SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File Number 0-25364
ANICOM, INC.
(Name of registrant as specified in its charter)
Delaware 36-3885212
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6133 North River Road, Suite 1000, Rosemont, Illinois 60018-5171
(Address of principal executive offices) (Zip Code)
(847) 518-8700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) 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 |_|
The number of shares outstanding of the registrant's Common Stock, par value
$.001 per share as of May 14, 1998: 23,424,997
<PAGE>
PART I. -- FINANCIAL INFORMATION
Item 1. Financial Statements
ANICOM, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
March 31, 1998 December 31,
(Unaudited) 1997
ASSETS
Current assets:
Cash and cash equivalents $ 857 $ 687
Accounts receivable, less allowance for doubtful
accounts of $2,785 and $2,442 respectively 83,730 65,125
Inventory, primarily finished goods 63,262 57,099
Other current assets 5,564 7,344
------------ ------------
Total current assets 153,413 130,255
Property and equipment, net 5,876 5,771
Goodwill, net of accumulated amortization of
$2,081 and $1,605, respectively 83,952 76,869
Other assets 2,176 2,562
============ ============
Total assets $ 245,417 $ 215,457
============ ============
See Notes to Condensed Consolidated Financial Statements
<PAGE>
ANICOM, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
March 31 1998 December 31,
(Unaudited) 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58,471 $ 47,740
Accrued expenses and acquisition liabilities 15,346 13,246
Long-term debt, current portion 1,979 1,773
------------ -----------
Total current liabilities 75,796 62,759
Long-term debt, net of current portion 19,147 6,267
Other liabilities 2,001 2,282
------------ -----------
Total liabilities 96,944 71,308
------------ -----------
Commitments and Contingencies
Stockholders' Equity:
Common stock, par value $.001 per share; 60,000
shares authorized, 23,423 and 23,293 shares
issued and outstanding, respectively 15 15
Preferred stock, undesignated, par value $.01
per share; 973 and 1,000 shares authorized;
no shares issued and outstanding __ __
Additional paid-in capital 142,400 140,743
Retained earnings 6,058 3,391
------------ -----------
Total stockholders' equity 148,473 144,149
------------ -----------
Total liabilities and stockholders' equity $ 245,417 $ 215,457
============ ===========
See Notes to Condensed Consolidated Financial Statements
<PAGE>
ANICOM, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
For the Three Months Ended
March 31,
(unaudited)
1998 1997
Net sales $ 102,099 $ 45,011
Cost of sales 79,419 34,537
----------------- -----------------
Gross profit 22,680 10,474
----------------- -----------------
Operating expenses:
Selling 9,248 4,821
General and administrative 8,780 4,194
----------------- -----------------
Total operating expenses 18,028 9,015
----------------- -----------------
Income from operations 4,652 1,459
----------------- -----------------
Other income (expense):
Interest income 24 42
Interest expense (230) (69)
----------------- -----------------
Total other income (expense) (207) (27)
----------------- -----------------
Income before income taxes 4,445 1,432
Provision for income taxes 1,778 544
----------------- -----------------
Net income $ 2,667 $ 888
================= =================
Earnings per common share:
Basic $ 0.12 $ 0.06
================= =================
Diluted $ 0.11 $ 0.06
================= =================
Weighted average common shares outstanding:
Basic 23,295 15,664
================= =================
Diluted 23,881 15,942
================= =================
See Notes to Condensed Consolidated Financial Statements
<PAGE>
ANICOM, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, except per share data)
For the Three Months Ended
March 31,
(unaudited)
1998 1997
Cash flows from operating activities:
Net income $ 2,667 $ 888
Adjustments to reconcile net income to net
cash provided by (used in)operating
activities:
Depreciation 274 193
Amortization 476 132
Gain on sale of product line (483)
Increase (decrease) in cash attributable to
changes in assets and liabilities:
Marketable securities 4,345
Accounts receivable (17,699) (4,380)
Inventory (5,219) (4,099)
Other assets 2,235 (303)
Accounts payable 10,116 10,278
Accrued expenses and acquisition
liabilities (3,176) 127
----------- -----------
Net cash (used in) provided by operating
activities (10,326) 6,698
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (249) (305)
Cash paid for acquired companies (1,657) (1,765)
Other 200
----------- -----------
Net cash used in investing activities (1,906) (1,870)
----------- -----------
Cash flows from financing activities:
Payment of long-term debt and assumed bank debt (13,898) (3,743)
Proceeds from long-term debt 26,300
----------- -----------
Net cash provided by (used in) financing
activities 12,402 (3,743)
----------- -----------
Net increase in cash and cash equivalents 170 1,085
Cash and cash equivalents, beginning of period 687 195
----------- -----------
Cash and cash equivalents, end of period $ 857 $ 1,280
=========== ===========
See Notes to Condensed Consolidated Financial Statements
<PAGE>
ANICOM, INC.
