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, 1999
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 1-13792
SYSTEMAX INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3262067
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
22 Harbor Park Drive
Port Washington, New York 11050
(Address of registrant's principal executive offices)
(516) 625-1555
(Registrant's telephone number, including area code)
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.
[X] Yes [ ] No
The number of shares outstanding of the registrant's Common Stock as of August
6, 1999 was 35,732,190.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SYSTEMAX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------ ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 34,707 $ 42,029
Short term investments 5,050
Accounts receivable, net 177,847 154,516
Inventories 122,011 129,966
Prepaid expenses and other current assets 35,910 28,382
---------- ----------
Total current assets 370,475 359,943
PROPERTY, PLANT AND EQUIPMENT, net 37,226 33,988
GOODWILL, net 68,834 56,612
OTHER ASSETS 4,184 3,896
--------- ----------
TOTAL $ 480,719 $ 454,439
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 185,951 $ 162,636
Current portion of long term debt 626 2,681
--------- ----------
Total current liabilities 186,577 165,317
--------- ----------
LONG TERM DEBT 1,898 2,493
--------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock
Common stock, par value $.01 per share, issued 38,231,990 shares,
outstanding 35,732,190 and 36,128,090 shares 382 382
Additional paid-in capital 176,743 176,743
Common stock in treasury at cost - 2,499,800 and 2,103,900 shares (34,323) (28,604)
Accumulated other comprehensive income (5,007) (348)
Retained earnings 154,449 138,456
--------- ----------
Total shareholders' equity 292,244 286,629
--------- ----------
TOTAL $ 480,719 $ 454,439
========= ==========
</TABLE>
See notes to condensed consolidated financial statements.
SYSTEMAX INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Six Month Three Month
Periods ended Periods ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
NET SALES $ 835,451 $ 688,810 $ 413,800 $ 330,452
COST OF SALES 679,917 546,385 337,578 263,396
-------- -------- --------- ---------
GROSS PROFIT 155,534 142,425 76,222 67,056
SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 129,433 110,721 67,292 55,430
-------- --------- --------- ----------
INCOME FROM OPERATIONS 26,101 31,704 8,930 11,626
INTEREST AND OTHER INCOME-net 350 1,603 20 761
--------- ---------- ---------- ---------
INCOME BEFORE INCOME TAXES 26,451 33,307 8,950 12,387
PROVISION FOR INCOME TAXES 10,458 12,823 3,720 4,768
-------- --------- --------- --------
NET INCOME $ 15,993 $ 20,484 $ 5,230 $ 7,619
========= ========= ========= ========
Net income per common share:
Basic $ .44 $ .54 $ .15 $ .20
========= ========= ========= ========
Diluted $ .44 $ .54 $ .15 $ .20
========= ========= ========= ========
Common and common equivalent shares outstanding:
Basic 35,941 38,174 35,818 38,117
========= ========= ========= ========
Diluted 35,976 38,231 35,838 38,125
========= ========= ========= ========
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
SYSTEMAX INC.
