SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: (DATE OF EARLIEST EVENT REPORTED) OCTOBER 4, 1996
------------------------------
CHS ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-24244 65-0263022
------------------------- ---------------------------------
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
2153 N.W. 86TH AVENUE
MIAMI, FLORIDA 33122
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 716-8273
-----------------------------
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Page 1 of ____ Pages
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 4, 1996, CHS Electronics, Inc. (the "Registrant" or
"CHS") consummated its acquisition of certain assets of Merisel, Inc., a
Delaware corporation ("Merisel"), pursuant to and in accordance with that
certain Purchase Agreement, dated as of September 27, 1996 (the "Purchase
Agreement"), by and among the Registrant and Merisel, as amended on October 4,
1996.
Pursuant to the Purchase Agreement, CHS acquired certain
subsidiaries of Merisel with operations in Austria, France, Germany, Mexico, The
Netherlands, Switzerland, the United Kingdom and Latin America (the "Acquired
Entities"). CHS also acquired certain assets of a Merisel subsidiary consisting
of certain operating systems in connection therewith (the assets acquired are
referred to herein as the "Acquired Assets"). The Acquired Entities are engaged
in the same business as CHS, the distribution of microcomputer products,
networking products and software.
The purchase price for the Acquired Entities and the Acquired Assets
was approximately $154 million, subject to an audit of the closing balance
sheets of the Acquired Entities.
CHS funded the acquisition of the Acquired Entities and the Acquired
Assets through a combination of approximately $36 million in cash (principally
with funds obtained through the sale of common stock of the Registrant to the
public in June 1996), $55 million received from the factoring of receivables of
the Acquired Entities and $63 million in asset secured borrowing including the
assumption of the continuing liability of Merisel (U.K.) Limited (one of the
Acquired Entities) under an Asset Securitization Agreement.
The acquisition will be accounted for as a "purchase" for financial
reporting purposes.
CHS presently intends to continue the respective operations of the
Acquired Entities and the Acquired Assets in substantially the same manner as
conducted prior to the acquisition and anticipates that its operations acquired
from Merisel will continue to grow from expanded sales to existing customers and
from an increased share of their markets. CHS will attempt to take advantage of
opportunities for profitable restructuring or disposition of certain of its
assets. CHS also intends to integrate the Acquired Entities and the Acquired
Assets to the extent appropriate in order to take advantage of certain
synergistic efficiencies presented by the acquisition.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The unaudited financial statements of Merisel, Inc.'s
European, Latin American and Mexican subsidiaries for the indicated periods are
attached hereto as Attachment 7(a) and are incorporated herein by this
reference.
-2-
<PAGE>
<TABLE>
<CAPTION>
MERISEL, INC.'S EUROPEAN, LATIN AMERICAN AND MEXICAN SUBSIDIARIES
COMBINED STATEMENTS OF EARNINGS
Nine Months Ended September 27, 1996 and September 30, 1995 (in thousands)
1996 1995
<S> <C> <C>
----------- -----------
(unaudited)
NET SALES $ 1,059,912 $ 901,793
COST OF SALES 986,454 875,004
----------- -----------
GROSS PROFIT 73,363 63,477
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 68,351 63,880
RESTRUCTURING CHARGE -- 3,961
OPERATING (LOSS) INCOME 5,012 (4,360)
INTEREST EXPENSE 9,577 5,789
OTHER EXPENSES -- 1,323
----------- -----------
LOSS BEFORE INCOME TAXES (4,565) (11,473)
----------- -----------
(BENEFIT)PROVISION FOR INCOME TAXES (NOTES 1 AND 5) 1,690 (2,504)
----------- -----------
NET LOSS $ (6,255) $ (8,968)
=========== ===========
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
MERISEL, INC.'S EUROPEAN, LATIN AMERICAN AND MEXICAN SUBSIDIARIES
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended September 27, 1996 and September 30, 1995 (in thousands)
1996 1995
-------- --------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (659) $ (8,968)
Adjustments to reconcile net loss to net cash provided
by (used for) operating activities:
Depreciation and amortization 3,150 2,631
Changes in assets and liabilities:
Accounts receivable 67,897 (26,224)
Inventories 85,982 (34,736)
Prepaid expenses and other assets (7,501) 11
Accounts payable (55,449) 63,372
Accrued liabilities (11,662) 26,265
Accrued and deferred income taxes 5,922 (4,586)
-------- --------
Net cash provided by (used in) operating activities: (87,680) 17,765
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment -- (9,862)
-------- --------
Net cash used in investing activities: -- (9,862)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing from (repayment to) banks (99,642) (56,189)
Net borrowings from (repayment to) parent 64,556 45,982
-------- --------
Net cash provided by (used in) financing activities: (35,086) (10,207)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,609) (808)
-------- --------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS 50,985 (3,112)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD (174) 2,268
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 50,811 $ (844)
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the years for:
Interest $ 7,346 $ 5,510
Income Taxes (2,223) (1,667)
Noncash activities:
Capital lease obligations entered into 5,708 --
Debt to equity conversion -- 4,281
</TABLE>
-4-
<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.
CHS ELECTRONICS, INC.
Date: May 12, 1997 By: /S/ CRAIG TOLL
---------------------------------
Craig Toll
Treasurer and Chief Financial Officer
-5-