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(Unaudited)
1. Basis of Presentation
The accompanying condensed consolidated unaudited financial statements
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments necessary to present
fairly the financial position of Anicom, Inc. (the "Company" or
"Anicom") as of March 31, 1998 and the results of its operations and
cash flows for the three months ended March 31, 1998 and 1997. Reported
interim results of operations are based, in part, on estimates that may
be subject to year-end adjustment. In addition, these interim results
of operations are not necessarily indicative of those expected for the
year.
These financial statements should be read in conjunction with the
Company's audited consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1997 (the "1997 Form 10-K").
2. Nature of Business and Summary of Significant Accounting Policies
Nature of Business
Anicom specializes in the sale and distribution of communications
related wire, cable, fiber optics and computer network and connectivity
products.
The Company sells to a wide array of customers, including contractors,
systems integrators, security/fire alarm companies, regional Bell
operating companies, distributors, utilities, telecommunications and
sound contractors, wireless specialists, construction companies,
universities, governmental agencies and companies involved in the
automotive, cable television, mining, marine, petro-chemical, paper and
pulp and other natural resource industries. The Company's customers are
principally located throughout the United States of America.
Income Taxes
The Company applies an asset and liability approach to accounting for
income taxes. Deferred tax assets and liabilities are established for
the expected future tax consequences of temporary differences between
the financial statement and tax bases of assets and liabilities, using
enacted tax rates.
The nature of reconciling items between the provision for income taxes
computed at the federal statutory rate and that reported for the three
months ended March 31, 1998 and 1997 are consistent with those
discussed in the Company's 1997 Form 10-K.
<PAGE>
ANICOM, INC.
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(Unaudited)
2. Nature of Business and Summary of Significant Accounting Policies,
continued
Earnings Per Common Share
The Company has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Standards No. 128, "Earnings Per Share"
("SFAS No. 128"), effective December 31, 1997. SFAS No. 128 specifies
the computation, presentation, and disclosure requirements for earnings
per share. The computation of basic earnings per common share is
computed based on net income available to common stockholders divided
by the weighted average common shares outstanding. The computation of
diluted earnings per common share is based on net income divided by
weighted average common shares and potentially dilutive securities such
as stock options and warrants.
The difference between basic and diluted weighted average common shares
in the periods presented is due to the inclusion of unexercised
dilutive stock options and warrants computed using the treasury stock
method.
Earnings per common share for the three months ended March 31, 1997
have been restated to conform to SFAS No. 128.
Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
This statement, effective for fiscal years beginning after December 15,
1997, requires the Company to report components of comprehensive income
in a financial statement that is displayed with the same prominence as
other financial statements. The Company's financial statements are
prepared in accordance with SFAS No. 130.
Recent Pronouncements
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information." ("SFAS No. 131"). This statement, effective for
financial statements for periods beginning after December 15, 1997,
requires that a public business enterprise report financial and
descriptive information about its reportable operating segments. Based
on the Company's current operations, management does not anticipate any
additional disclosure being required by SFAS No. 131.
In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits." This statement, effective for fiscal years
beginning after December 15, 1997, standardizes the disclosure
requirements for pensions and other postretirement benefits, requires
additional information on changes in the benefit obligation and fair
values of plan assets and eliminates certain disclosures that are no
longer useful. The Company has not yet determined the impact of this
statement on its financial statements.
<PAGE>
ANICOM, INC.
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(Unaudited)
3. Reengineering Costs
In the fourth quarter of 1997, the Company adopted a reengineering plan
(the "Plan). The Plan addressed developing and implementing a business
process reengineering plan, implementing a new information technology
system, terminating contracts associated with certain 1996 acquisitions
and consolidating redundant facilities.