Condensed Statement of Consolidated Shareholders' Equity
(IN THOUSANDS)
<TABLE>
<CAPTION>
Common Stock Accumulated
-------------- Additional Other Treasury
Number of Paid-in Retained Comprehensive Stock
Shares Amount Capital Earnings Income At Cost
---------- ------ --------- --------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES, DECEMBER 31, 1998 36,128 $ 382 $ 176,743 $ 138,456 $ (348) $ (28,604)
Change in cumulative translation adjustment ( 4,659)
Purchase of treasury shares (396) ( 5,719)
Net income 15,993
------ ----- --------- --------- -------- --------
BALANCES, JUNE 30, 1999 35,732 $ 382 $ 176,743 $ 154,449 $( 5,007) $(34,323)
====== ===== ========= ========= ======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
SYSTEMAX INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX-MONTH PERIOD
ENDED JUNE 30,
1999 1998
--------- --------
(UNAUDITED)
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 15,993 $ 20,484
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization, net 7,213 3,815
Provision for returns and doubtful accounts 3,351 2,889
Changes in certain assets and liabilities:
Accounts receivable (24,767) (5,112)
Inventories 10,177 (2,926)
Prepaid expenses and other current assets (7,791) (5,575)
Accounts payable and accrued expenses 6,610 17,530
--------- ------
Net cash provided by operating activities 10,786 31,105
--------- ------
CASH FLOWS PRIVIDED BY (USED IN) INVESTING ACTIVITIES:
Net change in short-term investments 5,050 (587)
Investments in property, plant and equipment (7,419) (5,542)
Acquisitions, net of cash acquired (8,398) (895)
--------- -------
Net cash used in investing activities (10,767) (7,024)
--------- -------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Purchase of treasury shares (5,719) (11,383)
Repayments of long-term borrowings (2,325) --
--------- -------
Net cash used in financing activities (8,044) (11,383)
--------- -------
EFFECTS OF EXCHANGE RATES ON CASH 703 251
--------- -------
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS (7,322) 12,949
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 42,029 43,432
--------- -------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 34,707 $ 56,381
========= ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
SYSTEMAX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The accompanying consolidated financial statements include the accounts of
Systemax Inc. and its wholly-owned subsidiaries (collectively, the
"Company" or "Systemax"). The Company is a corporate supplier of personal
computers (PCs), notebook computers, computer related products, industrial
products and office products in North America and Europe. Systemax markets
these products through an integrated system of direct mail catalogs, a
network of major account sales representatives and proprietary "e-
commerce" Internet sites.
2. BASIS OF PRESENTATION
Net income per common share - basic was calculated based upon the weighted
average number of common shares outstanding during the respective periods
presented. Net income per common share - diluted was calculated based upon
the weighted average number of common shares outstanding and included the
equivalent shares for dilutive options outstanding during the respective
periods.
All intercompany accounts have been eliminated in consolidation.
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all normal and recurring
adjustments necessary to present fairly the financial position of the
Company as of June 30,1999 and the results of operations for the three and
six month periods ended June 30, 1999 and 1998, cash flows for the six
months ended June 30, 1999 and 1998 and changes in stockholders' equity for
the three months ended June 30, 1999. The December 31, 1998 consolidated
balance sheet has been extracted from the audited consolidated financial
statements included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
These condensed consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements as
of December 31, 1998 and for the period then ended. The results for the
three months and six months ended June 30, 1999 are not necessarily
indicative of the results for an entire year.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30,
1998
Net sales for the three months ended June 30, 1999 increased 25% to $413.8
million compared to $330.5 million in the year ago quarter. The increase of
$83.3 million was attributable to increased demand for PCs, sales made by
Simply Computers Ltd. ("Simply"), acquired in February 1999, and increased
sales generated by the Company's Internet sites. The number of orders
shipped increased 8% to 1.0 million compared to the year ago quarter, and
showed a 16% increase in the average order value to $422, reflecting the
increased PC sales. Sales during the quarter from North American operations
increased 15% to $302.0 million compared to $261.6 million in the second
quarter of 1998. European sales increased 62% to $111.8 million (including
approximately $25 million for Simply) compared to $68.8 million in the year
ago quarter. The European sales increase is net of a $3.5 million reduction
due to the effects of changes in exchange rates.
Gross profit was $76.2 million, or 18.4% of sales, compared to $67.1
million, or 20.3% of sales in the year ago quarter, an increase of $9.1
million. The decrease in the gross profit percentage was primarily due to
the continuing trend of large increases in the sales of PCs, notebook
computers and brand name products, which generally have a lower gross
profit percentage than our other products. Increased relationship sales and
a relatively lower sales contribution from higher-margin industrial
products also affected the gross profit percentage unfavorably.
Selling, general and administrative expenses for the quarter increased by
$11.9 million or 21% to $67.3 million compared to $55.4 million in the
second quarter of 1998. This increase resulted from the inclusion of
Simply, continued expansion of the relationship marketing sales
organizations and investments in the Company's "e-commerce" Internet
business. This was partially offset by a decrease in net advertising
expense as a result of increased vendor participation. Selling, general and
administrative expenses for the second quarter of 1999 also include
one-time charges of $4.1 million for reserves related to certain
contingencies and a write-off of goodwill associated with a variety of
small acquisitions made during the last few years. As a percentage of
sales, selling, general and administrative expenses improved to 16.3%
compared to 16.8% in the year ago quarter.
