accounting. For purposes of the pro forma, the
purchase price of CHS Hungary was derived by adding the 1996 budgeted net
earnings of CHS Hungary of $3,100,000 to the book value of $3,800,000 at
December 31, 1995 to obtain the expected December 31, 1996 book value. The
purchase price was then calculated to be $14,586,000. Per the agreement, the
book value portion is payable in cash and the earnout portion is payable in
stock or cash at the seller's option. For purposes of the pro forma, it was
assumed 1,006,000 shares would be issued for the earnout portion at a price
of $11 per share.
Therefore, the acquisition entry is (in thousands of dollars):
(DR.) (CR.) (CR.)
COMPANY INVESTMENT CASH EQUITY
------- ---------- ---- ------
CHS Hungary 14,586 3,519 11,067
b. To eliminate the investment account, record goodwill of $12,809,000 for
CHS Hungary and minority interest.
c. To record amortization of goodwill over a period of 20 years.
d. To record an adjustment for minority interest for CHS Hungary.
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