As of December 31, 1997, the Company had accrued approximately $2,700
for costs incurred under the Plan that had not yet been paid. As of
March 31, 1998, approximately $1,400 remained accrued. Subsequent to
the end of the first quarter, $1,100 of severance accrued at December
31, 1997 was paid, reducing the accrued amount to approximately $300.
The majority of the remaining accrual relates to lease abandonment
costs that will be paid over several future quarters.
4. Acquisitions
In March 1998, the Company acquired substantially all of the assets and
assumed certain liabilities of Yankee Electronics Inc. ("Yankee") and
Optical Fiber Components Inc. ("OFCI"). Yankee and OFCI are located in
New Hampshire and Virginia, respectively. The purchase price for these
acquisitions consisted of $3,800 in cash and common stock. In addition,
the Company assumed approximately $255 of Yankee and OFCI debt.
In December 1997, the Company acquired TW Communication Corporation
("TW"). TW is a distributor of wire, cable, fiber optics and
installation supplies predominantly to the telecommunications, data and
cable television industries primarily in the United States. The
purchase price for this acquisition consisted of $16,000 in cash and
common stock. In connection with the acquisition, the Company paid in
full approximately $13,600 of TW bank indebtedness.
In October 1997, the Company acquired certain assets of Zack-DataCom,
the voice and data division of Zack Electronics, Inc. ("Zack") of San
Jose, California, a leader in the sale and distribution of multimedia
low voltage products. The purchase price was $4,700 payable in cash and
common stock.
In July 1997, the Company acquired Energy Electric Cable, a division of
Connectivity Products, Inc. ("Energy"). Energy is a national specialist
in the sale and distribution of multimedia wiring products based in
Auburn Hills, Michigan. The purchase price consisted of $12,000 in cash
and common stock and the pay down of $17,000 of Connectivity Products,
Inc. ("Connectivity") bank debt by Anicom. In addition, the Company
entered into a supply agreement with Connectivity.
<PAGE>
ANICOM, INC.
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(Unaudited)
4. Acquisitions, continued
Anicom purchased all of the issued and outstanding common stock of
Security Supply, Inc. ("Security Supply") of New Orleans, Louisiana, in
March 1997. Security Supply is a distributor of alarm, security and
life safety products in Louisiana and surrounding states. The purchase
price was approximately $2,000 in cash and common stock.
In February 1997, the Company acquired substantially all of the assets
and assumed certain liabilities of Carolina Cable & Connector, Inc.
("Carolina Cable") of Raleigh, North Carolina. Carolina Cable is a
specialist in the sale and distribution of wire and cable, fiber optics
and computer network and connectivity products. Carolina Cable has
seven locations in the Carolinas and Tennessee. The purchase price
consisted of $3,500 in cash and common stock. In addition, the Company
assumed approximately $3,500 of Carolina Cable indebtedness, which was
paid in full at closing.
All of the foregoing acquisitions have been recorded under the purchase
method of accounting. Accordingly, the results of operations of the
acquired businesses are included in the Company's consolidated results
of operations from the date of acquisition. The purchase price is
allocated to assets acquired and liabilities assumed based on the
estimated fair market value on the date of the acquisition.
The following pro forma condensed consolidated quarterly financial
information assumes that significant acquisitions and the May 1997 and
December 1997 issuances of equity discussed in Notes 4 and 11,
respectively in the 1997 Form 10-K, which were a significant source of
the funds used in these acquisitions, occurred on January 1, 1997. It
further assumes that the equity transaction discussed in Note 11 of the
1997 Form 10-K resulted in the issuance of Common Stock, based on the
conversion of the Preferred Stock to Common Stock approximately four
months after its issuance.
<PAGE>
ANICOM, INC.
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(Unaudited)
4. Acquisitions and Dispositions, continued
The results do not purport to be indicative of what would have occurred
had the acquisitions been made on January 1, 1997 nor are they
indicative of the results that may occur in the future.