Income from operations for the quarter decreased by $2.7 million to $8.9
million from $11.6 million in the year ago quarter. Income from operations
as a percentage of net sales decreased to 2.2% from 3.5% in the year ago
quarter. Operating income in North America decreased 12% to $8.3 million
from $9.5 million last year. Operating income in Europe decreased 73% to
$0.6 million from $2.2 million in the year ago quarter.
Interest and other income decreased as a result of less interest income in
the current year due to lower invested cash balances.
The Company's income tax rate was 41.6% for the second quarter of 1999 and
38.5% for the second quarter of 1998, increasing due to a variety of
factors, both domestic and international.
As a result of the above, net income for the quarter was $5.2 million, or
$.15 per basic and diluted share, compared to $7.6 million, or $.20 per
basic and diluted share in the second quarter of 1998.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
Net sales for the six months ended June 30, 1999 increased 21% to $835.5
million compared to $688.8 million in the year ago period. The increase of
$146.7 million was attributable to increased demand for PCs, sales made by
Simply, acquired in February 1999, and increased sales generated by the
Company's Internet sites. The number of orders increased 8% to 2.1 million
compared to the year ago period, with a 12% increase in the average order
value to $399. Sales during the six months from North American operations
increased 12% to $606.0 million compared to $540.6 million in 1998.
European sales increased 55% to $229.5 million (including approximately $46
million for Simply) compared to $148.2 million a year ago. The effect of
changes in exchange rates on European sales for the six months was not
material.
Gross profit was $155.5 million, or 18.6% of sales, compared to $142.4
million, or 20.7% of sales, last year, an increase of $13.1 million. The
decrease in the gross profit percentage was primarily due to the continuing
trend of large increases in the sales of PCs, notebook computers and brand
name products, which generally have a lower gross profit percentage than
our other products. Increased relationship sales and a relatively lower
sales contribution from higher-margin industrial products also affected the
gross profit percentage unfavorably.
Selling, general and administrative expenses for the period increased by
$18.7 million or 17% to $129.4 million compared to $110.7 million in the
first half of 1998. This increase was primarily the result of continuing
investments for expansion of the relationship marketing sales
organizations, investments in the Company's "e-commerce" Internet business,
the inclusion of Simply and the previously noted one-time charges of $4.1
million. This was partially offset by a decrease in net advertising expense
as a result of increased vendor participation and the overall leveraging of
selling, general and administrative expenses over the larger sales base.
Selling, general and administrative expenses as a percentage of sales
improved to 15.5% compared to 16.1% in the year ago period.
Income from operations for the period decreased by $5.6 million to $26.1
million from $31.7 million in the year ago period. Income from operations
as a percentage of net sales decreased to 3.1% from 4.6% a year ago.
Operating income in North America decreased by 16% to $21.5 million from
$25.8 million in the year ago period. Income from operations in Europe
decreased 23% to $4.6 million from $5.9 million in the year ago period.
Interest and other income decreased as a result of less interest income in
the current year due to lower invested cash balances.
The Company's income tax rate was 39.5% for the first six months of 1999
and 38.5% for the year ago period, increasing due to a variety of factors,
both domestic and international.
As a result of the above, net income for the six months was $16.0 million,
or $.44 per basic and diluted share, compared to $20.5 million, or $.54 per
basic and diluted share in the year ago period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital needs are to finance working capital for
sales growth, investments in property, equipment and information technology
and business acquisitions. Cash and cash equivalents totaled approximately
$35 million at June 30, 1999. For the six months ended June 30, 1999, the
Company generated cash from operating activities of $10.8 million compared
to $31.1 million for the year ago period. The decrease resulted from lower
net income in 1999, increased accounts receivable as a result of the
increased sales volume and decreased accounts payable. These were partially
offset by a decrease in inventory balances. Cash was used in investing
activities, primarily for the purchase of Simply Computers and additions of
capital equipment. Cash was also used in financing activities for the
purchase of additional treasury shares and repayment of a mortgage loan.
For the six months ended June 30, 1999, cash and cash equivalents decreased
by $7.3 million.