Three Months Ended March 31,
1998 1997
Net sales $ 102,099 $ 83,012
================= =================
Operating income $ 4,652 $ 2,251
================= =================
Net income $ 2,667 $ 1,334
================= =================
Earnings per common share:
Basic $ 0.12 $ 0.06
================= =================
Diluted $ 0.12 $ 0.06
================= =================
Weighted average common shares
outstanding:
Basic 23,295 22,779
================= =================
Diluted 23,881 23,057
================= =================
5. Supplemental Cash Flow Information
The following summarizes non-cash investing and financing activities
for the period noted. Non-cash activity related to acquisitions
includes initial amounts estimated and any subsequent changes to those
initial estimates.
Three Months Ended March 31,
1998 1997
Acquisitions:
Fair value of assets acquired $ 9,668 $ 13,161
Acquisition liabilities and costs (250) (1,229)
Liabilities assumed (6,114) (6,527)
Common stock issued (1,554) (3,405)
-------------- -------------
Cash paid 1,750 2,000
Less: cash acquired (93) (235)
-------------- -------------
Net cash paid for acquisitions $ 1,657 $ 1,765
============== =============
Dispositions:
Value of assets sold, net of
transaction costs $ 117
============
Notes receivable accepted $ 400
============
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following table sets forth selected income statement data of Anicom
expressed as a percentage of net sales for the periods indicated:
For the Three Months Ended March 31,
1998 1997
Income Statement Data:
Net sales 100.0% 100.0%
Cost of goods sold 77.8 76.7
------------- ------------
Gross profit 22.2 23.3
------------- ------------
Operating expenses and other:
Selling expenses 9.1 10.7
General and administrative expenses 8.6 9.3
------------- ------------
Operating income 4.6 3.2
Interest (expense) (.2) (.2)
Interest income __ .1
------------- ------------
Income before income taxes 4.4 3.2
Income taxes 1.7 1.2
============= ============
Net income 2.6% 2.0%
============= ============
__________________
Note: Percentages may not sum due to rounding.
Results of Operations for the Three Months Ended March 31, 1998 Compared to the
Months Ended March 31, 1997
Net sales for the quarter ended March 31, 1998 increased to a record $102.1
million, a 126.8% increase over net sales of $45.0 million in the first quarter
of 1997. This significant increase is attributable to new customers, new
products, expanded market penetration and increased volume with existing
customers, all of which have resulted from the Company's acquisitions and
internal growth.
Anicom's gross profit for the first quarter of 1998 increased by $12.2 million
or 116.5% to $22.7 million versus $10.5 million for the quarter ended March 31,
1997. This increase resulted from Anicom's acquired sales volume and internal
growth. As a percentage of net sales, gross profit was 23.3% in the first
quarter of 1997 compared to 22.2% in 1998. The gross margin improvements that
resulted from the economic efficiencies created by Anicom's increased purchasing
volume were offset by the impact of lower historical gross profit margins of
certain recently acquired businesses. TW, which the Company acquired in December
1997, sells products into its markets at lower margins as compared to Anicom.
Consequently, management anticipates that gross margins reported for the
remainder of 1998 may be less than those reported for 1997. Management believes
that it will partially mitigate the impact of TW's historically lower gross
margins by increasing the depth and breadth of product offerings maintained in
stock at these locations and continuing to leverage purchasing volume with
vendors.
<PAGE>
Selling expenses increased by $4.4 million for the quarter ended March 31, 1998
in conjunction with the Company's increase in net sales and the increase in
sales headcount that resulted from the Company's acquisitions and internal
growth. Selling expenses as a percentage of net sales decreased from 10.7% of
net sales in 1997 to 9.1% of net sales in 1998. These improvements primarily
resulted from the Company realizing operating leverage from acquisitions and
conforming the selling incentive programs of acquired companies to those of
Anicom.
General and administrative expenses increased from $4.2 million in the first
quarter of 1997 to $8.8 million in 1998. The Company's acquisitions in the last
half of 1997 accounted for the majority of the increase in general and
administrative expenses. As a percentage of net sales, general and
administrative expenses decreased to 8.6% for the quarter ended March 31, 1998
from 9.3% in the same period of the year prior. These improvements were
attributable to increases in net sales outpacing general and administrative
costs as the Company further realized operating leverage from its
acquisition-based, integrated growth strategy and the impact of implementing its
reengineering plan in the fourth quarter of 1997.
In the quarter ended March 31, 1998, interest expense increased to $230,000 from
$69,000 for the quarter ended March 31, 1997. The increase is due primarily to
the Company borrowing against its credit facility to fund increased working
capital requirements and the cash consideration paid in the Yankee and OFCI
acquisitions.
The provision for income taxes increased to $1.8 million in the first quarter of
1998 from $544,000 in the first quarter of 1997. The increase is a result of the
increase in income before income taxes. The provision for income taxes, as a
percentage of income before income taxes, increased to 40.0% from 38.0%. The
increase is primarily attributable to the impact of non-deductible goodwill
related to the acquisition of TW.
Net income for the quarter ended March 31, 1998 increased 200.3% to $2.7 million
or 2.6% of net sales as compared to $888,000 or 2.0% of net sales for the
quarter ended March 31, 1997. Basic earnings per share doubled to $0.12 in the
first quarter of 1998 when compared to the $0.06 earned in the same period of
the prior year while diluted earnings per share increased 83.3% to $0.11 versus
the $0.06 reported for the first quarter of 1997. These increases were reported
despite an increase of basic and diluted weighted average common shares
outstanding of 48.7% and 49.8%, respectively.
Liquidity and Capital Resources
As of March 31, 1998, Anicom had working capital of approximately $77.6 million
as compared to $67.5 million at December 31, 1997. Anicom also has a $50 million
unsecured revolving credit facility (the "Facility") with a syndicate of
lenders, including Harris Trust and Savings Bank, LaSalle National Bank and The
First National Bank of Chicago. The Facility provides various interest rate
options, determined from time to time, based upon the Company's leverage ratio,
as defined, and either the agent's Domestic Rate less .50% to .25% or LIBOR plus
.50% to 1.00%. The Facility expires in July, 2000 and contains customary
financial covenants, including minimum tangible net worth and current, interest
coverage and debt to earnings ratios. At March 31, 1998, the amount outstanding
under the Facility was $18.3 million.
<PAGE>
Management believes that existing cash, cash equivalents, cash flows from
operations and draws on the Facility will be sufficient to fund current
operations, and its planned integrated growth strategy. The Company does not
currently have any significant long-term capital requirements that it believes
cannot be funded from the sources discussed above. However, in connection with
its acquisition and integrated growth strategy, the Company's capital
requirements may change based upon various factors, primarily related to the
timing of acquisitions and the consideration to be used as purchase price. The
Company continues to examine opportunities to raise funds through the issuance
of additional equity or debt securities through private placements or public
offerings and to increase its available lines of credit.
For the three months ended March 31, 1998, operating activities used $10.3
million of cash compared with the $6.7 million provided during the same period
of 1997. The significant change between years is, in part, a result of the
classification of the Company's net marketable securities activity. In the first
quarter of 1997, the Company liquidated marketable securities totaling $4.3
million for use in acquisition related activities. Excluding the impact of
marketable securities, Anicom generated $2.3 million of cash from operations
during the first quarter of 1997 compared with the use of $10.3 million in the
first quarter of 1998. The use of cash in operations is due, in part, to the
increase in accounts receivable. This increase resulted from the increase in
sales, which accelerated as the first quarter came to a close, particularly as
it relates to certain portions of TW's business. Operating cash flow was also
used to fund acquisition-related activities, including expanding product
offerings to accommodate acquired locations, funding business integration
liabilities and working capital deficiencies of acquired companies. These
investments in receivables and inventory were partially funded by an increase in
accounts payable. Additional funding in 1998 was provided by borrowings against
the Facility.
Investing activities utilized approximately $1.9 million in the three months
ended March 31, 1998. During the first quarter of 1998, Anicom completed the
acquisition of Yankee and OFCI. Cash paid for these acquisitions accounted for
the majority of cash used for investing activities.
Cash flows from financing activities in the first three months of 1998 totaled
$12.4 million. In connection with the acquisitions of Yankee and OFCI, the
Company paid approximately $256,000 of bank debt assumed in these acquisitions.
In addition, the Company paid $1 million of debt issued with a 1996 acquisition.
During this period, the Company drew against and made repayments on its
revolving credit facilities. For the quarter, net draws against the Facility
were used to fund operating cash flow requirements.