The Company believes it has access to adequate funds for growth through its
available cash balances and funds generated by operations and secured and
unsecured lines of credit maintained with financial institutions.
YEAR 2000 COMPLIANCE
The Company is in the process of addressing what is known as the year 2000
(or Y2K) issue. Based on current information, management believes that the
Company will be year 2000 compliant in a timely manner and the cost of
achieving such compliance will not have a materially adverse effect on the
Company's results of operations or financial condition. As noted in the
following discussion, however, there are multiple variables in determining
whether full Y2K compliance can be achieved, many of which are dependent on
efforts of third parties. For a discussion of this problem see the
Company's Form 10-K for the year ended December 31, 1998, "Item 7.
Management's Discussion and Analysis of Financial Conditions and Results of
Operations."
Internal Systems
The Company has tested and, as necessary, repaired or replaced its internal
PC hardware/software and computer network systems, and management believes
they are now Y2K compliant. The Company's phone systems have been tested
and management believes they are Y2K compliant. A majority of the Company's
North American internal business systems are currently Y2K compliant. The
remainder are in the process of being repaired and/or replaced to assure
Y2K compliance in a timely manner. The internal business systems of the
Company's European subsidiaries are currently Y2K compliant with the
exception of one subsidiary, which is in the process of repairing its
systems. Management believes these repairs will be completed in a timely
manner.
As noted in the Company's Form 10-K, the Company has been contacting its
key vendors and service providers to ascertain their Y2K compliance to the
extent that their problems could affect the Company's internal systems or
other aspects of its business. Inquiry letters have been sent to all key
vendors and service providers. Positive responses or other assurances have
been received from substantially all of our significant vendors and service
providers.
Products Sold
The Company has questioned its vendors as to the Y2K compliance status of
the brand name (i.e. third party-manufactured) hardware and software
products it sells. This includes the brand name software that is pre-loaded
onto the private label PC's the Company sells. Substantially all of the
Company's significant vendors have indicated that their products are Y2K
compliant although the Company makes no warranties to customers regarding
the Y2K compliance of third party-manufactured products.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of that term in the Private Securities Litigation Reform
Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934). Additional written or oral forward
looking statements may be made by the Company from time to time, in filings
with the Securities Exchange Commission or otherwise. Statements contained
in this report that are not historical facts are forward looking statements
made pursuant to the safe harbor provisions referenced above.
Forward-looking statements may include, but are not limited to, projections
of revenue, income or loss and capital expenditures, statements regarding
future operations, financing needs, compliance with financial covenants in
loan agreements, plans for acquisition or sale of assets or businesses and
consolidation of operations of newly acquired businesses, and plans
relating to products or services of the Company, assessments of
materiality, predictions of future events and the effects of pending and
possible litigation, as well as assumptions relating to the foregoing. In
addition, when used in this discussion, the words "anticipates",
"believes", "estimates", "expects", "intends", "plans" and variations
thereof and similar expressions are intended to identify forward-looking
statements.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified based on
current expectations. Consequently, future events and actual results could
differ materially from those set forth in, contemplated by, or underlying
the forward-looking statements contained in this report. Statements in this
report, particularly in "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations", and the Notes to
Consolidated Financial Statements describe certain factors, among others,
that could contribute to or cause such differences. Other factors that
could contribute to or cause such differences include, but are not limited
to, unanticipated developments in any one or more of the following areas:
(i) the Company's ability to manage rapid growth as a result of internal
expansion and strategic acquisitions, (ii) the effect on the Company of
volatility in the price of paper and periodic increases in postage rates,
(iii) the operation of the Company's management information systems
including the costs and effects associated with the year 2000 date change
problem, (iv) the general risks attendant to the conduct of business in
foreign countries, including currency fluctuations associated with sales
not denominated in United States dollars, (v) significant changes in the
computer products retail industry, especially relating to the distribution
and sale of such products, (vi) competition in the PC, notebook computer,
computer related products, office products and industrial products markets
from superstores, direct response (mail order) distributors, mass
merchants, value added resellers, the Internet and other retailers, (vii)
the potential for expanded imposition of state sales taxes, use taxes, or
other taxes on direct marketing companies, (viii) the continuation of key
vendor relationships including the ability to continue to receive vendor
supported advertising, (ix) timely availability of existing and new
products, (x) risks due to shifts in market demand and/or price erosion of
owned inventory, (xi) borrowing costs, (xii) changes in taxes due to
changes in the mix of U.S. and non-U.S. revenue, (xiii)pending or
threatened litigation and investigations and (xiv) the availability of key
personnel, as well as other risk factors which may be detailed from time to
time in the Company's Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this report, which speak only as of the date
hereof. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unexpected events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
The Company is exposed to market risks, which include changes in U.S. and
international interest rates as well as changes in currency exchange rates
as measured against the U.S. dollar and each other. Systemax attempts to
reduce these risks by utilizing certain derivative financial instruments.