Year 2000 Compliance
During the fourth quarter of 1997, Anicom completed the implementation of a new
information technology system. This custom-designed information technology
system builds upon the strengths inherent in Anicom's previous system while
allowing for the reengineering of certain business processes that were necessary
to accommodate the explosive growth that Anicom has experienced in the last two
years. The new information system, which is year 2000 compliant, integrates
sales, inventory control and purchasing, warehouse management, financial control
and internal communications while providing real-time monitoring of inventory
levels, shipping status and other key operational and financial benchmarks at
all of Anicom's sales and distribution locations.
<PAGE>
This system will allow management to continue to execute their integrated growth
strategy by providing a platform capable of managing a company substantially
larger than Anicom's current size. This new system will allow Anicom to continue
to quickly integrate the operations of its acquisitions and maximize
productivity which management believes translates into a lower effective cost to
customers.
The Company does not anticipate incurring any material additional costs with
respect to the initial implementation of its information technology system,
which is currently year 2000 compliant. The Company's payroll outsourcing
service has confirmed that the systems used to process the Company's payroll are
year 2000 compliant. The Company is in the process of determining whether its
customers and suppliers are year 2000 compliant.
Recent Pronouncements
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information."
("SFAS No. 131"). This statement, effective for financial statements for periods
beginning after December 15, 1997, requires that a public business enterprise
report financial and descriptive information about its reportable operating
segments. Based on the Company's current operations, management does not
anticipate any additional disclosure being required by SFAS No. 131.
In February 1998, the FASB issued Statement of Financial Accounting Standards
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits." This statement, effective for fiscal years beginning after December
15, 1997, standardizes the disclosure requirements for pensions and other
postretirement benefits, requires additional information on changes in the
benefit obligation and fair values of plan assets and eliminates certain
disclosures that are no longer useful. The Company has not yet determined the
impact of this statement on its financial statements.
<PAGE>
PART II -- OTHER INFORMATION
Item 2. Changes in Securities
In March 1998, the Company issued shares of the Company's
common stock ("Common Stock") to Yankee Electronics, Inc.
("Yankee") and Optical Fiber Components, Inc. ("OFCI")
pursuant to agreements dated March 30, 1998 ("Agreements"),
under which the Company purchased certain assets and assumed
certain liabilities of Yankee and OFCI. Under the Agreements,
the Company paid $1,156,000 and $398,000, respectively, of the
purchase price in shares of Common Stock. The shares issued
pursuant to the Agreements were issued in reliance upon
Section 4 (2) of the Securities Act of 1933, as amended, and
the rules promulgated thereunder, as a transaction by an
issuer not involving any public offering. An appropriate
legend was affixed to the share certificates issued to Yankee
and OFCI.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The following exhibits are filed with this report:
Exhibit No.
27 Financial data schedule
(b) Reports on Form 8-K.
The following Report on 8-K was filed during the first quarter
of 1998:
Form 8-K/A, dated February 12, 1998 (Press Release)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ANICOM, INC.
Registrant
Dated: May 15, 1998 By: /S/ DONALD C. WELCHKO
Donald C. Welchko
Vice President and Chief Financial Officer
<PAGE>
ANICOM, INC.
INDEX TO EXHIBITS
Exhibit No.
27 Financial data schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTER ENDING MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFRENCE TO SUCH FORM 10-Q.
</LEGEND>
<CIK> 0000935802
<NAME> ANICOM, INC.
<MULTIPLIER> 1,000
<CURRENCY> DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.000
<CASH> 857
<SECURITIES> 0
<RECEIVABLES> 86,515
<ALLOWANCES> 2,785
<INVENTORY> 63,262
<CURRENT-ASSETS> 153,413
<PP&E> 7,882
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<CURRENT-LIABILITIES> 75,796
<BONDS> 0
0
0
<COMMON> 15
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 245,417
<SALES> 102,099
<TOTAL-REVENUES> 102,099
<CGS> 79,419
<TOTAL-COSTS> 79,419
<OTHER-EXPENSES> 18,028
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 230
<INCOME-PRETAX> 4,445
<INCOME-TAX> 1,778
<INCOME-CONTINUING> 2,667
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,667
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.11
</TABLE>