The value of the U.S. dollar affects the Company's financial results.
Changes in exchange rates may positively or negatively affect Systemax's
sales (as expressed in U.S. dollars), gross margins, operating expenses and
retained earnings. The Company may engage in hedging programs aimed at
limiting in part the impact of certain currency fluctuations. Using
primarily forward exchange and foreign currency option contracts, Systemax,
from time to time, hedges certain of its assets that, when remeasured
according to generally accepted accounting principles, may impact the
Statement of Consolidated Income. These hedging activities provide only
limited protection against currency exchange risks. Factors that could
impact the effectiveness of the Company's hedging programs include accuracy
of sales forecasts, volatility of the currency markets, availability of
hedging instruments and the credit-worthiness of the parties which have
entered into such contracts with the Company. All currency contracts that
are entered into by Systemax are for the sole purpose of hedging an
existing or anticipated currency exposure, not for speculative or trading
purposes. In spite of Systemax's hedging efforts to reduce the effect of
changes in exchange rates against the U.S. dollar, the Company sales or
costs could still be adversely affected by changes in those exchange rates.
As of June 30,1999, the Company had no outstanding forward exchange
contracts.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS
(a) Exhibits.
3.1 Certificate of Incorporation. (Incorporated herein by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-1, File
No. 33-92052).
3.2 By-laws. (Incorporated herein by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-1, File No. 33-92052).
3.3 Certificate of Amendment of Certificate of Incorporation changing the
Company's name to Systemax Inc. (Incorporated herein by reference to
the Company's current report on Form 8-K, filed on May 18, 1999).
4.1 Stockholders Agreement. (Incorporated herein by reference to the
Company's quarterly report on Form 10-Q for the quarterly period ended
June 30, 1995).
4.2 Specimen Stock Certificate. (Incorporated herein by reference to
Exhibit 4.2 to the Company's Registration Statement on Form S-1, File
No. 33-92052).
27 Financial Data Schedule.
(b) Reports on Form 8-K.
A report on Form 8-K was filed on May 18, 1999 relating to the change
of the Company's name to Systemax Inc.
<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.
SYSTEMAX INC.
Date: August 13, 1999 By: /S/ RICHARD LEEDS
-----------------------
Richard Leeds
Chairman and Chief Executive Officer
By: /S/ STEVEN GOLDSCHEIN
------------------------
Steven Goldschein
Senior Vice President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 1999 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30,
1999 (UNAUDITED) OF SYSTEMAX INC. 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> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 34,707
<SECURITIES> 0
<RECEIVABLES> 177,847
<ALLOWANCES> 0
<INVENTORY> 122,011
<CURRENT-ASSETS> 370,475
<PP&E> 37,226
<DEPRECIATION> 0
<TOTAL-ASSETS> 480,719
<CURRENT-LIABILITIES> 186,579
<BONDS> 1,898
<COMMON> 382
0
0
<OTHER-SE> 291,862
<TOTAL-LIABILITY-AND-EQUITY> 480,719
<SALES> 835,451
<TOTAL-REVENUES> 835,451
<CGS> 679,917
<TOTAL-COSTS> 679,917
<OTHER-EXPENSES> 129,433
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350
<INCOME-PRETAX> 26,451
<INCOME-TAX> 10,458
<INCOME-CONTINUING> 15,993
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,993
<EPS-BASIC> .44
<EPS-DILUTED> .44
</TABLE>
